is best left to the railroad when complying with part 218 and sought
comment on how to apply this requirement in a situation involving a
single person crew and how it interrelates with part 218.
    NYSDOT acknowledges that single person crews pose a challenge in
terms of ensuring that the safety benefits inherent with effective job
briefings are assured in all instances, including single-person
operations. At a minimum, states NYSDOT, the procedures for conducting
job briefings should be established in the railroad's operating rules
or in its timetable special instruction for all locations and
operations to ensure that expectations are clearly established.
    FRA continues to believe that it is sufficient for a one-person
crew to self-satisfy a job briefing in accordance with the railroad's
own operating rules developed pursuant to part 218.
    Under paragraph (n)(10), FRA is requiring railroads to develop
procedures to ensure that a qualified railroad employee inspects all
equipment that any emergency responder has been on, under, or between
for proper securement before the rail equipment or train is left
unattended. As it may be necessary for emergency responders to modify
the state of the equipment for the performance of their jobs by going
on, under, or between equipment, it is critical for the railroad to
have a qualified employee subsequently inspect the equipment to ensure
that the equipment continues to be properly secured before it is again
left unattended.
    The final rule requires railroads to establish a process to ensure
that a qualified railroad employee inspects all equipment that any
emergency responder (e.g., fireman, policeman, or paramedic) has been
on, under, or between for proper securement before the train or vehicle
is left unattended. FRA understands that on rare occasions there may be
situations where an emergency responder accesses railroad equipment
without the knowledge of the railroad. FRA will expect that a qualified
railroad employee inspect equipment after it has been accessed by an
emergency responder in any circumstance where the railroad acting in a
reasonable manner knew or should have known of an emergency responder's
presence on, under, or between the subject equipment.
    The final rule requires that these procedures are followed as soon
as safely practicable after learning that an emergency responder has
interfaced with the equipment. In the NPRM, FRA sought comments on what
should be considered ``as soon as safely practicable.''
    AAR and ASLRRA reiterated earlier statements that the railroads
support, and that the final rule should include,

the language ``as soon as safely practicable.'' AAR and ASLRRA assert
that this language addresses the reality of situations where an
emergency responder has had contact with rail equipment.
    NYSDOT believes that the type and severity associated with any
emergency event will significantly influence the definition of ``as
soon as safely practicable.'' NYSDOT would recommend that, given their
significant training regarding personal safety and protection, the
first responders on-site would be a reasonable `real time' resource to
provide the requisite guidance in each case. NYSDOT consulted with
counterparts from the NYS Division of Homeland Security and Emergency
Services (DHSES), Office of Fire Prevention and Control (OFPC) on this
topic. OFPC recommends that for scenarios in which first responders
access unattended equipment without the on-site presence of railroad
personnel, effective communication and coordination will be critical in
assuring that the incident scene and access to the equipment be turned
over to the appropriate railroad representative (i.e. ``qualified
employee'') when it has been determined safe to do so. NYSDOT also
states that in no case should the affected equipment be left in a
potentially unsafe or unattended condition prior to the arrival of
railroad personnel designated by the railroad to inspect and assume
responsibility for that equipment and its proper securement.
    FRA shares NYSDOT's concerns. However, while emergency and first
responder training would certainly be beneficial, FRA will refrain from
imposing such requirements at this time. Emergency response is
primarily a local function that falls under State or local governance,
which could impose such training requirements. FRA notes, however, that
AAR is currently providing training at its Transportation Technology
Center, Inc. (TTCI) to emergency responders on handling accidents
involving crude oil. Moreover, if each railroad's employee is properly
trained and complies with this regulation, there is little need to
require emergency responder training, which could be quite costly
nationwide.
    AAR and ASLRRA also make clear their belief that, in such a
situation, the railroad has to have actual knowledge that an emergency
responder has been on the equipment and it has to be safe for the
employee to inspect the equipment. According to AAR and ASLRRA, in some
situations, the railroad might not know that an emergency responder has
been in contact with the equipment until sometime after the contact.
Additionally, AAR and ASLRRA assert that in a potential emergency
situation, the railroad needs to be able to ensure that its employees
can safely examine the equipment before being able to verify its
securement.
    When enforcing this provision, FRA will consider the railroad's
actual and constructive knowledge of any emergency responder's
presence. However, FRA does not expect to hold the railroad accountable
if there is no reasonable means for the railroad to have known.
Further, the ``safely practicable'' language is intended to take into
consideration the circumstances presented. FRA's intent with this
regulation is not put a railroad employee in harm's way by requiring
him or her to enter an unsafe situation following an instance where a
first responder goes on, under, or between equipment. However, FRA will
require the railroad to take action once it can be reasonably
ascertained that securement can be effectuated without unnecessary
danger.
    As noted above, on March 24, 2010, FRA issued TB 10-01 to provide
enforcement guidance regarding the securement of equipment,
particularly in classification yards. In the NPRM to this proceeding,
FRA proposed codifying TB 10-01 by amending the rule at the final rule
stage of this proceeding. Accordingly, this final rule includes a
clarifying amendment to ensure that FRA's long-standing interpretation
and application of the existing regulation is contained directly in the
regulation. These amendments are for clarification purposes only and
add no new requirements to the regulations.
    NYSDOT agrees with the exception in TB 10-01 that, in certain
circumstances within classification yards, skates or retarders in lieu
of hand brakes may be used to secure equipment. AAR and ASLRRA
expressed concern that the NPRM did not include any proposed regulatory
text and recommended that FRA place the issue before the RSAC SWG for
discussion.
    TB 10-01 was issued approximately five years ago and the railroad
industry has had significant opportunity to become accustomed to its
interpretations of the existing rules. TB 10-01, and its codification
in this rulemaking, does not provide any new requirements; if anything,
it formalizes exceptions that provide operational flexibility for
railroads in classification yards. FRA sought comment on this issue and
had not received any regulatory text recommendations. Accordingly, FRA
does not believe it is necessary to either extend the comment period on
this issue or recall the RSAC SWG for further discussion.
    The purpose of TB 10-01, and its codification in this final rule,
is to indicate how Sec.  232.103(n) applies in classification yards.
Much of TB 10-01 is purely guidance, which will be incorporated into
this preamble for posterity. There are a few portions of TB 10-01,
however, which provide alternative securement options. These
alternatives are being codified into the rule text as further discussed
below. Upon the effective date of this final rule, which will
incorporate TB 10-01, that guidance document itself will be rescinded.
However, for continued guidance and educational purposes, FRA has
placed the illustrative photographs from TB 10-01 into the docket of
this proceeding.
    Prior to issuance of TB 10-01, FRA's Railroad Safety Board
reiterated that the failure to apply any hand brakes on unattended
equipment does not comply with the securement requirements of Sec.
232.103.\18\ However, FRA recognizes that it is sometimes necessary in
the switching of trains within classification yards to have equipment
unsecured with hand brakes. Therefore, like the TB, this final rule
allows for alternate forms of securement in limited circumstances--
including where they may be appropriate and what constitutes effective
use of alternate forms of securement. It also provides flexibility in
the application of securement on repair tracks.
---------------------------------------------------------------------------

    \18\ See Letter from Grady C. Cothen, Jr., Deputy Associate
Administrator for Safety Standards and Program Development, Federal
Railroad Administration, to Thomas J. Healey, Regulatory Counsel,
and Jeffery A. Liepelt, VP Operations, Canadian National Railway
Company, Docket No. FRA-2008-0060 (Apr. 3, 2009).
---------------------------------------------------------------------------

    Section 232.103(n) addresses the securement of unattended equipment
by means of applying hand brakes, venting the brake pipe to zero and
leaving the angle cock open on one end of a cut of cars, and requiring
the railroad to develop and implement procedures to verify that the
equipment is secure. Unattended equipment is equipment left standing
and unmanned in such a manner that the brake system of the equipment
cannot be readily controlled by a qualified person. When assessing this
situation for compliance, FRA may take into account the following
factors:
     Can an individual take corrective action if the equipment
should start to roll away?
     Can the individual readily mount the car and apply the
hand brake, or can the individual safely open an angle cock should the
equipment start to roll away?

     Can the individual readily mount the locomotive and either
apply the hand brake or operate the brake handles or emergency brake
valve to stop the unexpected movement?
     Is a qualified person focused on the situation?
     If the individual is eating lunch or in the bathroom, full
attention is not being given to the equipment.
     If the individual is in a crew room or talking on the
phone, full attention is not being given to the equipment.
    If an engineer and crew get off of their train to watch a passing
train, and remain in close proximity to their locomotive consist, hand
brakes would not have to be applied on the locomotives as long as
someone is close enough to readily mount the locomotive and apply an
emergency brake or hand brake, should the locomotives or train start to
roll away. In these situations, FRA would consider the equipment
attended. However, if the engineer and crew get off their train and
position themselves with the passing train between them and their
train, hand brakes have to be applied, as their train would be
considered unattended.
    Paragraph (n)(1) of Sec.  232.103 includes a performance-based
requirement that a sufficient number of hand brakes be applied to hold
the equipment and that railroads have to develop and implement a
process or procedure to verify that the applied hand brakes will
sufficiently hold the equipment when the air brakes are released. This
requires a railroad to develop appropriate operating rules to verify
the sufficiency of the hand brakes applied, which can be tailored to
the specific territory and equipment operated by the railroad. This can
be as elaborate as the use of a sophisticated matrix or some other type
of ``set calculations'' that specify exactly how many hand brakes have
to be applied on specific numbers of cars; or it can be as simple as
having the engineer release the pneumatic brakes after the hand brakes
have been applied (and before uncoupling from the cars) to determine if
the equipment is secure. To simply have instructions that state ``a
sufficient number of hand brakes have to be applied'' does not satisfy
the intent of the regulation, unless there is the provision that the
pneumatic brake has to be released to determine the equipment is
secure. When observing this practice, it is important that the
pneumatic brakes fully release. This can be accomplished by observing
piston travel on the rearmost car, or observing and ensuring that the
end-of-train brake pipe pressure returns to its original setting.
    Unless alternate forms of securement are permitted (as discussed
below), it is FRA's enforcement policy that one or more hand brakes
will have to be applied to a car in order to sufficiently secure
equipment in accordance with the regulation. The application of no hand
brakes on a car or a block of unattended freight cars will not meet the
securement requirements of 49 CFR 232.103(n).
    In paragraph (n)(11) of this final rule, FRA is including
exceptions from certain portions of the remainder of Sec.  232.103(n)
as long as a delineated alternative is followed.
    Paragraph (n)(11)(i) provides the flexibility to allow a railroad
to use in a prescribed location an alternative means of securement in
lieu of hand brakes per the remainder of paragraph (n). Like in TB 10-
01, FRA continues to believe in this final rule that unattended
equipment in classification yards--a series of tracks where locomotives
and cars are classified or switched to dismantle and make-up train
sets--present situations where alternate forms of securement can be
allowed. Classification yards may have hump, bowl, flat, graded, or
other characteristics. These characteristics and other local
conditions, such as prevailing winds and possible severe weather,
should be considered by the railroad in developing its instructions for
using alternate forms of securement. The burden of proof is on the
railroad in the use of alternate securement. If alternate securement is
not effective, securement defaults to the application of a sufficient
number of hand brakes.
    In classification yards, securement is not required for the end of
the yard that is actively being switched and is attended by the switch
crew or hump tower operator. At these locations, FRA does not require
securement for cars or blocks of cars on the yard tracks, as long as
the equipment on the opposite end of those tracks being actively
switched are secure. FRA believes that this flexibility applies only
when active switching is occurring and is not otherwise affected by the
commodities being handled, including equipment defined by paragraph
(n)(6). If the operations at these locations do not work for 24 hours a
day, 7 days a week, then the equipment at each end of the track would
have to be secured, but cars in between the secured equipment would not
have to be secured. At these locations, if a train crew removes a car
or block of cars, the railroad shall have instructions in place to
ensure any car remaining in the track is secure. This could be
accomplished by either placing the burden on the train crew making the
pickup, or by having other workers in place to secure the remaining
equipment. At all other locations outside of actively switched yards--
such as sidings, storage yards, or the mainline--each car and each
individual block of unattended equipment must be secure in compliance
with the regulation.
    FRA recognizes that there may be overlap between the securement
requirements within locomotive and car repair track areas and with the
alternate methods of Blue Signal Protection (49 CFR 218.29), which are
the primary methods of ensuring safety in these areas. However, once
repair tracks become unattended and the blue signals are removed,
securement will be required in these areas subject to the limitation
that under certain repair and servicing situations it will be
impractical or unnecessary to require the application of a hand brake.
These would include equipment in repair status that may be lacking hand
brakes, wheels, or trucks; and that is secured by means of a mechanical
securement device; which could include jack stands, chocks, chains,
skates, or other similar devices.
    Without applying hand brakes in classification yards, an
alternative means of securement is required per paragraph (n)(11)(i).
FRA is generally referring to such alternative means as mechanical
securement devices, which, as previously noted, FRA is including in
this final rule a new defined term. FRA intends mechanical securement
devices to include skates, retarders, inert retarders, and other
devices that provide at least the equivalent securement that a
sufficient number of hand brakes would provide in the same situation.
In these situations, skates or retarders are considered an alternative
form of securement, if they are maintained and used within their design
criteria and as intended.
    A skate (or rail skid) is a portable sliding device placed on the
rail to engage with a car wheel so as to provide continuous braking by
sliding friction. If using a skate to comply with this paragraph, the
rail car must be at rest and at least one skate must be fully engaged
to prevent movement. To be clearer, the following applies for the use
of skates:
     The railcar shall be constructively placed at rest, fully
engaged, with at least one skate, preventing movement away from the
actively switched direction of the yard track.
     Unengaged skates placed near the clearance points of yard
tracks (without a railcar in place) are not considered securement.

