[Federal Register: June 16, 2008 (Volume 73, Number 116)]
[Notices]
[Page 34061-34063]
[DOCID:fr16jn08-110]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57935; File No. SR-FINRA-2008-023]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Order Granting Accelerated
Approval of a Proposed Rule Change Relating to Violations Appropriate
for Disposition Under FINRA's Minor Rule Violation Plan

June 6, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on May 27, 2008, Financial Industry Regulatory Authority, Inc.
(``FINRA'') (f/k/a National Association of Securities Dealers, Inc.
(``NASD'')) filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been substantially prepared by FINRA. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons and to approve the
proposal on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    FINRA proposes to amend NASD Interpretive Material (``IM'') 9216
\3\ to expand FINRA's Minor Rule Violation Plan (``MRVP'') to include
violations of options position and exercise limits and contrary
exercise advice procedures. The text of the proposed rule change is
available at FINRA, the Commission's Public Reference Room, and http://
www.finra.org.
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    \3\ FINRA has filed with the Commission a proposed rule change
(SR-FINRA-2008-021) in which FINRA proposes, among other things, to
adopt NASD IM-9216 as FINRA Rule 9217, without material change.
Assuming Commission approval of this proposed rule change prior to
the approval of SR-FINRA-2008-021, FINRA will amend SR-FINRA-2008-
021, as necessary, to reflect such approval.
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, FINRA included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of those statements may be examined at the places specified in
Item III below. FINRA has prepared summaries, set forth in Sections A,
B, and C below, of the most significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The proposed rule change would amend NASD IM-9216 to include in
FINRA's MRVP violations of (1) options position and exercise limits
under NASD Rule 2860(b)(3) and (b)(4), and (2) contrary exercise advice
procedures under NASD Rule 2860(b)(23). NASD Rule 9216 sets forth
FINRA's MRVP, which allows FINRA to impose a fine of up to $2,500 on
any member or person associated with a member for a minor violation of
the rules identified in IM-9216 (known as ``Minor Rule Violations'').
The purpose of the MRVP is to provide meaningful sanctions for minor or
technical violations of rules when the initiation of a formal
disciplinary proceeding would be more significant than warranted. Minor
Rule Violation letters also represent a useful tool for implementing
the concept of progressive discipline.
    Inclusion of a rule in the MRVP does not mean that all violations
of that rule should be treated as Minor Rule Violations, and, in fact,
significant violations would not be handled under the MRVP.
Accordingly, under the MRVP, FINRA retains the discretion to bring full
disciplinary proceedings for any violation of a rule included in the
MRVP.
    The NASD options rules contain provisions imposing limits on the
size of an options position, and limits on the number of options
contracts that can be exercised into shares of the underlying security
during a fixed period. To address inadvertent violations of these
rules, due to among other things, miscounting, technical problems, or a
misinterpretation of the position limit calculation methodologies, that
in the judgment of FINRA do not materially affect the market, FINRA
proposes adding violations of options position and exercise limits as
eligible for disposition under the MRVP. Violations of these rules
deemed to have a manipulative effect or intent would not be treated as
Minor Rule Violations.
    Options issued by The Options Clearing Corporation (i.e., exchange-
traded options) have specific terms regarding whether options that can
be settled only by delivery of the asset underlying the option
(typically an equity security) will be automatically exercised at
settlement. The NASD options rule has detailed ``contrary exercise
advice'' (``CEA'') procedures describing the manner in which an option
holder can elect not to exercise an option that normally would be
exercised, or exercise an option contract that normally would expire
worthless. To prevent option holders from unfairly exploiting after-
hours news or market information that affects the price of the
underlying security, the CEA notices must be submitted to the broker-
dealer and by the broker-dealer to the OCC by certain specified cut-off
times. Occasionally, due to technical problems or other inadvertent
errors, firms fail to submit CEA notices within the applicable time
limits. For those instances, FINRA proposes to have the flexibility to
treat the violation as a Minor Rule Violation. Violations of the CEA
rules that exploit or are intended to exploit after-hours news would
not be treated as Minor Rule Violations.
    FINRA notes that position and exercise limits and CEA violations
are part of the MRVP of the options

