September 20, 2001

Dear Ms. Knapp:

     On June 4, 2001, the Department of Transportation (DOT) submitted a Federal Railroad Administration (FRA) draft interim final rule titled "U.S. Locational Requirement for Dispatching of U.S. Rail Operations" to the Office of Management and Budget (OMB) for review under Executive Order No. 12866. This interim final rule would, in general, require that all railroad operations dispatching that occurs in the U.S. be performed in the U.S.

     We have raised some concerns with this rulemaking, particularly with regard to how this rule might better address U.S. obligations under the North American Free Trade Agreement (NAFTA). The FRA responded to these concerns by committing to review some of the draft regulatory language and further explain why the agency believes the rule is consistent with NAFTA. While we are pleased with the FRA's consideration of our comments and the agency's willingness to try to address our concerns, we believe that resolution of these concerns will take some additional time.

     For these reasons, I am returning the above mentioned rule to the Department for your reconsideration, in accordance with Executive Order 12866. Our staff is available for further discussion with you on the concerns that have been raised as you work to revise this rule. We look forward to continuing to work with you on this and other important rulemaking efforts.