Remedial Actions Reporting; Final Rule DEPARTMENT OF TRANSPORTATION

SUMMARY: FRA is amending its railroad safety enforcement regulations to

require railroads to report actions taken to remedy certain alleged

violations of law. If a railroad receives notice from an FRA or State

safety inspector that (i) the inspector is recommending that a civil

penalty be assessed for an alleged violation of law and (ii) that a

remedial actions report must be submitted, the railroad shall report to

the inspector the actions that it took to remedy the alleged violation.

In such a case, the railroad is required to submit the remedial actions

report within 30 days after the end of the month in which the railroad

received the notice. The rule also provides that if appropriate

required remedial actions cannot be taken by the railroad within such

30-day period, it shall submit to the inspector (i) a written

explanation of the reasons for any delay and (ii) a final report upon

completion of the remedial actions.

EFFECTIVE DATE: This final rule will be effective January 1, 1995.

ADDRESSES: Any petition for reconsideration should reference Docket No.

RSEP-7, Notice No. 2, and be submitted in triplicate to the Docket

Clerk, Office of Chief Counsel, Federal Railroad Administration, 400

Seventh Street SW., Room 8201, Washington, D.C. 20590.

FOR FURTHER INFORMATION CONTACT: Edward R. English, Director, Office of

Safety Enforcement (RRS-10), FRA, Office of Safety, 400 Seventh Street,

S.W., Washington, D.C. 20590 (telephone number: 202-366-9252), or David

H. Kasminoff, Trial Attorney (RCC-30), FRA, Office of Chief Counsel,

400 Seventh Street, S.W., Washington, D.C. 20590 (telephone number:

202-366-0635).

SUPPLEMENTARY INFORMATION:

Background

On June 18, 1993, FRA published in the Federal Register a notice of

proposed rulemaking (NPRM) to amend part 209, entitled ``Railroad

Safety Enforcement Procedures,'' by revising Sec. 209.3 and adding a

new ``Subpart E--Reporting of Remedial Actions.'' The proposed Subpart

E prescribed reporting procedures for railroads notified by an FRA or

State safety inspector both that assessment of a civil penalty would be

recommended against them for their alleged noncompliance with the

Federal railroad safety laws and that a remedial actions report must be

submitted to the inspector. 58 FR 33595.

In a study released on July 31, 1990 (GAO/RCED-90-194), the General

Accounting Office (GAO) concluded that FRA had no assurance that

railroads were correcting problems identified in FRA's routine

inspections because there were no requirements that railroads respond

in writing to indicate that an identified defect had been repaired. The

GAO report acknowledged that, even in the absence of requirements to

report corrective actions, railroads voluntarily responded in writing

to FRA concerning most track and signal defects indicating that

corrective actions have been taken. For example, in 1986 through 1988

FRA identified about 361,000 track defects, for which approximately

320,000, or 89 percent, had a railroad response recorded in the

``Action'' and ``Date'' columns of the railroad's copy of the Track

Inspection Report. In the same period, FRA identified about 35,000

signal defects, for which approximately 30,000, or 86 percent, had a

railroad response recorded in the ``Action'' and ``Date'' columns of

the railroad's copy of the Signal and Train Control Inspection Report.

The GAO report further noted that, although some railroads also

reported corrective actions for equipment and operating practices

defects, FRA maintained no record of these written responses and that

FRA did not reinspect in every case to verify the correction of a

safety defect. The GAO recommended that FRA establish an effective

inspection follow-up program that would include (i) requiring railroads

to report actions taken on FRA inspection findings, (ii) determining

what reinspection levels are needed to ensure that railroads are

responding to inspection findings, and (iii) assessing civil penalties

for failure to report corrective actions.

On September 3, 1992, the President signed into law the Rail Safety

Enforcement and Review Act (RSERA), Pub. L. 102-365, 106 Stat. 972,

which mandated in Sec. 3 the issuance of rules requiring submission of

remedial actions reports. On July 5, 1994, the general and permanent

provisions of the RSERA and of all the other Federal railroad safety

laws were simultaneously repealed, reenacted without substantive

change, and recodified as positive law in title 49 of the U.S. Code by

Public Law 103-272. See H.R. Rep. No. 103-180, 103d Cong., 1st Sess.

(1993). Section 3 of the RSERA provided as follows:

(a) Regulations.--The Secretary of Transportation (hereafter in

this Act referred to as the ``Secretary'') shall issue regulations to

require that any railroad notified by the Secretary that assessment of

a civil penalty will be recommended for a failure to comply with a

provision of the Federal railroad safety laws, as such term is defined

in section 212(e) of the Federal Railroad Safety Act of 1970 (45 U.S.C.

441(e)), or any rule, regulation, order, or standard issued under such

provision, shall report to the Secretary, within 30 days after the end

of the month in which such notification is received, actions taken to

remedy that failure.

(b) Explanation of Delay.--Regulations issued under subsection (a)

shall provide that, if appropriate remedial actions cannot be taken by

a railroad within such 30-day period, such railroad shall submit to the

Secretary an explanation of the reasons for any delay.

(c) Schedule for Regulations.--The Secretary shall--(1) within 9

months after the date of enactment of this Act, issue a notice of

proposed rulemaking for regulations to implement this section; and (2)

within 2 years after the date of enactment of this Act, issue final

regulations to implement this section.

49 U.S.C. 20111(d), formerly codified at 45 U.S.C. 437 note. As

recodified at 49 U.S.C. 20111(d), the section now reads as follows:

(d) Regulations Requiring Reporting of Remedial actions.--(1) The

Secretary shall prescribe regulations to require that a railroad

carrier notified by the Secretary that imposition of a civil penalty

will be recommended for a failure to comply with this part, chapter 51

or 57 of this title, or a regulation prescribed or order issued under

any of those provisions, shall report to the Secretary, not later than

the 30th day after the end of the month in which the notification is

received--

(A) actions taken to remedy the failure; or

(B) if appropriate remedial actions cannot be taken by that 30th

day, an explanation of the reasons for the delay.

(2) The Secretary--

(A) not later than June 3, 1993, shall issue a notice of a

regulatory proceeding for proposed regulations to carry out this

subsection; and

(B) not later than September 3, 1994, shall prescribe final

regulations to carry out this subsection.

The Secretary has delegated these rulemaking responsibilities to

the Federal Railroad Administrator. 49 CFR 1.49 (c), (d), (f), (g),

(m), (s), (ee), (gg), and internal delegations.

The term ``Federal railroad safety laws'' in Sec. 3 of the RSERA

means the provisions of law that as a result of recodification are now,

generally, at 49 U.S.C. subtitle V, part A or 49 U.S.C. chap. 51 or 57

and the rules, regulations, orders, and standards issued under any of

those provisions. See Pub. L. 103-272 (1994). Before recodification,

these statutory provisions were contained in the following statutes:

(i) the Federal Railroad Safety Act of 1970 (Safety Act) (49 U.S.C.

20101-20117, 20131, 20133-20141, 20143, 21301, 21302, 21304, 21311,

24902, and 24905, and Secs. 4(b)(1), (i), and (t) of Pub. L. 103-272,

formerly codified at 45 U.S.C. 421, 431 et seq.); (ii) the Hazardous

Materials Transportation Act (Hazmat Act) (49 U.S.C. 5101 et seq.,

formerly codified at 49 App. U.S.C. 1801 et seq.); (iii) the Sanitary

Food Transportation Act of 1990 (SFTA) (49 U.S.C. 5713, formerly

codified at 49 App. U.S.C. 2801 (note)); and those laws transferred to

the jurisdiction of the Secretary of Transportation by subsection

(e)(1), (2), and (6)(A) of section 6 of the Department of

Transportation Act (DOT Act), as in effect on June 1, 1994 (49 U.S.C.

20302, 21302, 20701-20703, 20305, 20502-20505, 20901, 20902, and 80504,

formerly codified at 49 App. U.S.C. 1655(e)(1), (2), and (6)(A)). 49

U.S.C. 20111 and 20109, formerly codified at 45 U.S.C. 437 (note) and

441(e). Those laws transferred by the DOT Act include, but are not

limited to, the following statutes: (i) the Safety Appliance Acts (49

U.S.C. 20102, 20301, 20302, 20304, 21302, and 21304, formerly codified

at 45 U.S.C. 1-14, 16); (ii) the Locomotive Inspection Act (49 U.S.C.

20102, 20701-20703, 21302, and 21304, formerly codified at 45 U.S.C.

22-34); (iii) the Accident Reports Act (49 U.S.C. 20102, 20701, 20702,

20901-20903, 21302, 21304, and 21311, formerly codified at 45 U.S.C.

38-43); (iv) the Hours of Service Act (49 U.S.C. 20102, 21101-21107,

21303, and 21304, formerly codified at 45 U.S.C. 61-64b); and (v) the

Signal Inspection Act (49 U.S.C. 20102, 20502-20505, 20902, 21302, and

21304, formerly codified at 49 App. U.S.C. 26).

