be clear that the requirements in this part would not require an
employee to be able to cite the volume, chapter, and section of each
Federal railroad safety law, regulation, or order that is relevant to
the employee's qualification.
    Often, a railroad or contractor will train employees on the
employer's own safety-related rules, without referencing any particular
Federal requirement. There may also be instances where the Federal
requirement is generally stated with the expectation that the employer
will create procedures or plans that will implement the conceptual
requirement of the Federal requirement. Paragraph (a) makes clear that
this part covers both types of training; i.e., training that either
directly or indirectly is used to qualify safety-related railroad
employees on the Federal railroad safety laws, regulations, and orders
the person is required to comply with to do his or her job. As an
introductory matter, FRA also wishes to make clear that not all
training is task-based. Some Federal requirements include prohibitions
and the relevant training must impart that information so that
employees know how they can comply. For example, employees need to know
when they may use cell phones and when they are prohibited from using
them.

    FRA received one comment suggesting that paragraph (a) could be
improved. AAR suggests that paragraph (a) be amended because it could
be interpreted to mean the opposite of what the preamble says is not
intended; namely, that an employee has to be familiar with the actual
wording and citations for relevant regulations. AAR suggests that
paragraph (a) be amended to read: ``The purpose of this part is to
ensure that any person employed by a railroad or a contractor of a
railroad as a safety-related railroad employee is trained and qualified
to comply with any relevant Federal railroad safety laws, regulations,
and orders, as well as any relevant railroad rules and procedures
promulgated to implement those Federal railroad safety laws,
regulations, and orders.'' FRA agrees with AAR's recommendation and has
changed paragraph (a) accordingly.
    REB's comment recommends confirming the scope by stating that
``This rule does not apply to training programs that do not address FRA
rules, regulations, and orders.'' FRA believes it would be repetitive
to restate the scope of the rule in the way in which REB's comment
suggests and is concerned with the ambiguity of the double negative in
the suggested rewrite. Meanwhile, REB's comment has merit and FRA
offers the following clarification. REB's comment seems to indicate
that if another Federal agency, or State or local jurisdiction required
training, that the training required by these other authorities would
not need to be addressed in the training programs submitted to FRA for
approval. FRA agrees. Similarly, an employer may require its employees
to complete company-specific training, such as training on an
employee's duties and responsibilities, that are unrelated to FRA's
requirements. Again, FRA agrees with REB that this final rule is not
intended to require the employer to file those types of company-
specific training programs to FRA.
    No comments were received requesting specific changes to proposed
paragraphs (b) through (d), and these paragraphs are identical to those
in the NPRM.
    Paragraph (e) was not proposed, but has been added in order to
clarify that this rule does not address hazardous materials training of
``hazmat employees'' as that term is defined by PHMSA. PHMSA already
extensively regulates the training of hazmat employees. This
requirement has been added to prevent any confusion on the matter.

Section 243.3 Application and Responsibility for Compliance

    No comments were received concerning this proposed section and the
rule text is identical to the proposed version. See 77 FR 6421.
    As discussed in the NPRM, the extent of FRA's jurisdiction, and the
agency's exercise of that jurisdiction, is well-established. See 49 CFR
part 209, appendix A. The application and responsibility for compliance
section is consistent with FRA's published policy for how it will
enforce the Federal railroad safety laws. This final rule is intended
to apply to all railroads (except those types of railroads that are
specifically listed as exceptions in paragraph (a)), contractors of
railroads, and training organizations or learning institutions that
train safety-related railroad employees. Paragraph (b) contains a
statement clarifying that each person who performs the duties of this
part is responsible for compliance, even if that duty is expressed in
terms of the duty of a railroad.

Section 243.5 Definitions

    The final rule adds a definition for ``refresher training'' in
response to comments and modifies the definition of ``formal training''
so it is clear that correspondence training is an acceptable type of
formal training. The final rule also modifies the definition of
``designated instructor'' to be clear that such a person, where
applicable, has the necessary experience to effectively provide formal
training ``of the subject matter.'' Otherwise, the definitions in this
section are identical to the version in the NPRM. The analysis in the
NPRM can be found at 77 FR 6421-25.
    This section defines a number of terms that have specific meaning
in this part. A few of these terms have definitions that are similar
to, but may not exactly mirror, definitions used elsewhere in this
chapter. Definitions may differ from other parts of this chapter
because a particular word or phrase used in the definition in another
chapter does not have context within this part.
    FRA raised a question in the NPRM regarding the definitions of
Administrator and Associate Administrator, even though these are
standard definitions used in other parts of this chapter. In this part,
the term Associate Administrator means the Associate Administrator for
Railroad Safety/Chief Safety Officer. When the RSAC Committee voted for
certain recommendations prior to the NPRM's publication, the
recommendations did not address the role of the Associate Administrator
for Railroad Safety/Chief Safety Officer. The NPRM proposed this
additional definition so that it would be clear that some of the
proposed program review processes would be delegated to the Associate
Administrator. The agency's expertise in reviewing training programs
lies within its Office of Railroad Safety, and the decision-making on
these issues will routinely be decided by the Associate Administrator.
If a person were to have a material dispute with a decision of the
Associate Administrator, it would be expected that the person could
bring that dispute to the Administrator's attention and request final
agency action. As FRA did not receive comments on this issue and
believes it is an effective approach for agency decision-making, the
final rule retains the Associate Administrator definition.
    The final rule defines the term formal training mainly to
distinguish it from informal, less structured training that may be
offered by employers. Generally, a briefing during a ``safety blitz,''
in which an employer quickly tries to raise awareness of a safety issue
following an accident or close call incident, would not be considered
formal training. Formal training would typically be more structured
than a safety blitz briefing and be planned on a periodic basis so that
all eligible employees would continuously get opportunities to take the
training. Formal training should contain a defined curriculum, as it is
not the type of training that can be hastily prepared and improvised.
    Formal training may be delivered in several different ways. Many
people first think of classroom training as synonymous with formal
training, and certainly that is one acceptable way of delivering formal
training. However, the definition explains that ``[i]n the context of
this part, formal training may include, but is not limited to,
classroom, computer-based, correspondence, on-the-job, simulator, or
laboratory training.'' The only change to this definition from the
proposed rule is that FRA included correspondence training as a listed
type of formal training. Although the list of formal types of training
is specifically identified as not being comprehensive, FRA added
correspondence to the list to address a commenter's concern. In a
sense, correspondence training is not that much different than
computer-based training. Computer-based training could certainly be
web-based so that a learner could access training from anywhere with an
electronic device capable of accessing the internet. Similarly,
software could be given to a person to install on a business-owned or

personally-owned computer, and training could be accomplished anywhere
the person used the computer. Consequently, FRA is adding
correspondence training to the list of types of formal training.
    During the RSAC process prior to the NPRM's publication, some labor
organizations explained that their members expressed a preference for
classroom training over computer-based training. One valid concern
expressed was that computer-based training is often performed without a
qualified instructor present to answer questions. It can be frustrating
to a training participant if the person finds a subject confusing and
cannot get immediate clarification. Meanwhile, the RSAC members
recognized an equally valid concern that there could be circumstances
when a qualified instructor cannot immediately answer a substantive
question during classroom training--so mandating classroom training is
not necessarily the remedy for addressing this problem. The final rule
addresses this concern by requiring that formal training include an
opportunity for training participants ``to have questions timely
answered during the training or at a later date.'' An employer, or
other entity providing training, will need to establish procedures for
providing participants the opportunity to have questions timely
answered. For example, some course providers may give training
participants an email address to send questions and promise to respond
within five business days. Certainly, there are a wide-variety of
reasonable procedures that could be established by course providers
that could include registering a question by telephone, written form
made available at the time of the training, or even instant-messaging
(IM) during the training itself. However, in all such instances,
procedures must be clear and provide the training participant an
opportunity to have questions answered in a timely fashion.
    The term refresher training refers to the periodic retraining an
employer determines is necessary to keep a safety-related railroad
employee qualified. This is the training required for previously
qualified employees, not employees who are completely new to the
subject matter. Refresher training is required pursuant to paragraph
(e) of Sec.  243.201. The term was used in the proposed rule, but was
not defined in the NPRM. In consideration of a comment received, FRA
has added this definition. Additional information about the comment and
what is meant by refresher training is addressed in the Discussion of
Specific Comments and Conclusions section.

Section 243.7 Penalties and Consequences for Non-Compliance

    This section was formerly proposed as Sec.  243.9, but was
renumbered because proposed Sec.  243.7 (addressing the issue of
waivers) was not retained in this final rule.
    No comments were directly received with regard to proposed Sec.
243.9 and it is identical substantively to the proposed version; thus,
the analysis provided for in the NPRM is merely summarized here. See 77
FR 6425. Some commenters did raise questions regarding what civil
penalty amounts would be reasonable if FRA were to take enforcement
action, and those comments are addressed with regard to the analysis
for appendix A, the schedule of civil penalties.
    This final rule section provides minimum and maximum civil penalty
amounts determined in accordance with the Federal Civil Penalties
Inflation Adjustment Act of 1990, Public Law 101-410 Stat. 890, 28
U.S.C. 2461 note, as amended by the Debt Collection Improvement Act of
1996 Public Law 104-134, April 26, 1996, and the RSIA.

Subpart B--Program Components and Approval Process

Section 243.101 Employer Program Required

    Compared to the NPRM, this section only contains a few changes. In
paragraphs (a) and (b), FRA extends the actual implementation dates
significantly from the NPRM's proposed dates. The broad issue of
implementation dates is addressed in the Discussion of Specific
Comments and Conclusions section of this document. Also in paragraph
(b), FRA is making some substantive changes which are addressed below.
Finally, this analysis includes a discussion of comments received with
regard to paragraph (d)(3) of this section, to explain why FRA decided
to reject an alternative to the proposed rule that FRA suggested in the
NPRM's section-by-section analysis.
    Paragraph (a) differs from the NPRM as it was split into two
paragraphs so that small entity employers could be provided with one
year longer to comply with the training program submission requirement
as compared to those employers subject to this part with 400,000 total
employee work hours or more annually. Paragraphs (a)(1) and (a)(2)
contain the general requirement for each ``employer'' to submit, adopt,
and comply with a training program for its safety-related railroad
employees. Both paragraphs (a)(1) and (a)(2) provide a significantly
more generous deadline for compliance than what was proposed.
    An employer's program must be submitted and approved by FRA in
accordance with the process set forth in Sec. Sec.  243.107, 243.109,
and 243.113. However, an employer's duty is not complete upon
submission of a program to FRA. The employer will also be required to
adopt and comply with its program. By using the term ``adopt,'' FRA is
requiring each employer to accept its training program as its own.
Furthermore, an employer is obligated to comply with its program by
implementing it. Thus, when adopted and complied with, FRA would expect
the employer's safety-related railroad employees to receive training in
accordance with the employer's program. Potentially, FRA could take
enforcement action if an employer failed to comply with its approved
training program. As with any potential enforcement action, FRA will
use its discretion regarding whether to issue a warning, a civil
monetary penalty, or other enforcement action. See 49 CFR part 209,
appendix A.
    NRC and ASLRRA recommend amending paragraph (b) of this proposed
section so that an employer commencing operations subject to this part
after the rule is implemented shall submit a training program within
one year after commencing operations, instead of the proposed 90 days
in advance of commencing operations. The commenters take the position
that to do otherwise would stifle the entrepreneurial spirit of small
business job creators. The commenters also state that many small
business owners would not even know for certain that they would be
starting a new business 90 days prior to commencing operations, much
less be prepared to file an extensive training program with FRA. FRA
agrees that the commenters have identified an issue, but disagrees on
the approach to resolving the perceived conflict.
    Paragraph (b) differs from the proposal in order to provide equal
treatment of program review and implementation regardless of whether an
employer commences operations after the appropriate deadline under
paragraph (b) or submits a training program as an existing employer
under paragraphs (a)(1) or (a)(2). FRA decided not to retain paragraph
(b) as proposed in order to address the concerns FRA received regarding
the difficulties of compliance that start-ups and joint ventures could
face. The change will still require an employer under

