2024-24586. Federal Railroad Administration's Procedures for Waivers and Safety-Related Proceedings

Table III-1—Summary of Costs and Benefits Over the 10-Year Period

[2023 Dollars]

Impact	Undiscounted	* PV 7%	PV 3%	PV 2%	** Annualized 7%, 3%, 2%
Data Analysis and Metrics	$62,392	$43,821	$53,221	$56,044	$6,239
Consultation and Documentation	676,529	475,166	577,093	607,698	67,653
Waiver Renewal Effectiveness and Conditions Compliance	40,109	28,171	34,214	36,028	4,011
Total Costs	779,030	547,158	664,528	699,770	77,903
FRA Cost	Minimal overall change from baseline. Potentially more time to review additional waiver information may be offset by expected better-organized information explicitly addressing NPRM requirements.
Qualitative Benefit	In general, addressing incomplete information and facilitating affected stakeholder input expected to better meet statutory standards of “in the public interest” and “consistent with railroad safety.”
* PV = Present Value.
** Because the schedule of costs by year are the same, the annualized values are the same.
Figures in tables may not sum due to rounding.

( print page 85900)

Overall, FRA expects this rule will lead to higher-quality waiver applications that meet the positive objectives of DOT's innovation principles. Because this rule would apply to a variety of relief applications, it is difficult to quantify the potential benefits from consultation on any particular request for relief.

1. Need for Regulatory Action

a. Inadequate or Asymmetric Information

For convenience, this analysis uses the term “waiver” request to encompass petitions for waiver, or other safety-related proceedings for regulatory relief, including block signal applications (BSAPs), and waiver renewal requests subject to this rulemaking.

As stated in the Section-by-Section analysis for § 211.9 and FRA's Guidance,^[13] FRA has found that some submitted waiver requests on the surface seem to contain the information necessary under part 211 (and are therefore considered “received” by FRA), but in fact do not contain sufficient information for FRA to evaluate if a submitted waiver request meets the applicable legal standards and are therefore incomplete. For these waiver requests containing inadequate information, FRA expends resources to work with the petitioner and affected stakeholders to gather the necessary information. Although waiver requests, including requests for renewal and modification, are published in the Federal Register for comment, addressing these information needs early in the waiver development process would potentially result in a more streamlined and efficient waiver request “workflow,” i.e., waiver disposition procedure.

By requiring petitioners and affected stakeholders to consult on a waiver request prior to submission to FRA, this NPRM would provide information to both parties that they may be lacking under the current waiver process. For example, a railroad petitioner may lack information on the full effects of the proposed waiver, and employees may misunderstand how a proposed waiver may be implemented or simply lack awareness of the waiver request. Meaningful consultation could avoid unexpected and unintended effects of the proposed waiver that another party may not have considered. Furthermore, if the waiver would involve several parties, for example, several railroad disciplines ( e.g., operating practices, motive power and equipment), or more than one geographic district, consultation would enhance the distribution of information about the proposed waiver among these parties. Parties that may be potential petitioners, such as railroads and suppliers, and those that may be affected stakeholders, such as labor union representatives and community rail associations, have shown a willingness and ability to provide information through their participation in the Railroad Safety Advisory Committee (RSAC) ^[14] and submitting comments in notice-and-comment rulemakings. The burden to share information and consult on a proposed waiver rests primarily on the petitioner.

Through this NPRM, FRA is also proposing to define the terms “in the public interest” and “consistent with railroad safety” that are used in the statute, 49 U.S.C. 20103(d), but not previously defined. Defining these terms will help clarify for petitioners and affected stakeholders how FRA will decide whether waiver requests meet the statutory standard. By defining these terms, FRA expects that petitioners will be more likely to submit waiver requests providing the necessary and sufficient information for FRA to evaluate the waiver proposal. That may reduce the chances of a waiver being dismissed because a submitted waiver request did not meet these criteria.

b. Statutory Directive

The NPRM would also facilitate FRA's implementation of 49 U.S.C. 20103(d)(4), requiring review and analysis of a waiver that has been in continuous effect for six years. Specifically, the analysis and metrics required under proposed § 211.9(c), and the data about how effective a waiver has been (when a waiver renewal is requested) under proposed § 211.9(e) will help FRA evaluate whether codifying the waiver is in the public interest and consistent with railroad safety. That is, whether the waiver continues to meet the statutory requirements.