FRA performs its safety inspections in order to monitor and enforce

compliance with the Federal railroad safety laws by all entities

subject to its jurisdiction, not simply by railroads. The entities

themselves still retain ultimate responsibility for detecting,

repairing, and avoiding violations of those laws. Nevertheless, the

reporting requirement will assist FRA in monitoring followup actions by

railroads with respect to conditions sufficiently serious to warrant

possible future civil penalty actions.

If an FRA inspector, State inspector participating in investigative

and surveillance activities under 49 C.F.R. Part 212, or other duly

authorized official performing a railroad safety inspection

(hereinafter referred to collectively as ``FRA Safety Inspector'')

determines that a railroad has not complied with a provision of the

Federal railroad safety laws and if the inspector decides to recommend

the assessment of a civil penalty against the railroad for the

noncompliance, the inspector will first prepare an inspection report.

This report includes the following information: the name of the FRA

Safety Inspector, his or her identification number, the report number,

the name and job title of the railroad representative served with the

report, the railroad's name and computer code, the railroad division

and subdivision (if applicable), and the inspection report date.

Further, the inspection report also indicates if the FRA Safety

Inspector has checked the box specifying ``Violation Recommended.'' If

a violation is recommended, the FRA Safety Inspector will prepare a

violation report including a recommendation for the assessment of a

civil penalty.

The central requirement of the final regulations is that any

railroad receiving notification on the new version of the inspection

report that (i) the FRA Safety Inspector is recommending the assessment

of a civil penalty for a failure by that railroad to comply with a

provision of the Federal railroad safety laws and (ii) a report of

remedial actions must be filed, shall fill out the ``Railroad

Followup'' section of the railroad copy of the inspection report. The

railroad must then return the form to the designated FRA Safety

Inspector within 30 days after the end of the month in which such

notification is received. The remedial actions report must include the

name and job title of the individual completing the form on behalf of

the railroad and indicate the date(s) on which the remedial actions

occurred. A copy of the new inspection report on which to report to FRA

remedial actions taken is appended to this final rule.

Under the terms of the final regulations, the duty to submit a

remedial actions report does not arise merely upon notification that a

recommendation for the assessment of a civil penalty will be made

(i.e., in the box stating ``Violation Recommended,'' the word ``yes''

is selected). It arises only if notification is also provided to the

railroad on the inspection report itself that submission of a remedial

actions report for that specific failure is required (i.e., in the box

stating ``Written Notification to FRA of Remedial Action is:'' the word

``Required'' is selected). Broadly construed, under one permissible

interpretation of the reporting requirement of Sec. 3 of the RSERA, the

requirement could apply to all violations for which the assessment of a

civil penalty is recommended. This reading of Sec. 3 would, of course,

include all violations involving physical defects (e.g., in track,

equipment, and signals) where, absent remedial actions, the physical

defect continues to pose a safety hazard, e.g., a defective wheel on a

freight car. However, this interpretation would also include violations

involving a defect in human performance, such as permitting a

locomotive engineer to work in excess of 12 hours in violation of the

Federal hours of service laws. In that instance, the excess service

creates a risk during the period of the excess service itself, but does

not carry a continuing threat to safety.

FRA concludes that the intent of Congress in enacting Sec. 3 of the

RSERA was to require the reporting of remedial actions only for a

failure to comply that, in the judgment of the FRA Safety Inspector,

could literally and specifically be corrected by the specific railroad

notified. In other words, we think that Congress required remedial

actions reports only for violations that could still pose an ongoing

risk to rail safety if not corrected (e.g., operation of a freight car

that the railroad received in interchange in revenue service with a

defective wheel). In light of FRA's interpretation of Sec. 3 of the

RSERA and in an effort to develop meaningful compliance data, the final

regulations apply remedial actions reporting to only three general

categories of failures to comply with a provision of the Federal

railroad safety laws for which the assessment of a civil penalty is

recommended. The three general categories consist of (i) physical

defects, (ii) recordkeeping and reporting violations, and (iii) filing

violations.

The final regulations neither compel nor permit any affected

railroad to decide for itself whether a particular recommendation to

FRA for the assessment of a civil penalty falls under one of the three

general categories, and thus results in the need to submit a remedial

actions report. Consider, for example, a situation in which a railroad

is informed that because of its operation of a box car with a plain

bearing box having no visible free oil, in violation of 49 CFR 215.107,

a recommendation will be made for the assessment of a civil penalty.

However, the safety inspector neglects to include the requisite

notification on the inspection report that submission of a remedial

actions report is required. Although the inspector's omission would not

affect the railroad's underlying obligation to pay any civil penalty

assessed for the substantive freight car violation, FRA's failure to

provide the required notification would, under this rule, mean that the

railroad had no duty to file a remedial actions report regarding the

substantive violation.

After a railroad returns the completed remedial actions report to

the FRA Safety Inspector, he or she will first determine if the

remedial actions taken were proper and adequate under the circumstances

of the violation. If not, he or she will contact the representative of

the railroad who completed the report form to obtain additional

information. If necessary, the FRA Safety Inspector will return a

deficient report to the appropriate railroad representative for

revision. Once the remedial actions report is sufficient, the FRA

Safety Inspector will submit a copy of this report to FRA's Office of

Chief Counsel, which may make use of it during the penalty assessment

and negotiation process. FRA's Office of Safety will then correlate the

data representing the different types of remedial actions that entities

affected by the reporting requirement have undertaken. This

computerized data will assist FRA in systematically targeting

inspections by integrating available accident and injury data with

inspection and compliance data, so as to better determine if affected

entities are minimizing and correcting safety problems.

Under certain unusual circumstances, a railroad may be notified

that assessment of a civil penalty will be recommended for a failure of

that railroad to comply with a provision of the Federal railroad safety

laws unless the company undertakes a specific programmatic response to

the compliance problem. In such cases, although penalty action may be

withheld, it will be treated as if the penalty has already been

recommended, that is submission of a remedial actions report would be

required. Further, there are instances where a recommendation for the

assessment of a civil penalty may be made, but later overturned by

regional officials for technical or policy reasons or declined by FRA's

Office of Chief Counsel for evidentiary or other legal deficiencies.

FRA considers the phrase `` * * * that has received written

notification * * * from an FRA Safety Inspector both that assessment of

a civil penalty will be recommended * * * and that it must submit a

remedial actions report * * * ``as the triggering language that

requires a railroad to report its remedial actions to FRA within 30

days after the end of the month in which such notification is received.

See 49 CFR 209.405.

Discussion of Comments and Conclusions

A total of 11 responses were received concerning the NPRM. At the

public hearing held in Washington, D.C. on October 19, 1993, six

organizations were represented: the Association of American Railroads

(AAR); The American Short Line Railroad Association (ASLRA);

Consolidated Rail Corporation (Conrail); National Railroad Passenger

Railroad Corporation (Amtrak); Union Pacific Railroad Company (UP); and

Brotherhood Railway Carmen Division, Transportation Communications

International Union (BRC). Prepared statements were provided by the

AAR, the ASLRA, and the BRC, and written comments were received from

the AAR, the ASLRA, the UP, the BRC, the American Public Transit

Association (APTA), Akzo Chemicals Inc. (Akzo), Chemical Manufacturers

Association (CMA), and Southeastern Pennsylvania Transportation

Authority (SEPTA). Discussions follow with respect to the primary

issues raised by the commenters. In light of the comments received, FRA

has reconsidered some of its proposals.

1. Should the final rule require remedial actions reports for all

categories of failures to comply with provisions of the Federal

railroad safety laws for which assessment of civil penalties have been

recommended, or just for failures that can literally and specifically

be corrected?

The NPRM set forth FRA's belief that the intent of Congress in

enacting Sec. 3 of the RSERA was to require reporting of remedial

actions only for failures to comply that could literally and

specifically be corrected. FRA, however, acknowledged that one

permissible reading of the statute is that remedial actions reports are

required for all categories of alleged violations, and encouraged

commenters to submit their views on FRA's interpretation of Sec. 3 of

the RSERA. Specifically, FRA asked any commenter believing that

expansive reporting is required by the statute, or inherently useful,

to recommend specific ways that generally responsive measures taken to

prevent violations similar to those involved in completed or past

transactions could usefully be reported to FRA.

Five commenters agreed with FRA's position that the rule should

apply to only three general categories of failures to comply with a

provision of the Federal railroad safety laws for which the assessment

of a civil penalty is recommended. The three general categories consist

of (i) physical defects, (ii) recordkeeping and reporting violations,

and (iii) filing violations.