paragraph (b) to submit its training program prior to commencing
operations, but will no longer contain the proposed requirement that
the program be submitted at least 90 days prior to commencing
operations. In addition, FRA has removed the proposed requirement that
the employer wait for FRA to approve the program prior to adopting and
complying with it. Instead, the final rule requires that the employer
adopt and comply with its submitted training program no later than upon
the commencement of operations. FRA does not agree with the comments
suggesting that start-ups and joint ventures should be allowed to use
employees for up to one year to perform safety-related duties without
designating those employees in accordance with a training program filed
with FRA. If FRA were to do so, FRA believes it would be creating a
large loophole for many new businesses to use untrained or unqualified
individuals in positions that endanger the lives of railroad employees
and the general public. FRA notes that there is nothing in the
regulation preventing an employer from implementing a training program
prior to commencing operations so that its safety-related railroad
employees are ready to work independently on its first day of
operations. The employer is required to adopt and comply with the
training program for the same reasons as explained in the analysis for
paragraph (a).
    As no comments were received regarding paragraphs (c) through (f),
and those paragraphs are identical to the proposed versions, we are
merely summarizing the rest of the requirements in this section.
    Paragraph (c) requires a list of over-arching organizational
requirements for each employer's training program.
    Paragraph (d) contains OJT training requirements that are essential
to ensuring that OJT successfully concludes in a transfer of knowledge
from the instructor to the employee (learning transfer), but only
applies if a training program has OJT. As FRA alluded to in the
analysis for the definition of OJT, too much OJT is currently
unstructured and does not lead to learning transfer. OJT should not
vary so much that one person can have a good mentor who is able to give
the employee all the hands-on instruction the employee will need while
another mentor makes the person simply watch the mentor do the job
without any feedback, instruction, or quality hands-on experience. OJT
should be a positive experience for the learner, as well as the mentor,
with sufficient opportunity for practice and feedback.
    In the NPRM, FRA explained that a manual and a checklist may serve
similar, but not identical purposes. RSAC recommended that FRA only
require one or the other, or another similar document. By requiring
only one document, the requirement is less burdensome. However, FRA
requested comments in the section-by-section analysis of the NPRM with
regard to paragraph (d)(3). FRA wanted commenters to consider the
distinctions between these types of documents, and whether FRA should
promulgate this final rule with a requirement for both a manual and a
checklist. 77 FR 6426-27. In response, a number of railroads and
railroad association commenters unanimously voiced strong opposition to
the suggestion that a manual and a checklist should be required. The
commenters argued primarily that a requirement for both a checklist and
a manual would be micromanaging that would reduce an employer's
flexibility to comply. AAR stated that ``railroads might use different
methods for different types of employees and different types of
training [and thus] . . . [u]niform . . . requirements for the
documentation of tasks are neither necessary nor desirable.'' Although
FRA strongly urges each employer to consider making both detailed
manuals and the generally less detailed checklists available to all
employees involved in OJT exercises, FRA has decided to provide each
employer with the flexibility to choose which type of reference
document must be made to employees involved in OJT exercises.
    In concluding the analysis of this section, FRA responds to a
comment by APTA requesting that FRA simplify the OJT requirements
further. APTA suggests that the OJT does not have to be ``a formalized
program, replete with specific steps, tasks and methods that must be
followed and documented in exacting detail.'' FRA does not agree with
APTA that the OJT requirements are too complicated and unnecessary.
Without formalizing OJT, FRA will be unable to break the cycle of
unstructured OJT practices by some employers that permit shadowing an
experienced person without any confirmation of learning transfer on any
particular safety-related tasks. If the rule failed to contain this
requirement, the rule would likely fail to substantially improve
safety. Certainly, each employer will need to review whether a
previously imposed OJT program is too informal, and may not be able to
maintain the status quo without adding structure or a defined
curriculum as this rule requires for formal training.

Section 243.103 Training Components Identified in Program

    No comments were received that suggested specific changes with
regard to this section and the final rule is identical to the proposed
rule; thus, the analysis provided in the NPRM is merely summarized
here. See 77 FR 6427-29.
    Unlike Sec.  243.101, which focuses on the general requirements for
an employer's training program, this section details the component
requirements for each program. The main purpose for this section is to
ensure that an employer provides sufficient detail so that FRA would be
able to understand how the program works when the agency reviews the
program for approval. It is expected that a failure to include one or
more component requirements would result in disapproval of the program.
In Sec.  243.111, FRA also requires that training organizations and
learning institutions include all information required for an
employer's program in accordance with this part, and this mainly means
the information required in this section. Thus, each program submitter
should ensure that each component requirement in this section is
addressed.
    Although the analysis for paragraph (b) of this section remains the
same as that in the NPRM, FRA wants to emphasize that it provides an
option for an employer to avoid submitting one or more similar training
programs or plans when the employer has a separate requirement, found
elsewhere in this chapter, to submit that similar program or plan to
FRA. In order to take advantage of this option, an employer must choose
to cross-reference any program or plan that it wishes not to submit in
the program required by this part. In the NPRM, FRA listed the examples
of FRA training programs that an employer may choose not to resubmit as
located in Sec. Sec.  214.307, 217.9, 217.11, 218.95, 236.905, and
240.101. After publication of the NPRM, FRA published a final rule
regarding conductor certification at 49 CFR part 242. Certainly, the
training program required by Sec. Sec.  242.101 and 242.103 is another
example of a program that may be referenced in the program required by
this part without being submitted again.
    During the Working Group meeting to discuss comments, AAR asked
whether FRA will contact a railroad when a previously submitted program
does not meet the training program criteria of this

rule. FRA explained that paragraph (b) requires the employer to state
in the training program filed under this rule that it has previously
filed a training program in accordance with another FRA regulation.
Once an employer has put FRA on notice of the previously filed program
under a different regulation, it will be FRA's burden to contact the
railroad to address any perceived inadequacies.

Section 243.105 Optional Model Program Development

    This section of the final rule is identical to the proposed rule
except for the addition of paragraph (a)(3). See 77 FR 6429-30. The
addition of this paragraph was made to address FRA's concerns raised in
the NPRM that incentives should be offered to submitters of model
programs so that they are encouraged to seek FRA's approval of such
programs at an early stage. Early approval of model programs would make
it more likely that an employer could choose to adopt and comply with
the model program. If a model program is not approved prior to the
deadlines set forth in Sec.  243.101(a)(1) and (a)(2) for each employer
to submit a program, the model program is not likely to be of much use
to employers.
    To encourage early submission of model programs, FRA is
guaranteeing that, as long as the submission is made prior to May 1,
2017, the program may be considered implicitly approved and implemented
180 days after the program is submitted unless FRA explicitly
disapproves of the program. Although FRA encourages model program
submitters to submit much earlier than this optional deadline, the
deadline will permit programs submitted on April 30, 2017 to be
implicitly approved on October 27, 2017--which is 65 days prior to the
employer's deadline, for those employers with 400,000 total employee
work hours annually or more, under Sec.  243.101(a)(1), and at least
one year and 65 days prior to the small entity employer's deadline
under Sec.  243.101(a)(2), as the small entity deadline may be extended
depending on the date of issuance of FRA's Interim Final Compliance
Guide. Of course, FRA may explicitly approve the program in less than
180 days, which would also benefit the early model program submitter
and the employers that intend to use the model program.
    FRA also received one comment regarding this section that pertained
to the use of unique identifiers for each model program, but has
decided not to amend this section based on the comment. The commenter
recommends that FRA assign a unique identification number to all
training developers--whether they are employers or third-party
developers. In the NPRM, FRA proposed that each entity submitting an
optional model program should submit a unique identifier associated
with the program, or FRA will assign a unique identifier. The proposal
and final rule provide a training developer with the maximum
flexibility to create its own unique identifier. If one submitter
duplicates another entity's identifier, FRA intends to notify the
training developer so that entity has an opportunity to create another
identifier. There does not appear to be any basis for supporting FRA's
creation of unique identification numbers for training developers
versus the developers creating their own unique identifier.
    During the RSAC process, FRA expressed that it wanted to encourage
the development of model training programs that could be used by
multiple employers. There are several reasons why model programs are
desirable as an option. Smaller entities may struggle with the costs
and burdens of developing a program independently; thus, a model
program could reduce the costs, especially for smaller businesses. For
instance, in the context of locomotive engineer training and
certification programs required pursuant to 49 CFR part 240, FRA has
worked with ASLRRA in developing model programs for use by short line
and regional railroads. Furthermore, there are economies of scale that
benefit FRA in helping organizations, associations, and other
businesses to develop model programs that may be adopted by other
entities. That is, the more businesses that adopt model programs, the
fewer the number of programs FRA would need to closely scrutinize in
the review process. FRA is willing to provide early and frequent
feedback to any entity producing a model program. In that way, FRA can
ensure that each model program will contain all of the necessary
components of a successful program and can be implemented by multiple
businesses with little fear of rejection during the program submission
and approval process.
    Paragraph (a) contains an option that would permit any
organization, business, or association to submit one or more model
programs to FRA for later use by multiple employers. As FRA explained
in the preamble under the heading ``Compliance Guide,'' FRA will be
publishing an interim final compliance guide in early 2015.
Additionally, FRA has amended the proposal so that small entities will
have at least four years to review FRA's guidance prior to the
requirement in Sec.  243.101(a)(2) that a small employer file a
training program. That schedule for publication of a compliance guide
should also benefit model program developers who will want to reference
the guide in their attempt to meet the May 1, 2017 submission deadline
in Sec.  243.105(a)(3). In addition to short line and regional
railroads, FRA encourages similar types of contractors to submit model
programs possibly developed by a common association. In some instances,
it is foreseeable that several employers may hire an organization, such
as a training organization or learning institution, to develop a model
program for those multiple employers to submit to FRA. FRA notes that
the model program would be the program for any employer that chooses to
submit it, and it is not a program submitted on behalf of the training
organization, business, or learning institution that developed the
program. Another possibility is that one railroad or contractor
develops a program for its own use that it later allows other entities
to copy. FRA expects that some organizations, businesses, and
associations may take a proprietary interest in any model program it
develops; however, FRA would hope that the costs imposed on small
entities would be reasonable. Although FRA does not intend to draft and
develop programs for employers to use, FRA intends to provide guidance
to any person or entity in the development of model or individual
employer programs.
    To aid users, model program developers may use a modular approach
in the design phase. For example, a model program designed for Track
Safety Standards (49 CFR part 213), will likely incorporate all
subparts (A-G) of the regulation. A modular approach will enable small
railroad that may have all ``excepted track'' to essentially only use
the training materials associated with subparts A and F, since the
regulation for excepted track only requires a weekly inspection and a
record of the inspection. Similarly, any railroad that only operates
trains for distances of 20 miles or less are not required to train to
the full requirements of the Brake System Safety Standards for Freight
(49 CFR part 232). Once again, a modular approach in the design phase
will enable users to easily customize a model program to fit their
operational needs.