2. Baseline

As background, FRA considers several types of waiver requests under FRA's Rules of Practice and decides whether to grant, conditionally grant, or deny a submitted waiver request. If FRA's preliminary review of a submitted petition for waiver shows it to lack sufficient information for further evaluation, the petition may be denied or returned to the petitioner, who may choose to resubmit it.

This analysis uses the environment without the NPRM as the baseline scenario. Without the NPRM's proposed requirements, FRA would continue to receive some waiver requests that are incomplete because they fail to address the statutory criteria of “in the public interest” and “consistent with railroad safety.” FRA would continue to expend resources to gather the missing information from petitioners and affected stakeholders rather than the petitioner providing the necessary information. Petitioners may face uncertainty about the standards FRA is applying in FRA's waiver petition evaluation, and spend unnecessary resources supplementing a waiver petition the petitioner thought to be complete when initially submitted. When implementing the statutory directive to review waivers in operation for six years, FRA may lack some information to fully evaluate the effectiveness of the waiver.

Some categories of waivers already involve consultation with affected stakeholders and the procedure to evaluate these waivers will remain substantially the same under the baseline and the NPRM. These are waivers involving test committees, hours of service (HS) laws, and train horns.

3. Methodology

The proposed data analysis and consultation requirements apply to individual petitions for waivers. Therefore, this analysis used the additional labor time per waiver request to meet these requirements and the number of waiver requests as the basis to estimate the average per-waiver request cost and the overall costs of the NPRM.

The benefits estimate of potential time savings from “streamlining” the waiver process is qualitative because the benefits will depend on the nature of each waiver. Additionally, FRA does not have history to estimate the impact of the NPRM on FRA's waiver Rules of Practice to date. Although FRA's Guidance described much of the NPRM's provisions as best practices, it was issued recently (2023). FRA notes petitioner and stakeholder experiences with waivers that already involve much consultation, such as those for which test committees were established, have been generally positive. These waiver requests that already involve much consultation are relatively few, numbering about 8 waiver requests from the years 2019 through 2022. ( print page 85901)

Data and Assumptions

To estimate the number of waivers that may be affected, FRA counted the number of Federal Register notices published pertaining to its Railroad Safety Board proceedings. From the years 2020 to 2024, a period of 4 years, there were 280 Federal Register notices or an average of 70 notices annually. Furthermore, by applying the percentage of waiver petitions filed by Class 1 railroads,^[15] FRA estimated that of these 70 total waiver petitions, 21 were Class I railroad waiver petitions, 28 were small railroad waiver petitions, 17.5 were commuter and passenger service railroad waiver petitions, and 3.5 were blanket waiver petitions (covering more than 1 entity) and other waiver petitions. Based on the waiver petitions that have been submitted to FRA in the past, most petitioners will be railroads and most affected stakeholders will be employees, who may be represented by labor unions. For a small number of waiver petitions, a community adjacent to a rail line segment or rail yard may be an affected stakeholder.

To estimate the additional labor hours per waiver petition, FRA estimated 1 hour per waiver request for petitioners to add the data analysis and metrics required under proposed § 211.9(c), which will support that the waiver would be aligned with the proposed definition of “consistent with railroad safety” in § 211.1(b). For documenting meaningful consultation and the prerequisite consultation with affected stakeholders, FRA estimated an equal number of consultations would take 1 hour and those that would take 4 hours, for simple and more complex waiver requests respectively. FRA also estimated an administrative time of about 25 percent to schedule meetings and other logistics. The 50/50 split between simple and more complex waiver requests reflects the uncertainty around this estimate given that waiver requests vary and that this requirement would be new. The average consultation time is 2.5 hours per waiver request, and the average administrative time is 0.625 hours per waiver request, for a combined average time of 3.125 hours per waiver request. Furthermore, FRA estimated 2 employees from the petitioner and 2 employees from an affected stakeholder would each incur the opportunity cost to engage in the consultation, for a total of 12.5 hours per waiver request.