     A single railcar secured by a skate that is overwhelmed by
the mass of following railcars shall be considered the same as an
insufficient quantity of hand brakes, and a violation may be taken.
    Under paragraph (n)(11), a railroad may also use a retarder, which
is a powered or unpowered braking device permanently built into a
railway track to reduce the speed or secure railcars by means of brake
shoes that press against the lower sides of railcar wheels. When
installed at the exit of a hump yard, they are often referred to as
inert retarders or skate retarders (not to be confused with a skate
defined above). It is not necessary to have the first car in each block
engaged by the retarder during active switching. Also, a car may be
past a retarder and be considered secure if it is coupled to a car
engaged by the retarder and is not in a fouling condition as defined in
Sec.  218.101. However, if a railcar or following railcars are switched
into a retarder in a manner that overwhelms the capacity of the device
and consistently places equipment in a fouling condition, it shall be
considered the same as an insufficient quantity of hand brakes, and a
violation may be taken. While unengaged skates may be placed after
retarders to provide additional safety in the event that a retarder is
overwhelmed; their sole use will not be consider a properly used
mechanical securement device. If skates are being engaged excessively,
FRA may consider the retarders as being overwhelmed or not being
maintained, and a violation may be taken. For these and similar
reasons, skates and retarders are not usually considered sufficiently
safe securement alternatives to hand brakes when used outside of a
classification yard or within a repair shop environment where blue
signal protection has been initiated.
    In paragraph (n)(11)(ii) to this final rule, FRA is also
incorporating the flexibility afforded by TB 10-01 as it relates to the
isolation of the train pipe, also known as ``bottling of air.'' FRA
will continue to not take exception to a train crew cutting away from a
cut of cars, initiating an emergency brake application on the cut of
cars, and then closing the angle cock for the sole purpose of taking
the locomotives or otherwise proceeding directly to the opposite end of
the cut of cars to either: (1) Couple the locomotives to the cars or
(2) open the angle cock at the other end and leave the angle cock open
and vented to the atmosphere, as required under 49 CFR 232.103(n)(2).
However, if the locomotive cuts away from the cars and closes the angle
cock without the locomotive or an employee going ``directly'' to the
other end to either open the angle cock or couple the locomotives to
the cars, the railroad will be in violation of 49 CFR 232.103(n)(2).
The emphasis is on ``directly'' because, even though it may be the
train crew's intent to go directly to the opposite end of the cars to
take the appropriate action, if a train dispatcher, or whoever, directs
the crew to perform another job task before they directly go to the
opposite end of the cars, a violation is committed. It is only with the
understanding that the train crew goes directly to the other end of the
cars to take the appropriate action that FRA will permit this type of
activity.

Section 232.105 General Requirements for Locomotives

    New paragraph (h) to Sec.  232.105 provides further requirements
concerning locking mechanisms on locomotive doors. While Sec.
232.103(n)(8)(ii) provides securement requirements for the controlling
locomotive cab that is left unattended on a mainline track or siding as
part of a train that meets the minimum quantities of hazardous
materials established in proposed Sec.  232.103(n)(6)(i), FRA believes
that additional requirements should apply to all locomotives left
outside a yard except if directly adjacent to the yard. Accordingly,
FRA includes those requirements under Sec.  232.105.
    During the meetings of the RSAC SWG, representatives of the labor
unions proposed requiring the installation of locking mechanisms on all
locomotives covered by this rulemaking. AAR subsequently committed that
all locomotives will be equipped with cab door locks by March of 2017.
AAR clarified its statement by ensuring that there will be no
distinction between interchange and non-interchange locomotives. In the
interest of codifying this deadline as applicable to the scope of this
proposed rule, paragraph (h)(1) requires that after March 1, 2017, each
locomotive left unattended outside of a yard be equipped with an
operative exterior locking mechanism. By no means does this requirement
limit AAR's ambition that its members equip additional locomotives
(e.g., switching locomotives inside a yard) in their respective fleets.
FRA is also including this requirement in Sec.  232.105 so that it
applies to all locomotives left unattended outside of a yard, but not
on a track directly adjacent to a yard, not just those locomotives
defined under Sec.  232.103(n)(6).
    BLET expresses concern with a 2017 deadline, describing it as too
long. BLET also asserts that, without explanation or supporting data,
the proposed rule, in comparison to the RSAC recommendation, narrowed
the scope of the lock requirement to locomotives left outside of a
yard. In one-day snapshot surveys performed in 2004 and 2008, BLET says
that most respondents replied that there was no secured access to--or
security presence within--their rail yards. Many reported seeing
trespassers in the yard on the day they were surveyed, although the
second survey showed a marked decrease.
    NTSB supports the labor union's suggestion that locking mechanisms
be applied to each covered locomotive within 18 months after the
effective date of this final rule.
    NYSDOT supports the intent of this requirement, but notes that
while it requires all locomotives to have operative locks by 2017,
other than the language in paragraph (n)(8)(ii) for hazardous trains as
defined in paragraph (n)(6)(i), there is no requirement for the train
crew to apply the lock. NYSDOT suggests additional language to that
included in paragraph (n)(8)(ii) to cover all unattended locomotives on
mainline tracks and sidings regardless of the lading carried by the
train.
    Given that the railroads are already voluntarily installing locks
and have committed to a reasonable deadline of March 2017, which is
supported by factors highlighted by AAR during the RSAC process, FRA
does not believe it is appropriate to accelerate the process by
regulation. Without additional information, which was not provided in
comments, shortening the deadline by regulation could be viewed as
arbitrary. Nevertheless, at the time this final rule becomes effective,
it will be close to 18 months away from that deadline anyway, thus
rendering BLET's and NTSB's concerns moot.
    FRA also notes that AAR has issued standards regarding locomotive
cab securement and has committed to install locks on all locomotives.
See Locomotive Cab Securement, S-5520, AAR Manual of Standards and
Recommended Practices, Section M-Locomotives and Locomotive Interchange
Equipment (May 2014). Regardless of whether they operate in or out of
yards, this final rule only requires lock installation on locomotives
left unattended outside of yards, where trespasser access is arguably
easier. Nevertheless, as previously discussed under paragraphs
(n)(7)(ii) and (n)(8)(ii), any locomotive covered under paragraph
(n)(6) with an installed locked left unattended anywhere, either within
or outside of a yard, must have

that lock applied. Ultimately, this may provide each railroad with the
flexibility to determine on its own whether to install and operate
locks on locomotives dedicated to switching operations and confined to
classification yard limits.
    Paragraphs (h)(2) and (h)(3) are meant to ensure that locking
mechanisms, if broken or otherwise inoperative, are repaired in a
reasonable timeframe. FRA expects that each locomotive equipped with a
locking mechanism will be inspected and maintained at the time of the
locomotive's periodic inspection. See 49 CFR 229.23. If a locking
mechanism is found inoperative at any time other than the periodic
inspection, paragraph (h)(3) requires the railroad to repair it within
30 days. However, if the periodic inspection falls within the 30-day
limit for repair, FRA would expect that the lock will be repaired at
the time of the periodic inspection in accordance with the requirement
in paragraph (h)(2). For instance, if a locomotive engineer were to
find the lock inoperative during a daily inspection and the periodic
inspection was scheduled 15 days later, then FRA would expect that the
railroad could repair the locking mechanism at the time of the periodic
inspection. Alternatively, if the same situation were to arise but the
periodic inspection was scheduled to occur 45 days later, the railroad
would be expected to repair the locking mechanism prior to the time of
the periodic inspection to comply with the 30-day time limit in
paragraph (h)(3).
    For the purposes of this regulation, ``operative'' means that, when
applied, the locking mechanism will reasonably be expected to keep
unauthorized people from gaining access into a locomotive while the
locomotive is unoccupied. However, in doing so, the railroad must
assure that ingress and egress is provided for in normal circumstances
and emergencies. In the NPRM, FRA sought comments on this
understanding. FRA also sought information and comments on the
possibility of a qualified person having difficulty accessing the
locomotive cab in the event of an unintentional movement of the
equipment.
    NYSDOT believes that the proposed definition is reasonable. NYSDOT
understands that whatever type of locking mechanism is provided by the
railroad would be based upon its effectiveness and appropriate
functionality to accommodate the required ingress and egress under all
conditions.
    Since the railroad would decide upon the locking mechanism, NYSDOT
suggests relying upon the railroad to develop appropriate procedures to
address this scenario. In the event there is unintentional movement of
the equipment as described, and access to the cab is problematic,
NYSDOT would expect that the qualified person would likely attempt to
apply the hand brake from the outside of the locomotive.
    In its comments, AAR and ASLRRA indicated that the railroads have
evaluated this concern and that qualified employees will all have keys
to locked locomotives. AAR and ASLRRA also say that, if the qualified
employee has lost his or her company issued key, the train can be
accessed by a non-lead locomotive, which is where the train could be
placed into emergency.
    For the moment, FRA is satisfied with AAR's and ASLRRA's
explanation that, if locked out of a rolling locomotive, a qualified
employee could alternatively enter a non-lead locomotive and make an
emergency brake application. FRA also recognizes that, just as with a
rolling consist of cars without a locomotive, the qualified employee
would be expected to apply the outwardly-facing hand brakes in such a
situation.
    Under paragraph (h)(4), if the railroad discovers that a locking
mechanism has become inoperative in the interval between a locomotive's
periodic inspection dates, this provision does not require that a
locomotive be removed from service. Railroads may continue to use the
locomotive without an operative lock. However, if such equipment
covered by Sec.  232.103(n)(6) is left unattended and without an
operative lock, then the railroad must default to the alternative
securement option governing the reverser under proposed Sec.
232.103(n)(8)(ii) or fall under the exception provided per proposed
Sec.  232.103(n)(8)(iii).

