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DOT/FRA | RIN: 2130-AB24 | Publication ID: Spring 1999 |
Title: Regulations on Safety Integration Plans Governing Railroad Consolidations, Mergers, Acquisitions of Control and Start-Up Operations | |
Abstract: This proposed rule would require a railroad to file a Safety Integration Plan with the Federal Railroad Administration (1) whenever a Class I railroad, the National Railroad Passenger Corporation, or a railroad providing commuter service proposes to merge, consolidate or acquire control of one another; (2) whenever an entity proposes to start operations as a railroad; (3) whenever a Class II railroad proposes to consolidate, merge, or acquire control of another Class II railroad with which it would directly interchange freight, or (4) whenever a railroad merger, consolidation or acquisition of control would result in operations that generate revenue in excess of the Class I threshold. The proposed rule would prescribe content and subject matter areas that must be addressed in each plan before FRA may approve of such plan. FRA is working with the Surface Transportation Board to conduct coordinated rulemaking actions covering these transactions within the framework of each agency's jurisdiction. | |
Agency: Department of Transportation(DOT) | Priority: Other Significant |
RIN Status: Previously published in the Unified Agenda | Agenda Stage of Rulemaking: Final Rule Stage |
Major: No | Unfunded Mandates: No |
CFR Citation: 49 CFR 244 49 CFR 1.49 | |
Legal Authority: 49 USC 20103 49 USC 20107 49 USC 21301 28 USC 2461 |
Statement of Need: This rule is necessary to ensure advance planning of operations to promote rail safety. Given the safety problems encountered in previous transactions and the need for the merging or acquiring railroad to integrate and harmonize information systems, training, operational practices and safety procedures on a massive scale, the need to require detailed plans setting forth the manner in which the parties intend to safely implement integration plans became apparent to FRA. |
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Summary of the Legal Basis: Because this rule concerns rail safety, FRA is vested with statutory authority to issue regulations governing these regulated transactions. See 49 USC 20101 et seq. |
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Alternatives: The proposed rule would authorize a railroad carrying out a regulated transaction to petition for a waiver of compliance. The railroad would have to follow the procedures prescribed in 49 CFR 211 in filing such a petition. FRA may grant the petition if waiver of compliance is consistent with the public interest and railroad safety. |
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Anticipated Costs and Benefits: FRA has not yet determined the anticipated costs and benefits of this action. |
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Risks: The problems that surfaced after the merger of the Union Pacific and the Southern Pacific indicated that safety could be significantly compromised in implementing a consolidation unless the parties addressed the safety issues specifically, formally and systematically, particularly if the merger was large and complex. To address safety-related problems stemming from a merger, FRA needed a projection into the future of the safety consequences of consolidating the systems. To accomplish this, in response to the proposed acquisition of Conrail by Norfolk Southern and CSX Transportation, FRA suggested, and the STB required, that the merger applicants develop and submit well-defined Safety Integration Plans (SIPs) as part of the merger application process. The proposed rule would require, as a matter of FRA regulations, that such Plans be filed by certain railroads in the context of proposed mergers and acquisitions and similar circumstances. |
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Timetable:
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Regulatory Flexibility Analysis Required: No | Government Levels Affected: None |
Small Entities Affected: No | |
Included in the Regulatory Plan: Yes | |
Agency Contact: Jon Kaplan Trial Attorney Department of Transportation Federal Railroad Administration 400 Seventh Street SW., Washington, DC 20590 Phone:202 493-6042 |