exchanges,\4\ therefore including them in FINRA's plan would promote
greater consistency in sanctions among substantively similar rules
enforced by FINRA and the options exchanges.
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    \4\ See NASDAQ Options Rules, Chapter X, Section 7 (Penalty for
Minor Rule Violations); Boston Options Exchange Rules, Chapter X,
Section 2 (Penalty for Rule Violations); Chicago Board Options
Exchange Rule 17.50 (Imposition of Fines for Minor Rule Violations);
American Stock Exchange Rule 590. Part 1 (General Rule Violations);
Philadelphia Stock Exchange Rules F-15 (Minor Infractions of
Position/Exercise Limits and Hedge Exemptions) and F-35 (Violations
of Exercise and Exercise Advice Rules for Noncash-Settled Equity
Option Contracts); International Securities Exchange Rule 1614
(Imposition of Fines for Minor Rule Violations).
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    FINRA will announce the effective date of the proposed rule change
in a Regulatory Notice to be published no later than 60 days following
Commission approval. The effective date will be the date of Commission
approval.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\5\ which requires, among
other things, that FINRA rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest. FINRA believes that the proposed rule change is
consistent with Section 15A(b)(7) of the Act \6\ in that it provides
for the appropriate discipline for violation of FINRA rules. The
proposed rule change also is consistent with Section 15A(b)(8) of the
Act \7\ in that it furthers the statutory goals of providing a fair
procedure for disciplining members and associated persons. FINRA
believes that the addition of these violations to the MRVP will provide
FINRA staff with the ability to provide meaningful sanctions for minor
or technical violations of these rules when the initiation of a formal
disciplinary proceeding would be more significant than warranted.
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    \5\ 15 U.S.C. 78o-3(b)(6).
    \6\ 15 U.S.C. 78o-3(b)(7).
    \7\ 15 U.S.C. 78o-3(b)(8).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    FINRA does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-FINRA-2008-023 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-FINRA-2008-023. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Room, 100 F Street,
NE., Washington, DC 20549, on official business days between the hours
of 10 a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of FINRA. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-FINRA-2008-023 and should be
submitted on or before July 7, 2008.

IV. Commission's Findings and Order Granting Accelerated Approval of
Proposed Rule Change

    After careful consideration, the Commission finds that the proposed
rule change is consistent with the requirements of the Section 15 of
the Act and the rules and regulations thereunder applicable to a
national securities association.\8\ In particular, the Commission finds
that the proposed rule change is consistent with Section 15A(b)(6) of
the Act because it is designed to promote just and equitable principles
of trade, to foster cooperation and coordination with persons engaged
in regulating, clearing, settling, processing information with respect
to, and facilitating transactions in securities, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general, to protect investors and the public
interest; and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers, to fix minimum profits, to
impose any schedule or fix rates of commissions, allowances, discounts,
or other fees to be charged by its members.\9\
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    \8\ In approving this proposed rule change, the Commission has
considered its impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
    \9\ 15 U.S.C. 78o-3(b)(6).
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    The Commission further believes that FINRA's proposal to sanction
members and associated persons who fail to submit CEAs in a timely
manner or limit the size of an option position or the number of option
contracts is consistent with Sections 15A(b)(7) and 15A(b)(8) of the
Act,\10\ which require that the rules of an association enforce
compliance with, and provide appropriate discipline for, violations of
Commission and FINRA rules. In addition, the Commission finds that the
proposal is consistent with the public interest, the protection of
investors, or otherwise in furtherance of the purposes of the Act, as
required by Rule 19d-1(c)(2) under the Act,\11\ which governs minor
rule violation plans. The Commission believes that the proposed rule
change should strengthen FINRA's ability to carry out its oversight and
enforcement responsibilities in cases where full disciplinary
proceedings are unsuitable in view of the minor nature of the
particular violation.
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    \10\ 15 U.S.C. 78o-3(b)(7) and(b)(8).
    \11\ 17 CFR 240.19d-1(c)(2).
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    In approving this proposed rule change, the Commission in no way
minimizes the importance of compliance with FINRA's rules and all