V. Regulatory Impact and Notices

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

    This final rule has been evaluated in accordance with existing
policies and procedures, and determined to be significant under
Executive Order 12866, Executive Order 13563, and DOT policies and
procedures. 44 FR 11034, Feb. 26, 1979. For purposes of analyzing this
rule, FRA uses as a baseline the rules in effect at the time of
publication, including Emergency Order 28. The analysis separately
quantifies ongoing costs of Emergency Order 28 that might exceed
business practices that would remain in effect in absence of Emergency
Order 28. It is reasonable to assume that most of the requirements of
Emergency Order 28 would continue as business practices; for example
the railroads have already improved their practices in determining the
proper application of hand brakes to secure a train and the
verification that the hand brake application is adequate. Further, the
exterior locking mechanism provision in the rule reflects an existing
commitment among AAR member railroads, which had been working on
developing a lock standard applicable to its members for over a year,
so the costs associated with this provision are limited to non-AAR
member railroads, primarily short line railroads. FRA received comments
that the analysis should include the total cost of installing locks;
however, the analysis only counts costs that would not have been
incurred in the absence of the final rule. Since AAR members were in
the process of installing locks compliant with the final rule on the
affected locomotives, FRA will not include those costs in this
analysis. This analysis also does not include sunk costs.
    FRA was able to quantify the costs of the final rule, but not able
to quantify all the benefits, as many of the benefits are the result of
reducing risk from high consequence, low probability events that are
not easily quantified. Thus, FRA will discuss the benefits that can be
quantified, that by themselves justify the cost of the final rule and
will provide a brief discussion of the non-quantified benefits. The
monetized discounted and annualized net benefits would be:

------------------------------------------------------------------------
                                                 Discounted value
                                         -------------------------------
            Discounted values                     Discount factor
                                         -------------------------------
                                                7%              3%
------------------------------------------------------------------------
Total...................................      $1,076,984      $1,479,331
Annualized..............................          95,009          96,538
------------------------------------------------------------------------

Statement of Need
    The United States has experienced a dramatic growth in the quantity
of flammable materials being shipped by rail in recent years. According
to the rail industry, in the U.S. in 2009, there were 10,800 carloads
of crude oil shipped by rail. In 2013, there were 400,000 carloads. In
the Bakken region, over one million barrels a day of crude oil was
produced in March 2014,\19\ most of which is transported by rail.
Transporting flammable material carries safety and environmental risks.
The risk of flammability is compounded in the context of rail
transportation because petroleum crude oil and ethanol are commonly
shipped in large unit trains. In recent years, train accidents
involving a flammable material release and resulting fire with severe
consequences have occurred with increasing frequency (i.e. Arcadia, OH,
Plevna, MT, Casselton, ND, Aliceville, AL, Lac-M[eacute]gantic,
Quebec).
---------------------------------------------------------------------------

    \19\ Information regarding oil and gas production is available
at the following URL: http://www.eia.gov/petroleum/drilling/#tabs-summary-2.
---------------------------------------------------------------------------

    Shippers and rail companies are not insured against the full
liability of the potential consequences of incidents involving
hazardous materials. As a result, these events impose externalities.
Among Class I railroads, a self-insured retention of $25 million is
common, though it can be as much as $50 million, especially when PIH/
TIH material is involved. Smaller regional and short line carriers,
i.e., Class II and Class III railroads, on the other hand, typically
maintain retention levels well below $25 million as they usually have a
more conservative view of risk and usually do not have the cash-flow to
support substantial self-insurance levels. At this time, the maximum
coverage available in the commercial rail insurance market appears to
be $1 billion per carrier, per incident.\20\ While this level of
insurance is sufficient for the vast majority of accidents, it appears
that no amount of coverage is adequate to cover a higher consequence
event. One example of this issue is the incident that occurred at Lac
M[eacute]gantic, Quebec, in July of 2013. The rail carrier responsible
for the incident was covered for a maximum of $25 million in insurance
liability, and it had to declare bankruptcy because that coverage and
the companies remaining capital combined were insufficient to pay for
more than a fraction of the harm that was caused. This is one example
where rail carriers and shippers may not bear the entire cost of
``making whole'' those affected when an incident involving crude and
ethanol shipment by rail occurs.
---------------------------------------------------------------------------

    \20\ See ``The Transportation of Hazardous Materials: Insurance,
Security, and Safety Costs,'' DOT Report to Congress, December 2009,
at http://www.dot.gov/office-policy/transportation-hazardous-materials-insurance-security-and-safety-costs.
---------------------------------------------------------------------------

    FRA believes that the failure to secure equipment decreases the
safe transportation of goods by rail, and increases the possibility of
a higher-consequence event, particularly when dealing with a key train
transporting a material such as crude oil. It is difficult to assess
how much of the decrease in safety is from railroads not requiring
their employees to secure equipment or from employees failing to comply
with railroad securement requirements. The Lac-M[eacute]gantic accident
shows that the railroads were not successful using operating rules in
effect at the time of the accident, perhaps because an employee did not
follow those rules or might not have had adequate guidance on what
constituted adequate securement. FRA believes that use of its authority
will enhance compliance with railroad issued orders. There may also
have been an issue of incomplete information--which can cause a market
failure--that was corrected in the wake of the Lac-M[eacute]gantic
accident and Emergency Order 28, in that railroads had not yet
developed the procedures required in response to Emergency Order 28.
This problem of incomplete information related to securement procedures
has been addressed, so it is not part of the baseline. Finally,
incomplete information also may be causing a market failure among some
railroads that have not put locks on their locomotives left outside
yards.
Cost-Benefit Analysis of Individual Sections
    Following is a discussion of the regulatory costs and benefits
associated with each requirement.
    Changes to the definition in Sec.  232.5 have no substantive impact
and do not result in any new costs or benefits.
    Changes to Sec.  232.103(n)(2) will have negligible impact or real
burdens, but may increase compliance with existing rules. As noted
above, the changes to this paragraph merely clarify FRA's longstanding
interpretation, application, and enforcement of the existing
regulation.
    Section 232.103(n)(6) lists types of trains and equipment covered
by Sec.  232.103(n)(7) and (n)(8), but does not directly impose any
specific requirements.
    Section 232.103(n)(7)(i) prohibits leaving affected equipment
unattended on a main track or siding (except when that main track or
siding runs through, or is directly adjacent to a yard) until the
railroad has adopted and is complying with a plan identifying specific
locations or circumstances when the equipment may be left unattended.
Railroads already have developed and implemented such plans under
Emergency Order 28, so there is no cost to create such plans. The
initial revision and notification burden would have been in identifying
safety rationale related to such locations and circumstances, but that
has already been accomplished through compliance with Emergency Order
28. To the extent that railroads further revise their plans in the
future, there will be some additional costs. This will not occur
frequently, resulting in nominal burden in the future.
    Section 232.103(n)(7)(ii), an expansion of Emergency Order 28 that
applies to trains left unattended on main tracks that are in or
adjacent to yards, requires trains left in yards to have the locomotive
cab locked, or the reverser removed, if possible, but would not impose
additional requirements in a yard if the locking mechanism is
inoperative. This portion of the final rule's requirements is part of
long-standing railroad business practices, and will add no costs or
benefits.
    In paragraph (n)(8)(i), there is a new requirement, which in almost
all cases was already in place as a business practice. It requires that
the qualified individual who secures the train verify with a second
qualified individual that

the train has been secured in accordance with the railroad's operating
rules, including whatever the employee has done to ensure that an
adequate number of hand brakes have been employed. On a train with two
or more crew members, the train crew will verify among themselves. This
would happen as a matter of business practice. In the event that the
train is secured by a single person crew, the verification would
involve a second person, typically a yardmaster, who is also qualified.
All safety-critical activities by train crews are communicated to at
least one additional person as a standard operating practice. This is
part of the railroads' conscious effort to avoid a single point human
factor failure that can cause an accident. FRA believes that less than
one-tenth of one-percent (0.1%) of the affected trains will be operated
by a single crew member when securing in a yard, because there are very
few single person crews operating affected trains, and because many
affected trains will be operated continuously to their destination.
Some trains will be secured outside of yards, but that burden is
discussed below in this analysis. In this analysis, FRA assumes that
there will be 1,000 affected trains per day, of which 0.1% (1 daily or
365 annually) would have a single person crew. Further, FRA assumes
that in the absence of the final rule, 95 percent of railroads would
require the verification as a business practice. This means that over
20 years, only 365 trains would be affected. FRA believes the
communication will take 15 seconds of two qualified individuals' time,
or 30 labor seconds. There is no cost to initiate communication,
because in any event a person leaving a train would have to communicate
with the yardmaster to let the yardmaster know where the crew member
left the train and to let the yardmaster know the train would no longer
be moving in the yard. Over the 20-year life, the undiscounted value
would be 182.5 labor minutes or roughly 3 labor hours. At $50 per hour
the cost over 20 years, undiscounted cost would be $150, and the annual
cost would only be $7.50. FRA requested comments on the current and
future levels of train operations impacted and the labor estimates
associated with compliance, but did not receive any comments which
directly discussed costs or benefits of this provision.
    Section 232.103(n)(8)(i) requires that where a freight train or
standing freight car or cars as described in paragraph (n)(6) is left
unattended on a main track or siding outside of a yard, an employee
responsible for securing the equipment shall verify with another person
qualified to make the determination that the equipment is secured in
accordance with the railroad's processes and procedures. This will
impose no new burden nor create any new benefit since it is identical
to what is currently required by Emergency Order 28. Where train crews
with more than one crew member are involved, then the crew members
would need to discuss the securement and ensure that they had secured
the correct number of hand brakes and taken other steps to properly
secure the train. Where single member crews are involved, then the crew
member would have to call the dispatcher or some other qualified
railroad employee to verify with the qualified employee that the train
had been properly secured. As noted above, Emergency Order 28 requires
this communication to occur presently, thus railroads already have
these procedures established and continuing such practice will not
impose an additional cost. Thus, the changes to Sec.  232.103(n) would
create no new benefits or costs, compared to the base case.
    Section 232.103(n)(8)(ii) requires that the controlling locomotive
cab of a freight train described in paragraph (n)(6) shall be locked on
locomotives capable of being locked or the reverser on the controlling
locomotive shall be removed from the control stand and placed in a
secured location. In the case of a locomotive with an operative lock,
the compliance will simply be locking the lock. Railroads all require
their employees to lock unattended locomotives equipped with operative
locks, for both safety and security reasons. This provision of the
final rule codifies current business practices, and creates no new
benefits or costs. Under Sec.  232.105(h) each locomotive will have
been equipped with a lock, and if there should be a lock malfunction,
removing the reverser will be sufficient to comply. Removing the
reverser of such a locomotive is likely to be a business practice
required by operating rules except for two conditions. The first
condition is where the locomotive does not have a removable reverser.
Such locomotives are relatively old and are rarely used outside of yard
operations. The second condition is where there is a reason to keep the
locomotive running while standing. Almost all locomotives can idle with
the reverser removed, but there are no locomotives that can run at
speeds above normal idle, sometimes needed for cold weather conditions,
with the reverser removed. If a lock should malfunction under either of
those two conditions, a railroad could comply by several means:
     A railroad could remove the reverser; almost all
locomotives can idle with the reverser removed, except in very cold
weather;
     A railroad could attend the locomotive, which could
involve either placing a qualified individual aboard the locomotive
while it stands, or boarding a new crew and having the new crew
continue moving the train toward its destination. The most economical
way to accomplish this would be to board a new crew and take the train
further along its route. The railroad was going to have to call a crew
to move the train on its route anyway, so if the railroad has
sufficient time to call a new crew, generally two hours, the railroad
would call a crew earlier than originally planned. Dispatchers
continually adjust the flow of trains, and adding a single train
earlier than originally planned would have little effect on operations
in almost all cases. If the train is already close to its destination,
this would not be practical if the consignee unloading or transfer
operation were not available, or if the train could not proceed for
some other reason, such as track congestion or blockage, the railroad
would not simply board the next crew and the railroad would have to
comply by some other means;
     A railroad could arrange for the train to stop in a yard,
or on a main track in or adjacent to a yard. This might involve having
the dispatcher expedite the train so it can make a yard further along
its route, which might have minimal costs;
     A railroad could have the train crew switch locomotives,
putting a lock-equipped locomotive in the lead, which would be costly
and impractical; or
     A railroad could arrange to have the lock repaired before
leaving the train unattended, which would also carry a cost.
    The burdens of Sec.  232.103(n)(8)(ii) on main track or sidings
outside of yards are imposed by Emergency Order 28, so they are not new
burdens, and they still are relatively small. For purposes of this
analysis, FRA conservatively estimates that 1,000 trains per day \21\
will be subject to the requirements of Sec.  232.103(n)(8)(ii), but
that 90 percent of them will be excepted under Sec.
232.103(n)(8)(iii), because they will have routing that calls for
unattended stops only in or adjacent to yards.\22\