The AAR believed that to require more expansive reporting would

expand the scope of the rule beyond FRA's statutory authority, since in

Sec. 3(a) of the RSERA Congress ordered remedial actions reports only

on ``actions taken to remedy that failure,'' referring to the

particular ``failure'' to comply for which a civil penalty would be

sought. The AAR also stated that there is no policy or safety reason

for FRA to expand the scope of the rule and that FRA already has

sufficient information available to assist it in allocating agency

resources. The ASLRA opined that to require reporting of actions not

susceptible to physical change or administrative correction would be

counterproductive, leading to unnecessary paperwork and costs. The CMA

believed that FRA should be more selective in determining when a

remedial actions report must be filed and that FRA Safety Inspectors

(as that term is now defined in the final rule) should have discretion

to decide if safety concerns warrant the submission of a report even

for failures involving physical defects, recordkeeping and reporting

violations, and filing violations.

In contrast, the BRC believed that FRA's proposed restrictive

approach runs contrary to the legislative history and does not comport

with Congressional intent, and that Congress specifically intended to

limit FRA's discretion in implementation of the RSERA. The BRC stated

that completed or past transactions in violation of the law and

regulations are not usually isolated instances, but are indicative of

an ongoing pattern of violations which can be remedied by additional

instruction, education, or discipline. The BRC also indicated that even

if the rule is applied to all categories of violations, remedial

actions reporting would still address only violations that FRA Safety

Inspectors could confirm with sufficient evidence to warrant the

recommendation of assessment of a civil penalty.

While FRA disagrees with the AAR's conclusion that it would lack

the statutory authority to expand the scope of the rule, FRA also

disagrees with the BRC's conclusion that the legislative history,

including House Report No. 102-205, establishes a Congressional intent

to subject all violations to the reporting requirement. Section 3 of

the RSERA required remedial actions reports for ``actions taken to

remedy that failure'' (emphasis added), and FRA concludes that Congress

was referring to actions taken to remedy the particular ``failure'' to

comply for which a civil penalty would be sought (i.e., to the specific

instance that constituted a violation), not to the generic failure on

other occasions to comply with the same regulatory or statutory

provision.

After careful consideration of all of the comments, FRA has decided

to require the reporting of remedial actions only for failures to

comply that can literally and specifically be corrected, as set forth

in the NPRM. In response to the concerns raised by the BRC, FRA

emphasizes that for violations involving completed or past transactions

that can no longer be remedied by the given railroad (e.g., permitting

a locomotive engineer to work in excess of 12 hours in violation of the

Federal hours of service laws or offering a freight car in interchange

with a defective wheel that FRA identified to the receiving railroad as

requiring repair), FRA will expect the railroad against whom a civil

penalty is recommended (or even against whom only a written warning is

issued) to reassess its own overall policy and attitude toward future

compliance, such as by reallocating its resources or providing

additional employee training. Moreover, since the civil penalty that

will be recommended is expected to serve as an incentive toward

generally responsive actions, to require a remedial actions report for

violations that can no longer be remedied by that railroad would be

superfluous.

2. Should the reporting requirement apply to all entities over

which FRA has enforcement authority, e.g., shippers of hazardous

materials, or just to railroads?

The only two organizations that commented on this issue favored the

proposed expanded coverage of the rule. The BRC believed that expanded

coverage would promote better accountability and permit FRA to fully

monitor compliance with the law and regulations. CMA generally

supported the proposed reporting requirement, including expansion of

the proposed definition of ``responsible company'' to include shippers,

if improved safety in the shipment of hazardous materials by rail can

be realized. However, CMA noted that a discussion of the rule's

economic impact on shippers was omitted from FRA's regulatory impact

analysis.

As acknowledged in the NPRM, Sec. 3 of the RSERA mandated issuance

of rules requiring remedial actions reports only from railroads. FRA

proposed making the rule applicable to all persons other than

individuals under our rulemaking authority under Sec. 202 of the Safety

Act, in furtherance of our enforcement authority under the Hazardous

Materials Transportation Act, in order to develop more comprehensive

safety data, better utilize its limited resources, and consistently

treat all similarly situated violators of the Federal railroad safety

laws.

FRA has reconsidered its proposal and decided to limit the

applicability of the final rule to only railroads. First, FRA believes

that if Congress had intended for all persons besides railroads to be

included under Sec. 3 of the RSERA, Congress would have expanded the

scope of the rule. Second, FRA now concludes that in most instances in

which FRA Safety Inspectors choose to cite shippers of hazardous

materials for violations of the Hazardous Materials Regulations, the

tank cars or shipping papers that are the subjects of the civil penalty

recommendations are no longer under the control of the shipper.

Accordingly, the majority of these violations are for completed or past

transactions and thus would not subject shippers to the reporting

requirement even under the proposed expanded approach.

The shippers would still, however, be expected to reevaluate their

future compliance policies and procedures. For example, a shipper

receives written notification from an FRA Safety Inspector that a

recommendation for the assessment of a civil penalty is being made

pursuant to 49 CFR 173.29 for failure to properly secure all of the

closures on a residue tank car, but the car is found in a rail yard

hundreds of miles from the shipper's facility. Although this failure

would fall within one of the three general categories of correctable

violations, under ordinary circumstances the required remedial actions

(e.g., securement of the car's closures) would be performed exclusively

by the railroad. The shipper might investigate the circumstances

surrounding the tank car's preparation and then implement new

procedures, but under the terms of the NPRM the shipper would not be

required to submit a remedial actions report.

3. Does FRA have the legal authority to impose civil or criminal

penalties on railroads and/or individuals that either violate or cause

a violation of the reporting requirements?

The proposed rule identified the penalties that FRA might impose

upon any person who violates or causes the violation of any requirement

of Subpart E, and noted that penalties were authorized by Sec. 209 of

the Safety Act. However, the AAR, the ASLRA, and the UP stated that

although the source of FRA's authority in promulgating the rule was

Sec. 3 of the RSERA, neither that section nor any other section of the

RSERA authorized the imposition of civil or criminal penalties. The

three commenters noted that while Sec. 209 of the Safety Act authorized

penalties for violations of safety rules or regulations issued under

that Act, Sec. 3 of the RSERA was neither an amendment nor an addition

to the Safety Act. They then concluded that since FRA never provided

any notice or a reasoned explanation for why the rule's substantive

provisions are ``necessary'' for railroad safety under Sec. 202(a) of

the Safety Act (now codified at 49 U.S.C. 20103), or ``necessary or

appropriate'' for safe transportation of hazardous materials under

Sec. 105(a)(1) of the Hazardous Materials Transportation Act (now

codified at 49 U.S.C. 5103), neither civil nor criminal penalties are

authorized.

These commenters opined that since the underlying violation is

already subject to a civil penalty, and the necessary incentives to

submit a remedial actions report are already in place, the possible

imposition of an additional penalty would be superfluous. The BRC

contended that the incentive provided by a separate penalty for

submitting an improper remedial actions report increases accountability

and forces the railroads to ensure completion of the report.

FRA adopts the NPRM proposal that civil and/or criminal penalties

may be imposed upon any person, including a railroad, who either

violates or causes the violation of any requirement of Subpart E. As

stated in the authority citation for the proposed revised part 209,

FRA's authority for including civil and criminal penalty provisions in

the remedial actions reporting rule derives from our rulemaking

authority under 49 U.S.C. 20103 (formerly contained in Sec. 202 of the

Safety Act). See 49 CFR 1.49(m). Contrary to the implication of the

AAR, the ASLRA, and the UP, FRA is not issuing the remedial actions

reporting rule with respect to violations of the Hazardous Materials

Regulations under the authority of 49 U.S.C. 5103 (formerly contained

in Sec. 105(a)(1) of the Hazardous Materials Transportation Act). With

regard to submission of remedial actions reports for violations of the

Hazardous Materials Regulations, our authority for including civil and

criminal penalty provisions in the rule derives from our rulemaking

authority under 49 U.S.C. 20103, in furtherance of our enforcement

authority under the provisions of law formerly known as the Hazardous

Materials Transportation Act. See 49 CFR 1.49 (m) and (s). Of course,

FRA could issue these rules under the provisions of law formerly

contained in the Safety Act even if the provisions of law formerly

contained in Sec. 3 of the RSERA did not exist, so this is an academic

argument. For the record, FRA believes these rules are necessary for

safety.

Accordingly, consistent with FRA's belief that Congress did not

intend for FRA to lack the authority to enforce the remedial actions

reporting rule, we are issuing the rule under both 49 U.S.C. 20111(d)

and 49 U.S.C. 20103 in order to avail ourselves of all potential

remedies that may be necessary to achieve compliance. To the extent

that we are issuing the rule under 49 U.S.C. 20103, we have concluded

that it is ``necessary'' to ensure railroad safety, as required by

Sec. 20103(a). FRA strongly disagrees with the AAR's conclusion that

the NPRM failed to sufficiently set forth why the submission of

remedial actions is ``necessary'' for railroad safety. The AAR quoted

FRA's statement in the NPRM that ``* * * it is doubtful that this

proposed rule alone will reduce the number of defective conditions in

the industry, or that it will materially impact on the already

declining rate of train accidents.'' 58 FR 33601. The AAR also observed

that FRA ``* * * is unable to quantify any direct or indirect safety

benefit from this proposed rule.'' 58 FR 33601. The AAR further noted

that even if certain correctable violations (which, if uncorrected,

pose ongoing safety risks) have meaningful connections to safety, this

nexus does not establish that the submission of remedial actions

reports is ``necessary'' to railroad safety.

