Document ID: FRA-2011-0028-0016
Agency: fra
Document Type: Rule
Title: Positive Train Control Systems
Posted Date: 2012-05-14T04:00Z

[Federal Register Volume 77, Number 93 (Monday, May 14, 2012)]
[Rules and Regulations]
[Pages 28285-28305]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-11706]

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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

49 CFR Part 236

[Docket No. FRA-2011-0028, Notice No. 3]
RIN 2130-AC27

Positive Train Control Systems (RRR)

AGENCY: Federal Railroad Administration (FRA), Department of 
Transportation (DOT).

ACTION: Final rule.

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SUMMARY: FRA amends the regulations implementing a provision of the 
Rail Safety Improvement Act of 2008 that requires certain passenger and 
freight railroads to install positive train control (PTC) systems. This 
final rule removes regulatory provisions that require railroads to 
either conduct further analyses or meet certain risk-based criteria in 
order to avoid PTC system implementation on track segments that do not 
transport poison- or toxic-by-inhalation hazardous (PIH) materials 
traffic and are not used for intercity or commuter rail passenger 
transportation as of December 31, 2015.

DATES: This final rule is effective July 13, 2012. Petitions for 
reconsideration must be received on or before July 13, 2012. Petitions 
for reconsideration will be posted in the docket for this proceeding. 
Comments on any submitted petition for reconsideration must be received 
on or before August 27, 2012.

ADDRESSES: Petitions for reconsideration and comments on petitions for 
reconsideration: Any petitions for reconsideration or comments on 
petitions for reconsideration related to Docket No. FRA-2011-0028, may 
be submitted by any of the following methods:
     Web site: The Federal eRulemaking Portal, 
www.regulations.gov. Follow the Web site's online instructions for 
submitting comments.
     Fax: 202-493-2251.
     Mail: Docket Management Facility, U.S. Department of 
Transportation, 1200 New Jersey Avenue SE., W12-140, Washington, DC 
20590.
     Hand Delivery: Room W12-140 on the Ground level of the 
West Building, 1200 New Jersey Avenue SE., Washington, DC between 9 
a.m. and 5 p.m. Monday through Friday, except Federal holidays.

    Instructions: All submissions must include the agency name and 
docket number or Regulatory Identification Number (RIN) for this 
rulemaking. Note that all petitions received will be posted without 
change to www.regulations.gov including any personal information. 
Please see the Privacy Act heading in the SUPPLEMENTARY INFORMATION 
section of this document for Privacy Act information related to any 
submitted petitions, comments, or materials.
    Docket: For access to the docket to read background documents or 
comments received, go to www.regulations.gov or to Room W12-140 on the 
Ground level of the West Building, 1200 New Jersey Avenue SE., 
Washington, DC between 9 a.m. and 5 p.m. Monday through Friday, except 
Federal holidays.

FOR FURTHER INFORMATION CONTACT: Thomas McFarlin, Office of Safety 
Assurance and Compliance, Staff Director, Signal & Train Control 
Division, Federal Railroad Administration, Mail Stop 25, West Building 
3rd Floor West, Room W35-332, 1200 New Jersey Avenue SE., Washington, 
DC 20590 (telephone: 202-493-6203); or Jason Schlosberg, Trial 
Attorney, Office of Chief Counsel, RCC-10, Mail Stop 10, West Building 
3rd Floor, Room W31-207, 1200 New Jersey Avenue SE., Washington, DC 
20590 (telephone: 202-493-6032).

SUPPLEMENTARY INFORMATION: FRA is issuing this final rule to amend the 
regulatory requirements contained in 49 CFR part 236, subpart I, 
related to a railroad's ability to remove track segments from the 
necessity of implementing PTC systems as mandated by Section 104 of the 
Railroad Safety Improvement Act of 2008, Public Law 110-432, 122 Stat. 
4854 (Oct. 16, 2008) (codified at 49 U.S.C. 20157) (hereinafter 
``RSIA'') based on the track segments not carrying PIH traffic as of 
December 31, 2015.

Table of Contents for Supplementary Information

I. Executive Summary
II. Background
    A. Regulatory History
    B. Litigation and Congressional Hearings
III. Public Hearing, Comments, and FRA Response
    A. Routing Concerns and Shipper Participation
    B. Common Carrier Obligations
    C. Passenger Rail Impact
    D. Cost-Benefit Analysis
    1. Trade Associations
    2. AAR
IV. Section-by-Section Analysis
V. Regulatory Impact and Notices
    A. Executive Orders 12866 and 13563 and DOT Regulatory Policies 
and Procedures
    B. Regulatory Flexibility Act and Executive Order 13272
    C. Paperwork Reduction Act
    D. Federalism Implications
    E. Environmental Impact
    F. Unfunded Mandates Reform Act of 1995
    G. Energy Impact
    H. Privacy Act

I. Executive Summary

    For years, FRA has supported the implementation of positive train 
control (PTC) systems, forecasting substantial benefits of advanced 
train control technology in supporting a variety of business and safety 
purposes. However, FRA repetitively noted that an immediate regulatory 
mandate for PTC system implementation could not be justified based upon 
normal cost-benefit principals relying on direct safety benefits. In 
2005, FRA promulgated regulations providing for the voluntary 
implementation of processor-based signal and train control systems. See 
70 FR 11,052 (Mar. 7, 2005) (codified at 49 CFR part 236, subpart H).
    As a consequence of the number and severity of certain very public 
accidents, coupled with a series of other less publicized accidents, 
Congress passed RSIA mandating the implementation of PTC systems on 
lines meeting certain thresholds. RSIA requires PTC system 
implementation on all Class I railroad lines that carry PIH materials 
and 5 million gross tons or more of annual traffic, and on any 
railroad's main line tracks over which intercity or commuter rail 
passenger train service is regularly provided. In addition, RSIA 
provided FRA with the authority to require PTC system implementation on 
any other line.
    In accordance with its statutory authority, FRA's subsequent final 
rule, issued January 15, 2010, and amended on September 27, 2010, 
potentially required PTC system implementation on certain track 
segments that carried PIH traffic and 5 million gross tons or more of 
annual traffic in 2008 but that will not, as of December 31, 2015, 
carry PIH traffic, and will not be used for intercity or commuter rail 
passenger transportation that otherwise requires PTC installation under 
the rule. Per the regulation, the determination would be based upon 
whether the subject track segment would pass what has been called the 
alternative route analysis and the residual risk analysis (the ``two 
qualifying tests''), which are described below.

[[Page 28286]]

    Upon issuance of the PTC final rule, the Association of American 
Railroads (AAR) filed suit in the U.S. Court of Appeals for the 
District of Columbia Circuit challenging the two qualifying tests 
provisions of the final rule. After the parties filed their briefs, 
they executed a settlement agreement (Settlement Agreement). In the 
Settlement Agreement, FRA agreed to issue a notice of proposed 
rulemaking (NPRM) proposing to amend the PTC rule to eliminate the two 
qualifying tests and to also issue a separate NPRM that will address 
the issues of how to handle en route failures of PTC-equipped trains, 
circumstances under which a signal system may be removed after PTC 
system installation, and whether yard movements and certain other train 
movements should qualify for a de minimis exception to the PTC rule. 
The Settlement Agreement further provided that FRA would consider 
public comments on the NPRMs in determining whether to amend the PTC 
rule. The Settlement Agreement also provides that upon conclusion of 
the current rulemaking, the parties will determine whether to file a 
joint motion to dismiss with prejudice or advise the Court that they 
are unable to resolve all issues involved in the court suit.
    Consistent with the Settlement Agreement, FRA issued an NPRM in 
this proceeding on August 24, 2011, proposing to eliminate the two 
qualifying tests. Having considered the public comments on the NPRM, 
FRA is promulgating this final rule eliminating the two qualifying 
tests. FRA is in the process of developing the second NPRM which will 
address other possible amendments to the PTC rule.
    For the first 20-years of this final rule, the estimated quantified 
benefits to the rail industry due to the regulatory relief total 
approximately $620 million discounted at 7 percent and $818 million 
discounted at 3 percent. Substantial cost savings will accrue largely 
from not installing PTC system wayside components along approximately 
10,000 miles of track. Although these rail lines would forego some risk 
reduction, the reductions will likely be relatively small since these 
lines pose a much lower risk of accidents because they generally do not 
carry passenger trains or PIH materials, and generally have lower 
accident exposure. The analysis shows that if the assumptions are 
correct, the savings of the proposed action far outweigh the cost. The 
following table presents the expected quantified benefits:

                     Benefits (20-Year, Discounted)
 
------------------------------------------------------------------------
              Costs avoided                 7% Discount     3% Discount
------------------------------------------------------------------------
Reduced Mitigation Costs, Including          $91,793,822    $121,119,324
 Maintenance............................
Reduced Wayside Costs, Including             515,695,631     680,445,643
 Maintenance............................
Reduced Locomotive Costs, Including           12,479,834      16,466,785
 Maintenance............................
                                         -------------------------------
    Total Benefits......................     619,969,287     818,031,752
------------------------------------------------------------------------

    For the same 20-year period, the estimated quantified cost totals 
$26.7 million discounted at 7 percent and $39.3 million discounted at 3 
percent. The costs associated with the regulatory relief result from 
accidents that will not be prevented due to the affected track segments 
not being equipped with a PTC system. A substantial part of the 
accident reduction that FRA expects from PTC systems required under 
prior rules comes from reducing high-consequence accidents involving 
passenger trains or the release of PIH materials. FRA believes that the 
lines impacted by this final rule pose significantly less risk because 
they generally do not carry passenger trains or PIH materials and 
generally have lower accident exposure. The following tables present 
the expected total costs of the final rule as well as the breakdown of 
the costs by element:

                       Costs (20-Year, Discounted)
------------------------------------------------------------------------
         Foregone reductions in             7% Discount     3% Discount
------------------------------------------------------------------------
Fatality Prevention.....................     $11,453,106     $16,860,327
Injury Prevention.......................       4,254,484       6,263,104
Train Delay.............................         117,793         173,406
Property Damage.........................      10,163,835      14,962,367
Equipment Cleanup.......................         143,273         210,915
Environmental Cleanup...................         430,995         634,475
Evacuations.............................         138,780         204,301
                                         -------------------------------
    Total Costs.........................      26,702,267      39,308,896
------------------------------------------------------------------------

    FRA has also performed a sensitivity analysis for a high case 
(14,000 miles), expected case (10,000 miles), and low case (7,000 
miles).
    The net amounts for each case, subtracting the costs from the 
benefits, provide the following results:

------------------------------------------------------------------------
         Net societal benefits            7% Discount      3% Discount
------------------------------------------------------------------------
Expected Case (10,000 miles)..........     $593,267,020     $778,722,856
High Case (14,000 miles)..............      793,856,299    1,041,764,269
Low Case (7,000 miles)................      442,825,061      581,441,797
------------------------------------------------------------------------

[[Page 28287]]

    Further, the benefit-cost ratios under the scenarios analyzed range 
between 20:1 and 25:1.

------------------------------------------------------------------------
           Benefit-cost ratio               7% Discount     3% Discount
------------------------------------------------------------------------
Expected Case...........................           23.22           20.81
High Case...............................           22.24           19.93
Low Case................................           24.69           22.13
------------------------------------------------------------------------

II. Background

A. Regulatory History

    As a consequence of the number and severity of certain widely 
publicized accidents, coupled with a series of other accidents 
receiving less media attention, Congress passed RSIA, mandating 
implementation of PTC systems by December 31, 2015, on lines meeting 
certain specified criteria, and giving FRA authority to require the PTC 
system implementation on other lines. 75 FR 2598 (Jan. 15, 2010). Under 
RSIA, such PTC system implementation must be completed by each Class I 
railroad carrier and each entity providing regularly scheduled 
intercity or commuter rail passenger transportation on:

    (A) Its main line over which intercity rail passenger 
transportation or commuter rail passenger transportation, as defined 
in section 24102, is regularly provided;
    (B) its main line over which PIH hazardous materials, as defined 
in parts 171.8, 173.115, and 173.132 of title 49, Code of Federal 
Regulations, are transported; and
    (C) such other tracks as the Secretary may prescribe by 
regulation or order.

    49 U.S.C. 20157(a)(1). The statute further defined ``main line'' to 
mean:

    A segment or route of railroad tracks over which 5,000,000 or 
more gross tons of railroad traffic is transported annually, except 
that--
    (A) the Secretary may, through regulations under subsection (g), 
designate additional tracks as main line as appropriate for this 
section; and
    (B) for intercity rail passenger transportation or commuter rail 
passenger transportation routes or segments over which limited or no 
freight railroad operations occur, the Secretary shall define the 
term ``main line'' by regulation.

49 U.S.C. 20157(i)(2). To effectuate this goal, RSIA required the 
railroads to submit for FRA approval a PTC Implementation Plan (PTCIP) 
within 18 months (i.e., by April 16, 2010).
    The Secretary has delegated his authority under Sec.  20157 to the 
FRA Administrator. See 49 CFR 1.49(oo). Consistent with the statutory 
mandate of Sec.  20157, FRA published a final rule with a request for 
further comments on January 15, 2010, which established new regulations 
codified primarily in subpart I to 49 CFR part 236 (the ``PTC rule''). 
Subsequently, FRA received a number of petitions for reconsideration to 
the final rule and a number of comments responding to the request for 
further comments. In a letter dated July 8, 2010, FRA denied all of the 
petitions for reconsideration. On September 27, 2010, FRA issued a new 
final rule with clarifying amendments to the PTC rule.
    Under the current regulations applicable to the existing railroads, 
each PTCIP must have included the sequence and schedule in which track 
segments required to be equipped with a PTC system will be so equipped 
and the basis for those decisions. See 49 CFR 236.1011. This list of 
track segments must have included all track segments that fit the 
statutory criteria in calendar year 2008. See 49 CFR 236.1005(b)(1) and 
(b)(2).
    While the statutory PTC system implementation deadline is December 
31, 2015, FRA recognized a need for a starting point in time to 
determine where such implementation must occur. The final rule 
indicates that such a starting baseline should be based on the facts 
and data known in calendar year (CY) 2008 (the ``2008 baseline''). FRA 
determined, and continues to believe, that using CY 2009 data would 
have been difficult given the proximity to the PTCIP submission 
deadline and the notably atypical traffic levels caused by the down 
turn in the economy.
    Although each railroad's initial PTCIP includes a future PTC system 
implementation route map reflecting 2008 data, FRA recognized that PIH 
materials traffic levels and routings could change in the period 
between the end of 2008 and the start of 2016. Accordingly, in the 
event of changed circumstances, the PTC rule provides railroads with 
the option to file a request for amendment (RFA) of its PTCIP to not 
equip a track segment where the railroad was initially, but may no 
longer be, required to implement a PTC system. If a particular track 
segment included in a PTCIP no longer carries PIH materials traffic and 
applicable passenger traffic by the statutory implementation deadline, 
and its PTC system implementation is scheduled, but not yet 
effectuated, then the host railroad might avoid actual PTC system 
implementation by filing a supported RFA for FRA approval. Each such 
RFA must be supported with the data defined under Sec.  236.1005(b)(2) 
and (b)(4)(i), and satisfy the two qualifying tests that were 
promulgated under FRA's statutory authority to require PTC system 
implementation to be installed on lines in addition to those required 
to be equipped by RSIA. If a track segment fails either of these tests, 
FRA would deny the request, thus requiring PTC system implementation on 
the track segment.
    The first test, proverbially known as the ``alternative route 
analysis test,'' was initially codified at Sec.  236.1005(b)(4)(i)(A) 
and subsequently moved to a new Sec.  236.1020. See 75 FR 59,108 (Sept. 
27, 2010). Under this test, the railroad must establish that current or 
prospective rerouting of PIH materials traffic to one or more 
alternative track segments is justified. If a railroad reroutes all PIH 
materials off of a track segment requiring PTC system implementation 
under the 2008 baseline, and onto a new line, PTC system implementation 
on the initial line may not be required if the new line would have 
substantially the same overall safety and security risk as the initial 
line, assuming PTC system implementation on both lines. If the initial 
track segment, despite the elimination of all PIH materials traffic, is 
determined to pose higher overall safety and security risks under this 
analysis, then a PTC system must still be installed on that initial 
track segment. PTC system implementation may also be required on the 
new line if it meets the 5 million gross ton of annual traffic 
threshold and does not qualify under the de minimis exception of the 
rule.
    The second test that the railroad must satisfy in order to avoid 
having to install a PTC system on a track segment requiring 
implementation under the 2008 baseline is the so-called ``residual risk 
test.'' Under this test, the railroad must show that, without a PTC 
system, the remaining risk on the track segment--pertaining to events 
that can be prevented or mitigated in severity by a PTC system--is less 
than the national

[[Page 28288]]

average equivalent risk per route mile on track segments required to be 
equipped with PTC systems due to statutory reasons other than the 
presence of passenger traffic. Even lines that cease carrying PIH 
materials traffic can still pose significant safety risks associated 
with other traffic on the lines. When FRA issued its PTC rule 
amendments on September 27, 2010, FRA indicated that it was delaying 
the effective date of 49 CFR 236.1005(b)(4)(i)(A)(2)(iii), as revised 
under Sec.  236.1020, pending the completion of a separate rulemaking 
to establish how residual risk is to be determined. While FRA has 
attempted to determine a suitable methodology to determine such 
residual risk, no rulemaking proceeding on this test has yet occurred.