That leaves 100 trains per day, or 36,500 trains per year. FRA
estimates that one in 500 locomotives or 73 per year will have a
defective lock. FRA also estimates that 50 percent, or 36.5 locomotives
per year, would have been left running while unattended, or would have
been equipped with a non-removable reverser. A locomotive would be left
running either to avoid cold weather starting or to avoid a brake test
when the next crew takes charge of the train. If the locomotive would
have been left running to maintain brake pressure, the train crew can
leave one of the trailing locomotives running to maintain brake
pressure, and lock its door. FRA estimates that in all but ten cases
per year, the railroad will have been notified of the lock malfunction,
and will have the next crew or current crew take the train to a yard or
its destination, avoiding any costs.\23\
---------------------------------------------------------------------------

    \21\ In an analysis of the safety of HHFTs, PHMSA estimates that
there are 150 trains per day. FRA's estimate of 1,000 trains per day
is conservative.
    \22\ FRA assumes that railroads will fix locks in or adjacent to
the first yard available, as a business practice, and will leave any
unattended trains in yards locked.
    \23\ Taking the train further along its route is the least
costly method of attending a train. The railroad is obligated to
provide a crew to move the train further along its route anyway, and
train crews are on call. Once the train gets to the first yard on
its path, the lock will be repaired. Unloading facilities are not
part of the railroad, and FRA does not regulate securement at
unloading facilities, which are subject instead to PHMSA
regulations.
---------------------------------------------------------------------------

    Trains per year:
    Affected by the final rule: 365,000.
    No planned stop outside yards (90 percent of 365,000): 328,500.
    Planned stop outside yards (365,000-328,500): 36,500.
    Defective lock and planned stop outside yard (36,500/500): 73.
    Removing reverser provides compliance (50 percent of 73): 36.5.
    Further action needed (73-36.5): 36.5.
    Sent on to next yard or destination: 26.5.
    Remedial action must be taken: 10.\24\
---------------------------------------------------------------------------

    \24\ In the NPRM, FRA requested comment on the number of cases
per year where remedial action would be required, and on the
assumptions relied upon to estimate that number. Since FRA did not
receive any such comments, it continues to rely on the assumptions
used in the NPRM.
---------------------------------------------------------------------------

    FRA believes that in half the cases remaining (five cases), the
railroad will repair or replace the lock, and in the other half (also
five cases), the railroad will have personnel attend a standing train.
The railroad may repair or replace the lock, in which case the cost is
the additional cost of repairing the lock outside of a yard. A railroad
using AAR standard locks may attach an additional locking mechanism,
not compliant with AAR standards until the AAR standard lock can be
replaced. This appears to be the lowest cost means of complying with
the rule. If a hasp is present, the railroad may have provided the crew
with a spare lock, in which case the cost is negligible, two of the
five cases per year. If a hasp is not present, the railroad may have
repair personnel locate to the train, estimated at an average cost of
$0.56 per mile for 20 miles, or $11.20 per incident. In addition, the
installation is expected to require two hours service time, including
travel, for two repair personnel, at an estimated cost of $50 per
person hour,\25\ for a labor cost of $200. The installation is expected
to cost $100 if the railroad does not install a standard lock, one case
per year. The total cost for this repair would be $11.20 for
transportation, $100 for materials, plus $200 for labor, a total of
$311.20. If the railroad replaces the existing lock, then no materials
cost is added, because the railroad could have been expected to replace
the lock at the next yard. The total cost to replace an existing lock
would be $11.20 for transportation, plus $200 for labor for a total of
$211.20. The total cost to replace existing locks is 2 times $211.20,
or $422.40. The total cost for lock replacement includes the negligible
costs if the crew has a lock that fits an existing hasp, plus $311.20
to install a new hasp and lock, plus $422.20 to replace existing locks,
a total of $733.60. In any estimate of net present value, the labor
costs for lock installation should not be incremented by a factor to
account for growth in real wages, because the growth in real wages is
assumed to be directly related to productivity. The more productive the
worker, the fewer hours needed to install a lock, including reductions
in time needed to travel. FRA believes that small railroads will not be
affected by these costs because small railroads will use a lock and
hasp system and will be able to replace the lock before the train is
left stopped, should the lock malfunction.
---------------------------------------------------------------------------

    \25\ Surface Transportation Board (STB) wage data show that the
average compensation for personnel engaged in Maintenance of
Equipment & Stores was $28.46 in 2013. FRA adds a 75 percent burden
which would yield $49.81 per hour, which is rounded here to $50 per
hour.
---------------------------------------------------------------------------

    FRA estimates the cost to switch locomotives at $150 for the cost
of switching and at least $500 for a brake test after switching, for a
total of $650 per train. A railroad is unlikely to do this unless the
purpose of keeping engines running was to keep the engines warm on a
cold day, no stop was likely at a location where the lock could be
repaired, and at least one more stop was likely on the train's route.
The likelihood of such a situation is so small as to be negligible. FRA
does not believe this is a likely response, and this value is not used
any further.
    FRA estimates the cost to attend a standing train at $470 per
incident,\26\ or a total of $2,350 per year for 5 incidents, which
assumes a burdened rate for labor of $51.04 per hour.
---------------------------------------------------------------------------

    \26\ STB wage data show that the average compensation for
personnel engaged in Train, Yard and Engine was $29.16 in 2013. FRA
adds a 75 percent burden which would yield $51.04 per hour. The
minimum payment for qualified personnel called out is a fixed sum or
hourly pay, whichever is greater. The fixed amount is roughly equal
to 8 hours' pay. There may be instances where the duration of the
assignment exceeds 8 hours. FRA assumed a 9 hour average pay, or 9
times $51.04, for a burdened wage of $459.32 per incident. FRA
further assumed $11.20 in travel costs, or a total cost of $470.52
per incident, which FRA rounded to $470 per incident.
    \27\ Rounds to $3,100.
---------------------------------------------------------------------------

    In summary of the foregoing costs associated with locomotive locks,
FRA believes the likely responses to inoperative locking mechanisms,
where the railroad cannot simply remove a reverser or move the train,
will break down as follows:

------------------------------------------------------------------------
                                                            Annual total
        Approach taken            Unit cost     Frequency       cost
------------------------------------------------------------------------
Place Lock in Existing Hasp...         $0.00             2         $0.00
Install New Hasp and Lock.....        311.20             1        311.20
Replace Existing Lock.........        211.20             2        422.40
Attend Train..................        470.00             5      2,350.00
                               -----------------------------------------
    Total.....................  ............  ............          \27\
                                                                3,083.60
------------------------------------------------------------------------

    The total cost imposed by Sec.  232.103(n)(8)(ii) would be $2,350
plus $311.20 plus $411.40 per year, a total of $3,083.60, or roughly
$3,100, per year.
    To more accurately annualize these costs, however, FRA must also
consider the direct wage portion of the costs attending trains and
provide for annual real wage increases. Of the aforementioned burdened
wage rate, $29.16 is the direct wage portion. Multiplying the direct
wage portion hourly rate against 9 hours pay per event with 5 events
per year, the direct wage portion annual cost total is $1,312.33, which
we will round to $1,300. These direct wage costs for train personnel
will need to be incremented by a factor of 1.18 percent per year to
account for increases in real wage, induced by increased productivity
in accordance with estimates from the Congressional Budget Office.\28\
---------------------------------------------------------------------------

    \28\ Based on real wage growth forecasts from the Congressional
Budget Office, DOT's guidance estimates that there will be an
expected 1.18 percent annual growth rate in median real wages over
the next 30 years (2013-2043).
---------------------------------------------------------------------------

    FRA compiled the following summary table, using initial annual
costs of $3,100 (i.e., the first year's annual locomotive locks costs
total rounded up), broken into direct wage costs for simply attending
trains, $1,300--which are increased every year by 1.18 percent to
account for growth in real wages, whereas the first year's increase
would result in a direct wage cost of $1,315.34--and other costs of
$1,800, including initial burden on wages to attend trains, labor costs
to repair or replace locks, where productivity growth is assumed to
match growth in real wages, and costs for other items. The costs are
all the result of actions taken to comply with attendance of a train in
the event a locking mechanism becomes inoperative:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Discounted value
                                                                                -----------------------------------------------
                          Year                             Wage inflator    Direct wage      All other                            Discount factor
                                                                (%)            cost            costs        Total costs  -------------------------------
                                                                                7%              3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
2015....................................................          101.18       $1,315.34          $1,800       $3,115.34          $3,115          $3,115
2016....................................................          102.37        1,330.86           1,800        3,130.86           2,926           3,040
2017....................................................          103.58        1,346.57           1,800        3,146.57           2,748           2,966
2018....................................................          104.80        1,362.45           1,800        3,162.45           2,582           2,894
2019....................................................          106.04        1,378.53           1,800        3,178.53           2,425           2,824
2020....................................................          107.29        1,394.80           1,800        3,194.80           2,278           2,756
2021....................................................          108.56        1,411.26           1,800        3,211.26           2,140           2,689
2022....................................................          109.84        1,427.91           1,800        3,227.91           2,010           2,625
2023....................................................          111.14        1,444.76           1,800        3,244.76           1,888           2,561
2024....................................................          112.45        1,461.81           1,800        3,261.81           1,774           2,500
2025....................................................          113.77        1,479.06           1,800        3,279.06           1,667           2,440
2026....................................................          115.12        1,496.51           1,800        3,296.51           1,566           2,381
2027....................................................          116.47        1,514.17           1,800        3,314.17           1,472           2,324
2028....................................................          117.85        1,532.04           1,800        3,332.04           1,383           2,269
2029....................................................          119.24        1,550.11           1,800        3,350.11           1,299           2,215
2030....................................................          120.65        1,568.40           1,800        3,368.40           1,221           2,162
2031....................................................          122.07        1,586.91           1,800        3,386.91           1,147           2,111
2032....................................................          123.51        1,605.64           1,800        3,405.64           1,078           2,060
2033....................................................          124.97        1,624.58           1,800        3,424.58           1,013           2,012
2034....................................................          126.44        1,643.75           1,800        3,443.75             952           1,964
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................  ..............  ..............  ..............  ..............          36,685          49,909
                                                         -----------------------------------------------------------------------------------------------
    Annualized..........................................  ..............  ..............  ..............  ..............           3,236           3,257
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 232.103(n)(8)(ii) also provides a direct safety benefit of
this rulemaking. Only about 36.5 trains per year are likely to be
affected, as described above. FRA believes that in the absence of this
rulemaking all locomotives would be equipped with locks as a business
practice, as described below. FRA believes that as a business practice,
the locomotives that can be locked will be locked, and the remaining
locomotives that have reversers that can be removed that are not left
running would have their reversers removed and secured. FRA believes
that trains left running with reversers in place are the most
vulnerable to serious harm as a result of casual mischief. It is
possible that a vandal moving a reverser in an unattended running
locomotive could cause a higher-consequence event, given the kinds of
materials regulated here. Further, individuals who believe they are
doing some good--for example first responders who believe the train is
in a dangerous location--may also be tempted to try to move the train.
If they lack proper skills, this movement creates a risk. FRA does not
have a good way to estimate the likelihood of a serious event from such
a small number of affected trains; however, given the kinds of trains
involved, FRA finds that the costs are justified by the benefits of
risk reduction.
    Section 232.103(n)(8)(iii) provides an exception for trains left
unattended on main tracks in or adjacent to yards, and does not change
burdens from Emergency Order 28. The communication requirement in Sec.
232.103(n)(9) is unchanged from Emergency Order 28, and will impose no
new burden nor create any new benefit for train crews with more than
one crew member. Section 232.103(n)(10) requires railroads to adopt and
comply with procedures to ensure that, as soon as safely practicable, a
qualified employee verifies the proper securement of any unattended
equipment when the railroad has knowledge that a non-railroad emergency
responder has been on, under, or between the equipment. This was
required by Emergency Order 28 and remains unchanged from Emergency
Order 28, and will impose no new burden nor create any new benefit. FRA
also believes that after the Lac M[eacute]gantic accident that
railroads would have adopted this practice even