other rules subject to the imposition of fines under the MRVP. The
Commission believes that the violation of any self-regulatory
organization rules, as well as Commission rules, is a serious matter.
However, the MRVP provides a reasonable means of addressing rule
violations that do not rise to the level of requiring formal
disciplinary proceedings, while providing greater flexibility in
handling certain violations. The Commission expects that FINRA will
continue to conduct surveillance with due diligence and make a
determination based on its findings, on a case-by-case basis, whether a
fine of more or less than the recommended amount is appropriate for a
violation under the MRVP or whether a violation requires formal
disciplinary action.
    FINRA has requested that the Commission find good cause for
approving the proposed rule change prior to the thirtieth day after
publication of the notice thereof in the Federal Register. The
Commission hereby grants that request. FINRA's proposal is
substantially similar to those of other options exchanges, which
previously have been approved by the Commission.\12\ The Commission
does not believe that FINRA's proposal raises any novel regulatory
issues, and no comments were received on any of these earlier
proposals. Accordingly, the Commission finds good cause, pursuant to
Section 19(b)(2) of the Act,\13\ for approving the proposed rule change
prior to the thirtieth day after publication of the notice thereof in
the Federal Register.
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    \12\ See, e.g., Securities Exchange Act Release No. 57528 (March
19, 2008), 73 FR 15826 (March 25, 2008) (SR-Phlx-2008-18).
    \13\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act
\14\ and Rule 19d-1(c)(2) under the Act,\15\ that the proposed rule
change (SR-FINRA-2008-023), be, and hereby is, approved and declared
effective on an accelerated basis.
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    \14\ 15 U.S.C. 78s(b)(2).
    \15\ 17 CFR 240.19d-1(c)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12); 17 CFR 200.30-3(a)(44).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-13426 Filed 6-13-08; 8:45 am]

BILLING CODE 8010-01-P


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    \10\ ``Table of Size Standards,'' U.S. Small Business
Administration, January 31, 1996, 13 CFR part 121.
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    Pursuant to that authority, FRA has published a final policy that
classifies ``small entities'' as, inter alia, being railroads that meet
the line haulage revenue requirements of a Class III railroad.\11\ 49
CFR part 209, appendix C. Currently, the revenue requirements are 20
million inflation-adjusted dollars or less in annual operating revenue.
The 20-million limit is based on the Surface Transportation Board's
threshold of a Class III railroad carrier, which is adjusted by
applying the railroad revenue deflator adjustment.\12\ The same dollar
limit on revenues is established to determine whether a railroad
shipper or contractor is a small entity. FRA is using this definition
of ``small entity'' for regulatory flexibility purposes in this
rulemaking.
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    \11\ See 68 FR 24891 (May 9, 2003).
    \12\ For further information on the calculation of the specific
dollar limit, please reference 49 CFR part 1201.
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    There are approximately 665 small railroads.\13\ Potentially all
small railroads could be impacted by this proposed regulation. However,
because of certain characteristics that these railroads typically have,
there should not be any impact on the majority of them. Most have only
single-track operations. Some small railroads such as the tourist and
historic railroads, operate across the lines of other railroads that
would bear the burden or impact of the proposed rules requirements.
Finally, other small railroads, if they do have more than a single
track, typically have operations that are light enough such that the
railroads have generally always performed the pertinent trackside work
with the track and right-of-way taken out of service, or conducted the
work during hours that the track is not used.
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    \13\ 715 railroads--50 (large freight, medium freight,
passenger, and commuter railroads) = 665 small railroads.
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    In addition, FRA is not aware of any commuter railroads that
qualify as small entities. This is likely because commuter railroad
operations in the United States are part of larger governmental
entities whose jurisdictions exceed 50,000 in population. See 49 CFR
part 209, appendix C.
    FRA is uncertain as to the number of contractors that would be
affected by this proposed rule. FRA is aware that some railroads hire
contractors to conduct some of the functions of roadway workers on
their railroads. However, most of the costs associated with the burdens
from this rulemaking would ultimately get passed on to the pertinent
railroad. Most likely, the contracts would be written to reflect that,
and the contractor would bear no additional burden for the proposed
requirements. In addition, FRA is uncertain as to the number of
contractors that would be considered to be small entities. FRA requests
any information during the rulemaking comment period related to
contractors and the burdens that might impact them as a result of this
proposed rulemaking.
    No other small businesses (non-railroads) are expected to be
impacted by this proposed rulemaking.
    The impacts from this regulation are primarily a result of the
proposed requirements for roadway work groups to be provided on-track
safety when working on a track within close proximity of an adjacent
track that is controlled. Again, since small railroads either do not
have any adjacent track or conduct track work on the occupied track
with an adjacent track when the adjacent track is out of service, there
is no impact for small railroads. Since FRA does not anticipate that
this proposed rule would impose any burdens on small entities, there is
no alternative treatment proposed for small entities.
    Having made these determinations, FRA certifies that this NPRM is
not expected to have a significant economic impact on a substantial
number of small entities under the Regulatory Flexibility Act or
Executive Order 13272.