B. Litigation and Congressional Hearings

    After FRA issued its PTC final rule on January 15, 2010, and denied 
reconsideration on July 8, 2010, AAR filed a petition for review of the 
rule with the U.S. Court of Appeals for the District of Columbia 
Circuit. Once FRA issued its PTC final rule amendments, AAR filed 
another petition for review of those amendments on October 5, 2010. The 
court consolidated those two petitions on October 22, 2010 
(collectively, ``Petition for Review''). In its brief, AAR challenged 
FRA's determination to use 2008 as the baseline year, arguing that it 
rests on a fundamental legal error and was arbitrary and capricious.
    FRA and AAR entered into the Settlement Agreement on March 2, 2011. 
The terms and conditions of the Settlement Agreement included the joint 
filing of a motion to hold the Petition for Review in abeyance pending 
the completion of this rulemaking. That motion was filed on March 2, 
2011, and was granted by the court on March 3, 2011. The Settlement 
Agreement provides that FRA will issue two NPRMs. The first NPRM, 
published in the Federal Register on August 24, 2011, and culminating 
with this final rule, addresses the elimination of the two qualifying 
tests. The Settlement Agreement provides that upon the completion of 
this rulemaking proceeding, the parties will determine whether to file 
a joint motion to dismiss the lawsuit in its entirety. As previously 
noted, the Settlement Agreement also provides that FRA will issue a 
separate NPRM that will address other possible changes to the PTC rule; 
that NPRM is under development.
    On March 17, 2011, FRA and AAR testified before the Subcommittee on 
Railroads, Pipelines, and Hazardous Materials, Committee on 
Transportation and Infrastructure, U.S. House of Representatives. In 
addition to reporting on the Settlement Agreement, FRA's testimony 
discussed PTC system implementation planning and progress made thus far 
and highlighted the various ways that FRA has assisted the industry in 
meeting the statutory and regulatory goals. In particular, FRA has 
supported PTC system implementation by developing and approving certain 
implementation exceptions, providing technical assistance, and granting 
financial assistance.
    During its congressional testimony, made jointly with Norfolk 
Southern Railway (NS), AAR asserted that, ``If unchanged, the 2008 
base-year provision means railroads would have to spend more than $500 
million in the next few years to deploy PTC systems on more than 10,000 
miles of rail lines on which neither passenger nor TIH materials will 
be moving in 2015.'' \1\ FRA continues to understand AAR to assume that 
these 10,000 miles would still require PTC system implementation 
because they would not be able to pass the alternative route analysis 
and residual risk analysis tests. However, upon its own analysis, FRA 
assumes that 50 percent of the 10,000 miles would be able to pass both 
tests with the implementation of mitigation measures. In the NPRM to 
this proceeding, FRA sought comment on this assumption.
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    \1\ Hearing Before the Subcommittee on Railroads, Pipelines, and 
Hazardous Materials of the Transportation and Infrastructure 
Committee, U.S. House of Representatives, 112th Cong. (2011) (Joint 
statement of Edward R. Hamberger, President and Chief Executive 
Officer of the AAR, and Mark D. Manion, Executive Vice President and 
Chief Operating Officer of the Norfolk Southern Railway, on behalf 
of the AAR's member railroads) [hereinafter AAR Congressional 
Testimony].
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    Under the regulatory impact analysis (RIA) that accompanied the 
original PTC final rule, FRA estimated that the railroads would need to 
implement PTC systems on approximately 70,000 miles of track. FRA 
estimated that PTC system implementation could be avoided on 3,204 
miles of those 70,000 miles of track because PIH materials traffic will 
have ceased by 2015 and the subject track segments would pass the 
alternative route analysis and residual risk analysis tests. During the 
earlier rulemakings, no entity, including AAR or NS, challenged or 
otherwise commented on these conclusions.
    FRA also estimated that PTC system implementation could be avoided 
on 304 miles of track because gross tonnage will fall below 5 million 
gross tons per year, or passenger service would end so that neither of 
the two tests above would apply. Between the two categories, FRA 
estimated that railroads could exclude more than 3,500 miles. Assuming 
that the 3,500 miles represents about 50% of those tracks where PIH 
materials traffic will have ceased, FRA was implicitly estimating that 
there would be about 7,000 miles of track where PIH materials traffic 
will have ceased. The AAR and its members appear to have been more 
effective in the future reduction of PIH materials traffic than FRA had 
initially estimated based on AAR's congressional testimony and 
subsequent submissions to FRA. In its RIA associated with the NPRM in 
this proceeding, FRA estimated that PIH materials traffic would cease 
on 10,000 miles of track on which the installation of PTC systems would 
have been required had the traffic not ceased. FRA considered cases 
where 7,000 miles, 10,000 miles and, for sensitivity, 14,000 miles of 
track might be excluded from PTC requirements because of changes in PIH 
materials traffic. As FRA was completing its analysis of the proposal, 
AAR submitted data that indicated its member railroads believe that 
they can cease PIH materials traffic on 11,128 miles of track prior to 
December 31, 2015, of which 9,566 miles have no passenger traffic. In 
analyzing the final rule, FRA continues to use the cases where 7,000 
miles, 10,000 miles, and 14,000 miles of track might be excluded from 
PTC implementation requirements due to PIH traffic changes, because 
those values encompass the ranges submitted by AAR. Some of the 
passenger traffic miles identified by AAR may later qualify for a 
separate exclusion from the requirement to install a PTC system. For 
more discussion of those miles from which PIH traffic is removed, but 
on which passenger traffic remains, see FRA's Regulatory Impact 
Assessment, in this rulemaking docket.

III. Public Hearing, Comments, and FRA Response

    After publication of the NPRM to this proceeding on August 24, 
2011, which initially provided a 60-day comment period to end on 
October 24, 2011, the Chlorine Institute filed a request for a hearing 
``to allow for a complete discussion and understanding of the many 
issues and concerns that would result from adoption of the Proposed 
Rule that would have the effect of reducing the rail routes available 
to shippers and receivers of chlorine and the other Toxic-by-Inhalation 
products that are so necessary to the health, safety and economy of the 
Nation.'' On October 14, 2011, FRA published in the Federal Register a 
notice of public

[[Page 28289]]

hearing and extension of the comment period to November 25, 2011. See 
76 FR 63,899 (Oct. 14, 2011).
    In accordance with that notice, FRA held a public hearing on 
November 10, 2011, in Washington, DC. The following individuals 
representing the identified entities testified at the hearing: Frank 
Chirumbole, President of Olin Chlor Alkali Products, Olin Corporation 
(``Olin''); Frank Reiner, President, The Chlorine Institute (CI); 
Thomas Schick, American Chemistry Council (ACC); Dr. Howard Kaplan, 
U.S. Magnesium, LLC (``U.S. Magnesium''); and Michael J. Rush, AAR. By 
November 25, 2011, FRA received comments from AAR; ACC, CI, and the 
Fertilizer Institute (TFI) (collectively, the ``Trade Associations''); 
the National Railroad Passenger Corporation (Amtrak); the Brotherhood 
of Maintenance of Way Employees Division (BMWED/IBT) and Brotherhood of 
Railroad Signalmen (BRS) (collectively, the ``Labor Organizations''); 
E. I. du Pont de Nemours and Company (``DuPont''); and PPG Industries, 
Inc. (``PPG'').
    The Trade Associations' testimony and comments rely primarily on 
reports developed by L.E. Peabody & Associates, Inc. (``Peabody''), a 
firm specializing in solving economic, financial, marketing and 
transportation problems. Peabody developed its reports (``Peabody 
Reports'') on behalf of CI, which also invited Peabody to testify at 
the hearing regarding its own evaluation of the costs and benefits 
associated with PTC system implementation and on the instant proposal's 
potential economic harm to the PIH materials shippers.
    At the hearing, the ACC supported FRA's effort to minimize 
unnecessary regulatory burdens and recognized that certain operational 
factors may affect some rail lines by no longer requiring PTC system 
installation. ACC asserts that these implementation changes must not 
prevent chemical manufacturers from shipping their products.
    CI--a 200 member trade association comprised primarily of 
producers, repackagers and users of chlorine, and suppliers to the 
chlor-alkali industry--testified at the hearing that, ``Since many of 
the most significant rail accidents have been the result of operational 
errors,'' it has long advocated the adoption of new technologies, 
including PTC, to improve rail operational safety. According to the 
CI's testimony, ``While the statute only requires positive train 
control on TIH and passenger mainlines, all traffic on the equipped 
lines will derive the benefits of safer operation and improved 
operational efficiency.'' In their jointly filed comments, the Trade 
Associations representing shippers and receivers of PIH materials 
strongly support FRA's efforts to enhance rail safety, including the 
deployment of new technologies like PTC.
    The remainder of this section will discuss the various commenters' 
concerns with FRA's proposal.

A. Routing Concerns and Shipper Participation

    The Labor Organizations assert that by removing the two qualifying 
tests from the PTC rule, railroads may consequently be allowed to avoid 
PTC system implementation, hampering FRA's ability to identify routes 
that could be of higher risk. If the alternative route analysis test is 
eliminated, the Labor Organizations believe that PIH materials traffic 
may be rerouted to Class II railroad lines, which may have poorer track 
conditions, older rolling stock, and a less robust or no signal system, 
thus increasing the total public risk. The Labor Organizations believe 
that FRA should establish a mechanism to assess the risks related to 
the rerouting of PIH materials traffic onto lines that will not require 
PTC system implementation, and that such rerouting should be subject to 
FRA approval.
    The routes railroads use to provide PIH materials transportation is 
governed by the routing regulations of the Pipeline and Hazardous 
Materials Safety Administration (PHMSA) at 49 CFR 172.820. Under the 
PHMSA regulations, a railroad carrier is required to: compile annual 
data on shipments of PIH materials and other security sensitive 
materials; use the data to analyze safety and security risks along rail 
routes used by the carrier to transport those materials and practicable 
alternative routes over which the carrier has authority to operate; 
seek information from state, local and tribal officials regarding 
security risks to high-consequence targets along or in proximity to the 
routes; consider mitigation measures to reduce safety and security 
risk; and select and use the practicable routes that pose the least 
overall safety and security risk. FRA enforces PHMSA's regulation (49 
CFR part 209, subpart F). The routing of PIH materials is also impacted 
by the security regulations of the Transportation Security 
Administration at 49 CFR part 1580, which requires chain of custody 
requirements to ensure a positive and secure exchange of PIH materials 
transported by rail.
    FRA does not agree with the Labor Organizations' contention that 
PIH materials traffic will be rerouted from Class I railroads to Class 
II railroads. FRA is not aware of Class I railroads attempting such 
rerouting; rather, consistent with the PHMSA regulations, the removal 
of PIH materials from certain routes is the result of Class I railroads 
rerouting the traffic to other lines that they operate because those 
other lines pose the least overall safety and security risk for the 
movement of this traffic.
    In its filed comments, the Labor Organizations also request 
clarification of some of FRA's statements. For instance, in the NPRM, 
FRA states, ``AAR submitted data that indicates its member railroads 
believe that they can cease PIH materials traffic on 11,128 miles of 
track of which 9,566 miles have no passenger traffic. Some of the 
passenger traffic miles may later qualify for exclusion from the system 
on which PTC is required.'' 76 FR 52,922 (Aug. 24, 2011). The Labor 
Organizations assume, but are not completely confident, that the 
reference to ``exclusion from the system'' relates to the possibility 
that some of the passenger train operations over the remaining 1,562 
miles of track might be eligible for a de minimis exception. The Labor 
Organizations request that FRA clarify whether passenger train 
operations exceeding the de minimis exclusion will require PTC system 
installation regardless of the absence of PIH material on the line.
    With respect to the Labor Organizations' request for clarification, 
the existing PTC rule provides for exceptions to the requirement to 
install PTC systems for certain passenger train operations, as provided 
for in 49 CFR 236.1019. In the NPRM, FRA explained that AAR member 
railroads believe they can cease PIH materials traffic on 11,128 miles 
of track, over which 9,566 miles have no passenger traffic. The 
statement highlighted by the Labor Organizations means only that, of 
the remaining 1,562 miles of track that would now only require PTC 
systems as a result of passenger traffic, some of those miles of track 
might qualify for one of the passenger-specific exceptions and 
therefore be excluded from the PTC requirement entirely. The de minimis 
exception would not apply here, since there is passenger traffic on the 
line.
    CI expressed concerns with the lack of shipper participation in PTC 
system implementation and proposes that a system such as the STB line 
abandonment process be implemented if a line is proposed to be dropped 
from the coverage plan. The Trade Associations echoed this in their 
comments, indicating that they would like shippers to be part of the 
process in determining where PTC systems should be implemented. They 
note that there