in the absence of Emergency Order 28, as a standard business practice,
so FRA is confident that this section creates no new benefits or costs.
    One requirement of Emergency Order 28 that is not included in the
final rule is a requirement that employees who are responsible for
securing trains and vehicles transporting Appendix A Materials must
communicate to the train dispatcher the number of hand brakes applied,
the tonnage and length of the train or vehicle, the grade and terrain
features of the track, any relevant weather conditions, and the type of
equipment being secured; train dispatchers must record the information
provided; and train dispatchers or other qualified railroad employees
must verify and confirm with the train crew that the securement meets
the railroad's requirements. The final rule includes verification
procedures but does not include the recordkeeping required by Emergency
Order 28. FRA's Paperwork Reduction Act analysis of the recordkeeping
requirements shows the annual burden at 867 hours to notify the
dispatcher to make the record, and an additional 867 hours to make the
record. FRA estimates that there will be an average of 26,000
communications (100 instances on 260 days per year) to dispatchers
triggering the recording requirement, which takes an average of four
minutes to complete, for a total of 1,734 hours. If the value of the
employees' time is $50 per hour, the annual cost of the Emergency Order
28 recordkeeping requirement is $86,700, and that cost would be
eliminated by the final rule. FRA believes the recordkeeping
requirements have been relatively more onerous for smaller railroads,
but does not have a breakdown of the proportion of the cost reduction
benefit that will accrue to small railroads.
    Section 232.105(h) requires, after March 1, 2017, that each
locomotive left unattended outside of a yard shall be equipped with an
operative exterior locking mechanism. AAR standard S-5520 requires that
each locomotive left unattended outside of a yard shall be equipped
with an operative exterior locking mechanism, and requires that
locomotives be equipped in order to be used in interchange service.
These mechanisms will meet the requirements of Sec.  232.105(h). FRA
believes that for Class I and Class II railroads, all costs and
benefits of Sec.  232.105(h) will be a result of business practices
because their locomotives operate in interchange service. These
railroads are already in the process of installing exterior locking
mechanisms on all of their locomotives that do not operate exclusively
in yard service. FRA further believes that small railroads have already
equipped virtually all of their locomotives with exterior locking
mechanisms. This was discussed at RSAC meetings.
    FRA believes that the reason Class I and Class II railroads have
just recently started installing locking mechanisms on their
locomotives is that until recently there was no standard for keying the
locking mechanisms. Locomotives of these railroads operate in
interchange service and can move from railroad to railroad. If each
railroad had to maintain a set of keys for all other railroads'
locomotives, that would have been cumbersome. The recent, common keyed,
industry standard provides a solution, and allows the business practice
of installing locking mechanisms to proceed.
    FRA believes that, for smaller railroads, locking locomotive cabs
is a good business practice that already takes place because it avoids
vandalism and locomotive cab intruders. Several reports indicate that a
locomotive belonging to the Adirondack Scenic Railroad was vandalized
on or around October 15, 2013.\29\ Damage to the locomotive was
approximately $50,000, and does not include lost revenue. Anecdotal
reports are that the vandals removed the copper wiring, which has value
as scrap. This event was not reported to FRA. This is an example of
unreported vandalism, and FRA staff believes that a great deal of
vandalism is unreported, largely because the events do not meet all the
requirements that would result in filing an accident/incident report
with FRA. Over the years, FRA staff has received several first-hand
accounts of vandalism or cabs occupied by intruders. FRA believes that
the likelihood of vandalism or cabs being occupied by trespassers
increases as the likelihood of railroad observation of the train
decreases. Most small railroads operate in environments with a lower
than average likelihood of observation. FRA believes that vandalism is
also more likely to have a severe impact on a small railroad's
operations since these railroads do not have many spare locomotives or
personnel. If a railroad has ten locomotives and five get vandalized,
its operations will be severely impacted. Likewise if a small
railroad's operating crew is injured by an intruder in a cab, the
operations for that day will likely be halted. As indicated by small
railroad representatives at RSAC, small railroads do generally equip
their locomotives with exterior cab locks. FRA believes that if all
small railroads considered the impacts of vandalism and intruders, the
small railroads would and have installed exterior cab locks.
---------------------------------------------------------------------------

    \29\ Adirondack Scenic Railroad Locomotive Vandalized, North
County Public Radio Web site, October 15, 2013.
---------------------------------------------------------------------------

    The unit cost for a locking mechanism meeting AAR standard S-5520
is $215. FRA believes that smaller railroads could comply with Sec.
232.105(h) with a simpler lock and hasp system, for a unit cost of
$100. Given the smaller number of locomotives, personnel, territory,
and facilities, use of this type of system would not be problematic.
FRA requested comment regarding this estimate. ASLRRA commented that
its members claim that the unit cost will be greater for small
railroads than the $210 per unit estimated for AAR type locks. FRA
rejects the contention that a hasp and padlock would cost more than
$100 per unit, based on observation of hasp and lock costs at hardware
stores, and FRA staff knowledge of the costs to install a hasp by
welding, based on actual work experience as Class III railroad
employees. Nevertheless, FRA points out that the business benefits of
installing locks far exceed the unit costs of $210 per locomotive for
AAR type locks, so even if FRA were to accept the ASLRRA comment, the
business benefits of locks would still exceed their costs.
    FRA believes that no more than 500 locomotives belonging to Class
III railroads lack locking mechanisms that comply with Sec.
232.105(h). Thus, the cost to install the locking mechanisms would be
no more than 500 times $100, or $50,000.
    Based on anecdotal information from FRA staff, between 1 percent
and 3 percent of locomotives are vandalized each year. Some vandalism
is relatively minor, such as graffiti sprayed on the walls of the cab,
but some is much more serious, for example damage or removal of
electrical equipment, or of instruments. More modern cabs have very
expensive control systems, with one or more monitor screens. It would
not be difficult for vandals to cause more than $50,000 in damage to a
modern cab. The repairs not only would involve removal and replacement
of damaged components, but would also involve calibration. For purposes
of this analysis, FRA is assuming 1 percent of locomotives would be
vandalized each year if not equipped with locks, and the mean cost of a
vandalism incident is $3,000. The expected cost of vandalism is
therefore $30 per locomotive year for unequipped locomotives.
    Locomotive cabs are also occupied by unauthorized occupants,
usually homeless, from time to time. Based on staff anecdotal data, FRA
assumes that

five percent of locomotive cabs are occupied at least once per year.
FRA believes that the cost per incident is $100, including costs to
clean debris and inspect to determine that nothing in the cab has been
damaged. This cost represents 20 minutes delay with a train delay cost.
The economic impact of slowing trains depends upon multiple factors
including other types of trains, other train speeds, dispatching
requirements, work zones, and topography. Looking at numerous
variables, for purposes of another analysis, DOT estimated the average
cost of a train delay to be $500 per hour.\30\ This cost estimate was
determined by reviewing costs associated with crew members, supply
chain logistic time delays based on various freight commodities, and
passenger operating costs for business and other travel. It is
reasonable to assume that delays to smaller railroad operations are
lower in cost. Thus, for purposes of this analysis, for the impacted
railroads, FRA is using an hourly train delay cost of $300 per hour.
FRA requests comment regarding this assumption. Thus the cost per year
for 500 locomotives would be 500 times 5 percent times $100, or $2,500,
or $5 per locomotive year. Added to the vandalism cost the total cost
of exposure would be $35 per locomotive year. If an installation of a
locking mechanism costs $100, it would take less than 3 years for the
locks to pay for themselves (before applying discount factors). FRA
believes that in the absence of this rule most small railroads would
apply locking mechanisms to locomotives left unattended outside of
yards, especially in light of the vandalism incident on the Adirondack
Scenic Railroad. FRA believes the net cost of installing and using the
locks for small railroads is less than zero because the installation
cost is more than offset by the business benefits. FRA did not receive
any comments taking issue with FRA's estimates of locomotive vandalism
costs.
---------------------------------------------------------------------------

    \30\ In analyzing the NPRM, FRA noted that PHMSA's proposed rule
``Hazardous Materials: Enhanced Rail Tank Car Standards and
Operational Controls for High-Hazard Flammable Trains'' applied a
$500 per hour estimate of the cost of delay for the rail network
overall. 79 FR 45015, Aug. 1, 2014. There were no comments to the
NPRM taking issue with that estimate, and FRA continues to use that
estimate here.
---------------------------------------------------------------------------

    FRA assumes the locks will be purchased in the first year, because
the business benefit is apparent. Thus, the costs are $100 times 500
locomotives, or $50,000, the same at both discount rates because 2015
is not discounted.