C. Paperwork Reduction Act

    The information collection requirements in this proposed rule have
been submitted for approval to the Office of Management and Budget
(OMB) under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq.
The sections that contain the new and current information collection
requirements, and the estimated time to fulfill each requirement are as
follows:

----------------------------------------------------------------------------------------------------------------
                                                            Total annual       Average time per    Total annual
   CFR section (if applicable)     Respondent universe       responses             response        burden hours
----------------------------------------------------------------------------------------------------------------
Form FRA F 6180.119--Part 214      350 Safety           150 forms..........  4 hours............             600
 Railroad Workplace Safety          Inspectors.
 Violation Report.
214.303--Railroad On-Track Safety
 Programs
    --Amendments to Programs.....  60 Railroads.......  20 amend. + 584      20 hours; 4 hrs....           2,736
                                                         amend.
    --Subsequent Years: New        5 New Railroads....  5 new prog.........  250 hours..........           1,250
     Programs.
214.313--Good Faith Challenges to  20 Railroads.......  80 challenges......  4 hours per                     320
 On-Track Safety Rules.                                                       challenge.
214.315/335--Supervision and
 Communication
    --Job Briefings..............  50,000 Roadway       16,350,000           2 minutes per               545,000
                                    Workers.             briefings.           briefing.
    --Adjacent-Track Safety        24,500 Roadway       2,403,450 briefings  30 seconds per               20,029
     Briefings (New Requirement).   Workers.                                  briefing.
214.321--Exclusive Track           8,583 Roadway        700,739 written      1 minute...........          11,679
 Occupancy--Working Limits.         Workers.             authorities.
214.325--Train Coordination
    --Establishing Working Limits  50,000 Roadway       36,500               15 seconds.........             152
     through Communication.         Workers.             communications.
214.327--Inaccessible Track
    --Working Limits on Non-       718 Railroads......  50,000               10 minutes.........           8,333
     Controlled Track:                                   notifications.
     Notifications.
214.336--Procedures for Adjacent-
 Controlled-Track Movements Over
 25 mph (New Requirements)
    --Notifications/Watchmen/      100 Railroads......  10,000 notific.....  15 seconds.........              42
     Lookout Warnings.
    --Roadway Worker               100 Railroads......  3,000 comm.........  1 minute...........              50
     Communication with Train
     Engineers or Equipment
     Operators.
Procedures for Adjacent-
 Controlled-Track Movements 25
 mph or Less
    --Notifications/Watchmen/      100 Railroads......  3,000 notific......  15 seconds.........              13
     Lookout Warnings.
    --Roadway Worker               100 Railroads......  1,500 comm.........  1 minute...........              25
     Communication with Train
     Engineers or Equipment
     Operators.
214.337--On-Track Safety           718 Railroads......  2,080,000            30 seconds.........          17,333
 Procedures for Lone Workers:                            statements.
 Statements by Lone Workers.
214.343/345/347/349/351/353/355--  50,000 Roadway       50,000 tr. Empl....  4.5 hours..........         225,000
 Training Requirements.             Workers.
    --Additional On-Track Safety   35,000 Roadway       35,000 tr. Empl....  5 minutes..........           2,917
     Training (New Requirement).    Workers.
    --Records of Training........  50,000 Roadway       50,000 records.....  2 minutes..........           1,667
                                    Workers.
214.503--Good Faith Challenges;
 Procedures for Notification and
 Resolution
    --Notifications for Non-       50,000 Roadway       125 notifications..  10 minutes.........              21
     Compliant Roadway              Workers.
     Maintenance Machines or
     Unsafe Condition.
    --Development of Resolution    644 Railroads......  10 procedures......  2 hours............              20
     Procedures.
214.505--Required Environmental    644 Railroads......  10 lists...........  1 hour.............              10
 Control and Protection Systems
 for New On-Track Roadway
 Maintenance Machines with
 Enclosed Cabs.
214.507--As-Built Light Weight on  644 Railroads......  1,000 stickers.....  5 minutes..........              83
 New On-Track Roadway Maintenance
 Machines.
214.511--Required Audible Warning  644 Railroads......  3,700 identified     5 minutes..........             308
 Devices for New On-Track Roadway                        mechanisms.
 Maintenance Machines.
214.513--Retrofitting of Existing
 On-Track Roadway Maintenance
 Machines.
    --Identification of            703 Railroads......  200 mechanisms.....  5 minutes..........              17
     Triggering Mechanism--Horns.
214.515--Overhead Covers for       644 Railroads......  500 requests + 500   10 minutes; 20                  250
 Existing On-Track Roadway                               responses.           minutes.
 Maintenance Machines.
214.517--Retrofitting of Existing  644 Railroads......  500 stencils.......  5 minutes..........              42
 On-Track Roadway Maintenance
 Machines Manufactured on or
 after Jan. 1, 1991.
214.518--Safe and Secure Position
 for Riders
    --Positions Identified by      644 Railroads......  1,000 stencils.....  5 minutes..........              83
     Stencils/Markings/Notices.
214.523--Hi-Rail Vehicles........  644 Railroads......  2,000 records......  60 minutes.........           2,000
    --Non-Complying Conditions...  644 Railroads......  500 tags + 500       10 min.; 15 min....             208
                                                         reports.
214.527--Inspection for            644 Railroads......  550 tags + 550       5 min.; 15 min.....             184
 Compliance; Repair Schedules.                           reports.