[[Page 28290]]

are no express provisions allowing PIH materials shippers or receivers 
to file PTCIP requests for amendments or requiring notification that a 
railroad seeks to add or remove lines from its PTCIP. The Trade 
Associations believe that, without shipper input, FRA may inadvertently 
create PIH materials transport restrictions or infeasibility. The Trade 
Associations suggest that FRA should establish a process that would 
provide PIH materials shippers and consignees an opportunity to 
petition the agency to require additional PTC lines to accommodate new 
or expanded PIH materials-related business ventures.
    RSIA requires that only certain railroads submit a PTCIP. Since 
each railroad is legally responsible for implementing PTC systems on 
its own lines, FRA believes this makes sense. While FRA also requires a 
joint PTCIP filing where a tenant railroad would have been required to 
install a PTC system if the host railroad had not otherwise been 
required to do so, this exception exists primarily to ensure PTC system 
interoperability. Otherwise, FRA has not provided opportunities for 
parties other than the host railroad to file a PTCIP. For the same 
reason, FRA will not provide opportunities for third parties to file 
requests for amendments. To do so would create confusion and 
potentially impose additional burdens on the railroad. In any event, 
third parties do have an opportunity to express their views on the 
plans submitted pursuant to the PTC rule. 49 CFR 236.1011(e) continues 
to provide that, upon receipt of a PTCIP, NPI, PTCDP, or PTCSP, FRA 
will post on its public Web site a notice of receipt and reference to 
the public docket in which a copy of the filing has been placed. By 
extension, FRA also considers this paragraph applicable to any RFA that 
seeks to modify either of those plans and has endeavored to ensure that 
all plans and their RFAs are placed in their respective public dockets. 
FRA will consider any public comment on these documents to the extent 
practicable within the time allowed by law and without delaying PTC 
system implementation.
    PPG--an international diversified chemical manufacturer that 
receives chlorine by rail in the U.S.--expressed concern over the lack 
of transparency regarding the rail lines that would be implicated by 
the proposed rule, denying it the opportunity to effectively evaluate 
the impact of the proposal on its existing and future business plans. 
Moreover, PPG states that the existing PTC rule does not provide any 
audit or review process by which FRA may verify a railroad's traffic 
assertions or any appeals process by which a shipper can contest a 
railroad's decision not to install a PTC system on a particular rail 
line. PPG also states that if a PTC system is not installed on a 
particular line before 2016, then a railroad could attempt to condition 
any future service for PIH commodities at very high rates, stifling the 
shipper's business and impeding the national economy.
    The Trade Associations are also concerned with the availability of 
routes. According to CI, the lack of shipper participation could either 
restrict chlorine transportation by rail or render it unfeasible 
between some origins and destinations, ultimately restricting chlorine 
commerce and availability. If FRA were to eliminate the two qualifying 
tests, Peabody believes that FRA would allow the railroads to determine 
which track segments will be equipped with PTC systems without 
regulatory oversight regarding the determination of the level of safety 
and security on the subject segment. Peabody also expresses concerns 
that FRA, when making the proposal, considered the impact on the 
railroads, but not the shippers or the public.
    The Trade Associations believe that elimination of the two 
qualifying tests would, produce an opportunity for the railroads to 
unilaterally, arbitrarily, and without regulatory oversight, determine 
where PTC systems must be installed and reduce the transportation of 
PIH materials by rail. According to the Trade Associations, ``The 
opportunity cannot be examined in a vacuum but must be evaluated 
through the prism of the railroads' other actions to greatly reduce the 
common carrier obligation.'' Although FRA will continue to approve any 
requests to modify a railroad's PTCIP, the Trade Associations perceive 
that such approval will be automatic and based solely on the railroad's 
own traffic projections and without consideration of the shippers' PIH 
market projections.
    Dupont, a member of CI and ACC, provided additional comments. 
DuPont is concerned that, by removing the two qualifying tests, rail 
carriers would be granted the unlimited right and an incentive to 
refuse to provide service just by choosing routes without PTC systems 
despite any STB action. According to DuPont, it has experienced rail 
carriers moving PIH materials traffic onto inefficient routes and 
shifting the resulting costs elsewhere. DuPont states that by allowing 
the railroads to unilaterally deny the most direct route, the railroads 
will be allowed to violate their fundamental common carrier 
obligations.
    Accordingly, DuPont asserts that FRA should maintain the two 
qualifying tests, which allow each railroad to amend its PTCIP when the 
railroad is able to meet certain analyses and risk assessments. DuPont 
also suggests that FRA expand the existing PTC rule by promulgating a 
self-implementation regulation providing each shipper with the power to 
direct its rail carrier to transport its goods on lines where PTC 
systems would otherwise be required and which are not so equipped and 
providing each railroad the ability to self-certify a risk assessment 
for each such line.
    Olin also provided hearing testimony in favor of not eliminating 
the two qualifying tests. In particular, Olin is concerned that the 
proposed amendments will allow railroads to significantly restrict PIH 
shipments without shipper input or adequate FRA oversight. Olin states 
that the elimination of the two qualifying tests would effectively 
grant rail carriers carte blanche to determine PTC system 
implementation locations, which could ultimately allow rail carriers to 
dictate and limit efficient PIH shipments and would potentially result 
in increased transit times, longer shipping distances, limited customer 
access, and restriction to overall commerce and additional shipping 
costs. According to Olin, ``Allowing rail carriers to potentially limit 
the shipment of TIH without the protections of the `alternative route 
analysis test' and the `residual risk test,' or another appropriate 
process, would not only pose risks to shippers, it would also likely 
contradict the federal common carrier obligation which has been a 
keystone of U.S. rail policy for more than a century'' by opening ``a 
back door around the common carrier obligations for rail carriers.'' 
Olin also expressed concerns that the overall cost of PTC system 
implementation will be disproportionately placed on PIH shippers and 
that there are no provisions to examine shipper impact or address 
timely action for future PIH required rail lines.
    PPG also provided comments directly relating to the purposes of the 
two qualifying tests. According to PPG, FRA took a crucial and 
important step in the original PTC rule when it required use of 2008 as 
the baseline traffic year to determine which rail lines would require 
PTC system implementation. PPG states that, ``By using a historical 
year as the baseline, FRA largely eliminated the possibility for 
railroads to manipulate their traffic statistics in light of the 
looming PTC requirement.''

[[Page 28291]]

By removing the two qualifying tests, PPG is concerned that this 
possibility remains. More specifically, without the two qualifying 
tests, PPG fears that railroads could dissuade PIH materials shipments 
by providing substandard service or by charging excessive 
transportation rates.
    As an initial matter, questions relating to the quality of service 
provided PIH shippers and rates charged by railroad carriers for the 
movement of PIH materials are outside the scope of FRA's authority and 
properly lie with the STB.
    Each of the arguments made by the Trade Associations and the other 
railroad shippers rest on the premise that, by rerouting PIH materials 
traffic to avoid the installation of PTC systems, railroad carriers 
will somehow be able to ``lock in'' certain routes as the only routes 
available to carry PIH materials after the 2015 deadline. Ultimately, 
however, this premise is incorrect. As discussed in more detail below, 
FRA does not view the PTC mandate as limiting the common carrier 
obligation of railroad carriers as enforced by STB, and consequently 
does not view a smaller map of PTC-equipped line segments as 
restricting the availability of rail transportation for PIH materials 
in the future. FRA recognizes that equipping fewer line segments with 
PTC systems before 2016 will increase the probability that a future PIH 
materials shipment would eventually require access to an unequipped 
line in order to reach its destination; however, such concerns will 
exist with any requirement to install a PTC system that does not cover 
all line segments. The arguments of the Trade Associations and other 
railroad shippers are over-inclusive, insofar as they lead to the 
conclusion that FRA should simply require PTC systems to be installed 
on as many line segments as possible. However, reducing the probability 
of future controversies over future installation of PTC systems is 
insufficient justification for potentially using the two qualifying 
tests as a means to require additional PTC systems implementation prior 
to the 2015 deadline.
    FRA also rejects the premise that railroads will have an 
uninhibited means of rerouting PIH material traffic without meaningful 
oversight. As previously discussed, the rail routing of PIH materials 
is governed by the PHMSA routing rule. In their comments, the Trade 
Associations view the rail routing rule as satisfying the needs from a 
shipper perspective in three ways:

    ``1. Routing changes are to be based on 27 different risk-based 
factors and not solely on any one factor, such as cost, distance or 
time;
    2. No matter what routing changes are made, existing origin-
destination pairs are still accommodated and TIH traffic is not 
eliminated;
    3. There is nothing in the rule that indicates that future needs 
for TIH traffic would be limited or avoided.
    Despite potential increases in shipment cost or time, the 
shippers' need to transport TIH materials is essentially met.''

    AAR generally supports elimination of the two qualifying tests, 
asserting that the two tests would require PTC systems to be installed 
on an estimated 10,000 miles more than that required by the RSIA, at 
costs which substantially outweigh the safety benefits. The AAR did, 
however, suggest that FRA adopt slightly different regulatory language 
than that proposed in the NPRM; these suggested changes are discussed 
in the section-by-section analysis. The AAR responded to the shippers' 
concerns by noting that the routing of PIH materials is governed by the 
PHMSA rail routing rule, and that nothing in FRA's proposed rule 
changes, prevents, or in any manner affects, the transportation by rail 
of PIH materials from origin to destination.
    FRA agrees with AAR that the rerouting of PIH materials traffic is 
properly constrained by the PHMSA rail routing rule. FRA also agrees 
with AAR that PIH materials traffic will continue to move on rail lines 
that do not have PTC systems consistent with the requirements of 49 CFR 
236.1005(b)(3), and that the elimination of the two qualifying tests 
does not affect the railroads' common carrier obligation with respect 
to the transportation of PIH materials. Finally, removal of the two 
qualifying tests will not preclude FRA's ability or discretion under 49 
U.S.C. 20502 to require PTC system implementation on additional lines 
in the future based on risk or other relevant factors.

B. Common Carrier Obligations

    According to the Trade Associations, although FRA has made it clear 
in the past that it does not intend for matters within its jurisdiction 
to trump the railroads' common carrier obligation, FRA's determinations 
affect the location of PTC system implementation and, thus, where, 
when, how, and if PIH materials are to be moved.
    Accordingly, the Trade Associations are concerned that the 
railroads will use PTC system implementation as a means to limit their 
common carrier obligations with respect to PIH materials. More 
specifically, at the hearing, CI expressed that, ``We're concerned that 
FRA's [PTC] rule will be used to attempt to alter that common carrier 
obligation, which we fully understand is under the STB jurisdiction.'' 
While the Trade Associations recognize that it is not FRA's 
responsibility to enforce the railroads' common carrier obligation to 
transport PIH materials, they assert that PTC system implementation 
must not erode that obligation. The Trade Associations provide examples 
where FRA has considered the common carrier obligation in the past. For 
instance, in 2008, the Department testified before the STB, stating:

    [R]ailroads have a common carrier obligation to transport 
hazardous materials and cannot refuse to provide service merely 
because to do so would be inconvenient or unprofitable. While the 
railroads have expressed concern over this obligation, particularly 
with respect to their potential liability exposure arising from 
train accidents involving the release of poisonous by inhalation 
hazard or toxic inhalation hazard (referred to as PIH or TIH) 
materials, DOT believes that there is no reason to change this 
common carrier obligation.''

    Testimony of Clifford Eby, Deputy Federal Railroad Administrator, 
Common Carrier Obligation of Railroads, STB Ex Parte No. 677 (Sub-No. 
1) (July 22, 2008).
    The Trade Associations also state that the Department is on record 
as saying that railroads would be violating the common carrier 
obligation if they attempted, through their interchange rules, to 
prevent the movement of hazardous materials through the application of 
tank car specifications different from those duly considered and 
approved by the Department.\2\
---------------------------------------------------------------------------

    \2\ But see 73 FR 17818, 17824-25 (April 1, 2008). In its 
comments, the Trade Associations misunderstand FRA's statements. In 
this and the referenced proceeding, FRA has not asserted any 
authority to determine a railroad's common carrier obligation. In 
the rulemaking cited by the Trade Associations, FRA discussed the 
test used by STB to determine the reasonableness of interchange 
requirements in assessing if those requirements violate the common 
carrier obligation before ultimately concluding that FRA did not 
view the particular interchange requirement at issue as reasonable.
---------------------------------------------------------------------------

    Moreover, the Trade Associations request that FRA confirm its 
interpretation of 49 CFR 236.1005(b)(3)(ii), which states: ``If PIH 
traffic is carried on a track segment as a result of a request for rail 
service or rerouting warranted under part 172 of this title, and if the 
line carries in excess of 5 million gross tons of rail traffic as 
determined under this paragraph, a PTCIP or its amendment is 
required.'' The Trade Associations believe that this language, 
consistent with the common carrier obligation, implies that a rail 
carrier may not deny a shipper's request to transport PIH materials 
solely on the

[[Page 28292]]

grounds that a PTC system is not installed on any line segment 
necessary to complete the requested transportation. The Trade 
Associations believe that this regulation requires the railroad to 
accept the PIH materials traffic for transportation consistent with its 
common carrier obligation, amend its PTCIP, and equip the necessary 
track with a PTC system within 24 months, pursuant to 49 CFR 
236.1005(b)(3)(iii).
    PPG also believes that FRA must be mindful of the interplay between 
the PTC regulations and the railroads' common carrier obligation, which 
requires the carriers to provide service on reasonable request. PPG 
expresses similar concerns with the regulatory provision cited by the 
Trade Association and complains that seeking STB enforcement of the 
railroads' common carrier obligation could take months, if not longer, 
to resolve. Accordingly, PPG urges FRA to clarify that 49 CFR 
236.1005(b)(3)(ii) does not permit a railroad to refuse PIH materials 
service because a rail line does not have a PTC system installed, and 
that rail movement of PIH commodities may be provided over a non-PTC-
equipped line pending approval of FRA and the actual construction to 
add a PTC system to such line.
    US Magnesium also testified at the hearing. While extracting 
magnesium from the Great Salt Lake brines, US Magnesium produces 
chlorine as a co-product. Since chlorine cannot be vented or stored, US 
Magnesium must ship or sell it. However, according to US Magnesium, the 
chlorine market is seasonable and dynamic, with customers and demand 
levels always changing, requiring the company to change chlorine 
shipping routes to meet market conditions. US Magnesium believes that 
PTC technology will contribute greatly to continuing incident free 
performance and it claims that it has been affected by the railroads' 
interest in limiting or ceasing PIH shipments. While it recognizes the 
STB's resistance to railroad attempts to unilaterally restrict PIH 
routings, US Magnesium believes that removal of the two qualifying 
tests would allow elimination of lines from a PTCIP, thus facilitating 
the railroads' efforts to limit their common carrier obligation. US 
Magnesium expects the railroads to argue to the STB that they should 
not be ordered to provide PIH service over routes where they have 
informed FRA that no PTC system will be installed.
    These comments indicate some confusion over the jurisdiction of the 
various federal agencies governing the rail transportation of hazardous 
materials. Specifically, these commenters suggest that the PTC rule 
might be construed by FRA or STB to limit what line segments PIH 
materials may travel over. The structure of 49 CFR part 236, subpart I, 
requires that PTC systems be installed on many line segments over which 
PIH materials are transported; it does not in any way govern the 
movements of PIH materials.
    While both FRA and STB are vested with authority to ensure safety 
in the railroad industry, each agency recognizes the other agency's 
expertise in regulating the industry.\3\ FRA has expertise in the 
safety of all facets of railroad operations, and is authorized to 
promote safety in every area of railroad operations and reduce 
railroad-related accidents and injuries. 49 U.S.C. 20101 and 20102. 
Concurrently, the STB has expertise in economic regulation and 
assessment of environmental impacts in the railroad industry, as an 
economic regulatory agency charged by Congress with resolving railroad 
rate and service disputes and reviewing proposed railroad mergers and 
acquisitions. See 49 U.S.C. 10701(a), 10702. Further, there is no 
limitation over the STB's authority to address the reasonableness of a 
railroad's practices. See STB Ex Parte No. 661, Rail Fuel Surcharges 
(Aug. 3, 2006). Together, the agencies appreciate that their unique 
experience and oversight of railroads complement each other's interest 
in promoting a safe and viable industry.
---------------------------------------------------------------------------

    \3\ The rail transportation policy, 49 U.S.C. 10101, establishes 
the basic policy directive against which all of the statutory 
provisions the Board administers must be evaluated. The RTP 
provides, in relevant part, that ``[i]n regulating the railroad 
industry, it is the policy of the United States Government * * * to 
promote a safe and efficient rail transportation'' by allowing rail 
carriers to ``operate transportation facilities and equipment 
without detriment to the public health and safety.'' See, e.g., 49 
CFR part 244; 67 FR 11582 (Mar. 15, 2002).
---------------------------------------------------------------------------