Section 243.107 Training Program Submission, Introductory Information
Required

    No comments were received recommending specific changes with regard
to this section and the final rule is identical to the proposed rule;
thus,

the analysis provided in the NPRM is merely summarized here. See 77 FR
6430.
    In this section, FRA requires specific information from each
employer submitting a program. The required information will provide
FRA with some introductory information that the agency will need to
understand the employer's approach to training. The information
required in these paragraphs is intended to help put the training
components in the program in some context before a reviewer reads the
finer details of each component. For example, FRA may closely
scrutinize a small railroad's training program if the program states
that the employer primarily conducts the training of its own safety-
related railroad employees using its own resources. The reason that
information may raise a concern is that smaller railroads would not
always have qualified instructors to implement all the different types
of training required by the Federal laws, regulations, and orders.

Section 243.109 Training Program Submission, Review, and Approval
Process

    Several comments were received with regard to this section, but
most of those comments did not persuade FRA to deviate from the
provisions proposed in the NPRM. As the comments raised fairly narrow
issues, the comments have been addressed in this analysis. As most of
the final rule is identical to the proposed rule, the analysis provided
in the NPRM is merely summarized here. Interested parties are directed
to the NPRM for a more detailed discussion. The analysis in the NPRM
can be found at 77 FR 6430-32. However, the following analysis explains
the differences between the proposed rule and this final rule.
    Paragraph (a)(1) addresses the issue of how employers must address
apprenticeship, or similar intern programs, that have begun prior to
submission of the employer's initial program filed in accordance with
this part. RSAC recommended that FRA address this situation so that
those persons who had already started an apprenticeship-type training
program would know that their training would not be mooted by this
final rule. During the RSAC deliberations, there were general concerns
raised that some long-term training might be initiated prior to a
training program submission and that, when reviewed in the context of
the rest of the employer's initial program, the long-term training
would not meet the employer's program requirements. In some instances,
it may be possible to revise an apprenticeship or similar long-term
intern program that has already begun; in other instances, changing the
apprenticeship program would be prohibitively expensive or logistically
difficult. RSAC recommended and FRA accepted the premise that as long
as the apprenticeship-type training program is described in the
employer's initial program, that apprenticeship or similar intern
program may continue unless FRA advises the employer of specific
deficiencies.
    As FRA explained previously in the section-by-section analysis to
Sec.  243.101, the agency chose to provide equal treatment to an
employer whether it is submitting a training program as an existing
employer (as of January 1, 2018 under Sec.  243.101(a)(1) or as of
January 1, 2019 under Sec.  243.101(a)(2)) or as an employer commencing
operations after January 1, 2018 under Sec.  243.101(b). FRA decided to
provide this equal treatment in order to address concerns FRA received
regarding the difficulties of compliance that start-ups and joint
ventures could face. In order to carry that equal treatment throughout
the rule, FRA is requiring the same initial program submission
requirements for both Sec.  243.101(a) and (b) employers in paragraph
(a)(2) of this section, and has removed proposed paragraph (a)(3) of
this section. This will allow all employers to consider their initial
program submissions to be approved and ready for immediate
implementation. Railroads are already required to ensure proper
training techniques prior to commencing their operations. Therefore,
this rule should not create barriers to entry nor delays in starting
new operations. More so, new railroads would have access to model
training programs and best-in-class training practices. Therefore, they
should be able to use their own human resources more efficiently for
training purposes and possibly expedite entry into market.
    FRA did not receive comments suggesting that allowing an employer
to immediately implement a training program without explicit FRA-
approval might prove problematic; however, FRA considered whether the
final rule could be problematic in that regard. FRA starts with the
premise that even before this final rule is effective, all safety-
related railroad employees are required to comply with the applicable
Federal railroad safety laws, regulations and orders. An employer is
responsible for its employees, and thus FRA could hold an employer
accountable for any violations committed by an employee. In FRA's
experience with program approval requirements, employers express the
greatest anxiety over whether they can immediately implement a program
versus having to wait for FRA's explicit approval. By allowing
employers to immediately implement a program, FRA believes it has
relieved most anxiety that employers are likely to have. In FRA's
experience, it often takes several years before a latent problem in a
training program is discovered. The open ended approval process permits
FRA to go back years after initial approval and raise newly identified
alleged instances of non-compliance. Although FRA will use enforcement
when necessary, the agency's primary goal is to improve training for
safety-related railroad employees and FRA expects that its focus will
be on employers taking effective remedial measures.
    If an employer's training program failed to meet the requirements
of this final rule, there are two potential concerns. One concern is
that the employer will incur additional training costs beyond what it
would have incurred if FRA had rendered explicit approval prior to
implementation and the second is that the employees will not be
adequately trained. With regard to the first concern, FRA expects that
most shortline railroads and contractors will use model programs
previously FRA-approved in accordance with Sec.  243.105. Because the
model program would have received prior approval, FRA expects that any
problems encountered will likely be with the implementation of the
programs and not the programs themselves. Problems with implementation
are likely to be discovered during investigations and audits, not
during program reviews. If an employer is implementing its own
individualized program. FRA expects that the worst case scenario is
that the program would reflect the current state of the employer's
training program without formalizing OJT or other aspects of its
training. Under these scenarios, FRA intends to instruct the employer
on the requirements of the rule and request a plan to get the training
program in compliance with the final rule. Enforcement action will be
considered on a case-by-case basis, but certainly would not be
warranted in every instance if swift remedial action can be
accomplished. An employer filing an individualized training program
might be able to avoid these issues by submitting its program much
earlier than the applicable implementation deadline and thereby getting
FRA-approval prior to implementation. With regard to the second concern
that employees will not

be properly trained, again, FRA does not see the problem as an employer
failing to discuss a subject as an employer is responsible for an
employee's non-compliance even prior to the effective date of this
rule. FRA believes the problems will be that the training is not
sufficiently formalized to capture that an employee can complete each
assigned task; as this is an essential element of this final rule, it
seems that it would be a blatant disregard of the requirements of the
rule for an employer to leave it out of its program. In those cases,
enforcement action is likely appropriate and, depending on the
circumstances, an employer will have to plan a fix for the next
training cycle or immediate remedial measures.
    In paragraph (b), FRA implements a requirement for an annual
informational filing. This filing is intended to ease an employer's
regulatory burden by reducing the number of times an entire training
program would need to be revised, resubmitted, and reviewed for
approval on routine matters. An employer is required to submit a single
informational filing no later than January 30 each calendar year that
addresses any new safety-related Federal railroad laws, regulations, or
orders issued, or new safety-related technologies, procedures, or
equipment that were introduced into the workplace during the previous
calendar year. The rule explains how FRA may advise individual
employers, one or more group of employers, or the general public that
an informational filing is not required for a particular issue.
    APTA's comment requests that each railroad be provided the
discretion to file an information filing anytime it wants rather than
within 30 days of the end of the calendar year. However, FRA notes that
APTA has misinterpreted the requirement. Under paragraph (b) of this
section, an employer must file an informational filing ``not later than
30 days after the end of the calendar year in which the modification
occurred, unless FRA advises otherwise.'' There is no prohibition
against an employer filing earlier than 30 days after the end of the
calendar year in which the modification occurred. FRA has simply set a
deadline for filing the informational filings, not a requirement that
the filings can only be made within 30 days of the end of the calendar
year.
    Paragraph (c) sets forth the requirements for an employer that
wants to revise a training program that has been previously approved.
The requirement would allow substantial additions or revisions to a
previously approved program to be considered approved and implemented
immediately upon submission. For example, a program is considered
revised if the employer adds any occupational categories or
subcategories of safety-related railroad employees to the training
program. Most other changes to an existing program would not be
considered a substantial addition or revision but instead would likely
require only an ``informational filing'' under paragraph (b).
    AAR's comment reiterated a concern raised during RSAC Working Group
meetings that the final rule should contain the flexibility to
implement modifications in a manner consistent with each railroad's
normal training schedule. After discussing the issue at the Working
Group meeting to discuss the comments, it is FRA's belief that the
final rule contains the flexibility that AAR seeks. For example, under
paragraph (b), ``the employer must review its previously approved
training program and modify it accordingly when new safety-related
Federal railroad laws, regulations, or orders are issued, or new
safety-related technologies, procedures, or equipment are introduced
into the workplace and result in new knowledge requirements, safety-
related tasks, or modification of existing safety-related duties.''
Pursuant to paragraph (b), FRA expects that new legal requirements will
contain their own implementation deadlines and that any employer
implementing a new legal requirement will comply with that new legal
requirement's deadline. Paragraph (b) also requires that an employer
that needs to modify its training program to implement a new legal
requirement shall submit an informational filing to the Associate
Administrator not later than 30 days after the end of the calendar year
in which the modification occurred, unless FRA advises otherwise. In
other words, the rule requires that the employer be permitted the
flexibility to modify the program at any time but the employer is not
required to notify FRA of the modification until January 30 in the year
after the modification occurred. The informational filing is the
employer's notice to the FRA that the modification to the training
program was made the previous year. As AAR's members will have
completed new training curriculums by January 1 of each year,
summarizing the modifications and filing the changes in an
informational filing to FRA by January 30 should not pose an obstacle
for any railroad that wishes to continue its normal training schedule.
    Similarly, there is no requirement in paragraph (c) that could
possibly deter a railroad or contractor from having the maximum
flexibility to implement modifications in a manner consistent with the
employer's training schedules. Paragraph (c) permits substantial
additions or revisions to a previously approved program, that are not
described as informational filings in accordance with paragraph (b) of
this section, to be considered approved and ready for immediate
implementation upon submission. Of course, if an employer chooses to
submit the addition or revision during the early part of a newly
started training cycle (e.g., January through March for a major
railroad) and FRA finds the addition or revision does not conform to
this part, the employer will potentially have trained and be continuing
to train employees based on a non-conforming program. Thus, an employer
that begins new training in January should make every effort to get
FRA's approval of an addition or revision prior to January.
    FRA disagrees with APTA's concerns regarding the training program
submission, review, and approval process. APTA states that the approval
process ``stifles the development of innovative and progressive
techniques in training methodologies which could provide better
employee understanding and adherence.'' APTA suggests that FRA add a
provision to the final rule for a provisional status, such as
``Conditional Acceptance'' to allow for piloting or testing of new
training approaches outside of misusing the waiver application for such
a purpose. APTA is concerned that FRA will reject new training concepts
or that an employer cannot utilize new training concepts until FRA
approves a program. In response, FRA notes that under the rule, an
employer could, at any time, submit substantial additions or revisions
to a previously approved program and that the submission would be
considered approved and may be implemented immediately upon submission.
See Sec.  243.109(c). Thus, as an employer could change the method of
course delivery (see Sec.  243.103 Training components identified in
program) at any time after a program has been approved; a provision for
conditional acceptance is unnecessary. The change will be considered
accepted unless FRA determines that the new portion or revision to an
approved program does not conform to this part; however, even then an
employer will have 90 days to resubmit the program in accordance with
the instructions provided by FRA.
    APTA further comments that the disqualification procedure for the
program was not well-defined in the NPRM and that due process should be
provided. APTA is concerned about