214.533--Schedule of Repairs;      644 Railroads......  250 records........  15 minutes.........              63
 Subject to Availability of Parts.
----------------------------------------------------------------------------------------------------------------

    All estimates include the time for reviewing instructions;
searching existing data sources; gathering or maintaining the needed
data; and reviewing the information. Pursuant to 44 U.S.C.
3506(c)(2)(B), FRA solicits comments concerning whether these
information collection requirements are necessary for the proper
performance of the functions of FRA, including whether the information
has practical utility; the accuracy of FRA's estimates of the burden of
the information collection requirements; the quality, utility, and
clarity of the information to be collected; and whether the burden of
collection of information on those who are to respond, including
through the use of automated collection techniques or other forms of
information technology, may be minimized. For information or a copy of
the paperwork package submitted to OMB, contact Mr. Robert Brogan,
Information Clearance Officer, at<PHONE_NUMBER>, or Ms. Nakia Jackson at
202-493-6073.
    Organizations and individuals desiring to submit comments on the
collection of information requirements should direct them to Mr. Robert
Brogan or Ms. Nakia Jackson, Federal Railroad Administration, 1200 New
Jersey Avenue, SE., 3rd Floor, Washington, DC 20590. Comments may also
be submitted via e-mail to Mr. Brogan or Ms. Jackson at the following
addresses<EMAIL_ADDRESS>or<EMAIL_ADDRESS>    OMB is required to make a decision concerning the collection of
information requirements contained in this proposed rule between 30 and
60 days after publication of this document in the Federal Register.
Therefore, a comment to OMB is best assured of having its full effect
if OMB receives it within 30 days of publication. The final rule will
respond to any OMB or public comments on the information collection
requirements contained in this proposal.
    FRA is not authorized to impose a penalty on persons for violating
information collection requirements which do not display a current OMB
control number, if required. FRA intends to obtain current OMB control
numbers for any new information collection requirements resulting from
this rulemaking action prior to the effective date of the final rule.
The OMB control number, when assigned, will be announced by separate
notice in the Federal Register.