Although FRA readily acknowledged in the NPRM that it is unable to

quantify any direct or indirect safety benefit from the proposed rule,

it also stated that the potential benefit will come about by increasing

the ability of the railroad industry to manage quality control. 58 FR

33601. FRA also concluded that the rule will improve its ability to

efficiently and effectively manage its inspection resources. 58 FR

33601. In addition, it was hoped that railroads (previously included

under the term ``responsible company''), after being required to report

remedial actions to FRA, will create their own internal databases of

the remedial actions reports. Although we noted that internal analyses

of the information was not required by the NPRM, we stated that such

analyses (in conjunction with other resource management data) might

lead railroad management to take actions designed to reduce and/or

effectively respond to defective conditions. 58 FR 33601.

We also stated in the NPRM that remedial actions reporting will

assist FRA in monitoring follow-up actions by railroads with respect to

conditions sufficiently serious to warrant possible future civil

penalty actions. 58 FR 33601. FRA then noted that the rule also holds

particular potential for reducing the amount of time that FRA Safety

Inspectors spend returning to an inspection location to check on the

status of a violation for which a violation report had previously been

submitted. 58 FR 33601. The rule also will permit FRA to develop more

comprehensive safety data, better utilize its limited resources, and

consistently treat all similarly situated violators of the Federal

railroad safety laws.

4. Should notification to a railroad that it must submit a remedial

actions report be provided to a specific person and place designated by

that railroad?

The proposed rule identified the entity itself as the person upon

whom written notification of the requirement to submit a remedial

actions report would be served. No provision was included to permit a

railroad to direct FRA to serve the written notice upon either a named

individual or an individual having a particular job title or job

function on the railroad. FRA anticipated that written notice would be

given directly to an appropriate local railroad official, such as a

foreman, trainmaster, or supervisor.

Five commenters opined that unless FRA requires each railroad to

identify a specific person or contact within that railroad, delays or

failure to respond to the remedial actions report could result. The AAR

proposed that FRA provide initial notification of a filing requirement

to nonagreement officers (or their designates) involved in managerial

field supervision, with duplicate notice sent to a location to be

specified by each railroad. The AAR stated that while cost savings are

difficult to quantify, providing notification to a headquarters

location would enhance timeliness and compliance. The AAR requested

that if the final rule does not require central notification, then FRA

Safety Inspectors should be required to make every effort to hand

deliver notification to the nonagreement managers (or their designates)

who accompany the field inspectors. Conrail stated that many of its

first-line supervisors, with whom FRA Safety Inspectors currently leave

inspection reports, assume that the reports are not their

responsibility to forward or answer because the problems did not exist

or originate in their territories.

The BRC argued that if the railroads need to implement internal

reforms in order to comply with FRA regulations then blame cannot be

placed on the remedial actions reporting requirement. The BRC opined

that to the extent that the railroads already monitor and control

required repairs to track and equipment, their current internal

accountability will foster compliance with this rule. It also believed

that since most violations are resolved and handled locally, the

remedial actions report form could be completed locally.

FRA is not persuaded that a requirement to provide notification of

the duty to submit a remedial actions report to either a specific

local-level nonagreement official and/or to an official at a central

location of the railroad is either necessary or appropriate. Upon

consideration of all of the comments, FRA believes that to require its

inspectors to expend additional time serving notice upon only certain

categories of railroad employees at each inspection location and also

to maintain current lists of names and mailing addresses of designated

railroad officials at central locations, would undermine FRA's ability

to efficiently and effectively manage its inspection resources.

Under current FRA procedures, FRA Safety Inspectors usually will

deliver their inspection report directly to the individual who

accompanied them on the railroad's property during the inspection.

Other times, the inspectors will communicate with an appropriate local

railroad official (either agreement or nonagreement) shortly after they

perform an unaccompanied inspection. In any event, the inspection

report form shows to whom FRA has delivered the report, so there is a

clear basis on which a railroad can insist on accountability by its own

officers and employees. Accordingly, we believe that each railroad is

uniquely qualified to establish its own internal control mechanism for

ensuring that all information concerning remedial actions reporting,

delivered by FRA to any relevant local employee of the railroad, is

reported to the necessary individuals in the railroad's hierarchy in a

timely and efficient manner.

5. Should the inspection report itself be adapted and modified to

serve as the remedial actions report form?

The NPRM proposed the continued use by FRA Safety Inspectors of a

different type of inspection report form specific to each discipline.

However, only one generic remedial actions report form, regardless of

the rule, regulation, order, or standard involved, would be used by all

railroads required to report their remedial actions. It was anticipated

that FRA would develop a number of specific remedial actions report

forms unique to each discipline, either as part of, or as attachments

to, the inspection reports themselves.

The AAR, the UP, and the ASLRA strongly urged FRA to amend its

existing inspection reports to serve as remedial actions report forms,

thus eliminating much of the paperwork and reporting burdens from the

railroads. The AAR also noted that several of FRA's current inspection

forms already serve this purpose, such as the ``Railroad Followup''

section on inspection reports for Track, Motive Power and Equipment,

and Signal and Train Control inspections.

FRA agrees with the commenters that modifying the inspection report

to serve as the remedial actions report form will generally ease the

paperwork burden imposed by this rule on the railroads and will

specifically reduce the amount of time required to complete the form.

FRA has also decided to combine all four of its discipline-specific

inspection reports into one new generic inspection report, to be

designated as Form FRA F 6180.96. To denote that a railroad is required

to submit a remedial actions report, the FRA Safety Inspector checks

the box marked ``required'' in the section entitled ``Remedial

Actions'' of the new inspection report form. The railroad will then

provide the required remedial actions report information directly on

its copy of the inspection report, and mail that form back to the

appropriate FRA Safety Inspector.

6. Should the instructions on the remedial actions report form be

changed to make submission of a brief narrative statement optional,

thus permitting a railroad to submit its report by only selecting the

appropriate remedial action code?

The NPRM proposed prohibiting a railroad from reporting its

remedial actions simply by indicating that corrective actions were

performed. The proposed rule would have required a railroad to report

to FRA with the necessary level of specificity by selecting the

appropriate reporting code along with a brief narrative description to

indicate the nature of the actions taken.

The AAR and the ASLRA contended that, with the exception of the

code ``other remedial actions,'' FRA should not require written

narrative statements when an applicable action code already exists.

They believed that preparation of a narrative adds to compliance time

and costs, but yields no railroad safety benefits. They further argued

that the absence of a narrative would not undermine the quality of

railroad compliance, since FRA could perform field audits and random

samplings of railroad records.

The BRC strongly favored retention of the narrative description

requirement and suggested that additional instructions be added to the

reporting form to enhance the quality of the narrative statement, e.g.,

when repairs to a railroad car are necessary the narrative statement

should indicate the place of repair, the extent of the repair, and the

name of the person performing the repair. The BRC opined that the

narrative statement would assist FRA in determining if a railroad

needed to take additional actions, without the need for a formal audit.

FRA agrees with the AAR and the ASLRA that under most circumstances

the selection of a remedial action code on the reporting form will

fully and accurately reflect the action or actions taken to remedy a

failure to comply with a provision of the Federal railroad safety laws.

Examples of such codes include the following: repair or replacement of

a defective component without movement, movement of a locomotive or car

for repair (where permitted) and its subsequent repair, completion of a

required test or inspection, removal of a noncomplying item from

service but not for repair (where permitted), or reduction of operating

speed (where sufficient to achieve compliance). It is primarily this

coded information that FRA anticipates entering into its computer

database to augment FRA's ability to efficiently and effectively manage

its inspection resources. With the exception of the residuary code for

``other remedial actions,'' FRA concludes that requiring inclusion of a

narrative statement on the report form would unnecessarily add to the

time that a railroad would expend on completion of the form and would

be of marginal value to railroad safety.

Contrary to the BRC's argument, FRA believes that the possibility

of a followup FRA inspection, coupled with potential imposition of

civil and criminal penalties for filing a false remedial actions

report, will serve as a significant deterrent to any railroad

considering filing a report with a false or misleading remedial action

code selected. Accordingly, FRA is revising the final rule to require a

railroad compelled to file a remedial actions report to select only an

appropriate remedial action code to fully describe the remedial action

or actions performed. Completion of the brief narrative description

section will ordinarily be optional; however, for any railroad

selecting the remedial action code ``other remedial actions''

completion of the brief narrative description section will be

mandatory.

7. Did FRA substantially underestimate the regulatory impact of the

rule when it stated that it would cost the railroad industry only

$66,500 per year to fill out the required remedial actions reports?