    Accordingly, FRA recognizes that conflicts between railroad 
carriers and railroad shippers relating to common carrier obligations 
are best resolved by STB. The STB has previously ruled on railroad 
obligations to quote common carrier rates and provide service for the 
transportation of PIH materials such as chlorine. Union Pacific 
Railroad Company, STB Finance Docket No. 35219 (2009); see also Akron, 
Canton & Youngstown Railroad Company v. Interstate Commerce Commission, 
611 P.2d 1162 (6th Cir. 1979). FRA does not seek to interfere with 
STB's role in providing economic oversight of the railroad industry. 
Rather, just as the STB has previously declined to substitute its 
safety and security judgments for those of FRA, FRA presently declines 
to substitute its economic judgments for those of STB. In establishing 
and modifying rules governing PTC system implementation, FRA does not 
regulate what route over which PIH materials must move, as 
responsibility for such regulations lies with PHMSA. See 73 FR 72182 
(Nov. 26, 2008). FRA's PTC regulations expressly allow for new PIH 
material traffic over a line segment that previously lacked such 
traffic, and as such does not preempt the oversight and regulatory 
functions of either PHMSA or STB.
    FRA is aware that the impact of the present rulemaking will be to 
reduce the number of line segments included within the overall map of 
PTC system installations. The Trade Associations argue that the result 
of this reduction will be an ability of railroad carriers to 
unilaterally restrict PIH materials shipments by reducing the number of 
PTC-equipped line segments and subsequently refusing to carry PIH 
materials that would require straying from these line segments. 
However, because neither the prior or instant PTC rulemakings limit or 
restrict the common carrier obligation, enforced by STB, FRA does not 
view a reduction in PTC-equipped line segments as causing a reduction 
in available service for future PIH materials shipments. Additionally, 
there are substantial checks on a railroad's ability to modify its 
routes in such a manner. Oversight by the STB and FRA (in enforcing the 
PHMSA rail routing regulation) may preclude or even require certain 
routing and rerouting decisions. Furthermore, because railroads will 
likely seek to maximize the return on their investment in PTC system 
installation, railroads can be reasonably expected to maximize the 
connectivity of PTC-equipped segments to limit where additional PTC 
systems may ultimately be required. As discussed above, even where a 
railroad is able to reroute its PIH materials traffic in accordance 
with the PHMSA regulations, resulting in future PIH materials traffic 
needing to traverse a line segment that does not have a PTC system in 
order to travel from its source to its destination, FRA does not view 
such rerouting as a barrier to future PIH materials traffic. While STB 
is the agency ultimately responsible for the enforcement of the common 
carrier obligation, and FRA recognizes that PTC system implementation 
may affect STB's review of rates, FRA does not view the requirement to 
install PTC systems on certain rail lines as affecting the common 
carrier obligation in any way.
    With respect to the application of 49 CFR 236.1005(b)(3), FRA views 
the provision as neutral with respect to the

[[Page 28293]]

common carrier obligation. Where new PIH materials traffic exists on a 
line that meets the tonnage threshold, whether by the railroad's 
acceptance of the PIH material for transportation or by STB action to 
require such transportation, the rule requires the railroad carrier to 
file a PTCIP or RFA as soon as possible and to implement a PTC system 
on that line segment within 24 months. FRA expects that PTCIP or RFA to 
include risk mitigation and other measures necessary to effectively and 
efficiently implement the new PTC system so that PIH materials may 
safely traverse the line segment during those intervening two years. If 
the filings do not sufficiently address these issues, FRA may approve 
the PTCIP or grant the RFA with conditions intended to ensure as much.

C. Passenger Rail Impact

    In its filed comments, Amtrak reiterates its support of PTC system 
implementation and expects that it will complete installation on its 
lines in advance of the statutory deadline. Amtrak's comments are 
otherwise limited to concerns relating to the impact of this rulemaking 
on passenger railroads, and on federal and state funding requirements 
for passenger rail service. Amtrak states that if the proposed rule is 
adopted, railroads will not be required to install PTC systems on rail 
lines that were used to transport PIH shipments in 2008, but are no 
longer being utilized for PIH materials traffic as of December 31, 
2015. Amtrak expresses concern that passenger rail operators--whose 
presence may now be the sole reason for mandatory PTC system 
implementation on those lines--may be asked to bear some or all of the 
costs of PTC system installation that would have been borne by freight 
railroads under the original rule. Amtrak believes that this rule may 
pose a risk to the continued operation of affected passenger rail 
services since they do not generate profits, rely on constrained 
taxpayer funding, and Amtrak is already burdened by the need to fund 
PTC system installations on lines it owns.
    Amtrak states that the impact of the proposed rule on passenger 
railroads cannot be determined from the record in this proceeding. 
While the RIA invited comments on the accuracy of the data submitted by 
AAR--indicating that its member railroads have 1,562 route miles used 
for passenger rail service on which PIH materials traffic was handled 
in 2008, but on which PIH materials traffic is expected to cease by 
2015--Amtrak argues that the data is insufficient to determine the 
affected route segments that have passenger rail service. Amtrak 
asserts that additional federal funding is limited.
    FRA understands that, upon cessation of PIH materials traffic, a 
line segment may still require PTC system implementation due to the 
existence of passenger traffic. In some situations not under the 
control of FRA, this may result in the distribution of costs between 
the freight and passenger railroads. However, as was the case with 
respect to similar concerns expressed by the Trade Associations and 
shippers, this distributional concern alone does not provide adequate 
justification for maintaining the two qualifying tests. Moreover, it is 
within the jurisdiction of the STB to settle disputes and determine 
appropriate rate structures between freight railroads, shippers, and 
passenger operators in these circumstances. In response to Amtrak's 
concerns relating to insufficient funding, the availability of funds to 
support passenger railroads in the installation of PTC systems is 
outside the scope of this rulemaking. In regards to Amtrak's concerns 
regarding insufficient data to determine the affected route segments, 
it is FRA's understanding that the host and tenant railroads, through 
their discussions, would be able to communicate this information. To 
provide that information in this proceeding risks exposing certain 
sensitive security information.

D. Cost-Benefit Analysis

1. Trade Associations
    The Trade Associations also take issue with FRA's cost-benefit 
analysis, asserting that it is flawed. The Trade Associations support 
the Peabody Reports' assertion that FRA relied upon a cost-benefit 
analysis that substantially and erroneously excluded business benefits 
accruing to railroads, shippers and the public. According to the Trade 
Associations, this exclusion of business benefits violates Office of 
Management and Budget (``OMB'') Circular A-4, which governs cost-
benefit analyses conducted by federal agencies and resulted in an 
erroneous cost-benefit ratio of 20:1 in the PTC final rule published on 
January 15, 2010. The Trade Associations assert that the flaws in the 
January 2010 cost-benefit analysis accompanying the original final rule 
are continued and more extensive in the instant rulemaking.
    Ultimately, the Trade Associations and Peabody contend that FRA's 
cost-benefit analysis should have considered business benefits that 
they contend would significantly reduce the gap between the required 
PTC system implementation's costs and benefits. These parties discuss a 
2004 report produced by Zeta-Tech Associates, commissioned by FRA, 
quantifying the business benefits of positive train control, with 
direct and indirect business benefits ranging between $2.2 and $3.8 
billion annually, in 2001 dollars.\4\ According to the Trade 
Associations, these benefits include increased line capacity; fuel 
savings; improved rail dispatching operations; and societal benefits 
from reduced highway crashes and reduced pollution emissions. Using 
these findings, in conjunction with other sources, FRA in 2004 
submitted a report to Congress offering differing opinions as to 
whether or not PTC technologies could generate business benefits. One 
point of view was that PTC technologies could create net societal 
benefits that ranged from $2.1 to $3.9 billion annually, including 
significant accident-avoidance benefits as a result of modal diversion 
from highway to rail transportation.
---------------------------------------------------------------------------

    \4\ Zeta-Tech Associates, Quantification of the Business 
Benefits of Positive Train Control (Mar. 15, 2004) at 10-11. The 
Zeta-Tech analysis' estimate of benefits ranged as low as $0.9 
billion annually, including $0.4 billion in benefits accruing to 
shippers. See also Federal Railroad Administration, Benefits and 
Costs of Positive Train Control (Aug. 2004) (noting the numerous 
assumptions made by the Zeta-Tech analysis and also noting that some 
of these benefits may already be realized or may be realized without 
PTC system implementation).
---------------------------------------------------------------------------

    Peabody posits that Congress passed RSIA in 2008 based in part on 
FRA's report. Peabody also indicates that as part of the rulemaking 
developing the 2010 PTC rule, FRA updated each element of the 2004 
report, but did not include them in the RIA for that rule, which 
considered only direct railroad safety benefits and total direct 
implementation costs in its cost-benefit analysis. If FRA had included 
the business benefits as part of its economic analysis associated with 
the initial PTC rulemaking published on January 15, 2010, Peabody 
contends that the cost-benefit ratio would have been restated as 
1.1:1.0. Peabody's own May 2010 report asserts that a 0.86:1.00 cost-
benefit ratio is more realistic. However, by not including those 
benefits, FRA's RIA reflected a cost-benefit ratio of 21.7:1.0.
    In its report, Peabody asserts that FRA's cost-benefit analysis in 
this rulemaking should be based on the ``no action scenario'' (i.e., 
where PTC systems are not required), which would result in a much lower 
cost-benefit ratio than the 1:20 ratio contemplated by this rulemaking. 
In other words, Peabody believes that FRA should determine the change 
in costs and benefits where PTC

[[Page 28294]]

systems have not yet been installed, not where PTC systems will be 
installed in the future. According to Peabody, FRA's cost-benefit 
analyses support a perceived effort by the railroads to limit routes, 
forcing more PIH onto the roads or increasing shipper costs.
    FRA disagrees with Peabody. The ``no action scenario'' would leave 
the final rule in place and PTC system implementation would be required 
without the relief of this rulemaking. Peabody misstates what result 
occurs in a ``no action scenario'' for this rulemaking. Contrary to 
Peabody's assumptions, if FRA were not to publish this final rule, the 
result would be a continuation of the requirement to install PTC 
systems on certain line segments. In Circular A-4, Regulatory Analysis, 
the Office of Management and Budget, says ``[i]t may be reasonable to 
forecast that the world absent the regulation will resemble the 
present. If this is the case, however, your baseline should reflect the 
future effect of current government programs and policies.'' The future 
effect of the prior final rules is that PTC systems will be installed 
on a number of line segments. Accordingly, the no-action alternative 
includes the cost of PTC systems on those line segments and the 
commensurate costs and benefits. Peabody, as well as the Trade 
Associations generally, also relies on the Zeta-Tech Report to claim 
that FRA has failed to account for some business benefits that result 
from PTC system implementation. However, as FRA stated in its 
contemporaneous report to Congress, many of these benefits were 
speculative or achievable through other means. The intervening years 
have validated FRA's concerns with the report. The PTC systems that 
presently exist lack some of the features that Zeta-Tech used to 
justify its benefit assumptions, and railroads have already achieved 
some of the operational benefits without PTC system implementation. 
Accordingly, FRA cannot treat these benefits as attributable to PTC 
system implementation.
    Peabody asserts that FRA does not consider the costs or benefits to 
shippers or the public in its analysis. Peabody comes to this 
conclusion based on the exclusion of business and other societal 
benefits. Peabody also claims that FRA includes only railroad safety 
benefits in its economic analyses and continues to exclude business and 
other societal benefits that FRA had itself identified, quantified, and 
championed for much of the previous decade. FRA specifically did 
account for safety benefits accruing to society at large, such as 
evacuations. The costs of removing these benefits are accounted for in 
this final rule.
    In analyzing the PTC rule, FRA included a sensitivity analysis with 
business benefits when it appeared there was a possibility that a 
railroad would adopt a PTC system capable of generating business 
benefits. According to the railroads' PTCIPs submitted to FRA, there 
are no PTC systems that would generate business benefits, other than 
from train pacing, in the 20-year analysis period. The only business 
benefit that FRA had included in its base analysis of the PTC final 
rule was fuel savings that would result from train pacing. Only one 
railroad has adopted train pacing systems integrated with its PTC 
system, and that railroad is not likely to change the number of 
locomotives equipped for train pacing, and thus is not likely to see 
any change in its business benefits. In other words, issuance of this 
final rule is not expected to impact fuel saving benefit levels. To the 
extent that PTC systems planned for implementation would not include 
aspects to facilitate business benefit realization, there is no impact 
on business benefits from reducing the mileage over which wayside 
components will be installed. FRA does not anticipate the other forms 
of business benefits identified in the Zeta-Tech Report--improved work 
order reporting and precision dispatch systems--to be present in the 
PTC systems implemented by railroads. No such systems have been 
described in the PTCIP of any railroad; furthermore, while some 
railroads are implementing work order reporting and precision dispatch 
systems, these railroads are not integrating the systems into their PTC 
system due to technological infeasibility.
    FRA does not have any evidence that railroads installing PTC 
systems have found a way to make a profit by integrating additional 
equipment that would generate the kinds of business benefits described 
in the Peabody analysis. The railroads have long argued that there was 
no way for them to make a profit from PTC systems, and their behavior 
is consistent with that assertion. In FRA's 2004 letter report to 
Congress, the suggested business benefits would have been relatively 
large, but very little of that business benefit would have accrued to 
railroads. The business benefits would have gone in large measure 
(roughly 80 percent) to shippers, who in turn would have created even 
larger societal benefits. There is no market mechanism for railroads to 
share in most of those benefits. FRA therefore has no reason to believe 
that railroads will perform technological integrations that will create 
large business benefits.
    According to Peabody, FRA relies on several unsupported assumptions 
and estimates to derive its cost and benefit calculations. This appears 
to be a criticism of two assumptions that FRA relied upon in order to 
estimate this rule's impact: that 50 percent of segments submitted for 
exclusion from the system would have passed the ``two tests'' and that, 
under the prior rule mitigation costs, the costs of risk mitigating 
technologies currently referenced under Sec.  236.1020, would have 
averaged $10,000 per mile. While AAR also questioned the assumption 
that 50 percent of segments would pass the two tests, AAR did not 
comment on the estimate for mitigation costs.
    To perform a cost-benefit analysis in this proceeding, FRA required 
an estimated number of miles in the PTC network that would be affected 
by the final rule, and therefore estimated the number of miles in the 
PTC network that would fail one or both of the two qualifying tests and 
would have been required to be PTC-equipped. The two qualifying tests 
were intended to ensure that PTC systems were installed on certain 
risk-sensitive line segments. The tests would have no impact had all 
segments or no segments met the requirements of both tests. In order to 
estimate the affected mileage, FRA needed an estimate of how many miles 
the railroads could justify and likely remove from their systems--a 
figure provided by AAR (estimated at 10,000 miles in the base case)--
and an estimated probability of how likely those segments meet the 
minimum requirements of the two qualifying tests had the prior final 
rule remained unchanged.
    As noted, the two qualifying tests were never fully implemented and 
applied to track segments, so it is impossible to make inferences about 
the test results. Since the residual risk test was not developed, FRA 
cannot make an informed estimate of the proportion of segments likely 
to fail one or both of the two qualifying tests. FRA chose 50 percent 
as an estimate of the proportion of segments the railroads want to 
remove from PIH materials service that would pass both tests, because 
it provides the lowest expected difference from a percentage chosen at 
random in the possible range of 0 percent to 100 percent. No party has 
offered an alternative estimate, and no party has provided a means of 
deriving an alternative estimate, despite FRA's request for comments 
and information on this issue. See 76 FR 52,918, 52,921, 52,924. If FRA 
were to conduct a