D. Federalism Implications

    FRA has analyzed this NPRM in accordance with the principles and
criteria contained in Executive Order 13132, issued on August 4, 1999,
which directs Federal agencies to exercise great care in establishing
policies that have federalism implications. See 64 FR 43255. This NPRM
will not have a substantial direct effect on the States, on the
relationship between the National government and the States, or on the
distribution of power and responsibilities among various levels of
government.
    One of the fundamental federalism principles, as stated in Section
2(a) of Executive Order 13132, is that ``Federalism is rooted in the
belief that issues that are not national in scope or significance are
most appropriately addressed by the level of government closest to the
people.'' Congress expressed its intent that there be national
uniformity of regulation concerning railroad safety matters when it
enacted 49 U.S.C. 20106. As amended to date, that section provides that
all regulations prescribed by the Secretary of Transportation with
respect to railroad safety matters and the Secretary of Homeland
Security with respect to railroad security matters preempt any State
law, regulation, or order covering the same subject matter, except a
provision necessary to eliminate or reduce an essentially local safety
or security hazard that is not incompatible with a Federal law,
regulation, or order and that does not unreasonably burden interstate
commerce. Nothing in this NPRM proposes to alter the preemptive effect
of the RWP Rule so these provisions, once adopted as a final rule,
would have the same preemptive effect as the current RWP Rule in
accordance with the statute.
    FRA notes that the above factors have been considered throughout
the development of this NPRM both internally and through discussions
within the RSAC forum, as described in Sections VI and VII of this
preamble. The full RSAC, which, prior to the publication of this NPRM,
reached consensus on proposed rule text and recommended the proposal to
FRA, has as permanent voting members two organizations representing
State and local interests: AASHTO and ASRSM. As such, these State
organizations concurred with the proposed requirements, which differ in
only limited respects from the requirements contained in this NPRM. The
RSAC regularly provides recommendations to the FRA Administrator for
solutions to regulatory issues that reflect significant input from its
State members. To date, FRA has received no indication of concerns
about the Federalism implications of this rulemaking from these
representatives or from any other representative.
    For the foregoing reasons, FRA believes that this NPRM is in
accordance with the principles and criteria contained in Executive
Order 13132.

E. Environmental Impact

    FRA has evaluated this NPRM in accordance with its ``Procedures for
Considering Environmental Impacts'' (FRA's Procedures) (see 64 FR 28545
(May 26, 1999)) as required by the National Environmental Policy Act
(see 42 U.S.C. 4321 et seq.), other environmental statutes, Executive
Orders, and related regulatory requirements. FRA has determined that
this NPRM is not a major FRA action (requiring the preparation of an
environmental impact statement or environmental assessment) because it
is categorically excluded from detailed environmental review pursuant
to section 4(c)(20) of FRA's Procedures. See 64 FR 28547 (May 26,
1999). In accordance with section 4(c) and (e) of FRA's Procedures, the
agency has further concluded that no extraordinary circumstances exist
with respect to this regulation that might trigger the need for a more
detailed environmental review. As a result, FRA finds that this NPRM is
not a major Federal action significantly affecting the quality of the
human environment.

F. Unfunded Mandates Reform Act of 1995

    Pursuant to Section 201 of the Unfunded Mandates Reform Act of 1995
(Pub. L. 104-4, 2 U.S.C. 1531), each Federal agency ``shall, unless
otherwise prohibited by law, assess the effects of Federal regulatory
actions on State, local, and tribal governments, and the private sector
(other than to the extent that such regulations incorporate

requirements specifically set forth in law).'' Section 202 of the Act
(2 U.S.C. 1532) further requires --``[b]efore promulgating any general
notice of proposed rulemaking that is likely to result in the
promulgation of any rule that includes any Federal mandate that may
result in expenditure by State, local, and tribal governments, in the
aggregate, or by the private sector, of $100,000,000 or more (annually
adjusted for inflation) in any 1 year, and before promulgating any
final rule for which a general notice of proposed rulemaking was
published, the agency shall prepare a written statement. * * *''
    The written statement must detail the effect on State, local, and
tribal governments and the private sector. This NPRM will not result in
the expenditure, in the aggregate, of $141,300,000 in any one year, and
thus preparation of such a statement is not required.

G. Energy Impact

    Executive Order 13211 requires Federal agencies to prepare a
Statement of Energy Effects for any ``significant energy action.'' See
66 FR 28355 (May 22, 2001). Under the Executive Order, a ``significant
energy action'' is defined as any action by an agency (normally
published in the Federal Register) that promulgates or is expected to
lead to the promulgation of a final rule or regulation, including
notices of inquiry, advance notices of proposed rulemaking, and notices
of proposed rulemaking: (1)(i) that is a significant regulatory action
under Executive Order 12866 or any successor order, and (ii) is likely
to have a significant adverse effect on the supply, distribution, or
use of energy; or (2) that is designated by the Administrator of the
Office of Information and Regulatory Affairs as a significant energy
action. FRA has evaluated this NPRM in accordance with Executive Order
13211. FRA has determined that this NPRM is not likely to have a
significant adverse effect on the supply, distribution, or use of
energy. Consequently, FRA has determined that this regulatory action is
not a ``significant energy action'' within the meaning of Executive
Order 13211.