----------------------------------------------------------------------------------------------------------------
                                                                                Discounted value
                                                                                -------------------------------
                              Year                                  Total costs           Discount factor
                                                                                -------------------------------
                                                                                7%              3%
----------------------------------------------------------------------------------------------------------------
2015............................................................      $50,000.00         $50,000         $50,000
                                                                 -----------------------------------------------
    Total.......................................................       50,000.00          50,000          50,000
                                                                 -----------------------------------------------
    Annualized..................................................  ..............           4,411           3,263
----------------------------------------------------------------------------------------------------------------

    A more serious crime with far more potential to cause harm off the
railroads' rights-of-way is theft and operation of a train. In 1975,
two teenagers stole a switching locomotive and operated it until it
crashed.\31\ FRA staff has received anecdotal information regarding
other locomotives being stolen and operated, but permanent records of
the incidents could not be found. If a train described in Sec.
232.103(n)(6) were stolen and operated, it could easily cause the kinds
of harm seen at in the Graniteville, South Carolina accident and the
Lac M[eacute]gantic incident, with societal costs of $260 million to
$1.2 billion. The Lac M[eacute]gantic incident is illustrative of, but
not necessarily the outer limit of, a high-consequence event scenario
for derailment of a paragraph (n)(6) train. The derailment occurred in
a small town with a low population density by U.S. standards, but
resulted in the deaths of 47 people and the destruction of much of the
downtown area. A year after the event, decontamination of the soil and
water/sewer systems is still ongoing. Cleanup of the lake and river
that flows from it has not been completed, and downstream communities
are still using alternative sources for drinking water. Initial
estimates of the cost of this event were roughly $1 billion, but the
cleanup costs have doubled from initial estimates of $200 million to at
least $400 million, and the total cost to clean up, remediate, and
rebuild the town could rise as high as $2.7 billion. The frequency and
magnitude of these events is highly uncertain. It is, therefore,
difficult to predict with any precision how many of these higher
consequence events may occur over the coming years, or how costly these
events may be. In the worst case scenario for a fatal event, the
results could be several times the damages seen at Lac M[eacute]gantic
both in loss of life and other associated costs.
---------------------------------------------------------------------------

    \31\ Pierce Haviland, The Putnam Division, last updated November
10, 2010, available at http://piercehaviland.com/rail/putnam.html
This incident was probably not reportable because it occurred on an
abandoned railroad, no longer part of the general system of rail
transportation.
---------------------------------------------------------------------------

    In estimating the damages of a higher-consequence event, we begin
with the current estimated damages of Lac M[eacute]gantic. We used this
accident to illustrate the potential benefits of preventing or
mitigating events of this magnitude. It is challenging to use this one
data point to model potential damages of higher consequence events that
differ in nature from the Lac M[eacute]gantic accident. However, as the
volume of crude oil shipped by rail continues to grow, it is reasonable
to assume that events of this magnitude may occur.
    By installing locks to avoid such dangers, the benefits indicated
in the following table are $17,500 per year ($35 times 500
locomotives), starting in 2016, the year after the locks are installed.

----------------------------------------------------------------------------------------------------------------
                                                                                Discounted value
                                                                                -------------------------------
                              Year                                Total benefits          Discount factor
                                                                                -------------------------------
                                                                                7%              3%
----------------------------------------------------------------------------------------------------------------
2015...........................................................            $0.00              $0              $0
2016...........................................................        17,500.00          16,355          16,990
2017...........................................................        17,500.00          15,285          16,495
2018...........................................................        17,500.00          14,285          16,015
2019...........................................................        17,500.00          13,351          15,549
2020...........................................................        17,500.00          12,477          15,096
2021...........................................................        17,500.00          11,661          14,656
2022...........................................................        17,500.00          10,898          14,229
2023...........................................................        17,500.00          10,185          13,815
2024...........................................................        17,500.00           9,519          13,412
2025...........................................................        17,500.00           8,896          13,022
2026...........................................................        17,500.00           8,314          12,642
2027...........................................................        17,500.00           7,770          12,274
2028...........................................................        17,500.00           7,262          11,917
2029...........................................................        17,500.00           6,787          11,570
2030...........................................................        17,500.00           6,343          11,233
2031...........................................................        17,500.00           5,928          10,905
2032...........................................................        17,500.00           5,540          10,588
2033...........................................................        17,500.00           5,178          10,279
2034...........................................................        17,500.00           4,839           9,980
                                                                ------------------------------------------------
    Total......................................................  ...............         180,873         250,666
    Annualized.................................................  ...............          15,956          16,358
----------------------------------------------------------------------------------------------------------------

    In addition to the above noted benefits, the final rule itself
reduces costs--by removing the requirement to record securement
activities, provided under Emergency Order 28--by $86,700 per year,
with no decrease in safety. In FRA's view, these savings more than
offset the minor costs associated with the final rule.

----------------------------------------------------------------------------------------------------------------
                                                                                Discounted value
                                                                                -------------------------------
                              Year                                Total benefits          Discount factor
                                                                                -------------------------------
                                                                                7%              3%
----------------------------------------------------------------------------------------------------------------
2015...........................................................       $86,700.00         $86,700         $86,700
2016...........................................................        86,700.00          81,028          84,175
2017...........................................................        86,700.00          75,727          81,723
2018...........................................................        86,700.00          70,773          79,343
2019...........................................................        86,700.00          66,143          77,032
2020...........................................................        86,700.00          61,816          74,788
2021...........................................................        86,700.00          57,772          72,610
2022...........................................................        86,700.00          53,992          70,495
2023...........................................................        86,700.00          50,460          68,442
2024...........................................................        86,700.00          47,159          66,448
2025...........................................................        86,700.00          44,074          64,513
2026...........................................................        86,700.00          41,191          62,634
2027...........................................................        86,700.00          38,496          60,810
2028...........................................................        86,700.00          35,977          59,038
2029...........................................................        86,700.00          33,624          57,319
2030...........................................................        86,700.00          31,424          55,649
2031...........................................................        86,700.00          29,368          54,029
2032...........................................................        86,700.00          27,447          52,455
2033...........................................................        86,700.00          25,651          50,927
2034...........................................................        86,700.00          23,973          49,444
                                                                ------------------------------------------------
    Total......................................................  ...............         982,796       1,328,573
    Annualized.................................................  ...............          86,700          86,700
----------------------------------------------------------------------------------------------------------------

    FRA calculated the total monetized costs of the rule, with the
costs for locomotive lock installation accounted for only for the first
year:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Discounted value
                                                                                -------------------------------
                          Year                             Wage inflator    Direct wage      All other      Total costs           Discount factor
                                                                (%)            cost            costs                     -------------------------------
                                                                                7%              3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
2015....................................................          101.18       $1,315.34         $51,800      $53,115.34         $53,115         $53,115

2016....................................................          102.37        1,330.86           1,800        3,130.86           2,926           3,040
2017....................................................          103.58        1,346.57           1,800        3,146.57           2,748           2,966
2018....................................................          104.80        1,362.45           1,800        3,162.45           2,582           2,894
2019....................................................          106.04        1,378.53           1,800        3,178.53           2,425           2,824
2020....................................................          107.29        1,394.80           1,800        3,194.80           2,278           2,756
2021....................................................          108.56        1,411.26           1,800        3,211.26           2,140           2,689
2022....................................................          109.84        1,427.91           1,800        3,227.91           2,010           2,625
2023....................................................          111.14        1,444.76           1,800        3,244.76           1,888           2,561
2024....................................................          112.45        1,461.81           1,800        3,261.81           1,774           2,500
2025....................................................          113.77        1,479.06           1,800        3,279.06           1,667           2,440
2026....................................................          115.12        1,496.51           1,800        3,296.51           1,566           2,381
2027....................................................          116.47        1,514.17           1,800        3,314.17           1,472           2,324
2028....................................................          117.85        1,532.04           1,800        3,332.04           1,383           2,269
2029....................................................          119.24        1,550.11           1,800        3,350.11           1,299           2,215
2030....................................................          120.65        1,568.40           1,800        3,368.40           1,221           2,162
2031....................................................          122.07        1,586.91           1,800        3,386.91           1,147           2,111
2032....................................................          123.51        1,605.64           1,800        3,405.64           1,078           2,060
2033....................................................          124.97        1,624.58           1,800        3,424.58           1,013           2,012
2034....................................................          126.44        1,643.75           1,800        3,443.75             952           1,964
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................  ..............  ..............  ..............  ..............          86,685          99,909
    Annualized..........................................  ..............  ..............  ..............  ..............           7,647           6,520
--------------------------------------------------------------------------------------------------------------------------------------------------------

    FRA calculated the total monetized benefits of the rule, which
includes savings from relief of Emergency Order 28's recordation
requirement for each year plus savings provided each year from the use
of locomotive locks after the first year of installation:

----------------------------------------------------------------------------------------------------------------
                                                                                Discounted value
                                                                                -------------------------------
                              Year                                Total benefits          Discount factor
                                                                                -------------------------------
                                                                                7%              3%
----------------------------------------------------------------------------------------------------------------
2015............................................................      $86,700.00         $86,700         $86,700
2016............................................................      104,200.00          97,383         101,165
2017............................................................      104,200.00          91,012          98,218
2018............................................................      104,200.00          85,058          95,358
2019............................................................      104,200.00          79,494          92,580
2020............................................................      104,200.00          74,293          89,884
2021............................................................      104,200.00          69,433          87,266
2022............................................................      104,200.00          64,891          84,724
2023............................................................      104,200.00          60,645          82,256
2024............................................................      104,200.00          56,678          79,861
2025............................................................      104,200.00          52,970          77,535
2026............................................................      104,200.00          49,505          75,276
2027............................................................      104,200.00          46,266          73,084
2028............................................................      104,200.00          43,239          70,955
2029............................................................      104,200.00          40,411          68,888
2030............................................................      104,200.00          37,767          66,882
2031............................................................      104,200.00          35,296          64,934
2032............................................................      104,200.00          32,987          63,043
2033............................................................      104,200.00          30,829          61,207
2034............................................................      104,200.00          28,812          59,424
                                                                 -----------------------------------------------
    Total.......................................................  ..............       1,163,669       1,579,240
    Annualized..................................................  ..............         102,656         103,058
----------------------------------------------------------------------------------------------------------------

Summary of the Costs and Benefits
    To summarize the above identified costs and benefits, FRA tabulated
the contributions of each item to the total discounted costs and
benefits over 20 years.

------------------------------------------------------------------------
                                                 Discounted value
                                         -------------------------------
            Discounted values                     Discount factor
                                         -------------------------------
                                                7%              3%
------------------------------------------------------------------------
                                  Costs
------------------------------------------------------------------------
Attending Trains........................         $36,685         $49,909
Installing Locks........................          50,000          50,000
------------------------------------------------------------------------
    Total Costs.........................          86,685          99,909
                                Benefits
------------------------------------------------------------------------
Reduced Vandalism.......................         180,873         250,666
Reduced Recordkeeping...................         982,786       1,328,573
                                         -------------------------------
    Total Benefits......................       1,163,669       1,579,240
------------------------------------------------------------------------

    For further distillation, FRA calculated the net benefits over 20
years:

------------------------------------------------------------------------
                                                 Discounted value
                                         -------------------------------
     Discounted values net benefits               Discount factor
                                         -------------------------------
                                                7%              3%
------------------------------------------------------------------------
Total...................................      $1,076,984      $1,479,331
Annualized..............................          95,009          96,538
------------------------------------------------------------------------

    The costs that are not directly offset by a monetized benefit are
the annual costs of either attending locomotives or expediting their
repair. Above, FRA estimates the annualized cost beyond current
business practices at $3,236-$3,257 per year.\32\ These costs are
balanced against an incident with costs of $260 million to $1.2
billion, but with extremely low probability. The incidents avoided by
attendance provisions would only occur where the train was not equipped
with functioning locking mechanisms under conditions where the railroad
would have sent a repair team out to the location of the train to
repair the locking mechanism or would have sent a qualified employee to
attend the train, roughly ten events per year. As discussed above,
these situations would involve a locomotive that is left running either
to avoid cold weather starting or to avoid a brake test when the next
crew takes charge of the train. The number of events estimated is based
on professional judgment. If the event avoided is $330 million,\33\ and
the annual cost is less than $3,300 for ten events, then the rule costs
about $330 per event and would roughly break even if one in a million
events of leaving a locomotive consist for one of the regulated trains
unattended with an unlocked cab and a reverser unsecured in the cab
were to result in a higher-consequence incident. FRA believes the small
but relatively predictable annual cost is justified by the hard to
measure very small probability, very high consequence incident risk
avoided. The portion of the rule requiring attendance of a train with
inoperative locking mechanisms will not affect the likelihood of such
an incident where the locking mechanism is functioning or where
railroad does not comply with the rule.
---------------------------------------------------------------------------