The NPRM noted that the potential benefit of the rule comes from

increasing the ability of the railroad industry to manage quality

control, as well as by improving FRA's ability to efficiently and

effectively manage its inspection resources. It was anticipated that it

would not take the realization of many benefits to offset the

relatively insignificant cost to society of approximately $75,000 per

year ($66,500 to the railroad industry each year to fill out the

required remedial actions reports and approximately $8,100 to FRA to

review the reports). Moreover, the public reporting burden for the

collection of information was estimated to average approximately 23

minutes per response, including the time for reviewing instructions,

searching existing data sources, gathering and maintaining the data

needed, and completing and reviewing the collection of information.

The AAR argued that FRA's cost estimate is off by at least a factor

of ten. This commenter believed that although a voluntary report may

take only 15 minutes to complete, the risk of civil and criminal

penalties would require a railroad to devote more management time and

attention to reporting and would increase the completion time to at

least one and one-half hours. The AAR further contended that FRA erred

by estimating the actual employee cost per hour to be $24.00, rather

than $36.00 per hour with fringe benefits included in the calculation.

The ASLRA agreed with the AAR that the cost of implementation was

grossly understated. This commenter believed that based upon wage

levels for the larger Class II and Class III railroads of approximately

$28.00 to $30.00 per hour, along with an average 90-minute time period

required for recording, checking accuracy, and senior management

clearance, the estimated annual administration cost to small railroads

will be approximately $50,000 to $75,000. Both commenters, and the UP,

argued that the reporting burden would be eased if FRA incorporated the

reporting requirement directly onto the inspection report, and relied

primarily on a checkoff of coded responses in lieu of a written

description of remedial actions performed.

As already discussed in this preamble, FRA has addressed many of

the concerns about time and cost raised by the three commenters by

modifying the inspection report to serve as the remedial actions report

form and by making a railroad's submission of a narrative description

optional, under most circumstances, instead of required. Accordingly,

FRA anticipates that the public reporting burden for collection of

information required for this rule will remain as estimated in the

NPRM, an average of approximately 23 minutes per response for all

reports filed as a result of Secs. 209.405 and 209.407.

FRA rejects the argument that the risk of civil and criminal

penalties will increase the time required to complete a mandatory

remedial actions report over the time now required to complete a

voluntary report. A railroad is legally obligated to correct a cited

violation and avoid continued noncompliance, regardless of whether it

is required to inform FRA of its remedial actions. Presumably, a

railroad that currently voluntarily submits remedial actions reports to

FRA is not choosing to provide inaccurate and untruthful information

merely because the threat of civil and criminal penalties may be

lacking. Accordingly, FRA concludes that the time required to read the

remedial actions report form and select an appropriate remedial action

code will be minimal.

Section-by-Section Analysis

Section 209.3 is reorganized, the definition of ``person'' is

revised, and definitions of three important terms employed in the

remedial actions regulations are added. The first of the newly defined

terms is ``FRA Safety Inspector.'' It is defined to mean an FRA safety

inspector, a State inspector participating in railroad safety

investigative and surveillance activities under Part 212 of this

chapter, or any other official duly authorized by FRA. The term

``railroad'' is defined as it appears in the recodification of the

provisions of law formerly contained in the Safety Act. The term

``Federal railroad safety laws'' includes the provisions of law that

before their repeal and reenactment in title 49 of the U.S. Code were

contained in the Safety Act, the Hazmat Act, SFTA, and those laws

transferred to the jurisdiction of the Secretary of Transportation by

subsections (e)(1), (2), and (6)(A) of section 6 of the DOT Act. Those

laws which were transferred include, but are not limited to, the Safety

Appliance Acts, the Locomotive Inspection Act, the Accident Reports

Act, the Hours of Service Act, and the Signal Inspection Act. In

addition, the term ``Federal railroad safety laws'' encompasses the

rules, regulations, orders, and standards issued pursuant to the above

provisions of law.

As discussed elsewhere in this preamble, FRA has decided to limit

the applicability of the final rule to railroads only. Accordingly, the

term ``responsible company'' has been eliminated.

Section 209.401 describes the purpose and scope of the remedial

actions reporting regulations. FRA seeks to prevent and avoid accidents

and injuries that could result from a railroad's failure to remedy

certain violations of the Federal railroad safety laws that have been

recommended for the assessment of a civil penalty. The rules require a

railroad notified by an FRA Safety Inspector both that assessment of a

civil penalty will be recommended for a failure to comply with a

provision of the Federal railroad safety laws and that a remedial

actions report must be submitted, to report to the inspector actions

taken to remedy that failure. The railroad must report within 30 days

after the end of the month in which it receives such notification.

In response to AAR's request, FRA has added new subsection (d) to

Sec. 209.401 to clarify that FRA requires the submission of a remedial

actions report from a railroad against whom a civil penalty is

recommended only for a failure to comply that could literally and

specifically be corrected by that railroad. For completed or past

transactions that can no longer be remedied (e.g., permitting an

engineer to work over 12 hours in violation of the Federal hours of

service laws), FRA expects the railroad against whom a civil penalty is

recommended to reassess its own overall policy and attitude toward

future compliance, perhaps by reallocating its resources or providing

additional employee training. In all these situations, a civil penalty

has already been recommended as an incentive toward such generally

responsive actions. Accordingly, to require a railroad to inform FRA of

remedial actions taken in response to a particular violation that can

no longer be remedied by that railroad would be superfluous.

Accordingly, a railroad that has delivered a freight car in

interchange with a defective wheel that FRA identifies to a receiving

railroad as requiring repair might be recommended for the assessment of

a civil penalty, but the offering railroad would not be required to

submit a remedial actions report to FRA for this completed transaction.

However, if the receiving railroad is recommended for the assessment of

a civil penalty, it would be required to submit a report because the

nature of its violation poses an ongoing risk to rail safety. Of

course, for purposes of resource allocation with respect to future FRA

inspection and enforcement activity, FRA welcomes the receipt of

remedial actions reports from all entities (including railroads and

shippers of hazardous materials) on a voluntary basis when the FRA

Safety Inspector checks the ``Optional Box'' on the inspection report.

However, no entity will be penalized for failing to submit a

noncompulsory report.

Section 209.403 defines the applicability of these regulations. The

final regulations do not expand the number of entities affected by the

reporting requirement beyond the single category required by the

provisions of law formerly contained in the RSERA, i.e., all railroads

receiving written notification from an FRA Safety Inspector both that a

recommendation for the assessment of a civil penalty is being made and

that a remedial actions report must be submitted. The primary impact of

this change from the proposed rule is that hazardous materials shippers

over which FRA exercises enforcement authority will not be required to

report their remedial actions to the inspector. While the regulations

do not directly apply to individuals, as the penalty provision in

Sec. 209.409 makes clear, any individual who willfully thwarts the

reporting provisions of the proposed rule would be held individually

liable for the violation.

Section 209.405(a) requires that upon receipt of written

notification on Form FRA F 6180.96 from an FRA Safety Inspector both

that assessment of a civil penalty will be recommended for a failure to

comply with a provision of the Federal railroad safety laws and that a

remedial actions report must be submitted, the railroad shall report to

the inspector all actions taken to remedy that failure. The railroad

shall have 30 days after the calendar month in which the notification

is received to submit this report to the inspector in writing. The duty

to report to the inspector is not triggered merely by receiving written

notification from the inspector that assessment of a civil penalty will

be recommended, but only in conjunction with receiving written

notification from the inspector that a remedial actions report must be

submitted.

Since a recommendation for the assessment of a civil penalty must

be made before submission of a remedial actions report is required, the

duty would never arise merely upon notification that a defect has been

discovered. Alternatively, if a recommendation for the assessment of a

civil penalty is made and a railroad receives written notification that

a remedial actions report must be submitted, but no civil penalty is

later assessed either for policy or evidentiary reasons, the duty to

report remedial actions taken pursuant to this section still exists.

Accordingly, if the railroad is ultimately not required to pay a civil

penalty for the underlying alleged violation, the railroad would still

be liable for a civil penalty under Sec. 209.405 for failing to file a

required remedial actions report regarding the underlying alleged

violation.

Written notification that the submission of a remedial actions

report is required will occur only when a failure to comply with a

provision of a Federal railroad safety law for which the assessment of

a civil penalty is recommended falls into one of three general

categories. The three general categories consist of (i) physical

defects, (ii) recordkeeping and reporting violations, and (iii) filing

violations. These categories represent types of violations that could

still pose ongoing risks to rail safety if left uncorrected and/or can

actually be specifically corrected. The obligation to determine whether

a particular failure recommended for the assessment of a civil penalty

triggers the requirement to submit a remedial actions report rests

totally with FRA. Moreover, since a railroad's duty to submit a

remedial actions report arises only upon specific notification to this

effect, no violation can occur under this section unless such

notification is properly provided by FRA.