H. Trade Impact

    The Trade Agreements Act of 1979 (Pub. L. 96-39, 19 U.S.C. 2501 et
seq.) prohibits Federal agencies from engaging in any standards setting
or related activities that create unnecessary obstacles to the foreign
commerce of the United States. Legitimate domestic objectives, such as
safety, are not considered unnecessary obstacles. The statute also
requires consideration of international standards and, where
appropriate, that they be the basis for U.S. standards.
    FRA has assessed the potential effect of this NPRM on foreign
commerce and believes that its requirements are consistent with the
Trade Agreements Act. The requirements imposed are safety standards,
which, as noted, are not considered unnecessary obstacles to trade.

I. Privacy Act

    Anyone is able to search the electronic form of all comments
received into any of FRA's dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review DOT's
complete Privacy Act Statement in the Federal Register published on
April 11, 2000 (65 FR 19477-78), or you may visit http://
DocketsInfo.dot.gov.

List of Subjects in 49 CFR Part 214

    Occupational safety and health, Penalties, Railroad safety.

The Proposed Rule

    In consideration of the foregoing, FRA proposes to amend part 214
of chapter II, subtitle B of title 49, Code of Federal Regulations, as
follows:

PART 214--[AMENDED]

    1. The authority citation for part 214 is revised to read as
follows:

    Authority:  49 U.S.C. 20102-20103, 20107, 21301-21302, 21304; 28
U.S.C. 2461, note; and 49 CFR 1.49.

Subpart C--Roadway Worker Protection

    2. Section 214.315 is amended by revising paragraph (a) to read as
follows:

Sec.  214.315  Supervision and communication.

    (a) When an employer assigns a duty to a roadway worker that calls
for that employee to foul a track, the employer shall provide the
employee with an on-track safety job briefing that, at a minimum,
includes the following:
    (1) Information on the means by which on-track safety is to be
provided for each track identified to be fouled;
    (2) Instruction on each on-track safety procedure to be followed;
    (3) Information about any adjacent tracks, on-track safety for such
tracks, if required by this subpart or deemed necessary by the roadway
worker in charge, and identification of any roadway maintenance
machines that will foul such tracks; and
    (4) A discussion of the nature of the work to be performed and the
characteristics of the work location to ensure compliance with this
subpart.
* * * * *
    3. Section 214.335 is amended by removing paragraph (c) and
revising the section heading to read as follows:

Sec.  214.335  On-track safety procedures for roadway work groups,
general.

* * * * *
    4. New Sec.  214.336 is added to read as follows:

Sec.  214.336  Adjacent-controlled-track on-track safety procedures for
certain roadway work groups.

    (a) Procedures; general. (1) Except as provided in paragraph (e) of
this section, on-track safety is required for each adjacent controlled
track when a roadway work group with at least one of the roadway
workers on the ground is engaged in a common task with an on-track
roadway maintenance machine or coupled equipment on an occupied track.
The required on-track safety shall be established through working
limits (Sec.  214.319) or train approach warning provided by watchmen/
lookouts (Sec.  214.329) and as more specifically described in this
section.
    (2) If an occupied track has two adjacent controlled tracks, and
one of these adjacent controlled tracks has one or more adjacent-
controlled-track movements authorized at 25 mph or less, and the other
adjacent controlled track has one or more concurrent adjacent-
controlled-track movements authorized at over 25 mph, the more
restrictive procedures in paragraph (b) of this section apply.
    (3) As used in this section--
    ``Adjacent controlled track'' means a controlled track whose track
center is spaced 19 feet or less from the track center of the occupied
track.
    ``Adjacent tracks'' means two or more tracks with track centers
spaced less than 25 feet apart.
    ``Clear side'' means the field side of the occupied track that
either has no adjacent track on that side or has an adjacent track or
tracks on that side and working limits have been established in
accordance with this subpart on the closest adjacent track on that side
and there are no movements authorized through the working limits by the
roadway worker in charge on that adjacent track.
    ``Occupied track'' means the track on which a roadway maintenance
machine or coupled equipment is located while engaged in a common task
with a roadway work group.
    (b) Procedures for adjacent-controlled-track movements over 25