employers having to pay civil penalties for failing to resubmit
conforming programs. FRA does not believe that additional procedures
are warranted. The procedures are sufficiently defined and give FRA the
discretion to address each type of non-conformance through enforcement.
FRA believes it needs the discretion to decide the appropriate method
of addressing non-conforming training programs. FRA does not expect
civil penalties to be assessed for program deficiencies that are
correctable and corrected within the time allotted to the employer. FRA
envisions taking enforcement action when an employer has a deficient
program that is not corrected within the 90 days provided, and the
deficiency is likely to have an impact on the quality of the training
or the non-conforming aspect of the program makes it difficult for FRA
to properly assess the quality of the program. Whenever possible, FRA
would consider the potential disruption in requiring an immediate fix
to a deficient program and extend this 90-day period upon written
request in accordance with paragraph (a)(2). Instead of requiring the
deficiencies to be fixed within 90 days, FRA could allow changes in the
program to be made during during the employer's normal program review
and implemented during the employer's normal training cycle.
Furthermore, FRA is not obligated to assess civil penalties or take
other enforcement action, and does not anticipate doing so unless the
agency deems that such action is warranted.
    FRA also expects that, in some instances, FRA representatives will
be meeting with the entity that submits the non-conforming program and
discussing the issues FRA identifies as problematic. These types of
meetings are expected to lead to a better understanding of FRA's
concerns, which FRA hopes would alleviate any anxiety that the agency
is acting without understanding the submitter's concerns. Finally, once
a submitter has exhausted its requests for FRA to accept its program,
the submitter may have a legal cause of action based on the agency's
final decision. Thus, the submitter will receive due process by
appealing to Federal court after receiving an adverse final agency
action. See Administrative Procedure Act, 5 U.S.C. 701-706.
    The requirement in paragraph (d), to serve and involve labor
organizations in the review of training programs, is for railroads
only. One comment requested further clarification on what entities were
obligated to comply with paragraph (d). For this reason, FRA clarifies
that this requirement does not apply to any non-railroad entities that
may have other obligations within this part. Thus, paragraph (d) does
not apply to contractors, training organizations, and learning
institutions that submit training programs. Paragraph (d) also does not
apply to any model program submitters, unless the submitter is a
railroad that intends to implement the model program on its own
property following FRA approval.
    FRA has also rejected AAR's comments suggesting that the
requirement for a railroad to maintain proof that it has served a labor
organization president with a training submission, resubmission, or
informational filing is unnecessary under paragraph (d)(1)(ii) of this
section. AAR states that if a railroad failed to provide a labor
organization president with service of the training program, the
railroad would be subject to FRA enforcement. AAR also questions the
need for the names and addresses of the people served, as it is
anachronistic with the use of electronic service and electronic
docketing systems. FRA notes that it has recently promulgated a similar
provision in 49 CFR part 242, Conductor Certification, and that the
agency's concern is ensuring that the relevant labor organizations have
sufficient time to review and provide FRA with feedback on the training
submissions. When FRA reviews the program, if the agency notices that a
certificate of service contains out-of-date or incorrect information
then the agency can notify the railroad and relevant labor
representatives of the error quickly. Certainly, if the labor
organizations are amenable to being served by email or some other
electronic means, the railroad would be required to capture that
electronic address in addition to the name of the labor organization
president served. FRA is less concerned with catching a railroad out of
compliance than with ensuring that labor organizations have a full 90
days to comment on any program submission and not otherwise delaying
the approval process because of improper service. Without a certificate
of service, there is a greater likelihood that a railroad could
intentionally or negligently fail to properly serve a labor
organization. The certificate of service provides FRA with a relatively
simple way to verify that the correct persons have been served.
    Paragraph (d)(2) requires that each railroad labor organization has
up to 90 days to file a comment. The reason for the 90-day deadline is
that FRA would like to send approval notification to railroads in a
timely fashion. Without a deadline for comments, the approval process
would seem open ended. However, FRA realizes that, from time-to-time, a
labor organization may find something objectionable in a previously
approved program, and FRA encourages those types of comments to be
filed as they are discovered. When a labor organization discovers an
objectionable issue outside of the required 90-day window, FRA would
still accept the comment and review the issue to see whether a revision
to the training program is warranted.

Section 243.111 Approval of Programs Filed by Training Organizations or
Learning Institutions

    Only one comment was received with regard to this section and it is
addressed in this analysis without a need to change the proposal. FRA
made a slight change to paragraph (b) in order to align the
implementation deadline for training organizations and learning
institutions with that of the other implementation deadlines in the
final rule. Otherwise, the final rule is identical substantively to the
proposed version and the analysis provided for in the NPRM is merely
summarized here. Interested parties are directed to the NPRM for a more
detailed discussion. The analysis in the NPRM can be found at 77 FR
6432-34.
    The purpose of this section is to facilitate the option of using
training organizations or learning institutions. An employer that
intends to implement any training programs conducted by some other
entity (such as a training organization or learning institution), or
intends to qualify safety-related railroad employees previously trained
by training organizations or learning institutions, has an obligation
to inform FRA of that fact in the employer's submission. If FRA has
already approved the training organization or learning institution's
program, an employer could reference the approved program in its
submission, avoid lengthy duplication, and likely expect a quick review
and approval by FRA. Furthermore, individuals or employers that use
training provided by training organizations or learning institutions
need assurances that the training will meet or exceed FRA's
requirements prior to incurring any training expense. Without such
assurances, an individual or employer may determine that paying for
such training is not worth the risk.
    Paragraph (b) requires that a training organization or learning
institution that has provided training services to employers covered by
this part prior to January 1, 2017 may continue to offer such training
services without FRA approval until January 1, 2018. The final

rule is more generous than the NPRM as it provides additional time for
any training organization or learning institution to submit a program
for FRA approval. FRA decided that since the final rule does not
require any employer to submit a program prior to January 1, 2018, FRA
should permit any training organization or learning institution to
continue offering such training services without FRA approval until
that date. Each training organization and learning institution should
understand that its best interests are served by seeking early FRA
approval of its training program so the program can be referenced by
the employers who are its clients. In accordance with paragraph (d) of
this section, explicit approval of such a program is required and the
program will not be considered approved on submission. FRA will need
time to review each program and it can be anticipated that the agency
will be busy reviewing a large volume of programs late in 2017 and
throughout 2018. Thus, each training organization and learning
institution should plan to file its program as early as possible to
avoid implementation delays.
    Paragraph (c) requires that a program submitted by a training
organization or learning institution must include all information
required for an employer's program in accordance with this part, unless
the requirement could only apply to an employer's program. In the
section-by-section analysis in the NPRM, FRA explained that this
sentence mainly refers to the requirements found in Sec. Sec.  243.101
and 243.103. FRA received one comment requesting clarification as to
whether Sec.  243.103(a)(3) applies to employers only. In response to
the comment, FRA notes that the citation refers to the requirement for
an employer's program to have a document for each OJT program component
that includes certain information about the OJT program. FRA concludes
that OJT would not be a required part of a program filed by a training
organization or learning institution, but individual employers that
utilize a training organization or learning institution may choose to
supplement a program with OJT. It can be left to each employer to
clarify that supplemental OJT issue in the employer's program. Please
note that OJT is not considered a mandatory program requirement and,
other types of hands-on formal training provided by a training
organization or learning institution may be considered an adequate
substitute for OJT.

Sec.  243.113 Electronic and Written Program Submission Requirements

    In the NPRM, FRA raised the issue of whether the option to file a
program electronically should be modified to mandate electronic filing.
An electronic submission process would allow the agency to more
efficiently track and review training programs than a written paper
submission process would permit. FRA was also concerned with incurring
costs in developing and maintaining an electronic submission process if
many submitters opted out. FRA always has the option to add paper
submissions to an electronic database, but FRA would have to allocate
resources to digitize and upload those paper submissions to the
database.
    FRA received one comment that objected to mandatory electronic
submission. ASLRRA disagreed with FRA's assumption that even the
smallest Class III railroads should have access to the Internet (or
reliable access), and should therefore be able to file a training
program electronically. FRA explored this issue with ASLRRA and the
Working Group at the meeting held to discuss the comments filed in
response to the NPRM.
    FRA's electronic submission mandate addresses the ASLRRA's comment
by creating an exception for an employer with less than 400,000 total
employee work hours annually in paragraph (a) of this section.
Typically, when FRA has created an exception for small entities
(especially railroads), it has defined small entities as those having
less than 400,000 total employee work hours annually. FRA's exception
is an accommodation that will spare small companies from requesting a
waiver from the otherwise mandatory electronic submission process. Of
course, nothing in this final rule precludes an employer with less than
400,000 total employee work hours annually from submitting its program
electronically. If an employer does not meet the requirements for the
exception and does not have the capability to file electronically, the
employer may submit a waiver request to FRA, consistent with FRA's
general waiver provision found at 49 CFR part 211. Paragraph (a) also
requires that all model programs be filed electronically in accordance
with the requirements of this section.
    In addition to the previously mentioned considerations, FRA
considered that it is becoming routine for private and public
transactions to occur electronically. It would currently be unusual for
an employer to forego having a Web site that customers can visit. FRA
also expects that many companies would prefer not to have to print out
written materials to mail in when a paper free electronic submission
process is available. For these reasons, FRA is best served by
requiring electronic submission.
    This section and section title were modified from the NPRM to
reflect the mandatory nature of the electronic program submission and
to acknowledge that the section also contains the requirements for a
written submission. Other than the comment and changes previously
discussed, only minor edits were made compared to the proposed section.
Interested parties are directed to the NPRM for a more detailed
discussion. The analysis in the NPRM can be found at 77 FR at 6434.
    Paragraph (b)(1) was changed from the proposal so that it is clear
that organizations, businesses, and associations may file a program,
not just employers, training organizations, and learning institutions.
Throughout the section, the term ``person'' was substituted for the
term ``entity,'' which was not defined in the NPRM or this final rule.
    FRA intends to create a secure document submission site and will
need basic information from each company before setting up the user's
account. The points of contact information in paragraph (b) are
necessary in order to provide secure access. FRA has already developed
a prototype of the document submission site and has offered a variety
of likely users that represent the gamut of the regulated community an
opportunity to test the site. Based on feedback received from test
users, FRA received valuable insight into the pros and cons of the
prototype. If necessary, the secure site should be able to start
accepting electronic submissions by the effective date of the rule,
although FRA expects to make additional functionality improvements up
to the date of publication of FRA's compliance guide. FRA encourages
every regulated organization and employer to obtain access to FRA's
secure document submission site early in the program drafting process
in order to become familiar with what can be accomplished on the site
and potentially to enter basic user or program information so that the
contact for the organization or employer will only need to upload the
relevant written program submissions as they are completed. By
developing the electronic submission process years in advance before
the first programs are required for submission, FRA intends to create
an electronic submission process that is easy to use and provides
benefits to both the user and the agency.

    The requirements in paragraphs (c), (e), and (f) will allow FRA to
make efficient use of this electronic database. It is anticipated that
FRA will be able to approve or disapprove all or part of a program and
generate automated notifications by email to an entity's points of
contact. Thus, FRA wants each point of contact to understand that by
providing any email addresses, the entity is consenting to receive
approval and disapproval notices from FRA by email. Entities that allow
notice from FRA by email would gain the benefit of receiving such
notices quickly and efficiently.
    Paragraph (d) is necessary to provide FRA's mailing address for
those entities that need to submit a program submission in writing to
FRA. Those entities that choose to submit printed materials to FRA must
deliver them directly to the specified address. Some entities may
choose to deliver a CD, DVD, or other electronic storage format to FRA
rather than requesting access to upload the documents directly to the
secure electronic database; although this will be an acceptable method
of submission if the exception in paragraph (a) applies or the entity
is granted a waiver, FRA would encourage each entity to utilize the
electronic submission capabilities of the system. Please be advised
that FRA will reject any submission if FRA does not have the capability
to read it in the type of electronic storage format sent.
    In the NPRM, FRA requested comments on whether this section should
address the submission of proprietary materials or other materials that
an entity wishes to keep confidential. This issue has been addressed
previously under the Discussion of Specific Comments and Conclusions
section of this document.