The ASLRA commented that since circumstances vary as to what

constitutes a violation, FRA Safety Inspectors must receive clear

guidance as to when a violation requires the submission of a remedial

actions report. The commenter argues that without such guidance an

inspector might impose the reporting requirement on all categories of

violations, not just for the three general categories of violations

discussed earlier. FRA is aware of the potential for inconsistent

enforcement of the reporting regulations by its inspectors, and intends

to provide them with comprehensive training concerning the types and

circumstances of violations that require the submission of remedial

actions reports.

The 30-day time period is merely provided for the administrative

convenience of the railroad, so as to allow sufficient time to report

its remedial actions by filling out the form provided to it. The pre-

existing duty to correct the defect or take other appropriate remedial

action remains the same as it was before the effective date of these

regulations. Accordingly, a railroad would be subject to a new

recommendation for the assessment of a civil penalty for a willful

violation if, for example, it operated a freight car subject to the

Freight Car Safety Standards, except under the provisions of 49 CFR

215.9, knowing it to be defective, but with the intent to delay making

repairs until the end of the 30-day reporting deadline. Indeed, under

49 U.S.C. 21301 (formerly contained in Sec. 209(c) of the Safety Act),

each day the violation continued would constitute a separate offense.

In an instance where the FRA Safety Inspector hand delivers the written

notification directly to an appropriate official, such as a foreman,

trainmaster, or supervisor on duty at the location where the failure to

comply with the provision of a Federal railroad safety law is either

found or discovered, the date of actual delivery will be the operative

date for reporting purposes. This provision is intended to affect the

same categories of railroads that currently receive notification from

FRA either that a defect exists and/or that a recommendation for the

assessment of a civil penalty is being made. A railroad receiving

written notification by first class mail that a recommendation for the

assessment of a civil penalty is being made would be deemed to have

received such notification five business days after the date of

mailing, as determined by the date accompanying the signature of the

safety inspector.

This subsection also requires that the railroad reporting remedial

actions shall not simply indicate that corrective actions were taken,

but shall select the appropriate reporting code to indicate what

actions were taken, including the date of corrective actions. To take

an example from the accident/incident reporting regulations, if a

railroad fails to submit to FRA a monthly report of railroad accidents/

incidents within 30 days after the expiration of the month during which

the accident/incident occurred, an example of remedial action would be

to file a late report with FRA for the relevant month. The railroad

would select the remedial action code ``Report filed.'' See 49 CFR

225.11 and 225.13. Or if, under the Railroad Operating Rules, a

railroad required to file with the Federal Railroad Administrator one

copy of its code of operating rules, timetables, and timetable

instructions failed to do so, an example of remedial action would be to

file the copy of the relevant documents as soon as possible after

receiving the notification. The railroad would select the remedial

action code ``Document filed.'' See 49 CFR 217.7.

Unless the railroad selects the remedial action code ``other

remedial actions,'' submission of a brief narrative description will be

optional. Although a railroad selecting ``other remedial actions'' is

required to describe its remedial actions in a somewhat precise manner,

FRA does not expect a lengthy and technical step-by-step explanation of

what remedial actions were taken.

Section 209.405(a)(3) provides that each railroad shall return the

form only to the FRA Safety Inspector whose name and address are so

designated. Although FRA presently employs a different type of

inspection report specific to each discipline, the reporting form to be

provided by FRA is the current version of a new inspection report (a

copy of which is appended to this final rule) for use by all railroads

required to report their remedial actions. The FRA inspector will

submit a copy of the completed remedial actions report form to FRA's

Office of Chief Counsel for use during the penalty assessment and

negotiation process. It is anticipated that the available remedial

action codes along with the brief narrative section (when applicable)

will be sufficient to report the remedial actions involved.

Accordingly, a railroad will not be permitted the option of submitting

its own version of a reporting form to FRA, even if it contains the

same information as the FRA form.

A railroad is expected to submit its remedial actions report to FRA

within the time limit specified in Sec. 209.405(a), even if the

railroad believes that a question exists as to factual elements

constituting a violation of the statute or regulation cited on the

inspection report. The only exception to this requirement concerns a

railroad unable either to initiate or complete remedial actions that

comply with the ``Delayed Reports'' requirement of Sec. 209.407. If a

railroad does contest the allegation, Sec. 209.405(b) permits the

railroad to explain its reasons on the remedial actions report form. To

illustrate, while FRA does not expect a railroad to make repairs to a

component part that the railroad does not believe is broken or

defective, Sec. 209.405(b) does require the railroad to explain what

actions it took to reach the conclusion that FRA's allegation was

incorrect. For example, consider a situation in which a railroad

disagrees with an inspector's conclusion that the height of a wheel

flange on a car, from the tread to the top of the flange, was 1\1/2\

inches or more, in violation of 49 C.F.R. 215.103(b). Rather than

select the category code corresponding to an actual repair job, the

railroad would be expected to discuss what actions it took to disprove

the inspector's conclusion. In response to SEPTA's concern, that by

requiring the reporting of remedial actions FRA is in reality obtaining

a guilty plea which interferes with the review and negotiations

process, FRA states in Sec. 209.405(b) that a railroad's failure to

raise all pertinent defenses on the remedial actions report does not

preclude it from doing so later in response to a penalty demand.

Section 209.407 sets forth in subsection (a) the procedure that

must be followed by a railroad if, upon receipt of written notification

from FRA both that assessment of a civil penalty will be recommended

for a failure by that railroad to comply with a provision of the

Federal railroad safety laws and that a remedial actions report must be

submitted, it is unable to either initiate and/or complete remedial

actions within the time limit set forth in Sec. 209.405. Each railroad

shall have 30 days after the calendar month in which the notification

is received to report to FRA in writing the reasons for such delay and

a good faith estimate of the date by which the remedial actions will be

completed. For purposes of determining the calendar month in which

written notification is received, the same analysis as applied to

Sec. 209.405(a) applies to this subsection as well. Further, as

explained in the analysis of Sec. 209.405(a), the 30-day time period is

provided for the administrative convenience of the railroad, and the

pre-existing duty to correct the defect or take other appropriate

remedial actions would remain the same as it was before the effective

date of these regulations.

This subsection also requires that the railroad reporting a delay

in either initiating and/or completing remedial actions in a timely

manner pursuant to Sec. 209.405, shall not simply indicate that

corrective actions could not be taken. It shall report to FRA with the

necessary level of specificity to indicate why these actions could not

be taken. This subsection makes clear that although FRA does not expect

a lengthy and technical step-by-step explanation of why remedial

actions could not be taken, the regulations are intended to force a

railroad to be somewhat precise in its report. Consider an example from

the Track Safety Standards: A railroad is informed that a

recommendation for the assessment of a civil penalty is being made

pursuant to 49 C.F.R. 213.109 for the failure of a 39-foot segment of

its track to have a sufficient number of crossties which in combination

will hold gage within the limits prescribed in Sec. 213.53(b). Under

the wording of this subsection, a written explanation to FRA merely

stating that ``the defect could not be corrected'' would be

insufficient. However, an explanation briefly stating either that ``no

crossties are currently in stock but will arrive within 45 days and be

installed within three days after arrival'' or ``no funds are currently

available to initiate repairs and track has been taken out of service;

repairs will be completed in 60 days when funds are expected to become

available'' would fulfill the regulatory requirement. However, if

immediately upon receiving written notification from FRA that a

remedial actions report must be submitted, a railroad in the above

example makes a business decision to permanently cease operations over

a segment of track, the appropriate section under which to report this

remedial action would be Sec. 209.405.

Section 209.407(a)(1) provides that each railroad shall submit its

explanation of the reasons for its delay in a manner that provides the

inspection report number, the inspection date, and the item number. A

photocopy of both sides of the Form FRA F 6180.96 on which the railroad

received notification may be used for this purpose. The railroad must

retain the original of Form FRA F 6180.96 and, as soon as it finally

takes all actions necessary to remedy its failure to comply with a

provision of the Federal railroad safety laws, submit it to FRA in

accordance with Sec. 209.407(b).

Section 209.407(a)(2) requires that upon completing all actions

necessary to remedy a failure to comply with a provision of the Federal

railroad safety laws, each railroad shall have 30 days after the

calendar month in which the actions are completed to report to FRA in

writing, in accordance with the remedial action code reporting

procedures referenced in Sec. 209.405(a) and (b).

FRA will expect a railroad to exercise good faith to determine the

date by which it will complete its remedial actions, and to do so as

promptly as possible. However, FRA has dropped the proposed requirement

of Sec. 209.407(c) concerning a showing of good cause by any railroad

failing to complete its remedial actions within 90 days of receiving

written notification of a failure to comply with a provision of the

Federal railroad safety laws.

As set forth in the discussion of Sec. 209.405(b), Sec. 209.407(b)

requires a railroad to submit its remedial actions report to FRA under

the provisions of Sec. 209.405 even if the railroad believes that a

question exists as to factual elements constituting a violation of the

statute or regulation cited on the inspection report. As also set forth

in the analysis of Sec. 209.405(b), if a railroad does contest the

allegation it may explain its reasons on the remedial action report

form and later present all pertinent defenses in response to a penalty

demand.