mph. Except as provided in paragraph (e) of this section, if a train or
other on-track equipment is authorized to move on an adjacent
controlled track at a speed greater than 25 mph, each roadway work
group to which this section applies must comply with the following
procedures:
    (1) Ceasing work and occupying a place of safety. Each roadway
worker in the roadway work group shall cease any on-ground work and
movement of any roadway maintenance machine or coupled equipment in the
fouling space of the occupied track and the adjacent controlled track,
and occupy a predetermined place of safety upon receiving--
    (i) A notification in accordance with Sec.  214.319(c) indicating
that the roadway worker in charge intends to authorize one or more
train or other on-track equipment movements through the working limits
on the adjacent controlled track, if adjacent-controlled-track on-track
safety has been established through working limits alone; or
    (ii) A watchman/lookout warning, if on-track safety through train
approach warning (Sec.  214.329) has been established on the adjacent
controlled track either as the sole method of on-track safety or in
addition to working limits.
    (2) Resuming work. (i) A component of a roadway work group may
resume on-ground work and movement of any roadway maintenance machine
or coupled equipment on or fouling the occupied track only after the
trailing-end of all trains or other on-track equipment moving on the
adjacent controlled track (for which a notification or warning has been
received in accordance with paragraph (b)(1) of this section) has
passed and remains ahead of that component of the roadway work group.
    (ii) If the train or other on-track equipment stops before its
trailing-end has passed all of the roadway workers in the roadway work
group, the work to be performed on or fouling the occupied track ahead
of the trailing-end of the train or other on-track equipment on the
adjacent controlled track may resume only--
    (A) If on-track safety through train approach warning (Sec.
214.329) has been established on the adjacent controlled track; or
    (B) After the roadway worker in charge has communicated with the
train engineer or equipment operator and established that further
movements of such train or other on-track equipment shall be made only
as permitted by the roadway worker in charge.
    (c) Procedures for adjacent-controlled-track movements 25 mph or
less. If a train or other on-track equipment is authorized to move on
an adjacent controlled track at a speed of 25 mph or less, each roadway
work group to which this section applies must comply with the
procedures listed in paragraph (b) of this section, except that work
that is performed exclusively while positioned on or between the rails
of the occupied track or on the clear side may continue, provided that
any on-ground work is performed more than 25 feet in front of or behind
any roadway maintenance machine on or fouling the occupied track during
such adjacent-controlled-track movement.
    (d) Procedures for a roadway maintenance machine or coupled
equipment fouling an adjacent controlled track. A roadway maintenance
machine or coupled equipment shall not foul an adjacent controlled
track unless working limits have been established on the adjacent
controlled track and there are no movements authorized through the
working limits by the roadway worker in charge.
    (e) Exceptions to the requirement for adjacent-controlled-track on-
track safety. The procedures for adjacent-controlled-track on-track
safety in paragraphs (a) through (c) of this section do not apply to
the following work activities:
    (1) One or more on-ground roadway workers performing work while
exclusively positioned on the clear side of the occupied track.
    (2) A hi-rail vehicle on or fouling an occupied track while engaged
in a common task with one or more roadway workers on the ground,
provided that such hi-rail vehicle is not coupled to one or more
railroad cars or operating on the same occupied track and within the
working limits of a roadway work group as described in paragraph (a) of
this section. In accordance with Sec.  214.315(a)(3), where multiple
hi-rail vehicles are engaged in a common task, the on-track safety
briefing shall include discussion of the nature of the work to be
performed to determine if adjacent-controlled-track on-track safety is
necessary.
    (3) A catenary maintenance tower car on or fouling an occupied
track that is engaged in a common task with one or more roadway workers
positioned on the ground within the gage of the occupied track for the
sole purpose of applying or removing grounds, provided that such
catenary maintenance tower car is not operating on the same occupied
track and within the working limits of a roadway work group as
described in paragraph (a) of this section.
    (f) Discretion of roadway worker in charge. Nothing in this subpart
prohibits the roadway worker in charge from establishing on-track
safety on one or more adjacent tracks as he or she deems necessary
consistent with both the purpose and requirements of this subpart.

    Issued in Washington, DC, on November 16, 2009.
Karen J. Rae,
Deputy Administrator.
[FR Doc. E9-27974 Filed 11-24-09; 8:45 am]

BILLING CODE 4910-06-P