    \32\ This cost is slightly increased by the increase in value of
real wages over time.
    \33\ This estimate falls between the damages of Graniteville and
Lac-M[eacute]gantic. It is selected only for illustrative purposes.
---------------------------------------------------------------------------

    The remainder of Emergency Order 28 and the final rule do not
impose costs beyond expected business practices. FRA believes that the
business benefits of installing locking mechanisms and locking
locomotive cabs return net benefits to the railroads. FRA believes that
locking the locomotive cab or removing the reverser will reduce the
likelihood of a higher-consequence event. FRA believes the continuing
requirements from Emergency Order 28 or the requirements of the final
rule will provide more opportunities to sever the potential causal
chain of a low-probability high-consequence event. Thus, FRA rejects
the alternative of simply removing Emergency Order 28.
Alternatives Considered
    FRA considered as an alternative requiring all trains subject to
Sec.  232.103(n)(6) to be attended if left stopped outside yards,
without regard to the presence of a locking mechanism or reverser. FRA
believes that railroads would work to enhance routing and crew
scheduling so that of the 1,000 affected trains per day, only 50 would
require unattended stops outside of yards. The cost per event to attend
a train would be $470 per incident. The daily cost would be 50 times
$470, or $23,500. The annual cost would be $8,577,500.
    FRA believes the final rule is as effective as the alternative
considered, at much lower cost. Thus, FRA rejected the more restrictive
alternative. FRA further believes that given the tradeoff between the
certainty of relatively low costs and the benefit of very low-
probability yet very high-consequence incidents, the final rule is a
reasonable approach. In the NPRM FRA requested comments on all aspects
of this analysis. The comments FRA received are discussed above.
Regulatory Flexibility Act and Executive Order 13272
    To ensure that the impact of this rulemaking on small entities is
properly considered, FRA developed this final rule in accordance with
Executive Order

13272 (``Proper Consideration of Small Entities in Agency Rulemaking'')
and DOT's policies and procedures to promote compliance with the
Regulatory Flexibility Act (5 U.S.C. 601 et seq.).
    The Regulatory Flexibility Act requires an agency to review
regulations to assess their impact on small entities. An agency must
conduct a regulatory flexibility analysis unless it determines and
certifies that a rule is not expected to have a significant economic
impact on a substantial number of small entities.
    As discussed in the preamble above, FRA is amending regulations
affecting securement of certain trains carrying particular hazardous
materials in particular quantities, and requiring that cabs of all
locomotives left unattended, except for those left unattended on main
tracks that are in or adjacent to yards, be equipped with locking
mechanisms. FRA is certifying that this final rule will result in ``no
significant economic impact on a substantial number of small
entities.'' The following section explains the reasons for this
certification.
1. Description of Regulated Entities and Impacts
    The ``universe'' of the entities under consideration includes only
those small entities that can reasonably be expected to be directly
affected by the provisions of this rule. In this case, the ``universe''
will be Class III freight railroads that own locomotives or that have
traffic including trains that would be subject to Sec.  232.103(n)(6).
    The U.S. Small Business Administration (SBA) stipulates in its
``Size Standards'' that the largest a railroad business firm that is
``for-profit'' may be, and still be classified as a ``small entity,''
is 1,500 employees for ``Line Haul Operating Railroads'' and 500
employees for ``Switching and Terminal Establishments.'' ``Small
entity'' is defined in the Act as a small business that is
independently owned and operated, and is not dominant in its field of
operation. Additionally, section 601(5) defines ``small entities'' as
governments of cities, counties, towns, townships, villages, school
districts, or special districts with populations less than 50,000.
    Federal agencies may adopt their own size standards for small
entities in consultation with SBA and in conjunction with public
comment. Pursuant to that authority, FRA has published a final policy
that formally establishes ``small entities'' as railroads which meet
the line haulage revenue requirements of a Class III railroad.\34\ The
revenue requirements are currently $20 million or less in annual
operating revenue. The $20 million limit (which is adjusted by applying
the railroad revenue deflator adjustment) \35\ is based on the Surface
Transportation Board's (STB) threshold for a Class III railroad
carrier. FRA is using the STB's threshold in its definition of ``small
entities'' for this rule.
---------------------------------------------------------------------------

    \34\ See 68 FR 24891, May 9, 2003; 49 CFR part 209, app. C.
    \35\ For further information on the calculation of the specific
dollar limit, please see 49 CFR part 1201.
---------------------------------------------------------------------------

    FRA believes that virtually all small railroads on the general
system of rail transportation will be affected by this rule, as there
are almost no railroads that do not own at least one locomotive. There
are 671 small railroads on the general system of rail transportation.
    As noted above, no small entities are expected to incur any costs
under Sec.  232.103. Small entities owning locomotives may incur a cost
to install a locking mechanism under Sec.  232.105, but as also noted
above, the locking mechanisms will pay for themselves in reduced
vandalism costs in less than three years. FRA believes that at least 90
percent of affected locomotives are already equipped with locking
mechanisms, and the cost to install a locking mechanism is $100 for a
mechanism that does not have to comply with AAR standards for
interchange. Any small railroad's locomotives operated in interchange
service would have to have AAR compliant locks to remain in interchange
service, but that is not a cost of the rule. Thus, the rule will impose
a cost of $100 on about ten percent of locomotives, but the investment
will pay for itself in less than three years. FRA believes this is not
a substantial impact on any small entity.
    Further, small railroads will benefit from a reduction in
recordkeeping requirements, as described above.
    Pursuant to the Regulatory Flexibility Act, 5 U.S.C. 605(b), the
FRA Administrator certifies that this final rule will not have a
significant economic impact on a substantial number of small entities.
In the NPRM, FRA requested comment on both this analysis and the
certification, and its estimates of the impacts on small railroads. The
only comment FRA received was that the unit cost of locks for small
railroads would be more than $100, exceeding even the AAR-estimated
unit cost of $210 per locomotive. For reasons discussed in the
Regulatory Impact section above, FRA rejects that comment.

B. Paperwork Reduction Act

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

----------------------------------------------------------------------------------------------------------------
                                       Respondent         Total annual      Average time per      Total annual
           CFR section                  universe            responses           response          burden hours
----------------------------------------------------------------------------------------------------------------
229.27--Annual tests.............  30,000 locomotives  120,000 tests.....  15 minutes........  30,000 hours.
232.3--Applicability--Export,      655 railroads.....  8 cards...........  10 minutes........  1 hour.
 industrial, & other cars not
 owned by railroads--
 identification.
232.7--Waivers...................  655 railroads.....  10 petitions......  160 hours.........  1,600 hours.
232.15--Movement of Defective      1,620,000 cars....  128,400 tags/       2.5 minutes.......  5,350 hours.
 Equipment--Tags/Records.                               records.
    --Written Notification.......  1,620,000 cars....  25,000 notices....  3 minutes.........  1,250 hours.
232.17--Special Approval
 Procedure
    --Petitions for special        655 railroads.....  1 petition........  100 hours.........  100 hours.
     approval of safety--critical
     revision.
    --Petitions for special        655 railroads.....  1 petition........  100 hours.........  100 hours.
     approval of pre-revenue
     service acceptance plan.
    --Service of petitions.......  655 railroads.....  1 petition........  20 hours..........  20 hours.
    --Statement of interest......  Public/railroads..  4 statements......  8 hours...........  32 hours.

    --Comment....................  Public/railroads..  13 comments.......  4 hours...........  52 hours.
232.103--Gen'l requirements--all   114,000 cars......  70,000 sticker....  10 minutes........  11,667 hours.
 train brake systems--Stickers.
Proposed Rule New Requirements...  Already Fulfilled   Fulfilled under     Fulfilled under     Fulfilled under
232.103(n)(3)(iv)--RR Procedure     under OMB No.       OMB No. 2130-0601.  OMB No. 2130-0601.  OMB No. 2130-
 for Securing Unattended            2130-0601.                                                  0601.
 Locomotive.
232.103(n)(7)--RR Plan             655 railroads.....  10 revised plans..  10 hours..........  100 hours.
 Identifying Specific Locations
 or Circumstances where Equipment
 May Be Left Unattended.
    --Notification to FRA When RR  655 railroads.....  10 notices........  30 minutes........  5 hours.
     Develops and Has Plan in
     Place or Modifies Existing
     Plan.
232.103(n)(8)--Employee            Included under      Included Under      Included under      Included under
 Verification with Another          Sec.                Sec.                Section             Sec.
 Qualified Employee of Securement   232.103(n)(9).      232.103(n)(9).      232.103(n)(9).      232.103(n)(9).
 of Freight Train or Freight Car
 Left Unattended.
232.103(n)(9)--RR Implementation   655 railroads.....  491 revised rules/  2 hours...........  982 hours.
 of Op. Rules/Practices Requiring                       practices.
 Job Briefing for Securement of
 Unattended Equipment.
    --Securement Job Briefings...  100,000 Employees.  23,400,000 job      30 seconds........  195,000 hours.
                                                        briefings.
232.103(n)(10)--RR Adoption of     655 railroads.....  12 inspections/     4 hours...........  48 hours.
 Procedure for Verification of                          records.
 Securement of Equipment by
 Qualified Employee.
    --Inspection of Equipment by
     Qualified Employee after
     Responder Visit.
    --Procedure for Alternative    655 railroads.....  655 procedures....  1 hour............  655 hours.
     Securement (New Requirement).
232.105--General requirements for  30,000 Locomotives  30,000 forms......  5 minutes.........  2,500 hours.
 locomotives--Inspection.
Proposed Rule New Requirements
232.105(h)--RR Inspection of       30,000 Locomotives  30,000 insp./       30 seconds........  250 hours.
 Locomotive Exterior Locking                            records.
 Mechanism/Records.
    --RR Repair, where necessary,  30,000 Locomotives  73 repairs/records  60.25 minutes.....  73 hours.
     of Locomotive Exterior
     Locking Mechanism.
232.107--Air source requirements   10 new railroads..  1 plan............  40 hours..........  40 hours.
 and cold weather operations--
 Monitoring Plan (Subsequent
 Years).
    --Amendments/Revisions to      50 railroads/plans  10 revisions......  20 hours..........  200 hours.
     Plan.
    --Recordkeeping..............  50 railroads/plans  1,150 records.....  20 hours..........  23,000 hours.
232.109--Dynamic brake             655 railroads.....  1,656,000 rec.....  4 minutes.........  110,400 hours.
 requirements--status/record.
    --Inoperative dynamic brakes:  30,000 locomotives  6,358 records.....  4 minutes.........  424 hours.
     repair record.
    --Tag bearing words            30,000 locomotives  6,358 tags........  30 seconds........  53 hours.
     ``inoperative dynamic
     brakes''.
    --Deactivated dynamic brakes   8,000 locomotives.  10 markings.......  5 minutes.........  1 hour.
     (Sub. Yrs.).
    --Operating rules (Subsequent  5 new railroads...  5 rules...........  4 hours...........  20 hours.
     Years).
    --Amendments/Revisions.......  655 railroads.....  15 revisions......  1 hour............  15 hours.
    --Requests to increase 5 mph   655 railroads.....  5 requests........  30 min. + 20 hours  103 hours.
     Overspeed restriction.
    --Knowledge criteria--         5 new railroads...  5 amendments......  16 hours..........  80 hours.
     locomotive engineers--
     Subsequent Years.
232.111--Train information         5 new railroads...  5 procedures......  40 hours..........  200 hours
 handling--Sub. Yrs.--Amendments/  100 railroads.....  100 revisions.....  20 hours..........  2,000 hours.
 Revisions.
    --R655 report requirements to  655 railroads.....  2,112,000 reports.  10 minutes........  352,000 hours.
     train crew.
232.203--Training requirements--   15 railroads......  5 programs........  100 hours.........  500 hours.
 Tr. Prog.--Sub Yr..
    --Amendments to written        655 railroads.....  559 revisions.....  8 hours...........  4,472 hours.
     program.
    --Training records...........  655 railroads.....  67,000 records....  8 minutes.........  8,933 hours.
    --Training notifications.....  655 railroads.....  67,000 notices....  3 minutes.........  3,350 hours.
    --Audit program..............  655 railroads.....  1 plan + 559        40 hours/1 min....  49 hours.
                                                        copies.
    --Amendments to validation/    655 railroads.....  50 revisions......  20 hours..........  1,000 hours.
     assessment program.
232.205--Class 1 brake test--      655 railroads.....  1,646,000 notices/  45 seconds........  20,575 hours.
 Notifications/Records.                                 records.
232.207--Class 1A brake tests--    655 railroads.....  5 lists...........  1 hour............  5 hours.
 Designation Lists Where
 Performed.
Subsequent Years: Notice of        655 railroads.....  250 notices.......  10 minutes........  42 hours.
 Change to.
232.209--Class II brake tests--    655 railroads.....  1,597,400 comments  3 seconds.........  1,331 hours.
 intermediate ``Roll-by
 inspection''--Results to train
 driver.
232.213--Written Designation to    83,000 long dist.   250 letters.......  15 minutes........  63 hours.
 FRA of Extended haul trains.       movements.
232.303--General requirements--    1,600,000 frgt.     5,600 tags........  5 minutes.........  467 hours.
 single car test: Tagging of        cars.
 Moved Equipment.
    --Last repair track brake      1,600,000 frgt.     320,000 markings..  5 minutes.........  26,667 hours.
     test/single car test.          cars.
    --Stenciled on Side of
     Equipment.
232.305--Single Car Tests--        1,600,000 frgt.     320,000 tests/      60 minutes........  320,000 hours.
 Performance and Records.           cars.               records.
232.307--Modification of single    AAR...............  1 request + 3       100 hours + 5       100 hours.
 car air brake test procedures:                         copies.             minutes.
 Requests.