[[Page 28295]]

sensitivity analysis on this range, it would be difficult to choose a 
range of passing percentages for the undeveloped test. For the purposes 
of argument, FRA uses a range of 25 percent to 75 percent, representing 
a broad range of possible percentages covering half of the possible 
range from 0 percent to 100 percent.
    Given this reasonable range, an additional sensitivity analysis is 
unnecessary, as such an analysis would yield similar results as the 
analysis already present. In the sensitivity analysis of the NPRM, 
which estimated the range of miles of line segments over which PIH 
materials would be removed, FRA calculated benefits with the number of 
miles equaling 7,000 miles, 10,000 miles, and 14,000 miles. As 
discussed above, some of these miles would have no longer been required 
to have an implemented PTC system under the prior rules; FRA estimated 
that only half of these miles would be required to install PTC systems 
under the prior rules. As such, FRA calculated the benefits of removing 
PTC systems from 3,500, 5,000, and 7,000 miles--50 percent respectively 
of 7,000, 10,000, and 14,000 miles. Were FRA to perform a new 
sensitivity analysis on the percentage of miles that would have no 
longer been required to have a PTC system implemented, the estimates of 
25 percent, 50 percent, and 75 percent of miles passing the two 
qualifying tests and not requiring PTC systems would result in 7,500, 
5,000, and 2,500 miles--75 percent, 50 percent, and 25 percent of 
10,000, respectively--that would have nonetheless required PTC systems. 
Accordingly, FRA would calculate the benefits of removing PTC systems 
from 2,500, 5,000, and 7,500 miles. The analysis of mileage estimates 
so similar to those used by FRA in its existing sensitivity analysis 
would not yield meaningful new data, and therefore additional 
sensitivity analysis on the percentage of segments passing both tests 
would be redundant.
    Peabody also objects to the estimates of mitigation costs avoided. 
Under the PTC final rule issued in January 2010, in order to remove 
some segments from the PTC system network, and to compensate for the 
resulting safety reductions, the railroads would have had to propose 
mitigations of the additional risk created by that removal. FRA 
purposefully avoided defining such mitigations, providing the railroads 
the flexibility to propose their own solutions, which would then be 
subject to FRA approval. Even if FRA had fully developed the 
methodologies for the two qualifying tests, FRA still would not have 
prescribed particular mitigations, and therefore would not require 
mitigation that would be more costly than the estimates provided and 
where less costly solutions are available. To estimate these mitigation 
costs, FRA made the reasonable assumption that mitigation costs could 
only rise to a certain percentage of the total wayside costs of 
implementing PTC technologies; as the cost of mitigations rises, the 
likelihood rises of a railroad deciding to install a PTC system rather 
than incur the mitigation costs. The mitigation cost estimate also 
includes resources that might have been expended to pass the tests. 
Despite FRA's request for comments on its calculation of costs, no 
commenter provided alternative estimates or methodologies for the 
agency to use in lieu of the present estimates.
    Peabody also states that FRA ought to include business benefits 
because FRA included some uncertain figures without including other 
uncertain figures. More specifically, according to Peabody, FRA is 
uncertain about the correct values of the two figures it included in 
its business economic estimates (i.e., the proportion passing both 
qualifying tests and the cost per mile for mitigations) and FRA was 
also uncertain (in analyzing the PTC rule) about whether business 
benefits would be generated, which FRA did not include. FRA is certain 
that a percentage of track segments would have passed the two 
qualifying tests, and is using the best estimate available to calculate 
the impacts. FRA is also certain that some segments would have required 
mitigation, and is using the best information available regarding the 
expected cost of the mitigations. FRA was required to estimate these 
values, and FRA has pointed out that within reasonable ranges the exact 
value of these estimates will not affect FRA's conclusions. The final 
rule still provides net societal benefits regardless of the range of 
impact. In other words, since the costs exceed the benefits for any 
given mile of PTC system implementation, removing the requirement to 
install a PTC system for any number of miles in the scope proposed will 
result in a net benefit. At this time, FRA is less uncertain about 
whether the PTC systems being adopted under the PTC rule will create 
business benefits of the type and magnitude explored in the sensitivity 
analysis of the prior final rule, for the reasons described above. It 
is clear that with minor exceptions, unaffected by this final rule, the 
railroads have adopted PTC systems that will not likely create the 
kinds of business and societal benefits suggested in the sensitivity 
analysis of the prior final rule.
    Peabody asserts that in many cases FRA accepts, without question, 
AAR's estimates and assumptions. Peabody also claims that FRA 
improperly focuses on the net costs and benefits associated with PTC 
system implementation based on the AAR's estimated 10,000 track miles 
that would be PTC-equipped but for the proposed rules changes. Peabody 
says that, in doing so, FRA fails to account for 3,500 track miles it 
had originally determined would not be equipped with PTC systems.
    FRA did not accept or adopt any of AAR's estimates without first 
analyzing them. Peabody refers to estimates of how many miles of PTC 
system wayside equipment would be affected by this rule. FRA includes 
AAR's estimate as the base case, because railroads are the parties most 
likely to know how much wayside would be affected. The railroads' 
actions will determine how much of their systems may be excludable 
under the final rule, and they do not seem to have an incentive to 
misstate that amount.
    As previously noted, FRA assumes that 50 percent of the segments 
that the railroads plan to remove from the PTC network could pass both 
tests. When analyzing the PTC rule published in January 2010, FRA had 
estimated that the railroads could exclude roughly 3,500 miles due to 
the cessation of PIH materials traffic. If those segments represent the 
50 percent of those track segments that would have passed the two 
tests, this would imply that the railroads would have been interested 
in removing roughly 7,000 miles from their PTC networks, a figure that 
has become the low benefit case.
    In its analysis for the NPRM in the instant proceeding, FRA assumed 
that the 3,500 miles are a subset of those 10,000 miles that would not 
be equipped with PTC systems, and are therefore accounted for. When 
analyzing the PTC rule published in January 2010, FRA needed to 
estimate the number of miles that might have been eligible to avoid PTC 
system implementation in the event that PIH materials traffic would be 
removed. FRA reviewed traffic patterns for segments from which FRA 
believed the railroads could remove PIH materials traffic with little 
or no difficulty. For that rulemaking, this information supported the 
conservative estimate used in the analysis of the NPRM. FRA did not 
receive any dissenting comments.
    In analyzing the NPRM issued in the instant proceeding, FRA 
attempted to remain consistent with the aforementioned prior analysis, 
as it had

[[Page 28296]]

subsequently become the subject of much discussion. From the railroads' 
submissions, it does not appear that the 10,000 miles are in addition 
to the 3,500 miles; rather, the 3,500 miles are a subset of the 10,000 
miles. In its comments, AAR did not challenge or correct FRA's 
impression that the 10,000 miles included the 3,500 miles. FRA 
therefore continues to assume that the 3,500 miles are a subset of the 
mileage AAR intends to remove from PIH service. In reviewing AAR's 
data, FRA found that the 10,000 miles included many track segments that 
FRA, in previously arriving at the 3,500 mile figure, did not think it 
would have been practical to select for removal of PIH materials 
traffic when compared to the 3,500 miles for which there appeared to be 
several logical mitigation treatments. FRA was presented with several 
options for estimating the impact of this rule in light of the new data 
provided by AAR. While FRA could have analyzed a low case that 
consisted of removing the two tests from the 3,500 miles, yielding an 
estimate where the savings were the avoided costs of undergoing the two 
tests and undertaking mitigations, this does not seem to be a 
reasonable alternative to analyze as the railroads are already claiming 
that they intend to remove many more segments from PIH service. 
Alternatively, FRA could have treated the 3,500 miles as the only 
subset of the 10,000 miles that would pass the two tests. As a result, 
the percentage passing both tests would be 35 percent with a base 
mileage of 10,000 miles. As noted in the sensitivity analysis, the 
14,000 mile case with 50 percent proportion passing both tests provides 
very similar results as considering a 10,000 mile case with only 30 
percent passing both tests. A case using 35 percent is not very 
different from a case using 30 percent, and presenting it would not add 
any value to a decision maker. Finally, FRA could continue to use the 
3,500 mile figure as representative of what would happen in a low case, 
with 7,000 miles and 50 percent of segments passing both tests. This 
adds value as a low case in sensitivity analysis. FRA has adopted this 
latter approach, and continues to believe the approach is sound.
    Peabody also claims that, if FRA were to reconduct its economic 
analysis of the prior final rules, the outcome would be a reduced 
estimate of the total cost of PTC wayside implementation. However, FRA 
is not updating its analysis of the prior final rule; the agency is 
only estimating the impacts of the changes induced by this final rule. 
This estimate relies upon PTC system implementation plan submissions to 
arrive at total PTC system mileage, though total mileage has relatively 
little impact on the analysis, and on AAR representations as to the 
affected mileage. Peabody also uses its mileage estimates to argue that 
fewer locomotives than FRA estimates will no longer need to be equipped 
with PTC onboard apparatuses. In making this comment, Peabody appears 
to rely on its mileage estimates that differ with FRA's. FRA's 
estimates are based on actual railroad PTC implementation plans, and on 
its estimates of affected mileage. The primary use of this calculation 
is for FRA to estimate the impact on locomotive costs on small 
entities. In doing so, FRA also estimated impact of this final rule on 
Class II railroads. Reduced locomotive costs account for roughly 2 
percent of the benefits. Even if FRA were to reduce that by 30 percent, 
as Peabody requests, the total societal benefits accruing from this 
rulemaking would be decreased by 0.6 percent. Use of the Peabody 
estimate would not impact the RIA's conclusion.
    Peabody also asserts that FRA erred in assuming an annual PTC 
system maintenance cost of 15 percent of the total installation costs, 
substituting a 12.5 percent factor. However, FRA continues to believe 
maintenance costs will be relatively high compared to electronic 
equipment that does not need to pass strict qualification procedures. 
Railroads and their suppliers will use components developed for the 
general market, including microprocessors. The railroad segment is not 
sufficiently large to provide an incentive for chipmakers to develop or 
manufacture microprocessors exclusively for railroad use. Thus, when 
microprocessors become obsolete, the railroads and their suppliers will 
have to buy different microprocessors, and re-qualify their PTC systems 
using the newer microprocessors. This will increase the maintenance 
costs relative to the value of the installed base. FRA will continue to 
use its estimate that maintenance costs will be 15%, and will adjust 
only if future empirical evidence indicates otherwise. Maintenance cost 
savings were 59 percent of the total benefit using a 7 percent discount 
factor and 65 percent of the total benefit using a 3 percent discount 
factor. Reducing maintenance costs by one-sixth (12.5 percent instead 
of 15 percent) would reduce the total benefit estimate by 10-11 
percent. Even assuming the lower number of locomotives estimated by 
Peabody and the lower maintenance savings estimated by Peabody would 
not have any impact on the conclusions of the analysis, that benefits 
far exceed costs.
    Peabody also argues that FRA improperly shifted the analysis period 
from 2009-2028 to 2012-2031. However, as was the case in several of 
Peabody's other arguments, here Peabody fails to take heed of the fact 
that the instant rulemaking is a new proceeding. Accordingly, FRA has 
adopted a current starting point and 20 year time period for analysis. 
Decisions made prior to this rulemaking were not impacted by this 
rulemaking, and this analysis is appropriately forward-looking only.
    Peabody claims that the exclusion of so-called headline accidents 
is unverified. FRA pointed out in its analysis that all of the headline 
accidents involved either passenger trains or release of chlorine, a 
PIH material. Relief under this rulemaking will only apply to segments 
from which PIH is removed (except for de minimis quantities) and do not 
have passenger traffic except on other than main lines as defined in 
the regulation. The conditions under which the headline accidents 
generally occur would not allow for line segments to get relief from 
PTC requirements. Thus, headline accidents are not relevant to the 
costs or benefits of this rule, as there is not a substantial risk of 
such accidents occurring on the line segments no longer required to be 
equipped with PTC systems as a result of this rule. Peabody also 
objects to applying a percentage to the risk of other PTC-preventable 
accidents on the segments. FRA reviewed data submitted by railroads for 
segments likely to be those from which PIH materials traffic would be 
removed, and made two observations. First, FRA observed that the 
railroads claimed that only 21 PTC-preventable accidents had occurred 
over a 7 year period, an average of 3 per year. This contrasts with the 
PTC-preventable accident data on which FRA based the PTC final rule, 
which showed an average of 52 PTC-preventable accidents per year, 
excluding headline accidents. FRA also observed that in general the 
segments appeared to have below-average tonnage volumes, although FRA 
does not have directly comparable volume data for the entire PTC 
network. It seemed improbable to FRA that roughly 16 percent of the PTC 
network had only 5.8 percent of the PTC-preventable accidents, but 
clearly the average risk per mile would be lower. The calculated 
probability of an accident on the miles to be removed was 36.2 percent 
of the likelihood on the

[[Page 28297]]

entire PTC network.\5\ It also seemed unlikely that the risk per mile 
was identical between the entire PTC network and the miles to be 
removed from PIH materials service. As a conservative estimate, FRA 
used a value of 60% to estimate the accident benefits that would no 
longer occur on segments removed from the PTC network, a value that 
leads to a higher estimate of costs than a value of 36% would have. In 
other words, 60% constitutes a risk estimate within a range of 36% and 
100% of the risk for the segments not subject to this rule, and the 60% 
estimate falls toward the lower end as a result of adjustments for 
density and regulatory changes implemented since the publication of the 
previous final rule. Peabody argues that the removal of the headline 
accidents was a sufficient reduction in estimated risk. FRA disagrees. 
In addition to the reduction of risk from the absence of PIH and 
passenger traffic, the available evidence indicates that the segments 
eligible for exclusion are less likely to have non-headline PTC-
preventable accidents, and FRA has estimated the costs and benefits of 
excluding such segments accordingly.
---------------------------------------------------------------------------

    \5\ Calculation: ((3 accidents per year)/(52 accidents per 
year))/((11,248.43 miles)/(70,000 miles)) = 36.2 percent.
---------------------------------------------------------------------------

    Finally, Peabody objects to FRA's approach to annualization of 
costs. This approach is based on OMB guidance and used by DOT for all 
significant regulations.\6\ Accordingly, FRA will retain the annualized 
estimates.
---------------------------------------------------------------------------

    \6\ OMB Circular A-4 at 45 (``You should present annualized 
benefits and costs using real discount rates of 3 and 7 percent.'').
---------------------------------------------------------------------------

2. AAR
    AAR recognizes the RSIA mandate that PTC systems must be 
implemented by December 31, 2015, on main lines used to transport 
passengers or PIH materials and that FRA maintains the statutory 
discretion to require additional PTC system implementation. However, 
AAR asserts that FRA's discretion must be exercised reasonably. With a 
cost-benefit ratio of 20:1, AAR believes that it is patently 
unreasonable for FRA to exercise any discretion beyond the statute's 
minimum implementation requirements. For the same reason, AAR states 
that the two qualifying tests are inconsistent with RSIA, because, ``No 
additional prerequisites are appropriate unless FRA can justify 
additional PTC requirements beyond the statutory mandate. There is no 
justification for going beyond the statutory mandate in any event, but 
especially with such a disparate cost-benefit ratio.''
    AAR believes that removal of the two qualifying tests could result 
in avoiding PTC system implementation on 10,000 track miles. AAR 
determined this amount based upon the difference between PIH materials 
route maps as they looked in 2008 and what they expect them to look 
like by the end of 2015. AAR expects a reduction in track miles upon 
which PIH materials will be transported due to a change of customer 
demands, regulatory compliance, and pro rata changes to become more 
efficient. AAR estimates PTC system installation-related savings of 
$50,000 per mile, totaling $500 million. AAR expects further savings 
from avoiding the associated maintenance costs.
    With the removal of the two qualifying tests, AAR believes that a 
railroad should still be able to file an RFA to remove a track segment 
from the PTCIP's implementation schedule if there is passenger service 
on the line that qualifies for a main line track exclusion under 49 CFR 
Sec.  236.1019. According to AAR, the statement in the first sentence 
of proposed Sec.  236.1005(b)(4)(i)--that a line qualifies only if 
there is a ``cessation of passenger service''--could be interpreted as 
stating that a PTC system will be required for a line over which no PIH 
materials will be transported after 2015 if there is any passenger 
service, even if the passenger service qualifies for a main line track 
exclusion. While FRA viewed the prior language as sufficient to allow 
for the exclusion of such lines, the rule text has nonetheless been 
further clarified to explicitly reference main line track exclusions.
    In the preamble to the proposed amendments, FRA asks about the 
accuracy of its cost-benefit analysis. While there are some differences 
between AAR's and FRA's assessment of costs, the differences would not 
materially affect FRA's conclusion that the costs to the industry that 
would be avoided far outweigh any benefits that would be lost. In 
general FRA assumes the base cost of $50,000 per mile has not changed 
as a result of technological advancements. Further, FRA assumes this 
$50,000 per mile estimate represents a variable cost estimate that is 
relatively constant across different segments of track.
    While AAR indicated that removal of the two qualifying tests could 
potentially avoid PTC system implementation on 10,000 track miles, FRA 
also performed a sensitivity analysis in its proposed RIA, using 7,000 
miles as a conservative low-number threshold. AAR believes that FRA 
underestimates the route miles at stake, because it presumably does not 
account for track miles potentially affected by the currently 
undeveloped residual risk analysis. Thus, AAR states that it does not 
know the basis for FRA's assumption that 50 percent of the lines in 
question would have qualified under that criterion. FRA agrees that it 
is difficult to estimate the percentage of segments that would have met 
both tests, because both tests were not fully developed. As noted in 
its response to the Peabody study, FRA's sensitivity analysis provides 
a view of what the outcome might have been under the base case had the 
percentage passing the two tests been higher or lower. Ultimately, 
regardless of the exact number of miles no longer requiring PTC system 
implementation, the societal benefits of the final rule are much 
greater than the societal costs.
    AAR also contests statements made at the hearing by those 
representing some of the shippers, taking issue with the shippers' 
reliance on the Peabody and Zeta-Tech studies, which AAR asserts was 
already refuted by the Oliver Wyman study sent to FRA on April 27, 
2010. In particular, while the Peabody and Zeta-Tech studies each 
provide a cost-benefit analysis that included business benefits, Oliver 
Wyman contends that with the advancements made since the writing of the 
Zeta-Tech report, this benefit would be ``minimal.''
    AAR believes that the shippers' reference to the Zeta-Tech analysis 
is misplaced, because it analyzed hypothetical PTC systems and 
hypothetical business benefits. AAR asserts that some of those business 
benefits have already been achieved through implementation of other 
systems and that the PTC systems being installed will not enhance the 
capability to achieve those business benefits. Moreover, according to 
AAR, the PTC systems currently being installed will lack those business 
benefits and will likely face many operational inefficiencies, 
particularly as they relate to braking algorithm changes and the 
resultant effect on network velocity and capacity constraints. FRA did 
not include those business benefits in either the analysis of the NPRM 
or this analysis, and agrees with AAR that it would not have been 
proper to include those hypothetical benefits in either analysis, as 
described in more detail above. In addition, AAR contends that any 
discussions on pricing or common carrier obligations are not 
appropriate for this forum. FRA described these issues in more detail 
in Sections III.A and III.B, above.