Section 209.409 identifies the penalties FRA may impose upon any

person, including a railroad, that violates any requirement of this

subpart. These penalties are authorized by 49 U.S.C. 21301, 21304, and

21311 (formerly contained in Sec. 209 of the Safety Act). The penalty

provision parallels penalty provisions included in numerous other

regulations issued by FRA under authority of the provisions of law

formerly contained in the Safety Act. Essentially, any person who

violates any requirement of this subpart or causes the violation of any

such requirement will be subject to a civil penalty of at least $500

and not more than $10,000 per violation. Civil penalties may be

assessed against individuals only for willful violations, and where a

grossly negligent violation or a pattern of repeated violations creates

an imminent hazard of death or injury to persons, or causes death or

injury, a penalty not to exceed $20,000 per violation may be assessed.

In addition, each day a violation continues will constitute a separate

offense. Finally, a person may be subject to criminal penalties for

knowingly and willfully falsifying reports required by these

regulations. FRA believes that the inclusion of penalty provisions for

failure to comply with the regulations is important in ensuring that

compliance is achieved not only in terms of submitting the relevant

reports of remedial actions taken, but also in development of more

accurate inspection and compliance data so as to better determine if

railroads are minimizing and correcting safety problems.

Environmental Impact

FRA has evaluated these final regulations in accordance with its

procedures for ensuring full consideration of the potential

environmental impacts of FRA actions, as required by the National

Environmental Policy Act (42 U.S.C. 4321 et seq.) and related

directives. These final regulations meet the criteria that establish

this as a non-major action for environmental purposes.

Regulatory Impact

Executive Order l2866 and DOT Regulatory Policies and Procedures

This final rule has been evaluated in accordance with existing

policies and procedures. It is considered to be non-significant under

both Executive Order 12866 and the DOT policies and procedures (44 FR

11034; February 26, 1979). FRA has prepared and placed in the docket a

regulatory evaluation addressing the economic impact of the final rule.

It may be inspected and photocopied at Office of Chief Counsel, Federal

Railroad Administration, 400 Seventh Street, S.W., Room 8201,

Washington, D.C. 20590. Photocopies may also be obtained by submitting

a written request to the FRA Docket Clerk at the above address.

FRA believes that, in general, the railroad industry performs

repairs or takes other remedial actions in response to notification by

FRA of defects and violations in a timely and complete manner.

Especially where violations have been filed, failure to take corrective

action could lead to vastly increased penalties and even individual

liability. These regulations may provide some additional incentive to

take such corrective action where it otherwise might not be taken, but

that potential benefit cannot be quantified. However, it is doubtful

that these regulations alone will reduce the number of defective

conditions in the industry, or that they will materially reduce the

rate of train accidents. Further, these regulations will not change the

manner in which FRA enforces the other Federal railroad safety laws;

the types of violations for which safety inspectors currently recommend

the assessment of a civil penalty will remain the same.

At this time, FRA is unable to quantify any direct or indirect

safety benefit from this final rule. The potential benefit of this rule

comes about by increasing the ability of the railroad industry to

manage quality control, as well as by improving FRA's ability to

efficiently and effectively manage its inspection resources. It is

hoped that railroads, after being required by these regulations to

report remedial actions, will create their own internal databases of

these reports. Although not required by these regulations, an internal

analysis of this information, in conjunction with other resource

management data, might lead railroad management to take actions

designed to reduce or effectively respond to defective conditions.

The regulations will assist FRA in monitoring follow-up actions by

railroads with respect to conditions sufficiently serious to warrant

possible future civil penalty actions. Moreover, the regulations hold

particular potential for reducing the amount of time safety inspectors

spend returning to an inspection location to check on the status of a

violation for which a violation report had previously been submitted.

Further, the regulations permit FRA to develop more comprehensive

safety data, better utilize its limited resources, and consistently

treat all similarly situated violators of the Federal railroad safety

laws.

The extent to which these potential benefits will be realized will

become clearer over time as both the railroads and FRA learn how to

best use the data required by these regulations. What appears clear at

this time, however, is that it will not take the realization of many

benefits to offset the relatively insignificant cost to society of

approximately $71,000 per year ($63,121 to the railroad industry each

year to fill out the required remedial actions reports and

approximately $7,700 to FRA to review the reports).

Regulatory Flexibility Act

The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.)

requires a review of rules to assess their impact on small entities. In

reviewing the economic impact of the rule, FRA has concluded that it

will have a minimal economic impact on a minor number of small

entities. There are no direct or indirect economic impacts for small

units of government, businesses, or other organizations; therefore, it

is certified that this rule will not have a significant economic impact

on a substantial number of small entities under the provisions of the

Regulatory Flexibility Act. State rail safety agencies remain free to

participate in the administration of FRA's rules, but are not required

to do so.

Federalism Implications

This rule does not have substantial direct effects on the States,

on the relationship between the national government and the States, or

on the distribution of power and responsibilities among the various

levels of government. Therefore, in accordance with Executive Order

12612, FRA has determined that this rule does not have sufficient

federalism implications to warrant the preparation of a Federalism

Assessment.

Paperwork Reduction Act

This final rule has information collection requirements in

Secs. 209.405 and 209.407. Section 209.405 provides that when a

railroad is notified in writing by an FRA Safety Inspector that a civil

penalty will be recommended for a failure to comply with a provision of

the Federal railroad safety laws, and that a remedial actions report

must be submitted, the railroad must report to FRA all actions taken to

remedy that failure. Section 209.407 has an additional information

collection requirement, stating that any railroad unable to either

initiate and/or complete remedial actions within the time limit set

forth in Sec. 209.405 shall submit a written explanation of the reasons

for the delay and a good faith estimate of the date by which the

remedial actions will be completed. FRA is submitting this information

collection requirement to the Office of Management and Budget for

approval under the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et

seq.). The public reporting burden for this collection of information

is estimated to average approximately 23 minutes per response,

including the time for reviewing instructions, searching existing data

sources, gathering and maintaining the data needed, and completing and

reviewing the collection of information. A Federal Register notice will

be published when Paperwork Reduction Act approval is obtained.

List of Subjects in 49 CFR Part 209

Railroad safety, Railroad remedial actions reporting rules.

The Final Rule

In consideration of the foregoing, chapter II, subtitle B, of title

49, Code of Federal Regulations is amended as follows:

PART 209--[AMENDED]

1. The authority citation for part 209 is revised to read as

follows:

Authority: 49 U.S.C. subtitle V, part A; 49 U.S.C. chap. 51 and

57; Pub. L. 103-272; 49 U.S.C. 20301, 20303, 20304, 21302, and

21304; 49 U.S.C. 21302 and 21304; 49 U.S.C. 21302, 21304, 21311, and

20901; 49 U.S.C. 21303, 21304, and 21102; 49 U.S.C. 20102, 20103,

20107, 20108, 20110-20114, 20131-20143, 21301, 21302, 21304, 21311,

and 24902; 49 U.S.C. 103(c); 49 U.S.C. 21302 and 21304; 49 U.S.C.

20302, 20305, 20502-20505, 20701-20703, 20901, 20902, 21302, and

80504; 49 U.S.C. 5103, 5104, 5110, 5112, 5120, and 5123-5125; and 49

CFR 1.49(c), (d), (f), (g), (m), (s), (ee), (gg), and internal

delegations.

2. By revising Sec. 209.3 to read as follows:

Sec. 209.3. Definitions.

As used in this part--

Administrator means the Administrator of FRA, the Deputy

Administrator of FRA, or the delegate of either.

Chief Counsel means the Chief Counsel of FRA or his or her

delegate.

Day means calendar day.

Federal railroad safety laws means the provisions of law generally

at 49 U.S.C. subtitle V, part A or 49 U.S.C. chap. 51 or 57 and the

rules, regulations, orders, and standards issued under any of those

provisions. See Pub. L. 103-272 (1994). Before recodification, these

statutory provisions were contained in the following statutes: (i) the

Federal Railroad Safety Act of 1970 (Safety Act) (49 U.S.C. 20101-

20117, 20131, 20133-20141, 20143, 21301, 21302, 21304, 21311, 24902,

and 24905, and Secs. 4(b)(1), (i), and (t) of Pub. L. 103-272, formerly

codified at 45 U.S.C. 421, 431 et seq.); (ii) the Hazardous Materials

Transportation Act (Hazmat Act) (49 U.S.C. 5101 et seq., formerly

codified at 49 App. U.S.C. 1801 et seq.); (iii) the Sanitary Food

Transportation Act of 1990 (SFTA) (49 U.S.C. 5713, formerly codified at

49 App. U.S.C. 2801 (note)); and those laws transferred to the

jurisdiction of the Secretary of Transportation by subsection (e)(1),

(2), and (6)(A) of section 6 of the Department of Transportation Act

(DOT Act), as in effect on June 1, 1994 (49 U.S.C. 20302, 21302, 20701-

20703, 20305, 20502-20505, 20901, 20902, and 80504, formerly codified

at 49 App. U.S.C. 1655(e)(1), (2), and (6)(A)). 49 U.S.C. 20111 and

20109, formerly codified at 45 U.S.C. 437 (note) and 441(e). Those laws

transferred by the DOT Act include, but are not limited to, the

following statutes: (i) the Safety Appliance Acts (49 U.S.C. 20102,

20301, 20302, 20304, 21302, and 21304, formerly codified at 45 U.S.C.