Subpart C--Program Implementation and Oversight Requirements

    Once a program has been approved by FRA, each employer will have to
comply with the requirements of this subpart. The subpart includes both
implementation and oversight requirements. Some requirements apply only
to railroads, and others to both railroads and contractors.
Additionally, each training organization and learning institution will
be required to maintain records as evidence of completed training.

Section 243.201 Employee Qualification Requirements

    Except for comments received regarding implementation dates, no
comments were received requesting specific changes to this proposed
section. FRA made some minor changes and clarifications to this section
which are explained in the following analysis. This analysis summarizes
all the requirements, but interested parties should reference the NPRM
(77 FR 6434-36) for additional analysis on those requirements that are
the same as the proposal.
    The implementation dates in paragraphs (a), (b), and (e) have been
extended from the proposal to address concerns raised in the comments.
Paragraph (a), which requires each employer to designate existing
employees, was split into two paragraphs so that smaller employers will
have an extra year to comply with that requirement; this change from
the proposal mirrors the change made to Sec.  243.101(a) that provides
smaller employers with an extra year to submit a training program. The
implementation date issues are discussed in greater detail in the
Discussion of Specific Comments and Conclusions section of this
document, but FRA complied with the spirit of the agreement reached by
the Working Group to delay the start of refresher training so that it
does not interrupt the normal three year training cycle instituted by
many employers. Paragraph (b) contains a conforming change to reflect
the new implementation dates in paragraph (a) of this section.
Paragraph (e) was also split into two paragraphs so that smaller
employers will have an extra year to comply with the refresher training
requirements. In addition, in order to explain FRA's intent regarding
when refresher training is due when the last training event occurs
prior to FRA's approval of the employer's training program, some
clarifying language has been added to paragraphs (e)(1) and (e)(2).
This clarification is explained in more detail later in this analysis.
    In the NPRM, FRA raised the issue of whether proposed paragraph (f)
should stand alone or be combined with proposed paragraph (c)(2) of
this section. That is, the proposed paragraph (f) requirement related
directly to situations in which ``as part of the OJT process and prior
to completing such training and passing the field evaluation, a person
may perform such tasks under the direct onsite observation of any
qualified person, provided the qualified person has been advised of the
circumstances and is capable of intervening if an unsafe act or non-
compliance with Federal railroad safety laws, regulations, or orders is
observed.'' Because proposed paragraph (f) provided the context of what
is a ``qualified person'' under paragraph (c)(2) of this section, FRA
has decided that the proposed paragraph (f) requirement should be
incorporated into the final paragraph (c)(2). This information explains
why FRA deleted proposed paragraph (f) of this section.
    This section includes an exemption for existing employees to be
designated for a particular occupational category or subcategory
without further training, provides procedures for qualifying those
employees that are not exempted by the employer for a particular
occupational category or subcategory, and requires each employer to
deliver refresher training. FRA's intention is to ensure that all
safety-related railroad employees receive proper initial training if
previously unqualified, and that all previously qualified employees
receive refresher training at regular intervals to ensure continued
compliance. FRA encourages each employer to find ways to provide
remedial training and retesting of any employee that fails to
successfully pass any training or testing. Under this part, a failure
of any test or training does not bar the person from successfully
completing the training or testing at a later date. Of course, FRA does
not regulate employment issues and will leave those issues to be
settled in accordance with any applicable collective bargaining
agreement or employment and labor law.
    Paragraph (e) of this section requires that each employer shall
deliver refresher training at an interval not to exceed three calendar
years from the date of an employee's last training event, except where
refresher training is specifically required more frequently in
accordance with this chapter. Comments were raised at the Working Group
meeting regarding how to treat employees who are already receiving
refresher training in a three year cycle. The commenters wanted to
clarify that FRA would not be requiring every existing employee to
receive refresher training in the same year, which would disrupt the
current refresher training cycle as well as be expensive and
logistically difficult. The commenters correctly stated FRA's position,
although FRA determined that the proposal could be improved to
articulate that position more clearly. The regulatory language
indicates that the employer is required to conduct refresher training
at an interval based on ``an employee's last training event.'' Based on
the comments, FRA has added clarification in the rule to further
bolster the agency's intent that if the last training event occurs
prior to FRA's approval of the employer's training program, the
employer shall provide refresher training either within 3

calendar years from that prior training event or no later than December
31, 2022 or December 31, 2023, depending on the size of the employer.
The changes from the proposal do not prevent an employer from
initiating and completing its first round of refresher training all
within the year of the applicable deadline established by paragraphs
(e)(1) or (e)(2). However, the final rule allows for any employer to
begin or continue implementing refresher training on a three calendar
year cycle for one-third of its workforce each year without creating
any logistical issues.

Section 243.203 Records

    Several comments were received with regard to this section and they
are addressed in this analysis. Compared to the NPRM, this section is
substantially the same except that proposed paragraph (b)(5) was
deleted, resulting in the renumbering of the remaining numbered
paragraphs in paragraph (b); paragraph (c) was amended to address
comments suggesting that certain types of records should only be
required to be kept at one of the employer's headquarters location
within the United States; and, the electronic recordkeeping
requirements were revised to more closely resemble FRA's latest
approach in this chapter. As most of the final rule is identical to the
proposed rule, the analysis provided in the NPRM is merely summarized
here. Interested parties are directed to the NPRM for a more detailed
discussion. See 77 FR 6436-38.
    An essential requirement of any training program is the maintenance
of adequate records to support that the training was completed. In
paragraph (a) of this section, FRA sets forth the general requirements
for each safety-related railroad employee's qualification status
records and the accessibility of those records. One commenter asks
whether a railroad will be required to maintain records for its
contractors. The answer to the question is found in paragraph (a) which
requires that each employer is responsible for keeping records of each
of its own safety-related railroad employees. Thus, a railroad is not
required to maintain records for any contractor's safety-related
railroad employees. It is the contractor that is responsible for
keeping records of its own employees.
    In paragraph (b), FRA requires that certain core information be
kept in the records for each current or former safety-related railroad
employee. As mentioned previously in this analysis, proposed paragraph
(b)(5) was deleted. In the NPRM, FRA questioned whether proposed
paragraph (b)(5) was necessary as it would have required that the
records for each current or former safety-related railroad employee
indicate whether the person passed or failed any tests associated with
training even though paragraph (b)(4) requires that the employer
indicate in the records that the person successfully completed a
specified formal training course. FRA received four comments supporting
removal of proposed paragraph (b)(5) as unnecessary and none in support
of retaining the provision.
    Paragraph (c) contains a three-year record retention requirement
for any records that are not individual employee records. The records
referred to here would mainly be those kept in accordance with periodic
oversight (Sec.  243.205) and the annual review (Sec.  243.207). The
proposed three-year window for retention would actually be a bit longer
than 3 years because it would be measured as three calendar years after
the end of the calendar year to which the event relates. Thus, if a
test occurred on March 1, 2018, the record would need to be maintained
through December 31, 2021.
    Paragraph (c) also requires that any records that are not
individual employee records must be accessible at one headquarters
location within the United States. This paragraph lists different types
of acceptable headquarters locations, but this is not an all-inclusive
list and certainly other locations may be suitable. However, FRA has
specifically rejected the idea that a multi-national corporation could
maintain these records exclusively in a foreign location as doing so
could hamper FRA's enforcement activities. FRA eliminated the proposed
requirement that these records also be kept at each division
headquarters where the test, inspection, annual review, or other event
is conducted after considering the overwhelming negative comments
received. Thus, the revisions to this paragraph provide the flexibility
sought by employers to choose where to maintain records, as well as
eliminating the proposed requirement that the records also be
maintained at certain division headquarters.
    Paragraph (d) contains the requirements for each employer, training
organization, or learning institution to make available any record that
it is required to maintain under this part.
    Paragraph (e) contains the requirements that apply for each
employer, training organization, or learning institution that chooses
to retain the information prescribed in this section by maintaining an
electronic recordkeeping system. FRA decided not to retain the same
provisions that were in the NPRM because the agency recently
promulgated electronic recordkeeping provisions in the conductor
certification final rule that provide a more up-to-date version of such
requirements. See 49 CFR 242.203(g). NRC recommends deleting paragraphs
(e)(1) through (e)(3) from this proposed section arguing that small
contractors would find the requirements too prescriptive to comply
with. In response, FRA disagrees with the comment that a small business
would have difficulty complying with proposed paragraph (e)(3) or
paragraph (e)(2) of the final rule, which requires limiting access and
identifying individuals with access. Off-the-shelf software should be
available to small businesses that would provide the appropriate
security necessary to comply with these requirements. FRA is concerned
that if these electronic recordkeeping system requirements are relaxed
for small businesses that the integrity of the records would be
susceptible to inadvertent changes or outright falsification.
Individual employers may file a waiver request, using FRA's standard
procedures in 49 CFR part 211, and provide alternative assurances to
the integrity of an electronic system to bolster such a request.
    Paragraph (f) contains a transfer of records requirement with the
goal of preserving training records that might otherwise be lost when
an employer ceases to do business.

Section 243.205 Periodic Oversight

    FRA had requested comments on whether to expand periodic oversight
beyond what was proposed in the NPRM, but the only comment FRA received
with regard to this section requested that FRA not consider any
additional oversight necessary. Considering the comment and the RSAC's
recommendation, FRA has decided to keep this section of the final rule
identical to the proposed version except for one non-substantive change
discussed in this analysis. Thus, the analysis provided for in the NPRM
is still applicable and merely summarized here. Interested parties are
directed to the NPRM for a more detailed discussion. The analysis in
the NPRM can be found at 77 FR 6438-41.
    There are two central purposes to conducting periodic oversight
under a training rulemaking. One central purpose is to take notice of
individual employees who are in non-compliance and to take corrective
action to ensure