[[Page 28298]]

IV. Section-by-Section Analysis

    Unless otherwise noted, all section references below refer to 
sections in title 49 of the Code of Federal Regulations (CFR).

Proposed Amendments to 49 CFR Part 236

Section 236.1003 Definitions
    FRA currently defines PIH materials within the rule text at Sec.  
236.1005(b)(1)(i), which some may find difficult to locate. 
Accordingly, for the purposes of clarity, FRA is adding the definition 
for PIH materials to the definitions section of subpart I. The 
inclusion of this definition in Sec.  236.1003 does not change the 
meaning of the term as understood under Sec.  236.1005(b)(1)(i) or its 
cross-reference to Sec. Sec.  171.8, 173.115, and 173.132.
Section 236.1005 Requirements for Positive Train Control Systems
    In this final rule, FRA is eliminating the alternative route 
analysis and the residual risk analysis tests. When initially published 
in the PTC rule on January 15, 2010, these provisions were included in 
Sec.  236.1005(b). On September 27, 2010, FRA issued amendments to the 
PTC rule, moving the text to a new Sec.  236.1020, and providing more 
clarifying language. However, to ensure continuity and understanding, 
Sec.  236.1005 contained various cross-references to Sec.  236.1020. As 
indicated below, FRA is eliminating Sec.  236.1020. Accordingly, FRA is 
also removing the relevant cross-references in Sec.  236.1005.
    AAR has concerns regarding the text of proposed (b)(4). AAR 
believes that a railroad should still be able to file an RFA to remove 
a track segment from the PTCIP's implementation schedule if there is 
passenger service on the line that qualifies the railroad to submit a 
main line track exclusion addendum (MTEA) under 49 CFR 236.1019. 
According to AAR, the statement in the first sentence of proposed Sec.  
236.1005(b)(4)(i)--that explicitly references the ``cessation of 
passenger service'' but does not discuss MTEAs--could be interpreted as 
stating that a PTC system will be required for a line over which no PIH 
will be transported after 2015 if there is any passenger service, even 
if the passenger service qualifies for an MTEA. AAR also argues that 
this paragraph, if literally read, provides that FRA will approve a 
request for excluding a line segment from the PTC mandate if there is a 
cessation of passenger service or PIH materials service by December 31, 
2015, or a decline in freight traffic below 5 million gross tons over a 
2-year period. AAR states that, ``The first issue with proposed 
(b)(4)(ii) is a repetition of the problem presented by the first 
sentence of (b)(4)(i), a reference to a cessation of passenger service 
rather than a reduction to an amount qualifying for a main track 
exclusion. The second issue with proposed (b)(4)(ii) is the use of 
`or.' Under a strict reading of the proposed language, a line with over 
5 million gross tons of freight traffic used for TIH and passenger 
service, for example, would qualify for an exclusion from the PTC 
mandate if passenger service ceased even if there were no changes in 
the freight volume and TIH traffic continued.''
    In response to these concerns, FRA has clarified the language of 
paragraph (b)(4) without changing its intended meaning. Paragraph 
(b)(4)(i) now specifically mentions the approval of an MTEA as one 
cause for a routing change to allow for approval of an exclusion. 
Paragraph (b)(4)(ii) now more precisely states the set of conditions 
necessary to approve an exclusion. Specifically, an exclusion may only 
be granted where both of the following conditions are established by 
the railroad to be true as of December 31, 2015: first, that there is 
no passenger service, or any passenger service that exists is subject 
to an MTEA; second, that there is no PIH materials traffic or less than 
5 million gross tons of freight traffic.
Section 236.1020 Exclusion of track segments for implementation due to 
cessation of PIH materials traffic
    As previously noted, the current PTC rule requires that, for each 
RFA seeking to exclude a track segment from PTC system implementation 
due to the cessation of PIH materials traffic, a railroad must satisfy 
both an alternative route analysis, and eventually a residual risk 
analysis test, in order to secure FRA's approval. FRA's cost-benefit 
analysis of the PTC rule indicates that the railroads will incur 
approximately $20 in PTC costs for each $1 in PTC safety benefits. In 
its congressional testimony, AAR testified that 2010 was the safest 
year for America's railroads, that railroads have lower employee injury 
rates than most other major industries, that only around 4 percent of 
all train accidents on Class I main lines are likely to be prevented by 
PTC systems, and that there are many far less costly ways to provide 
greater improvements in rail safety than through the implementation of 
PTC systems on lines not required by Congress to be equipped.\7\ 
According to the testimony, if the PTC rule remains unchanged, 
railroads may be required to spend more than $500 million in the next 
few years to deploy PTC systems on more than 10,000 miles of rail lines 
on which neither passengers nor PIH materials will be transported as of 
December 31, 2015.
---------------------------------------------------------------------------

    \7\ See AAR Congressional Testimony, at 8-9.
---------------------------------------------------------------------------

    FRA recognizes that the railroads have much work to do to have 
interoperable PTC systems implemented in accordance with the 
congressional mandate by the December 31, 2015, statutory deadline. FRA 
also recognizes that the alternative route analysis and residual risk 
tests could potentially require PTC system implementation at a great 
cost to the railroads on lines that will not carry PIH materials 
traffic as of December 31, 2015. Lines that no longer carry PIH 
materials traffic can still pose significant safety risks associated 
with other hazardous material traffic on the lines and these safety 
risks may justify a requirement that the lines be equipped with PTC 
systems. However, as FRA noted when it last amended the PTC rule (75 FR 
59111-59113 (Sept. 27, 2010)), FRA will need to develop an appropriate 
risk methodology through a separate rulemaking proceeding before it can 
require PTC systems to be installed on any line that no longer carries 
PIH materials. FRA has had discussion with members of the railroad 
industry regarding an appropriate risk methodology but has yet to come 
up with a reasonable and satisfactory methodology that could form the 
basis of this further rulemaking. FRA is, therefore, eliminating the 
two qualifying tests that would potentially require PTC system 
implementation on lines not specifically mandated by Congress, 
consistent with Executive Order 13563. To achieve this end, FRA is 
eliminating Sec.  236.1020. While FRA has removed these analyses from 
the PTC rule, FRA reserves its statutory and regulatory authority to 
require PTC system implementation on additional track segments in the 
future based on risk levels or other rational bases.

V. Regulatory Impact and Notices

A. Executive Orders 12866 and 13563 and DOT Regulatory Policies and 
Procedures

    This final rule has been evaluated in accordance with existing 
policies and procedures, and determined to be significant under 
Executive Order 12866, Executive Order 13563 and DOT policies and 
procedures. 44 FR 11,034 (Feb. 26, 1979). We have prepared and placed 
in the docket a regulatory impact analysis (RIA) addressing the 
economic impact of this final rule. FRA is

[[Page 28299]]

removing regulatory provisions that require railroads to meet two tests 
in order to avoid PTC system implementation on track segments that were 
used to transport PIH materials traffic in 2008 and carried 5 million 
gross tons of traffic, but that, as of December 31, 2015, do not 
transport PIH materials traffic and are not used for intercity or 
commuter rail passenger transportation that otherwise require PTC 
system installation under the rule. Substantial cost savings will 
accrue largely from not installing PTC system wayside components or 
other mitigations along approximately 10,000 miles of track. Although 
these rail lines will forgo some risk reduction, the reductions in risk 
will likely be small since these lines pose a much lower risk of 
accidents because they generally do not carry passenger trains or PIH 
materials and generally have lower accident frequency and severity, 
because the lines have relatively lower traffic volumes than the 
average segment on which PTC systems will be required, based on FRA's 
review of the data submitted by AAR. The analysis shows that if the 
assumptions are correct, the savings to the industry in the form of 
regulatory relief as proposed far outweigh the cost associated with 
increased accident exposure.
    The largest part of the cost savings benefit comes from reducing 
the extent of wayside that must be equipped with PTC systems. Some of 
these lines would have qualified for exemption by passing the two tests 
contained in the 2010 PTC final rule, while others may not have. In 
addition, benefits will come from reducing the number of locomotives 
belonging to Class II and Class III (small) railroads that must be 
equipped with PTC systems, because they run on Class I railroads' track 
that will no longer need to be equipped with PTC systems. Although 
these benefits will be small relative to the wayside equipment savings, 
they would be large relative to the size of the railroads being 
impacted. The tables below present the total estimated cost savings 
benefits of the final rule, assuming installation or additional 
mitigation measures would no longer be required along 10,000 miles of 
track. The analysis assumes that 5,000 miles of track would have passed 
both tests with some mitigation measures being taken, and the remaining 
5,000 miles would not have passed both tests and would have required 
PTC system implementation under the rules in effect before this 
rulemaking.

                     Benefits (20-Year, Discounted)
------------------------------------------------------------------------
             Costs avoided                7% Discount      3% Discount
------------------------------------------------------------------------
Reduced Mitigation Costs, Including         $91,793,822     $121,119,324
 Maintenance..........................
Reduced Wayside Costs, Including            515,695,631      680,445,643
 Maintenance..........................
Reduced Locomotive Costs, Including          12,479,834       16,466,785
 Maintenance..........................
                                       ---------------------------------
    Total Benefits....................      619,969,287      818,031,752
------------------------------------------------------------------------

    Total costs may also be broken down into initial investment and 
maintenance costs. Although railroads may already have spent money to 
install and maintain PTC systems, FRA assumes here that those funds 
have not been spent on the lines considered here, as they tend to be 
lower volume, lower priority lines, and FRA assumes that the railroads 
would not install PTC systems on those lines until 2014, at the 
earliest, in the absence of this rulemaking. FRA estimates that 
avoiding installation on 10,000 miles would let railroads avoid $300.5 
million in initial installation costs (not discounted). Maintenance 
cost savings would total $366.0 million (discounted at 7%) or $538.9 
million (discounted at 3%). Maintenance includes all of the activities 
and subsequent purchases needed to operate the PTC system over its 
life-cycle, and to maintain its proper functioning, reliability, and 
availability. Maintenance includes training, system inspection, 
testing, adjustments, repair, and replacement of components. 
Replacement components can be very expensive in processor-based systems 
with relatively small installed bases, such as PTC. PTC systems are not 
installed in great enough numbers to justify a processor manufacturer 
making a processor just for PTC. PTC systems developers must use 
standard processors, and over time those processors usually become 
obsolete and are no longer supported or manufactured. Then the PTC 
system developer must redesign and re-test the PTC system to ensure it 
will continue to operate safely and reliably with the new processor. 
The Trade Associations commented that they believe the estimated 
savings from reduced maintenance costs are too high, and should have 
been based on 12.5 percent of the value of installed PTC systems, 
rather than the 15 percent of the value of installed PTC systems used 
in analyzing both the NPRM and this final rule. For reasons described 
above, in its response to comments FRA explains its rationale for 
rejecting the lower estimate of maintenance costs.
    Costs associated with the proposed regulatory relief will come from 
reducing the potential for accident reduction. A substantial part of 
the accident reduction that FRA expects from PTC systems comes from 
reducing high-consequence accidents involving passenger trains or the 
release of PIH materials. FRA believes that the track segments impacted 
by this final rule pose significantly less risk because they generally 
do not carry passenger trains or PIH materials and generally have lower 
accident frequency and severity, as discussed above, because the lines 
have relatively lower traffic volumes and track speeds than the average 
segment on which PTC systems are required, based on FRA's review of the 
data submitted by AAR. The following tables present the total costs of 
the final rule as well as the breakdown of the costs by element.

                       Costs (20-Year, Discounted)
------------------------------------------------------------------------
        Foregone reductions in            7% Discount      3% Discount
------------------------------------------------------------------------
Fatality Prevention...................      $11,453,106      $16,860,327
Injury Prevention.....................        4,254,484        6,263,104
Train Delay...........................          117,793          173,406
Property Damage.......................       10,163,835       14,962,367
Equipment Cleanup.....................          143,273          210,915

[[Page 28300]]

 
Environmental Cleanup.................          430,995          634,475
Evacuations...........................          138,780          204,301
                                       ---------------------------------
    Total Costs.......................       26,702,267       39,308,896
------------------------------------------------------------------------

    The 20-year discounted net benefits (subtracting the costs from the 
benefits) are expected to be $590 million over 20 years, discounted at 
7 percent per year; and $780 million over 20 years, discounted at 3 
percent per year. The timing of benefits and costs are such that a 
large benefit in terms of capital investment is avoided in early years, 
while the benefit of avoided maintenance and the disbenefit (costs) of 
accidents not avoided would be realized annually in later years. FRA 
also assessed the sensitivity of the analysis with respect to scenarios 
in which railroads may only be able to get relief for 7,000 miles of 
track and in which railroads may get relief on as many as 14,000 miles 
of track. Each of these assumes that 50% of the track miles would have 
passed both tests with some mitigation measures being taken, and that 
the remaining 50% of the track miles would not have passed both tests 
and would have required PTC system implementation under the current 
rules. Such scenarios also show net benefits.

------------------------------------------------------------------------
         Net societal benefits            7% Discount      3% Discount
------------------------------------------------------------------------
Expected Case (10,000 miles)..........     $593,267,020     $778,722,856
High Case (14,000 miles)..............      793,856,299    1,041,764,269
Low Case (7,000 miles)................      442,825,061      581,441,797
------------------------------------------------------------------------

    Further, the benefit-cost ratios under the scenarios analyzed range 
between 20:1 and 25:1.