1-14, 16); (ii) the Locomotive Inspection Act (49 U.S.C. 20102, 20701-

20703, 21302, and 21304, formerly codified at 45 U.S.C. 22-34); (iii)

the Accident Reports Act (49 U.S.C. 20102, 20701, 20702, 20901-20903,

21302, 21304, and 21311, formerly codified at 45 U.S.C. 38-43); (iv)

the Hours of Service Act (49 U.S.C. 20102, 21101-21107, 21303, and

21304, formerly codified at 45 U.S.C. 61-64b); and (v) the Signal

Inspection Act (49 U.S.C. 20102, 20502-20505, 20902, 21302, and 21304,

formerly codified at 49 App. U.S.C. 26).

FRA means the Federal Railroad Administration, U.S. Department of

Transportation.

FRA Safety Inspector means an FRA safety inspector, a state

inspector participating in railroad safety investigative and

surveillance activities under Part 212 of this chapter, or any other

official duly authorized by FRA.

Motion means a request to a presiding officer to take a particular

action.

Person generally includes all categories of entities covered under

1 U.S.C. 1, including but not limited to the following: a railroad; any

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; however,

person, when used to describe an entity that FRA alleges to have

committed a violation of the provisions of law formerly contained in

the Hazardous Materials Transportation Act or contained in the

Hazardous Materials Regulations, has the same meaning as in 49 U.S.C.

5102(9) (formerly codified at 49 App. U.S.C. 1802(11)), i.e., an

individual, firm, copartnership, corporation, company, association,

joint-stock association, including any trustee, receiver, assignee, or

similar representative thereof, or government, Indian tribe, or

authority of a government or tribe when offering hazardous material for

transportation in commerce or transporting hazardous material to

further a commercial enterprise, but such term does not include the

United States Postal Service or, for the purposes of 49 U.S.C. 5123-

5124 (formerly contained in Secs. 110 and 111 of the Hazardous

Materials Transportation Act and formerly codified at 49 App. U.S.C.

1809-1810), a department, agency, or instrumentality of the Federal

Government.

Pleading means any written submission setting forth claims,

allegations, arguments, or evidence.

Presiding Officer means any person authorized to preside over any

hearing or to make a decision on the record, including an

administrative law judge.

Railroad means any form of nonhighway ground transportation that

runs on rails or electro-magnetic guideways, including (i) commuter or

other short-haul railroad passenger service in a metropolitan or

suburban area and commuter railroad service that was operated by the

Consolidated Rail Corporation on January 1, 1979; and (ii) high speed

ground transportation systems that connect metropolitan areas, without

regard to whether those systems use new technologies not associated

with traditional railroads; but does not include rapid transit

operations in an urban area that are not connected to the general

railroad system of transportation.

Respondent means a person upon whom FRA has served a notice of

probable violation, notice of investigation, or notice of proposed

disqualification.

3. By adding a new Subpart E--Reporting of Remedial Actions, to

read as follows:

Subpart E--Reporting of Remedial Actions

Sec.

209.401. Purpose and scope.

209.403. Applicability.

209.405. Reporting of remedial actions.

209.407. Delayed reports.

209.409. Penalties.

(a) The purpose of this subpart is to prevent accidents and

casualties arising from the operation of a railroad that result from a

railroad's failure to remedy certain violations of the Federal railroad

safety laws for which assessment of a civil penalty has been

recommended.

(b) To achieve this purpose, this subpart requires that if an FRA

Safety Inspector notifies a railroad both that assessment of a civil

penalty will be recommended for its failure to comply with a provision

of the Federal railroad safety laws and that a remedial actions report

must be submitted, the railroad shall report to the FRA Safety

Inspector, within 30 days after the end of the calendar month in which

such notification is received, actions taken to remedy that failure.

(c) This subpart does not relieve the railroad of the underlying

responsibility to comply with a provision of the Federal railroad

safety laws. The 30-day period after the end of the calendar month in

which notification is received is intended merely to provide the

railroad with an opportunity to prepare its report to FRA, and does not

excuse continued noncompliance.

(d) This subpart requires the submission of remedial actions

reports for the general categories of physical defects, recordkeeping

and reporting violations, and filing violations, where the railroad can

literally and specifically correct a failure to comply with a provision

of the Federal railroad safety laws, as reasonably determined by the

FRA Safety Inspector. No railroad is required to submit a report for a

failure involving either a completed or past transaction or a

transaction that it can no longer remedy.

Sec. 209.403. Applicability.

This subpart applies to any railroad that receives written

notification from an FRA Safety Inspector both (i) that assessment of a

civil penalty will be recommended for its failure to comply with a

provision of the Federal railroad safety laws and (ii) that it must

submit a remedial actions report.

Sec. 209.405. Reporting of remedial actions.

(a) Except as provided in Sec. 209.407, each railroad that has

received written notification on Form FRA F 6180.96 from an FRA Safety

Inspector both that assessment of a civil penalty will be recommended

for the railroad's failure to comply with a provision of the Federal

railroad safety laws and that it must submit a remedial actions report,

shall report on this form all actions that it takes to remedy that

failure. The railroad shall submit the completed form to the FRA Safety

Inspector within 30 days after the end of the calendar month in which

the notification is received.

(1) Date of receipt of notification. If the FRA Safety Inspector

provides written notification to the railroad by first class mail, then

for purposes of determining the calendar month in which notification is

received, the railroad shall be presumed to have received the

notification five business days following the date of mailing.

(2) Completion of Form FRA F 6180.96, including selection of

railroad remedial action code. Each railroad shall complete the

remedial actions report in the manner prescribed on the report form.

The railroad shall select the one remedial action code on the reporting

form that most accurately reflects the action or actions that it took

to remedy the failure, such as, repair or replacement of a defective

component without movement, movement of a locomotive or car for repair

(where permitted) and its subsequent repair, completion of a required

test or inspection, removal of a noncomplying item from service but not

for repair (where permitted), reduction of operating speed (where

sufficient to achieve compliance), or any combination of actions

appropriate to remedy the noncompliance cited. Any railroad selecting

the remedial action code ``other remedial actions'' shall also furnish

FRA with a brief narrative description of the action or actions taken.

(3) Submission of Form FRA F 6180.96. The railroad shall return the

form by first class mail to the FRA Safety Inspector whose name and

address appear on the form.

(b) Any railroad concluding that the violation alleged on the

inspection report may not have occurred may submit the remedial actions

report with an appropriate written explanation. Failure to raise all

pertinent defenses does not foreclose the railroad from doing so in

response to a penalty demand.

Sec. 209.407. Delayed reports.

(a) If a railroad cannot initiate or complete remedial actions

within 30 days after the end of the calendar month in which the

notification is received, it shall--

(1) Prepare, in writing, an explanation of the reasons for such

delay and a good faith estimate of the date by which it will complete

the remedial actions, stating the name and job title of the preparer

and including either:

(i) A photocopy of both sides of the Form FRA F 6180.96 on which

the railroad received notification; or

(ii) The following information:

(A) The inspection report number;

(B) The inspection date; and

(C) The item number; and

(2) Sign, date, and submit such written explanation and estimate,

by first class mail, to the FRA Safety Inspector whose name and address

appear on the notification, within 30 days after the end of the

calendar month in which the notification is received.

(b) Within 30 days after the end of the calendar month in which all

such remedial actions are completed, the railroad shall report in

accordance with the remedial action code procedures referenced in

Sec. 209.405(a). The additional time provided by this section for a

railroad to submit a delayed report shall not excuse it from liability

for any continuing violation of a provision of the Federal railroad

safety laws.

Sec. 209.409. Penalties.

Any person who violates any requirement of this subpart or causes

the violation of any such requirement is subject to a civil penalty of

at least $500 and not more than $10,000 per violation, except that:

Penalties may be assessed against individuals only for willful

violations, and, where a grossly negligent violation or a pattern of

repeated violations has created an imminent hazard of death or injury

to persons, or has caused death or injury, a penalty not to exceed

$20,000 per violation may be assessed. Each day a violation continues

shall constitute a separate offense. A person may also be subject to

the criminal penalties provided for in 49 U.S.C. 21311 (formerly

codified in 45 U.S.C. 438(e)) for knowingly and willfully falsifying

reports required by this subpart.

Issued in Washington, D.C., on August 16, 1994.

Note: The following Inspection Report/Remedial Actions Report

will not appear in the Code of Federal Regulations.

Jolene M. Molitoris,

Administrator.

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[FR Doc. 94-20722 Filed 8-23-94; 8:45 am]

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