that those specific employees know how to do the work properly. In some
instances, the employee might need coaching or retraining, especially
if the person has not had much experience doing the work. In other
instances, training may not be an issue and other remedial action may
be appropriate. A second central purpose in conducting periodic
oversight is to look at all of the oversight data as a whole to detect
patterns of non-compliance. The annual review in Sec.  243.207 is
intended to spur such a global review of training and trigger
adjustments that improve the effectiveness of training courses. Taken
together, these oversight and review actions should lead to significant
improvements in compliance and the overall quality of training
programs. The recording of oversight, and the identification of problem
areas, is intended to compel each employer to focus on how a training
course can be improved to place greater emphasis on the causes of such
non-compliance.
    Paragraph (a) contains the general periodic oversight provision and
limits the required testing and inspection oversight to the Federal
railroad safety laws, regulations, and orders particular to FRA-
regulated personal and work group safety. The Federal railroad safety
laws, regulations, and orders particular to FRA-regulated personal and
work group safety that FRA is referring to are currently limited to 49
CFR part 214 (Railroad Workplace Safety), part 218 (Railroad Operating
Practices), and part 220 (Railroad Communications). These particular
compliance issues are not currently required to be as closely monitored
as train movements and other railroad operations. For that reason, FRA
would like to close that gap and have employers more closely monitor
the activities of largely maintenance-of-way, signal, and operations
personnel (who are not conductors or locomotive engineers, see Sec.
243.205(b)) that are required to abide by the listed regulations
related to FRA-regulated personal and work group safety. Thus, this
section does not impose periodic oversight requirements for each and
every Federal railroad safety law, regulation, and order that the
training program required by Sec.  243.101 covers.
    Periodic oversight means regularly conducting both tests and
inspections. In this context, a test is conducted by a qualified
supervisor who changes the work environment so that one or more
employees would need to act to prevent non-compliance. An inspection
involves a qualified supervisor observing one or more employees at a
job site and determining whether the employees are in compliance.
    Paragraph (b) exempts railroads from conducting periodic oversight
under this part on certified locomotive engineers and conductors as
those safety-related railroad employees are already covered by similar
requirements found elsewhere in this chapter.
    Although only paragraph (c) contains the heading ``[r]ailroad
oversight,'' paragraphs (c) through (f) need to be read together in
order to fully understand the responsibilities for each railroad as it
performs oversight. Generally, a railroad is required to provide
periodic oversight tests and inspections for the safety-related
railroad employees that it authorizes to perform safety-related duties
on its property. Paragraph (c) lists several exceptions to this general
rule.
    Paragraph (d) limits a railroad's requirement to conduct periodic
oversight of a contractor's employees. In situations where a railroad
is obligated to conduct oversight of a contractor's employees, a
railroad would not be required to perform operational tests of safety-
related railroad employees employed by a contractor. Please note that
although paragraph (d) does not require a railroad to conduct
operational tests of safety-related railroad employees employed by a
contractor, this provision does not prohibit it either.
    Paragraph (e) provides each railroad with significant discretion to
conduct oversight of a contractor's safety-related railroad employees
when it is convenient for the railroad. Each railroad has the
discretion to choose when it is convenient to conduct oversight of
contractors. Paragraphs (e)(1) and (e)(2) suggest that a railroad may
choose to require supervisory employees to perform oversight under
certain conditions.
    Paragraph (f) requires that when a railroad finds evidence of
contractor employee non-compliance during the periodic oversight it
shall provide that employee and that employee's employer with details
of the non-compliance. The final rule substitutes ``a railroad'' for
``any railroad,'' but the meaning is the same as the requirement
applies to each and every railroad that finds such evidence of a
contractor employee's non-compliance.
    Paragraph (g) requires each contractor to conduct periodic
oversight tests and inspections of its safety-related railroad
employees provided that certain conditions are met. If any condition is
not met, the contractor is exempt from being required to perform the
oversight. For instance, in paragraph (g)(1) there is a small business
exemption for any contractor that employs 15 or fewer safety-related
railroad employees.
    Paragraph (h) would allow a railroad and a contractor to agree that
the contractor will provide the periodic oversight, notwithstanding the
requirements of this section that impose the requirements on either the
railroad or the contractor. With that understanding, the RSAC proposed
that in order to accept this oversight responsibility, the contractor
would need to address in its program that the railroad has trained the
contractor employees responsible for training and oversight. In other
words, the contractor may accept responsibility for the oversight, but
not until the railroad trains the contractor's supervisory employee and
qualifies that person to do the oversight; thus, the railroad has some
obligation to ensure that the contractor's supervisory employees are
capable of conducting the oversight before abdicating what would
otherwise be the railroad's responsibility.
    Paragraph (i) contains the requirements for retaining oversight
records and paragraph (j) contains the statement that the records
required under this section are subject to the requirements of Sec.
243.203, which is the section containing the recordkeeping requirements
of this part. In the NPRM, FRA requested comments on whether paragraph
(j) is necessary given that the requirements of Sec.  243.203 would
apply to any records of period oversight required under this part even
if paragraph (j) was deleted. Although FRA has not received any
comments on this issue, FRA is retaining paragraph (j) as a reminder
that records of periodic oversight must be retained and that without
the paragraph some employers might not grasp that the recordkeeping
requirements apply under these circumstances.
    FRA also sought comments on a potential scope issue that would
allow some situations where safety-related railroad employees would not
be subject to any oversight. Those situations would likely occur when a
short line railroad hires a contractor with 15 or fewer safety-related
railroad employees. It is possible that the short line railroad would
not have the supervisors with the expertise necessary to conduct the
oversight and the contractor would be too small to be required to do it
themselves per the requirements of this section. As FRA did not receive
any comments raising concerns with this scope issue, FRA has decided to
finalize its proposal for the reasons acknowledged in the NPRM. Of
course, if FRA receives information that supports addressing this
issue, FRA can

initiate a rulemaking to amend the rule accordingly.

Section 243.207 Annual Review

    FRA has decided to keep this section of the final rule identical to
the proposed version, except for a non-substantive change to paragraph
(b) to clarify that this section does not apply to a railroad with less
than 400,000 total employee work hours annually. Thus, the analysis
provided for in the NPRM is still applicable and merely summarized
here. Interested parties are directed to the NPRM for a more detailed
discussion. The analysis in the NPRM can be found at 77 FR 6441-43. The
comments received with regard to this section have been addressed in
this analysis.
    Paragraph (a) of this section requires that each railroad with at
least 400,000 total employee work hours per year must conduct an annual
review in accordance with the requirements of this section. This
section only applies to railroads except that, in accordance with
paragraphs (a) and (f), contractors must use any information provided
by railroads to adjust training specific to the Federal railroad safety
laws, regulations, and orders particular to FRA-regulated personal and
work group safety. In order to address a comment suggesting proposed
paragraph (b) seemed to include railroads with less than 400,000 total
employee work hours per year despite the exclusion in paragraph (a),
FRA has added a reference to this exception in an introductory phrase
to paragraph (b). FRA anticipates that this non-substantive change will
prevent further misunderstandings of the agency's intent.
    It is likely that most annual reviews will reveal that the current
method of formal training covers the subject matter, but some aspect of
the training could be improved. For example, it might be determined
that the training could place more emphasis on compliance with one or
more specific tasks. Greater emphasis could be placed on the task by
increasing the amount of time covering how to perform the task and the
problems that could be encountered when conducting the task. The course
materials should be reviewed to see if they could be improved for
clarity. In other instances, especially when the pattern of non-
compliance is detected in a safety-related task, adding an OJT or
hands-on component, or adding more repetitions within the OJT or hands-
on component, may increase an employee's proficiency and lead to more
lasting compliance. In still other instances, adding opportunities for
individualized instruction and feedback could cut down on non-
compliance. It could also be determined that a particular instructor is
ineffective, or some other aspect of the way the course is delivered is
not conducive to learning.
    There are certainly a number of ways to improve training and that
is why it is important that each person a railroad designates to
conduct the annual review should be familiar with the training program
filed with FRA. The rule does not mandate that the designated person in
paragraph (c) have any specific knowledge requirements; although the
NPRM requested comments on whether there should be any such
requirements, FRA did not receive any comments on this issue.
Consequently, FRA is maintaining the position it took in the proposal
that the person designated to conduct the review will need to have
extensive information about the training program and individual course
material, as well as direct access to shape the methods of delivery.
Again, the annual review is intended to effect change in how training
is delivered to improve performance and should not be viewed as the end
itself.
    In the NPRM, FRA explained that paragraph (f) requires that
contractors have a duty to use any information provided by railroads to
adjust training specific to the Federal railroad safety laws,
regulations, and orders particular to FRA-regulated personal and work
group safety. FRA solicited comments regarding this paragraph because
FRA was concerned that it failed to address a situation in which a
contractor disagrees with the railroad's information that a
modification to a training program is necessary. FRA received three
comments on this issue and all three comments took the position that
FRA should not address such potential conflicts between a railroad and
a contractor. The NRC, ASLRRA, and AAR were unified in their position
that such conflicts should be handled without Federal intervention and
during the normal course of business. As FRA does not have a strong
rationale for addressing these potential conflicts between a railroad
and a contractor, FRA has decided not to change the rule from the
proposal.

Section 243.209 Railroad Maintained List of Contractors Utilized

    FRA has decided to keep this section of the final rule identical to
the proposed version. Thus, the analysis provided for in the NPRM is
still applicable and merely summarized here. See 77 FR 6443-44.
    One issue that was repeatedly raised during the RSAC meetings was
that employees of contractors routinely work alongside employees of
railroads. From an enforcement viewpoint, it is essential that FRA be
able to identify which employees work for railroads and which for
contractors. When an employee works for a contractor, FRA can sometimes
find it an additional burden to figure out basic contact information
for the contractor employer. This section is intended to require each
railroad to maintain a list of the contractors it uses and some basic
contact information about each of those contractors.
    With this basic information, FRA should be able to track down a
contractor to follow-up during any audit or investigation.

Appendix A

    FRA did not publish a proposed penalty schedule because such
penalty schedules are statements of policy, and thus notice and comment
are not required prior to their issuance. See 5 U.S.C. 553(b)(3)(A).
FRA has published similar penalty schedules in each of its existing
rules and this practice is described in 49 CFR part 209, appendix A,
under the heading ``Penalty Schedules: Assessment of Maximum
Penalties.'' The schedule is intended to set penalty levels
commensurate with the severity of the violation for typical violations,
whether willful or non-willful. Of course, the penalty schedule does
not constrict the agency's authority to issue a penalty anywhere in the
range from the statutory minimum amount to the statutory maximum
amount.
    In the NPRM, FRA reminded interested parties that they were welcome
to submit their views on what penalties may be appropriate. FRA
received three comments requesting that FRA adopt a penalty schedule at
the lowest or lower range of possible penalties. Each commenter
expressed a different reason why low penalties in the schedule are
warranted.
    ASLRRA asked that FRA adopt a penalty schedule at the lowest range
of possible penalties which reflects the low threat to safety which
training rule infractions represent. ASLRRA is concerned that onerous
penalties against small railroads for recordkeeping and procedural
errors will waste resources when few of those types of non-complying
conditions are likely to have a direct, adverse, or serious consequence
on the immediate safety to employees or the public. In response, it
should be noted that regardless of recommended standard penalties in a
schedule, FRA is always

free to adjust penalties for small entities based on ability to pay and
a variety of mitigating factors. See 49 CFR part 209, appendix C.
    AAR urged FRA to adopt a penalty schedule with the potential
penalties at the lower end of the penalty ranges normally found in
FRA's penalty schedules. AAR argues that it is extremely unlikely that
violations of the training requirements would lead directly to
accidents. Furthermore, AAR stated that the railroads already have a
record of providing sufficient training to their employees. In
response, FRA acknowledges AAR's position and believes it has been
taken into account in the penalty schedule. Of course, there are many
other factors to consider in creating this penalty schedule. For
example, some penalties may be geared towards one-time violations when
others are for systemic issues; in that case, it may be appropriate to
propose higher penalties on average for systemic non-compliance than a
violation involving a single occurrence. FRA has also considered that
gaps in training or ineffective training are often found to be
contributing causes to accidents/incidents.
    NRC urges FRA to adopt a penalty schedule with the potential
penalties on the lowest end of the penalty ranges normally found in
FRA's penalty schedules in order to consider the ``unprecedented level
of direct interaction between the FRA and hundreds of rail contractors
that have little previous experience being directly regulated by a
federal agency.'' Again, FRA appreciates the comment and can make
adjustments to assessed penalties on a case-by-case basis depending on
the totality of the legal and factual circumstances. Contractors
unfamiliar with FRA's civil penalty process should consult 49 CFR part
209, appendix A for a description of that process and the factors FRA
considers when deciding the amount or the appropriateness of any
penalty. FRA also understands that NRC's comment refers to the fact
that FRA is an active enforcement agency that conducts inspections and
audits of regulated entities on a continual basis, not just when an
accident/incident occurs. Some rail contractors may be more familiar
with other Federal agencies that rarely are quite as active as FRA in
that regard. Despite the truth to NRC's comment that some contractors
may not have experience with an active Federal enforcement agency, FRA
does not agree that the penalty schedule amounts should be adjusted
lower to account for employers that lack that experience.