------------------------------------------------------------------------
          Benefit-cost ratio              7% Discount      3% Discount
------------------------------------------------------------------------
Expected Case.........................            23.22            20.81
High Case.............................            22.24            19.93
Low Case..............................            24.69            22.13
------------------------------------------------------------------------

    FRA also received comments from the Trade Associations saying that 
FRA understated the costs of the proposed rule, especially by not 
accounting for business benefits of PTC that would be lost on the 
affected segments. FRA has reviewed PTCIPs, and at present the only 
business benefits the railroads are seemingly likely to realize from 
PTC would result from train pacing. Train pacing benefits are derived 
from locomotive onboard equipment, and would not be affected by the 
reduction in wayside component installations. Train pacing is likely to 
result in fuel savings, but since train pacing will not be affected by 
this rule, fuel savings will remain unchanged. This is discussed in 
more detail in the response to comments above.

B. Regulatory Flexibility Act and Executive Order 13272

    To ensure that the impact of this rulemaking on small entities is 
properly considered, FRA developed this final rule in accordance with 
Executive Order 13272 (``Proper Consideration of Small Entities in 
Agency Rulemaking'') and DOT's policies and procedures to promote 
compliance with the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).
    The Regulatory Flexibility Act requires an agency to review 
regulations to assess their impact on small entities. An agency must 
conduct a regulatory flexibility analysis unless it determines and 
certifies that a rule is not expected to have a significant economic 
impact on a substantial number of small entities.
    As discussed in earlier sections of this preamble, FRA is amending 
the regulations implementing a provision of RSIA that requires certain 
passenger and freight railroads to install PTC systems. Specifically, 
FRA is removing two regulatory requirements that require railroads to 
either conduct further analyses or meet certain risk-based criteria in 
order to avoid PTC system implementation on track segments that carried 
PIH traffic and 5 million or more gross tons of traffic in 2008 but 
that will not carry PIH hazardous materials traffic as of December 31, 
2015.
    FRA is certifying that this final rule will result in ``no 
significant economic impact on a substantial number of small 
entities.'' The following section explains the reasons for this 
certification.
1. Description of Regulated Entities and Impacts
    The ``universe'' of the entities under consideration includes only 
those small entities that can reasonably be expected to be directly 
affected by the provisions of this rule. In this case, the ``universe'' 
would be Class III freight railroads that operate on rail lines that 
are currently required to have PTC systems installed. Such lines are 
owned by railroads not considered to be small.
    The U.S. Small Business Administration (SBA) stipulates in its 
``Size Standards'' that the largest a railroad business firm that is 
``for-profit'' may be, and still be classified as a ``small entity,'' 
is 1,500 employees for ``Line Haul Operating Railroads'' and 500 
employees for ``Switching and Terminal Establishments.'' ``Small 
entity'' is defined in the Act as a small business that is 
independently owned and operated, and is not dominant in its field of 
operation. Additionally, section 601(5) defines ``small entities'' as 
governments of cities, counties, towns, townships, villages, school 
districts, or special districts with populations less than 50,000.

[[Page 28301]]

    Federal agencies may adopt their own size standards for small 
entities in consultation with SBA and in conjunction with public 
comment. Pursuant to that authority, FRA has published a final policy 
that formally establishes ``small entities'' as railroads which meet 
the line haulage revenue requirements of a Class III railroad.\8\ The 
revenue requirements are currently $20 million or less in annual 
operating revenue. The $20 million limit (which is adjusted by applying 
the railroad revenue deflator adjustment) \9\ is based on the Surface 
Transportation Board's (STB) threshold for a Class III railroad 
carrier. FRA is using the STB's threshold in its definition of ``small 
entities'' for this rule.
---------------------------------------------------------------------------

    \8\ See 68 FR 24891 (May 9, 2003); 49 CFR part 209, app. C.
    \9\ For further information on the calculation of the specific 
dollar limit, please see 49 CFR part 1201.
---------------------------------------------------------------------------

    The final rule impacts Class III railroads that operate on lines of 
other railroads currently required to have PTC systems installed. To 
the extent that such host railroads receive relief from such a 
requirement along certain lines, Class III railroads that operate over 
those lines would not have to equip their locomotives with PTC system 
components. FRA believes that elimination of the two tests for relief 
from the requirement to install PTC systems will result in PTC systems 
not being installed on track segments totaling over 10,000 miles in 
length. Approximately five small railroads operate locomotives on lines 
currently required to be equipped with PTC systems, but that would 
receive relief under the final rule. In addition, two Class III 
railroads operate over railroad crossings (diamonds) that intersect 
tracks required to be equipped with PTC systems in the absence of 
changes adopted in this final rule. The total of seven affected Class 
III railroads is not a substantial number of small entities, given that 
there are 674 small railroads. Under the final rule Class III railroads 
will avoid equipping 28 locomotives with PTC onboard apparatuses at a 
cost savings of $55,000 per locomotive initially plus maintenance of 
the PTC equipment.
    As a business model, most small railroads purchase old locomotives 
being sold by larger railroads, because they have become functionally 
obsolete for the larger railroads. In the RSAC PTC Working Group 
discussions leading up to the PTC final rule published in the Federal 
Register on January 15, 2010, the American Short Line & Regional 
Railroad Association (ASLRRA) representatives asserted that some short 
lines are operating locomotives with a market value of no more than 
$75,000, and that it would be very difficult for those railroads to 
equip their locomotives at a unit cost of $55,000 each. Further, even 
if the average cost to equip a locomotive is $55,000, it may be more 
expensive to equip an older locomotive. These railroads will have to 
develop a new and unique installation for a small number of locomotives 
that may also have space limitations and that may not be equipped with 
the more modern mechanisms and design that make it easier to install 
PTC systems. One or more of the seven affected small railroads may be 
using such older locomotives. For such a railroad, the cost of 
equipping a locomotive with an onboard PTC apparatus may be a 
significant burden. Thus, the relief of that burden provided by the 
final rule may be a significant benefit for such small entities.
    The avoided installation cost will also have a significant 
beneficial effect on small railroads' annual net income. For instance, 
if a short line railroad avoids onboard PTC apparatus installation on 
six locomotives, then the savings would be $330,000. When such a 
railroad may have annual revenues of $10 million to $20 million, with 
the profit of that amount ranging between $1 million and $2 million, 
the avoided installation cost could be between 16.5 percent and 33 
percent of that railroad's annual income. This savings could be a 
significant benefit for an affected small railroad. However, even if 
all seven of the affected Class III railroads were to receive a 
significant benefit, seven railroads is not a substantial number of 
small railroads.
    In addition, a Class III railroad will avoid paying for PTC system 
installation at one railroad-to-railroad crossing, at an initial cost 
of $80,000 plus annual maintenance. Finally, Class III railroads will 
avoid operational costs associated with having to reduce operating 
speeds to cross over two railroad-to-railroad crossings at an annual 
cost of $43,800. The unit costs presented above for installing PTC 
systems on locomotives, and at railroad-to-railroad crossings, and the 
operational costs of operating over a crossing at reduced speed are the 
values used in the Regulatory Flexibility Analysis of the PTC final 
rule issued January 15, 2010, and can be found in the docket for that 
rulemaking. The changes FRA is adopting will benefit the small entities 
impacted. FRA requested comment on whether the impacts on them would be 
significant and whether the number of small railroads affected is 
substantial. The Trade Associations commented that they believe the 
mileage affected on Class I railroads would be less, and the impact on 
Class II and Class III railroads also correspondingly less. FRA does 
not concur with the comments and the information provided by commenters 
does not provide any rationale against certification that the rule is 
not expected to impact a substantial number of small entities 
significantly. The Trade Associations comments actually support the 
certification by suggesting that the impact on the affected small 
entities would be less than FRA had estimated. The seven railroads 
affected by this rule do not represent a substantial number of 
railroads out of more than approximately 600 Class III railroads.
2. Certification
    Pursuant to the Regulatory Flexibility Act, 5 U.S.C. 605(b), the 
FRA Administrator certifies that this final rule will not have a 
significant economic impact on a substantial number of small entities.

C. Paperwork Reduction Act

    The information collection requirements in this final rule are 
being 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 current information collection 
requirements and the estimated time to fulfill each requirement are as 
follows:

----------------------------------------------------------------------------------------------------------------
                                                            Total annual       Average time per    Total annual
           CFR Section             Respondent universe       responses             response        burden hours
----------------------------------------------------------------------------------------------------------------
234.275--Processor-Based Systems-- 20 Railroads.......  25 letters.........  4 hours............             100
 Deviations from Product Safety
 Plan (PSP)--Letters.
236.18--Software Mgmt Control      184 Railroads......  184 plans..........  2,150 hours........         395,600
 Plan.
    --Updates to Software Mgmt.    90 Railroads.......  20 updates.........  1.50 hours.........              30
     Control Plan.
236.905--Updates to RSPP.........  78 Railroads.......  6 plans............  135 hours..........             810
    --Response to Request For      78 Railroads.......  1 updated doc......  400 hours..........             400
     Additional Info.

[[Page 28302]]

 
    --Request for FRA Approval of  78 Railroads.......  1 request/modified   400 hours..........             400
     RSPP Modification.                                  RSPP.
236.907--Product Safety Plan       5 Railroads........  5 plans............  6,400 hours........          32,000
 (PSP)--Dev.
236.909--Minimum Performance       5 Railroads........  2 petitions/PSP....  19,200 hours.......          38,400
 Standard--Petitions For Review
 and Approval.
    --Supporting Sensitivity       5 Railroads........  5 analyses.........  160 hours..........             800
     Analysis.
236.913--Notification/Submission   6 Railroads........  1 joint plan.......  25,600 hours.......          25,600
 to FRA of Joint Product Safety
 Plan (PSP).
    --Petitions For Approval/      6 Railroads........  6 petitions........  1,928 hours........          11,568
     Informational Filings.
    --Responses to FRA Request     6 Railroads........  2 documents........  800 hours..........           1,600
     For Further Info. After
     Informational Filing.
    --Responses to FRA Request     6 Railroads........  6 documents........  16 hours...........              96
     For Further Info. After
     Agency Receipt of Notice of
     Product Development.
    --Consultations..............  6 Railroads........  6 consults.........  120 hours..........             720
    --Petitions for Final          6 Railroads........  6 petitions........  16 hours...........              96
     Approval.
    --Comments to FRA by           Public/RRs.........  7 comments.........  240 hours..........           1,680
     Interested Parties.
    --Third Party Assessments of   6 Railroads........  1 assessment.......  104,000 hours......         104,000
     PSP.
    --Amendments to PSP..........  6 Railroads........  15 amendments......  160 hours..........           2,400
    --Field Testing of Product--   6 Railroads........  6 documents........  3,200 hours........          19,200
     Info. Filings.
236.917--Retention of Records....  ...................  ...................  160,000 hrs........  ..............
    --Results of tests/            6 Railroads........  3 documents/records  160,000 hrs.;               360,000
     inspections specified in PSP.                                            40,000 hrs.
    --Report to FRA of             6 Railroads........  1 report...........  104 hours..........             104
     Inconsistencies with
     frequency of safety-relevant
     hazards in PSP.
236.919--Operations & Maintenance
 Man
    --Updates to O & M Manual....  6 Railroads........  6 updated docs.....  40 hours...........             240
    --Plans For Proper             6 Railroads........  6 plans............  53,335 hours.......         320,010
     Maintenance, Repair,
     Inspection of Safety-
     Critical Products.
    --Hardware/Software/Firmware   6 Railroads........  6 revisions........  6,440 hours........          38,640
     Revisions.
236.921--Training Programs:        6 Railroads........  6 Tr. Programs.....  400 hours..........           2,400
 Development.
    --Training of Signalmen &      6 Railroads........  300 signalmen; 20    40 hours; 20 hours.          12,400
     Dispatchers.                                        dispatchers.
236.923--Task Analysis/Basic       6 Railroads........  6 documents........  720 hours..........           4,320
 Requirements: Necessary
 Documents.
    --Records....................  6 Railroads........  350 records........  10 minutes.........              58
 
   SUBPART I--NEW REQUIREMENTS
 
236.1001--RR Development of More   46 Railroads.......  3 rules............  80 hours...........             240
 Stringent Rules Re: PTC
 Performance Stds.
236.1005--Requirements for PTC
 Systems
    --Temporary Rerouting:         46 Railroads.......  50 requests........  8 hours............             400
     Emergency Requests.
    --Written/Telephonic           46 Railroads.......  50 notifications...  2 hours............             100
     Notification to FRA Regional
     Administrator.
    --Temporary Rerouting          46 Railroads.......  760 requests.......  8 hours............           6,080
     Requests Due to Track
     Maintenance.
    --Temporary Rerouting          46 Railroads.......  380 requests.......  8 hours............           3,040
     Requests That Exceed 30 Days.
236.1006--Requirements for
 Equipping Locomotives Operating
 in PTC Territory
    --Reports of Movements in      46 Railroads.......  45 reports + 45      8 hours + 170......           8,010
     Excess of 20 Miles/RR                               reports.
     Progress on PTC Locomotives.
    --PTC Progress Reports.......  46 Railroads.......  35 reports.........  16 hours...........             560
236.1007--Additional Requirements
 for High Speed Service
    --Required HSR-125 Documents   46 Railroads.......  2 documents........  3,200 hours........           6,400
     with approved PTCSP.
    --Requests to Use Foreign      46 Railroads.......  1 request..........  8,000 hours........           8,000
     Service Data.
    --PTC Railroads Conducting     46 Railroads.......  2 documents........  3,200 hours........           6,400
     Operations at More than 150
     MPH with HSR-125 Documents.
    --Requests for PTC Waiver....  46 Railroads.......  1 request..........  1,000 hours........           1,000
236.1009-Procedural Requirements
    --Host Railroads Filing PTCIP  46 Railroads.......  1 PCTIP; 20 RFAs...  535 hours; 320                6,935
     or Request for Amendment                                                 hours.
     (RFAs).
    --Jointly Submitted PTCIPs...  46 Railroads.......  7 PTCIPs...........  267 hours..........           1,869
    --Notification of Failure to   46 Railroads.......  1 notification.....  32 hours...........              32
     File Joint PTCIP.
    --Comprehensive List of        46 Railroads.......  1 list.............  80 hours...........              80
     Issues Causing Non-Agreement.
    --Conferences to Develop       46 Railroads.......  2 conf. calls......  60 minutes.........               2
     Mutually Acceptable PCTIP.
    --Type Approval..............  46 Railroads.......  2 Type Appr........  8 hours............              16
    --PTC Development Plans        46 Railroads.......  20 Ltr. + 20 App; 2  8 hrs/1600 hrs;              44,960
     Requesting Type Approval.                           Plans.               6,400 hours.
    --Notice of Product Intent w/  46 Railroads.......  1 NPI; 1 IP........  1,070 + 535 hrs....           1,605
     PTCIPs (IPs).
    --PTCDPs with PTCIPs (DPs +    46 Railroads.......  1 DP...............  2,135 hours........           2,135
     IPs).
    --Updated PTCIPs w/PTCDPs      46 Railroads.......  1 IP; 1 DP.........  535 + 2,135 hrs....           2,670
     (IPs + DPs).
    --Disapproved/Resubmitted      46 Railroads.......  1 IP + 1 NPI.......  135 + 270 hrs......             405
     PTCIPs/NPIs.
    --Revoked Approvals--          46 Railroads.......  IP + 1 DP..........  135 + 535 hrs......             670
     Provisional IPs/DP.
    --PTC IPs/PTCDPs Still         46 Railroads.......  1 IP + 1 DP........  135 + 535 hrs......             670
     Needing Rework.
    --PTCIP/PTCDP/PTCSP Plan       46 Railroads.......  1 document.........  8,000 hours........           8,000
     Contents--Documents
     Translated into English.
    --Requests for                 46 Railroads.......  46 ltrs; 46 docs...  8hrs.; 800 hrs.....          37,168
     Confidentiality.
    --Field Test Plans/            46 Railroads.......  460 field tests; 2   800 hours..........         369,600
     Independent Assessments--                           assessments.
     Req. by FRA.
    --FRA Access: Interviews with  46 Railroads.......  92 interviews......  30 minutes.........              46
     PTC Wrkrs..
    --FRA Requests for Further     46 Railroads.......  8 documents........  400 hours..........           3,200
     Information.