    --Affirmation Statement on     AAR...............  1 statement + 4     30 minutes + 5      1 hour.
     Mod. Req. To Employee                              copies.             minutes.
     Representatives.
    --Comments on Modification     Railroad/Public...  2 comments........  8 hours...........  16 hours.
     Request.
232.309--Repair track brake test.  640 shops.........  5,000 tests.......  30 minutes........  2,500 hours.
232.403--Unique Code.............  245 railroads.....  12 requests.......  5 minutes.........  1 hour.
232.407--EOT Operations requiring  245 railroads.....  50,000 verbal       30 seconds........  417 hours.
 2-way Voice Radio Communications.                      comments.
232.409--Inspection/Tests/Records  245 railroads.....  447,500 tests/      30 seconds........  3,729 hours.
 EOTs.                                                  notices/record.
    --Telemetry Equipment--        245 railroads.....  32,708 units        1 minute..........  545 hours.
     Testing and Calibration.                           marked.
232.503--Process to introduce new  655 railroads.....  1 letter..........  1 hour............  1 hour.
 brake technology.
    --Special approval...........  655 railroads.....  1 request.........  3 hours...........  3 hours.
232.505--Pre-revenue svc accept.   655 railroads.....  1 procedure.......  160 hours.........  160 hours.
 test plan.
--Submission of maintenance
 procedure
    --Amendments to maintenance    655 railroads.....  1 revision........  40 hours..........  40 hours.
     procedure.
    --Design description.........  655 railroads.....  1 petition........  67 hours..........  67 hours.
    --Report to FRA Assoc. Admin.  655 railroads.....  1 report..........  13 hours..........  13 hours.
     for Safety.
    --Brake system technology      655 railroads.....  1 description.....  40 hours..........  40 hours.
     testing.
232.603--Configuration             4 railroads.......  1 plan............  160 hours.........  160 hours.
 Management--Configuration
 Management Plan (ECP).
    --Subsequent Years--           4 railroads.......  1 plan............  60 hours..........  60 hours.
     Configuration Management
     Plans.
    --Request for Modification of  4 railroads.......  1 request + 2       8 hours + 5         8 hours.
     Standards and Extra Copies                         copies.             minutes.
     to FRA.
    --Affirmative Statements that  4 railroads.......  4 statements + 24   60 minutes + 5      6 hours.
     RRs have served copies of                          copies.             minutes.
     Modification Request to
     Employee Representatives.
    --Comments on requested        Public/Industry...  4 comments........  2 hours...........  8 hours.
     modification.
232.605--ECP Brakes: Training--    1 railroad........  1 program.........  100 hours.........  100 hours.
 Adopt/Developing an ECP Training
 Program--First Year.
    --Subsequent Years--ECP        1 railroad........  1 program.........  100 hours.........  100 hours.
     Training Prog..
    --ECP Brakes Training of       1 railroad........  1,602 trained       8 hours/24 hrs....  26,480 hours.
     Employees--First Year.                             employees.
    --ECP Brakes Training of       2 railroads.......  1,602 trained       1 hour/8 hours....  7,580 hours.
     Employees--Subsequent Years.                       employees.
    --ECP Training Records--Yr.    2 railroads.......  1,602 records.....  8 minutes.........  214 hours.
     One.
    --ECP Training Records--       2 railroads.......  1,602 records.....  4 minutes.........  107 hours.
     Subsequent Yrs..
    --Assessment of ECP Training   2 railroads.......  1 ECP plan........  40 hours..........  40 hours.
     Plan.
    --Adopt Operating Rules for    2 railroads.......  1 Oper. Rule......  24 hours..........  24 hours.
     ECP Brakes.
    --Amended Locomotive Engineer  2 railroads.......  1 amended program.  40 hours..........  40 hours.
     Certification Program (ECP
     Brakes).
232.607--ECP Inspection and        1 railroad........  2,500 insp.+ 2,500  90 min. + 45        3,781 hours.
 Testing--Initial Terminal--                            notices.            seconds.
 Inspections and Notification/
 Record of Class I Brake Tests.
    --Cars added or removed en     1 railroad........  250 inspection +    60 minutes + 45     253 hours.
     route--Class I Brake Test                          125 notices.        seconds.
     and Notification.
    --Non-ECP cars added to ECP    200 Cars..........  50 insp. + 100      5 minutes + 2.5     8 hours.
     Trains--Inspections and Tags                       tags/records.       minutes.
     for Defective Cars.
232.609--Handling of Defective     25 Cars...........  50 tags/records...  2.5 minutes.......  2 hours.
 Equipment with ECP Brake
 Systems--Freight Car w/defective
 conventional brakes moved in
 train operating in ECP brake
 mode.
    --Inspections/Tagging for ECP  20 Cars...........  20 insp. + 40 tags/ 5 minutes + 2.5     3 hours.
     Train moving w/less than 85                        records.            minutes.
     percent operative/effective
     brakes.
    --Cars tagged in accordance    25 Cars...........  50 tags/records...  2.5 minutes.......  2 hours.
     with Section 232.15.
232.609--Conventional Train with   50 Cars...........  100 tags/records..  2.5 minutes.......  4 hours.
 stand-alone ECP brake equipped
 cars--Tagging.
    --Procedures for handling ECP  2 railroads.......  2 procedures......  24 hours..........  48 hours.
     brake system repairs and
     designation of repair
     locations.
    --List of repair locations...  2 railroads.......  2 lists...........  8 hours...........  16 hours.
    --Notification to FRA Safety   2 railroads.......  1 notification....  1 hour............  1 hour.
     Administrator regarding
     change to repair location
     list.
232.611--Periodic Maintenance--    500 Freight Cars..  500 insp./rcds....  10 minutes........  83 hours.
 Inspections before being
 released from repair Shop.
    --Procedures/Petition for ECP  1 Railroad Rep....  1 petition + 2      24 hours + 5        24 hours.
     Single Car Test.                                   copies.             minutes.
    --Single Car Air Brake Tests-- 50 Freight Cars...  50 tests/records..  45 minutes........  38 hours.
     Records.
    --Modification of Single Car   1 Railroad Rep....  1 mod. Proc.......  40 hours..........  40 hours.
     Test Standards.
----------------------------------------------------------------------------------------------------------------

    All estimates include the time for reviewing instructions;
searching existing data sources; gathering or maintaining the needed
data; and reviewing the information. For information or a copy of the
paperwork package submitted to OMB, contact Mr. Robert Brogan,
Information Clearance Officer, at<PHONE_NUMBER>, or Ms. Nakia Poston,
Information Clearance Officer, at<PHONE_NUMBER>.
    OMB is required to make a decision concerning the collection of
information requirements contained in this final rule between 30 and 60
days after publication of this document in the Federal Register.
Therefore, a comment to OMB is best assured of having its full effect
if OMB receives it within 30 days of publication.
    FRA 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.

C. Federalism

    Executive Order 13132, ``Federalism'' (64 FR 43255, Aug. 10, 1999),
requires FRA to develop an accountable process to ensure ``meaningful
and timely input by State and local officials in the development of
regulatory policies that have federalism implications.'' ``Policies
that have federalism implications'' are defined in the Executive Order
to include regulations that have ``substantial direct effects on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government.'' Under Executive Order 13132, the agency
may not issue a regulation with federalism implications that imposes
substantial direct compliance costs and that is not required by
statute, unless the Federal government provides the funds necessary to
pay the direct compliance costs incurred by State and local governments
or the agency consults with State and local government officials early
in the process of developing the regulation. Where a regulation has
federalism implications and preempts State law, the agency seeks to
consult with State and local officials in the process of developing the
regulation.
    This final rule has been analyzed in accordance with the principles
and criteria contained in Executive Order 13132. FRA has determined
that the final rule does not have substantial direct effects on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government. In addition, FRA has determined that this
final rule does not impose substantial direct compliance costs on State
and local governments. Therefore, the consultation and funding
requirements of Executive Order 13132 do not apply.
    This rule adds requirements to part 232. FRA is not aware of any
State having regulations similar to these proposals. However, FRA notes
that this part could have preemptive effect by the operation of law
under a provision of the former Federal Railroad Safety Act of 1970,
repealed, revised, reenacted, and codified at 49 U.S.C. 20106 (Sec.
20106). Sec. 20106 provides that States may not adopt or continue in
effect any law, regulation, or order related to railroad safety or
security that covers the subject matter of a regulation prescribed or
order issued by the Secretary of Transportation (with respect to
railroad safety matters) or the Secretary of Homeland Security (with
respect to railroad security matters), except when the State law,
regulation, or order qualifies under the ``essentially local safety or
security hazard'' exception to Sec. 20106. In addition, section
20119(b) authorizes FRA to issue a rule governing the discovery and use
of risk analysis information in litigation.
    In sum, FRA has analyzed this final rule in accordance with the
principles and criteria contained in Executive Order 13132. As
explained above, FRA has determined that this final rule has no
federalism implications, other than the possible preemption of State
laws under 49 U.S.C. 20106 and 20119. Accordingly, FRA has determined
that preparation of a federalism summary impact statement for this
final rule is not required.