VII. Regulatory Impact and Notices

A. Executive Order 12866, Executive Order 13563, and DOT Regulatory
Policies and Procedures

    This final rule is a significant regulatory action within the
meaning of Executive Order 12866, Executive Order 13563, and the U.S.
Department of Transportation's regulatory policies and procedures (DOT
Order 2100.5 dated May 22, 1980; 44 FR 11034, Feb. 26, 1979). FRA has
prepared and placed in the docket a regulatory impact analysis (RIA)
addressing the economic impact of this final rule.
    The RIA details estimates of the costs likely to occur over the
first twenty years after its effective date and a breakeven analysis
that details the reductions in relevant railroad accidents and
incidents that will be necessary for the final rule to breakeven in the
same timeframe. Informed by its analysis of the economic effects of
this final rule, FRA believes that this final rule will result in
positive net benefits. FRA believes the final rule will achieve
positive net benefits primarily through requiring that training
programs include ``hands-on'' training components, such as OJT,
simulation, and lab training,\6\ which scientific literature has shown
to be much more effective at reducing railroad accidents and incidents
than traditional training.\7\ The costs that will be induced by this
final rule over the twenty-year period considered include: the costs of
revising training programs to include ``hands-on'' training where
appropriate, as well as the costs of creating entirely new training
programs for any employer that does not have one already; the costs of
customizing model training programs for those employers that choose to
adopt a model program rather than create a new program; the costs of
annual data review and analysis required in order to constantly improve
training programs; the costs of revising programs in later years; the
costs of additional time new employees may have to spend in initial
training; the costs of additional periodic oversight tests and
inspections; the costs of additional qualification tests; and the costs
of additional time all safety-related railroad employees may have to
spend in refresher training. (FRA has accounted for additional costs
that were not addressed in the NPRM including: hiring new trainers and
indoctrinating them into the railroad training programs; filing
documentation on programs to FRA; and hosting visits of FRA officials
to review training programs.)
---------------------------------------------------------------------------

    \6\ Hands-on training is generally used by instructors/trainers
to re-enforce new skills to the learner. Hands-on can be a simulated
exercise in a laboratory, classroom, or it can be used in the actual
work environment similar to OJT. Hands-on activity enables the
trainer/instructor to objectively assess learning transfer based on
successful completion of the task to be performed.
    \7\ For a review and citation information of this scientific
literature, please see the Regulatory Impact Analysis that
accompanies this final rule and that has been placed in the docket.
---------------------------------------------------------------------------

    In analyzing the final rule, FRA has applied updated ``Guidance on
the Economic Value of a Statistical Life in US Department of
Transportation Analyses,'' March 2013. This policy updates the Value of
a Statistical Life (VSL) from $6.2 million to $9.1 million and revises
guidance used to compute benefits based on injury and fatality
avoidance in each year of the analysis based on forecasts from the
Congressional Budget Office of a 1.07% annual growth rate in median
real wages over the next 30 years (2013-2043). FRA also adjusted wage
based labor costs in each year of the analysis accordingly. Real wages
represent the purchasing power of nominal wages. Non-wage inputs are
not impacted. The primary cost and benefit drivers for this RIA are
labor costs and avoided injuries and fatalities, both of which in turn
depend on wage rates.
    Based on the 2013 VSL DOT guidance and CBO wage forecast, the total
non-discounted cost of the final rule over the 20-year period analyzed
is approximately $389.9 million. Present discounted costs evaluated
over the first 20 years of the final rule total about $290.9 million at
a 3% discount rate and about $207.1 million at a 7% discount rate.
    The annualized costs are $26,201,913 at a 3% discount rate and
$36,796,090 at a 7% discount rate.
    FRA has performed a break-even analysis for this final rule. FRA
expects that improving training primarily by requiring the inclusion
and implementation of ``hands-on'' elements where appropriate will
reduce the number of relevant railroad accidents and incidents. Rather
than assume any specific reduction will be achieved, FRA has calculated
the percentage of relevant railroad accidents that will need to be
prevented by this final rule to at least offset the total costs of the
final rule. Reductions in railroad accidents will result in fatalities
avoided, injuries avoided, and property damage avoided, all of which
can be monetized and quantified using FRA safety data.
    The table below presents the average yearly number of accidents,
fatalities, injuries, and property damage from relevant railroad
accidents between 2001 and 2010.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Average monetized
                                                                                economic damages from
        Average yearly number of accidents/incidents              Average yearly         Average yearly         Average yearly          all relevant
                                                               number of fatalities    number of injuries      property damage      accidents (using VSL
                                                                                of $9.1 million)
--------------------------------------------------------------------------------------------------------------------------------------------------------
9,723.......................................................                    43                  7,545           $273,896,902         $1,566,480,194
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The accident/incident pool that FRA used for its analysis includes
a wide range of events. These range from very minor and less expensive
incidents to major accidents with multiple fatalities. An incident that
was a result of an employee not wearing proper fall protection is an
example of an incident that might be impacted by this rule. The more
rigorous training (emphasized by this rule) not only focuses on
specific safety hazards and safety behavior, it also enhances the
overall safety culture which will affect both work safety performance
and the quality of the safety training provided. On the higher end of
the range, for example, are derailments and collisions between on track
equipment.
    FRA believes that additional hands-on and refresher training will
reduce the frequency and severity of some future accidents and
incidents. Expected safety benefits were calculated using full accident
costs, which are based on past accident history, the values of
preventing future fatalities and injuries sustained, and the cost of
property damage. (Full accident costs are determined by the number of
fatalities and injuries multiplied by their respective prevention
valuations, and the cost of property damage.)
    In addition to fatalities, injuries, and property damage, railroad
accidents can result in train delay, environmental damages, evacuations
and emergency response costs, but FRA does not have sufficient data
with which to estimate those potential costs savings related to
implementation of the enhanced training requirements due to this final
rule. Human factors can also play a role in limiting the consequences
of accidents--in other words reducing the severity of their outcomes.
Some FRA regulations are focused on the subject of reducing human
factor caused accidents and this final rule has the potential to result
in improvements in this area as well.
    Using the 2013 VSL guidance, FRA estimates that this final rule
will break even if it results in a 20-year total reduction in relevant
railroad accidents and incidents of 4.59% using a 3% discount rate, and
4.59% using a 7% discount rate. These are the official break-even
percentages. Safety regulations have already achieved significant
results, while the industry has increased freight and passenger
traffic, total number of trains, and employee hours worked. However,
all of these statistics are on an upward trend with very little
increase in track miles (i.e., density ever increasing, creating an
environment where the probability of an accident is higher). FRA
believes that this comprehensive rule that improves the safety behavior
of safety-related employees in the industry should achieve the results
as stated above. The table below shows the total present discounted
annual costs of relevant railroad accidents and incidents that would
likely be incurred over the next 20 years without this final rule, as
well as the percent reduction in relevant railroad accidents and
incidents that will be necessary for the accident reduction benefits to
justify implementation of the final rule. This corresponds to
approximately 118 accidents and incidents per year on average over the
20-year period that would have to be avoided for this rule to break
even. This potential reduction of 118 accidents and incidents would
likely involve relatively more employee fatality or injury incidents
resulting while carrying out work duties (as compared to train
accidents). Another way this final rule would break even is by
preventing 1 fatality and 86 injuries per year. These injuries would
likely be comprised of a few severe injuries and many minor injuries.
These calculations take into account various other recent and
concurrent initiatives to address railroad accidents and incidents
including implementation of positive train control systems, revisions
to hours of service regulations, development of conductor certification
standards and a roadway worker protection rule, and implementation of
programs to address fatigue and electronic device distraction, among
others.
    The following table summarizes estimates using the revised DOT
guidance and CBO real wage rate forecasts.

--------------------------------------------------------------------------------------------------------------------------------------------------------
    Present value of                                                              Present value of
    potential annual            Total present         Percent reduction for       potential annual           Total present        Percent reduction for
 benefits  (3% discount     discounted costs  (3%    breakeven  (3% discount   benefits  (7% discount    discounted costs  (7%   breakeven  (7% discount
          rate)                discount rate)                 rate)                     rate)                discount rate)               rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
      $6,333,998,623              $290,932,418                     4.59%            $4,507,378,459              $207,068,184                    4.59%
--------------------------------------------------------------------------------------------------------------------------------------------------------

    With the 2013 VSL policy, DOT also recommended a sensitivity
analysis be considered using VSL of $5.2 million and $12.9 million.
Using a VSL of $5.2 million, FRA estimates that this final rule will
break even if it results in a 20-year total reduction in relevant
railroad accidents and incidents of 7.18% using a 3% discount rate, and
7.18% using a 7% discount rate. Using a VSL of $12.9 million, FRA
estimates that this final rule will break even if it results in a 20-
year total reduction in relevant railroad accidents and incidents of
3.41% using a 3% discount rate, and 3.41% using a 7% discount rate.
    For comparability purposes, FRA has also provided below the costs
and benefits, as calculated and using the same real wage and VSL
assumptions used in the NPRM--assuming no changes in real wage rates
for the period of the analysis, using a VSL of $6.2 million, which
reflected DOT guidance at the time, and in 2010 dollars.
    Using this methodology, the total cost of the final rule is
estimated to be about $261 million, discounted at a 3% rate, and about
$186.9 million, discounted at a 7% rate. The Table below lists specific
cost elements and each element's estimated cost over the first 20 years
following promulgation of the final rule, as well as the total cost
estimates.

------------------------------------------------------------------------
                                    Twenty-year total  Twenty-year total
           Cost element                (3% discount       (7% discount
                                          rate)              rate)
------------------------------------------------------------------------
Creating and revising training            $31,796,815        $26,599,026
 programs.........................
Revising programs for model
 program users:
    400,000 or more total labor               166,976            117,558
     hours annually...............
    Less than 400,000 total labor           7,654,491          5,870,184
     hours annually...............
Customizing model programs........            839,572            727,798
Designating current and future                995,974            804,215
 employees........................
Additional initial training.......         91,195,393         62,663,586
Additional refresher training.....         74,701,853         48,936,721
Additional periodic tests and              24,689,109         16,964,762
 inspections......................
Qualification testing.............         14,136,417         12,185,273
Hiring and indoctrinating                  12,209,461          9,991,110
 additional trainers..............
Other Costs (Filing, hosting FRA).          2,656,263          2,012,102
                                   -------------------------------------
    Total.........................        261,042,324        186,872,334
------------------------------------------------------------------------

    Using the former methodology with a VSL of $6.2 million and no
annual growth rate in real wages, FRA estimates that this final rule
will break even if it results in a twenty-year total reduction in
relevant railroad accidents and incidents of 6.07% using a 3% discount
rate, and a 6.06% reduction using a 7% discount rate. The table below
details the total present discounted annual costs of the final rule.