[[Page 28303]]

 
236.1011-PTCIP Requirements--      7 Interested Groups  1 rev.; 40 com.....  143 + 8 hrs........             463
 Comment.
236.1015--PTCSP Content
 Requirements & PTC System
 Certification
    --Non-Vital Overlay..........  46 Railroads.......  3 PTCSPs...........  16,000 hours.......          48,000
    --Vital Overlay..............  46 Railroads.......  40 PTCSPs..........  22,400 hours.......         896,000
    --Stand Alone................  46 Railroads.......  1 PTCSP............  32,000 hours.......          32,000
    --Mixed Systems--Conference    46 Railroads.......  3 conferences......  32 hours...........              96
     with FRA regarding Case/
     Analysis.
    --Mixed Sys. PTCSPs (incl.     46 Railroads.......  1 PTCSP............  28,800 hours.......          28,800
     safety case).
    --FRA Request for Additional   46 Railroads.......  23 documents.......  3,200 hours........          73,600
     PTCSP Data.
    --PTCSPs Applying to Replace   46 Railroads.......  40 PTCSPs..........  3,200 hours........         128,000
     Existing Certified PTC
     Systems.
    --Non-Quantitative Risk        46 Railroads.......  40 assessments.....  3,200 hours........         128,000
     Assessments Supplied to FRA.
236.1017--PTCSP Supported by       46 Railroads.......  1 assessment.......  8,000 hours........           8,000
 Independent Third Party
 Assessment.
    --Written Requests to FRA to   46 Railroads.......  1 request..........  8 hours............               8
     Confirm Entity Independence.
    --Provision of Additional      46 Railroads.......  1 document.........  160 hours..........             160
     Information After FRA
     Request.
    --Independent Third Party      46 Railroads.......  1 request..........  160 hours..........             160
     Assessment: Waiver Requests.
    --RR Request for FRA to        46 Railroads.......  1 request..........  32 hours...........              32
     Accept Foreign Railroad
     Regulator Certified Info.
236.1019--Main Line Track
 Exceptions
    --Submission of Main Line      46 Railroads.......  138 MTEAs..........  160 hours..........          22,080
     Track Exclusion Addendums
     (MTEAs).
    --Passenger Terminal           46 Railroads.......  23 MTEAs...........  160 hours..........           3,680
     Exception--MTEAs.
    --Limited Operation            46 Railroads.......  46 plans...........  160 hours..........           7,360
     Exception--Risk Mit.
    --Ltd. Exception--Collision    46 Railroads.......  23 analyses........  1,600 hours........          36,800
     Hazard Anal.
    --Temporal Separation          46 Railroads.......  11 procedures......  160 hours..........           1,760
     Procedures.
236.1021--Discontinuances,         46 Railroads.......  23 RFAs............  160 hours..........           3,680
 Material Modifications,
 Amendments--Requests to Amend
 (RFA) PTCIP, PTCDP or PTCSP.
    -- Review and Public Comment   7 Interested Groups  7 reviews + 20       3 hours; 16 hours..             341
     on RFA.                                             comments.
236.1023--PTC Product Vendor       46 Railroads.......  46 lists...........  8 hours............             368
 Lists.
    --RR Procedures Upon           46 Railroads.......  46 procedures......  16 hours...........             736
     Notification of PTC System
     Safety-Critical Upgrades,
     Rev., Etc.
    --RR Notifications of PTC      46 Railroads.......  150 notifications..  16 hours...........           2,400
     Safety Hazards.
    --RR Notification Updates....  46 Railroads.......  150 updates........  16 hours...........           2,400
    --Manufacturer's Report of     5 System Suppliers.  5 reports..........  400 hours..........           2,000
     Investigation of PTC Defect.
    --PTC Supplier Reports of      5 System Suppliers.  150 reports + 150    16 hours + 8 hours.           3,600
     Safety Relevant Failures or                         rpt. copies.
     Defective Conditions.
236.1029--Report of On-Board Lead  46 Railroads.......  1,012 reports......  96 hours...........          97,152
 Locomotive PTC Device Failure.
236.1031--Previously Approved PTC
 Systems
    --Request for Expedited        46 Railroads.......  3 REC Letters......  160 hours..........             480
     Certification (REC) for PTC
     System.
    --Requests for Grandfathering  46 Railroads.......  3 requests.........  1,600 hours........           4,800
     on PTCSPs.
236.1035--Field Testing            46 Railroads.......  230 field test       800 hours..........         184,000
 Requirements.                                           plans.
    --Relief Requests from         46 Railroads.......  46 requests........  320 hours..........          14,720
     Regulations Necessary to
     Support Field Testing.
236.1037--Records Retention
    --Results of Tests in PTCSP    46 Railroads.......  1,012 records......  4 hours............           4,048
     and PTCDP.
    --PTC Service Contractors      46 Railroads.......  22,080 records.....  30 minutes.........          11,040
     Training Records.
    --Reports of Safety Relevant   46 Railroads.......  4 reports..........  8 hours............              32
     Hazards Exceeding Those in
     PTCSP and PTCDP.
    --Final Report of Resolution   46 Railroads.......  4 final reports....  160 hours..........             640
     of Inconsistency.
236.1039--Operations &             46 Railroads.......  46 manuals.........  250 hours..........          11,500
 Maintenance Manual (OMM):
 Development.
    --Positive Identification of   46 Railroads.......  120,000 i.d.         1 hour.............         120,000
     Safety-critical components.                         components.
    --Designated RR Officers in    46 Railroads.......  92 designations....  2 hours............             184
     OMM. regarding PTC issues.
236.1041--PTC Training Programs..  46 Railroads.......  46 programs........  400 hours..........          18,400
236.1043--Task Analysis/Basic      46 Railroads.......  46 evaluations.....  720 hours..........          33,120
 Requirements: Training
 Evaluations.
    --Training Records...........  46 Railroads.......  8,560 records......  10 minutes.........           1,427
236.1045--Training Specific to     46 Railroads.......  64 trained           20 hours...........           1,280
 Office Control Personnel.                               employees.
236.1047--Training Specific to
 Loc. Engineers & Other Operating
 Personnel
    --PTC Conductor Training.....  30 Railroads.......  8,000 trained        3 hours............          24,000
                                                         conductors.
----------------------------------------------------------------------------------------------------------------

    All estimates include the time for reviewing instructions; 
searching existing data sources; gathering or maintaining the needed 
data; and reviewing the information. For information or a copy of the 
paperwork package submitted to OMB, contact Mr. Robert Brogan at 202-
493-6292 or Ms. Kimberly Toone at 202-493-6132 or via email at the 
following addresses: robert.brogan@dot.gov; kimberly.toone@dot.gov.
    Organizations and individuals desiring to submit comments on the 
collection of information requirements

[[Page 28304]]

should direct them to the Office of Management and Budget, Office of 
Information and Regulatory Affairs, Washington, DC 20503, Attention: 
FRA Desk Officer. Comments may also be sent via email to the Office of 
Management and Budget at the following address: oira_submissions@omb.eop.gov mailto:victor.angelo@fra.dot.gov.
    OMB is required to make a decision concerning the collection of 
information requirements contained in this direct 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 cannot impose a penalty on persons for violating information 
collection requirements which do not display a current OMB control 
number, if required. FRA intends to obtain current OMB control numbers 
for any new information collection requirements resulting from this 
rulemaking action prior to the effective date of this final rule. The 
OMB control number, when assigned, will be announced by separate notice 
in the Federal Register.

D. Federalism Implications

    This final rule has been analyzed in accordance with the principles 
and criteria contained in Executive Order 13132, ``Federalism.'' See 64 
FR 43,255 (Aug. 4, 1999). As discussed earlier in the preamble, this 
final rule would provide regulatory relief from the mandated 
implementation of PTC systems.
    Executive Order 13132 requires FRA to develop a process to ensure 
``meaningful and timely input by state and local officials in the 
development of regulatory policies that have federalism implications.'' 
Policies that have ``federalism implications'' are defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.'' Under 
Executive Order 13132, the agency may not issue a regulation with 
federalism implications that imposes substantial direct compliance 
costs and that is not required by statute, unless the federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by State and local governments, or the agency consults 
with State and local government officials early in the process of 
developing the regulation. Where a regulation has federalism 
implications and preempts state law, the agency seeks to consult with 
State and local officials in the process of developing the regulation.
    FRA has determined that this final rule would not have substantial 
direct effects on the States, on the relationship between the national 
government and the States, nor on the distribution of power and 
responsibilities among the various levels of government. In addition, 
FRA has determined that this final rule would not impose any direct 
compliance costs on State and local governments. Therefore, the 
consultation and funding requirements of Executive Order 13132 do not 
apply.
    However, this final rule will have preemptive effect. Section 20106 
of Title 49 of the United States Code provides that States may not 
adopt or continue in effect any law, regulation, or order related to 
railroad safety or security that covers the subject matter of a 
regulation prescribed or order issued by the Secretary of 
Transportation (with respect to railroad safety matters) or the 
Secretary of Homeland Security (with respect to railroad security 
matters), except when the State law, regulation, or order qualifies 
under the local safety or security exception to Sec.  20106. 
Furthermore, the Locomotive Boiler Inspection Act (49 U.S.C. 20701-
20703) has been held by the U.S. Supreme Court to preempt the entire 
field of locomotive safety.
    In sum, FRA has analyzed this final rule in accordance with the 
principles and criteria contained in Executive Order 13132. As 
explained above, FRA has determined that this final rule has no 
federalism implications, other than the possible preemption of State 
laws. Accordingly, FRA has determined that preparation of a federalism 
summary impact statement for this final rule is not required.

E. Environmental Impact

    FRA has evaluated this final rule in accordance with its 
``Procedures for Considering Environmental Impacts'' (``FRA's 
Procedures'') (64 FR 28545, May 26, 1999) as required by the National 
Environmental Policy Act (42 U.S.C. 4321 et seq.), other environmental 
statutes, Executive Orders, and related regulatory requirements. FRA 
has determined that this final rule is not a major FRA action 
(requiring the preparation of an environmental impact statement or 
environmental assessment) because it is categorically excluded from 
detailed environmental review pursuant to section 4(c)(20) of FRA's 
Procedures. In accordance with section 4(c) and (e) of FRA's 
Procedures, the agency has further concluded that no extraordinary 
circumstances exist with respect to this regulation that might trigger 
the need for a more detailed environmental review. As a result, FRA 
finds that this final rule is not a major Federal action significantly 
affecting the quality of the human environment.

F. Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 2 U.S.C. 
1531) (UMRA) requires agencies to prepare a written assessment of the 
costs, benefits, and other effects of proposed or final rules that 
include a federal mandate likely to result in the expenditures by 
state, local or tribal governments, in the aggregate, or by the private 
sector, of $100 million (adjusted annually for inflation with base year 
of 1995) or more in any one year. The value equivalent of $100 million 
in CY 1995, adjusted annual for inflation to CY 2008 levels by the 
Consumer Price Index for All Urban Consumers (CPI-U) is $141.3 million. 
The assessment may be included in conjunction with other assessments, 
as it is in this rulemaking.
    FRA is publishing this final rule to provide additional flexibility 
in standards for the development, testing, implementation, and use of 
PTC systems for railroads mandated by RSIA to implement PTC systems. 
The RIA provides a detailed analysis of the costs and benefits of the 
final rule. This analysis is the basis for determining that this rule 
will not result in total expenditures by State, local or tribal 
governments, in the aggregate, or by the private sector of $141.3 
million or more in any one year. The costs associated with this final 
rule are reduced accident reduction from an existing rule.

G. Energy Impact

    Executive Order 13211 requires federal agencies to prepare a 
Statement of Energy Effects for any ``significant energy action.'' 66 
FR 28355 (May 22, 2001). Under the Executive Order, a ``significant 
energy action'' is defined as any action by an agency (normally 
published in the Federal Register) that promulgates or is expected to 
lead to the promulgation of a final rule or regulation, including 
notices of inquiry, advance notices of proposed rulemaking, and notices 
of proposed rulemaking: (1)(i) That is a significant regulatory action 
under Executive Order 12866 or any successor order, and (ii) is likely 
to have a significant adverse effect on the supply, distribution, or 
use of energy; or (2) that is designated by the Administrator of the 
Office of

[[Page 28305]]

Information and Regulatory Affairs as a significant energy action. FRA 
has evaluated this final rule in accordance with Executive Order 13211. 
FRA has determined that this final rule is not likely to have a 
significant adverse effect on the supply, distribution, or use of 
energy. Consequently, FRA has determined that this regulatory action is 
not a ``significant regulatory action'' within the meaning of Executive 
Order 13211.

H. Privacy Act

    FRA wishes to inform all interested parties that anyone is able to 
search the electronic form of any written communications and comments 
received into any of our dockets by the name of the individual 
submitting the document (or signing the document), if submitted on 
behalf of an association, business, labor union, etc.). Interested 
parties may also review DOT's complete Privacy Act Statement in the 
Federal Register published on April 11, 2000 (65 FR 19477) or visit 
www.regulations.gov.

List of Subjects in 49 CFR Part 236

    Penalties, Positive train control, Railroad safety, Reporting and 
recordkeeping requirements.

The Final Rule

    In consideration of the foregoing, FRA hereby amends chapter II, 
subtitle B of title 49, Code of Federal Regulations as follows:

PART 236--[AMENDED]

0
1. The authority citation for part 236 continues to read as follows:

    Authority:  49 U.S.C. 20102-20103, 20107, 20133, 20141, 20157, 
20301-20303, 20306, 21301-21302, 21304; 28 U.S.C. 2461, note; and 49 
CFR 1.49.

0
2. Amend Sec.  236.1003 by adding the definition ``PIH Materials'' to 
paragraph (b) to read as follows:

Sec.  236.1003  Definitions.

* * * * *
    (b) * * *
    PIH Materials means materials poisonous by inhalation, as defined 
in Sec. Sec.  171.8, 173.115, and 173.132 of this title.
* * * * *

0
3. Amend Sec.  236.1005 by redesignating paragraph (b)(4)(ii) as 
paragraph (b)(4)(iii); revise paragraph (b)(4)(i) and add a new 
paragraph (b)(4)(ii) to read as follows:

Sec.  236.1005  Requirements for Positive Train Control systems.

* * * * *
    (b) * * *
    (4) * * *
    (i) Routing changes. In a PTCIP or an RFA, a railroad may request 
review of the requirement to install PTC on a track segment where a PTC 
system is otherwise required by this section, but has not yet been 
installed, based upon changes in rail traffic such as reductions in 
total traffic volume to a level below 5 million gross tons annually, 
cessation of passenger service or the approval of an MTEA, or the 
cessation of PIH materials traffic. Any such request shall be 
accompanied by estimated traffic projections for the next 5 years 
(e.g., as a result of planned rerouting, coordinations, or location of 
new business on the line).
    (ii) FRA will approve the exclusion requested pursuant to paragraph 
(b)(4)(i) of this section if the railroad establishes that, as of 
December 31, 2015:
    (A) No passenger service will be present on the involved track 
segment or the passenger service will be subject to an MTEA approved in 
accordance with 49 CFR 236.1019; and
    (B) No PIH traffic will be present on the involved track segment or 
the gross tonnage on the involved track segment will decline to below 5 
million gross tons annually as computed over a 2-year period.
* * * * *

Sec.  236.1020  [Removed and reserved]

0
4. Remove and reserve Sec.  236.1020.

    Issued in Washington, DC, on May 9, 2012.
Joseph C. Szabo,
Administrator.
[FR Doc. 2012-11706 Filed 5-11-12; 8:45 am]
BILLING CODE 4910-06-P