--------------------------------------------------------------------------------------------------------------------------------------------------------
    Present value of                                                              Present value of
    potential annual            Total present         Percent reduction for       potential annual           Total present        Percent reduction for
 benefits  (3% discount     discounted costs  (3%    breakeven  (3% discount   benefits  (7% discount    discounted costs  (7%   breakeven  (7% discount
          rate)                discount rate)                 rate)                     rate)                discount rate)               rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
      $4,301,939,374              $261,042,324                     6.07%            $3,081,262,864              $186,872,334                    6.06%
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In the RIA, FRA presented a sensitivity analysis using the $6.2
million VSL. By presenting a low and high end of four main cost
components,\8\ and varying the accident benefit reduction potential
from other FRA regulations,\9\ a break-even range was presented. Using
all possible combinations of the cost component options and accident
benefit options, the lowest break-even point (at 3 percent discount
rate) was 1.87% and the highest was 15.91%. Using a 7 percent discount
rate, the lowest break-even point was 1.96% and the highest was 17.03%.
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    \8\ Cost components that were varied for the sensitivity
analysis were: number of employers creating/revising their own
programs, number of employers customizing programs, costs for 1.5
days of initial training, and the amount of additional refresher
training required per employee.
    \9\ For the sensitivity analysis, four alternate projections of
future economic damages from relevant railroad accidents were
presented, given alternate future reductions from other initiatives.
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    Given the prevalence of accidents and incidents in the railroad
industry and the relationship between quality training and safety, FRA
believes it is reasonable to expect that improvements in training as
required in this final rule will yield safety benefits that will exceed
the costs.\10\ As stated above, accident/incident reductions due to
safety regulations have occurred even while the industry has been
growing at a fast rate for the most part of the last decade
(infrastructure assets, business, and people). This training standards
final rule will improve the safety behavior of all safety-related
employees in the industry and should achieve the results as concluded.
The improvements to training programs is expected to produce employees
who are more highly qualified, and therefore better able to avoid or
prevent accidents and incidents, even in an environment that has more
employees, passengers, work activities, and assets operated.
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    \10\ To further indicate the reasonableness of this analysis,
FRA has removed other regulatory impact results so no double-
counting of accident/incident reductions from other regulations are
represented here. These benefits solely reflect training standards
results.
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B. Regulatory Flexibility Act and Executive Order 13272; Final
Regulatory Flexibility Assessment

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) and Executive
Order 13272 require a review of proposed and final rules to assess
their impacts on small entities. An agency must prepare an initial
regulatory flexibility analysis (IRFA) unless it determines and
certifies that a rule, if promulgated, would not have a significant
impact on a substantial number of small entities. During the Notice of
Proposed Rulemaking (NPRM) stage, FRA had not determined whether the
proposed rule would have a significant economic impact on a substantial
number of small entities. Therefore, FRA published an IRFA to aid the
public in commenting on the potential small business impacts of the
proposals in the NPRM. All interested parties were invited to submit
data and information regarding the potential economic impact that would
result from adoption of the proposals in the NPRM.
    The Regulatory Flexibility Act also requires an agency to conduct a
final regulatory flexibility assessment (FRFA) unless it determines and
certifies that a rule is not expected to have a significant impact on a
substantial number of small entities. FRA is not able to certify that
the final rule will not have a significant economic impact on a
substantial number of small entities. FRA received comments and data
from several commenters on the IRFA, and that information was used to
make this determination. Therefore, FRA will publish this FRFA and
issue a guidance document that includes small entities.
    FRA estimates that approximately 10% of the total cost of this
rulemaking (see the regulatory impact analysis (RIA)) will be borne by
small entities. This burden is because more small railroads will have
to enhance, upgrade, or modify their current training programs. It is
important to note that, in general, the typical small railroad is a
less complex operation and has an average of only 21 employees. Small
railroads do not have as many layers of supervision; therefore,
revising or implementing programs can be done more quickly and
efficiently than in larger railroads.
    This final rule also mandates that each railroad have an approved
training

program, but the training program is only applicable to federally
mandated training requirements. Therefore, the training program, its
requirements, and implications do not cover other training that a
railroad provides or initiates for other purposes.
    FRA provides the rationale the agency used for assessing what
impacts will be borne by small entities. FRA considered comments
received in the public comment process when making a determination in
the FRFA.
    This FRFA was developed in accordance with the Regulatory
Flexibility Act.
    (1) A succinct statement of the need for and objectives of the
rule.
    FRA is addressing the RSIA's statutory mandate to establish minimum
training standards for safety-related railroad employees and the
submission of training plans in this rulemaking. FRA is requiring that
each employer of one or more safety-related railroad employees (whether
the employer is a railroad, contractor, or subcontractor) be required
to train and qualify each such employee on the Federal railroad safety
laws, regulations, and orders that the employee is required to comply
with, as well as any relevant railroad rules and procedures promulgated
to implement those Federal railroad safety laws, regulations, and
orders. The final rule also requires that the training program
developed by each employer be submitted to FRA for approval.
    The scientific literature on training in general and FRA's
experience with training in the railroad industry show a clear link
between the quality of training programs--including whether training is
engaging or hands-on--and safety. Please see the RIA for a more
detailed discussion and references for the scientific literature.
    Even though rail transportation in the United States is generally
an extremely safe mode of transportation and rail safety has improved
over the years, well-designed training programs have the potential to
further reduce risk in the railroad environment. All of the positive
impacts noted above would apply to expected results from enhanced
training in the railroad industry, and the work force performing job
tasks more efficiently, skillfully, and more safely. The main goal of
this rulemaking is to improve railroad safety by ensuring that safety-
related employees receive appropriate training that takes into
consideration the type of activities they perform and analysis of
relevant data.
    (2) A summary of the significant issues raised by the public
comments in response to the IRFA, a summary of the assessment of the
agency of such issues, and a statement of any changes made to the
proposed rule as a result of such comments.
    Several comments were received that directly addressed the IRFA or
the impacts on small entities. One commenter (ASLRRA) disagreed with
FRA's RIA for the NPRM. ASLRRA also believed that this rulemaking would
have a significant economic impact on the small railroad industry.
(a) Training Program Approval
    ASLRRA noted that ``further aggravating the potential cost
disadvantage for small railroads is the threat by FRA in the proposed
rule to scrutinize more intensely the training programs of small
railroads that primarily conduct their own training. (77 FR 6430).
Railroads that otherwise might have perfectly adequate in-house safety
programs may turn to more costly alternatives out of fear of being
subject to extensive and distracting audits from FRA just because they
are small. There are many reasons that small railroads may evaluate in
deciding whether or not to conduct their own training programs or use
outside resources . . . . FRA should allow the railroads to make the
most rational economic and operating decision according to their
individual circumstances and not intimidate them into choosing a more
costly option if they would not otherwise do so.'' FRA believes that
the level of scrutiny that any railroad's training program will receive
will be based on a number of risk factors. The comment did not include
FRA's explanation in the proposed rule that the reason to more closely
scrutinize a small railroad that chooses to conduct all of its own
training is because a small railroad ``would not always have qualified
instructors to implement all the different types of training required
by the Federal laws, regulations, and orders.'' Thus, FRA's example in
the proposed rule focused on the situation where a shortline's training
program appears legally sufficient at first glance, but unless the
shortline has taken affirmative steps to train or hire qualified
instructors, the shortline is unlikely to be able to fully implement
its program. FRA recognizes that this issue could still potentially be
a concern that it considers in its review of programs, as we want to
put all railroads on notice that they must both adopt and comply with
the training program submitted to FRA. However, when it comes to the
amount of scrutiny FRA gives each program, FRA will certainly be
looking at other factors that are more directly related to safety
concerns and a greater level of scrutiny will be placed on the
particular risks inherent in a particular employer's operation. For
example, a small railroad operation that is relatively segregated from
major railroad operations and only operates in rural areas may pose
less risk than those that routinely interchange with major railroads or
operate through more populated suburbs and urban neighborhoods. If a
simple railroad operation with low risk has a good history complying
with FRA's regulations, FRA may view in-house training more favorably,
as long as the railroad's program meets the minimum requirements of the
final rule. Meanwhile, if a small railroad has a relatively complicated
operation that poses significant risks to employees and the general
public, FRA would certainly be justified to more closely scrutinize the
in-house training for that operation; especially if the railroad does
not have a good history of railroad safety law compliance. Other risk
factors FRA may consider including, but are certainly not limited to,
are the employer's accident history, the condition of the railroad's
track and equipment, the types of commodities hauled, and the number of
train miles operated annually.
    Although each employer may be better suited than FRA to identify
the weaknesses in its existing training program and to seek ways to
strengthen those components, FRA has the expertise to also make such
judgments. FRA understands that changing a training program will have
costs associated with it, and the agency intends to only request
training adjustments that will positively impact safety. FRA will not
require training program changes that would force an entity to exceed
the minimum requirements for compliance. Finally, small entities should
expect that FRA will consult with the entity in order to receive
constructive input prior to ordering any programmatic changes.
Therefore, the process FRA envisions is expected to engage any size
entity in a discussion of any FRA-perceived weaknesses in a training
program before FRA issues a decision that the entity's program is
inadequate and must be upgraded.
    FRA also notes that each employer's training program will not be
reviewed by an FRA field inspector. FRA will have a specific group of
safety specialists designated, trained, and responsible for reviewing
and approving the training programs. Local or regional FRA personnel
will not be authorized to conduct random audits without the involvement
of FRA's specialized training staff, which should lead to a uniform
approach to enforcement of this

rule. Small railroads will generally not be subject to intrusive or
distracting audits as some might be concerned, unless one of three
events occur: (1) A major accident or fatality occurs on that
railroad's property; (2) a complaint is filed with FRA from an employee
or other entity alleging noncompliance with respect to the mandates of
this part; or (3) a pattern of incidents industry wide raises a
training concern attributable to multiple small railroads with certain
similar characteristics. In summary, FRA is unlikely to initiate
enforcement activities to find weaknesses in a small entity's training
program unless there is some basis that raises a specific concern.
    FRA does not agree with ASLRRA's comment suggesting that small
railroads will be intimidated into providing unneeded costly training.
FRA fully intends to offer to enter into a constructive dialog with any
employer whose training program is found to be deficient. In each
instance, FRA fully expects that there will be more than one option to
correct a training deficiency and that it will be up to the employer to
choose those options. Because FRA will review all the training
programs, FRA may have some recommended options for addressing any
training program deficiency. Meanwhile, just like any other business
decision, there will be pros and cons to every option. For example,
some options may be proven effective, but cost more than a lesser-used
option. Although FRA will have the authority to reject unsuitable
options that fail to meet the minimum requirements of this part, FRA
will not otherwise reject less expensive options and impose additional
costs on any employer.
(b) Annual Review Exemption
    ASLRRA also noted ``Section 243.207(a) expressly grants an
exemption from the annual review requirement for a railroad with fewer
than 400,000 total employee work hours annually. Paragraph (b) then
states that any railroad required to conduct periodic oversight under
section 243.205 is also required to conduct an annual review.'' ASLRRA
requested clarification of who is exempt from the annual review
requirement.
    FRA addressed this issue by adding the exemption language as an
introductory phrase to 49 CFR 243.207(b). Paragraph (b) now reads:
``[e]xcept as provided for in paragraph (a) of this section, each
railroad that is required to conduct periodic oversight in accordance
with Sec.  243.205 is also required to conduct an annual review, as
provided in this section, and shall retain, at its system headquarters,
one copy of the written annual review'' (italicized emphasis added). As
noted in the preamble above, FRA did not change the intent of paragraph
(b) of this section but, by adding the exception language, it did
clarify that this section does not apply to railroads with less than
400,000 total employee work hours annually. FRA anticipates that this
non-substantive change will prevent further misunderstandings of the
agency's intent.
    FRA also notes that the final rule requires all railroads and most
contractors to conduct periodic oversight, per Sec.  243.205. A
contractor would be exempt from the periodic oversight requirements if
it (1) employs 15 or fewer employees; (2) does not rely on training it
directly provides to its own employees as the basis for qualifying
those employees to perform safety-related duties on a railroad; or (3)
does not employ supervisory safety-related railroad employees capable
of performing oversight. Periodic oversight is limited to Federal
regulations associated with FRA-regulated personal and work group
safety currently in parts 214, 218, and 220. Periodic oversight does
not apply to employees covered by parts 240 and 242, but information
gained (performance gaps) from those assessments must be used when
appropriate in training programs to close performance gaps.
(c) Impact on Railroads That Have Less Than 16 Employees