To monetize these additional labor hours, FRA used wage rates reported to the Surface Transportation Board (STB) by the Class I railroads, burdened by 75 percent. For this analysis FRA used the STB wage rates for the relevant employee groups. For data analysis and describing metrics costs, FRA used the wage rate of $89.13, representing the Professional and Administrative employee group. For consultation costs, FRA used the wage rate of $77.32, representing the total for all groups, because a waiver request can include several different types of employees or railroad disciplines.^[16]

FRA used a 10-year period for this analysis, allowing for 1 original waiver petition and 1 waiver renewal request after a period of 5 years. FRA has found that some railroads may not seek renewals beyond 10 years, possibly because equipment may be over-age, the waiver codified, or other changes in operations or equipment covered under the waiver. FRA also used 2023 real dollars ( i.e., a 2023 base year).

4. Costs

The substantive changes from the baseline are found in following proposed sections:

• § 211.1(b) to add definitions of “in the public interest” and “consistent with railroad safety.”
• § 211.9(c) to require analysis and describe effectiveness metrics.
• § 211.9(d) to include documentation of meaningful consultation.
• § 211.9(e) to require waiver renewal requests to show waiver effectiveness and demonstrate compliance with conditions under which the waiver was granted.

Proposing to clarify the definitions of “in the public interest” and “consistent with railroad safety” in § 211.1(b) have no direct costs except the data analysis and metrics required under proposed § 211.9(c) support demonstrating the waiver request meets these criteria; the sections may be seen to work together. It may take some additional effort to explicitly show how the proposed waiver would meet these criteria, which is reflected in the data analysis, metrics, and consultation cost sections.

The title of § 211.9 is proposed to be revised to include “other safety-related proceedings petitions.” The revision would add proceedings such as those for BSAPs and test programs to this section. FRA has historically held BSAPs to the same safety standards as other waiver petitions. Also, as mentioned, waivers for which test committees are established include much consultation under the baseline. Therefore, this change would be administrative in nature and has no costs.

More significantly, proposed changes to § 211.9(c) would add requirements for (data) analysis and metrics. Although ensuring that a proposed waiver meets safety criteria has always been a part of FRA's evaluation, the changes in this section emphasize that requirement. Waiver requests would need to include analysis and clearly identify safety impacts. In addition, the specified metrics can be used to determine if the waiver is achieving the intended goals, and meeting the “in the public interest” and “consistent with railroad safety” standards. The metrics need not be complex, for example, accident/incident measures appropriate to the type of waiver proposed ( i.e., discipline or railroad operation covered by the waiver), or relevant casualties. FRA estimated this cost as: Cost of analysis and metrics = time to perform analysis and metrics × wage rate × no. of waivers. Using 1 hour for the time, and the Professional and Administrative wage rate of $89.13 per hour, yields an estimated cost of $89.13 per waiver request, or $6,239 for the estimated 70 waiver requests per year. The schedule of these costs is shown in the summary table below.

The documentation requirement proposed in § 211.9(d) requires meaningful consultation between the petitioner and affected stakeholders. FRA estimated this cost as: Cost of consultation and documentation = (hours per waiver × wage rate × no. of employees) × no. of waivers. The cost is incurred by both the petitioner and affected stakeholders. FRA assumes the cost is equal for both parties. Using an average time (including administrative time) of 3.125 hours per waiver request, a wage rate representing all employee types of $77.32 per hour, 2 employees each for the petitioner and affected stakeholder(s), and 70 total waiver requests results in a cost of $33,826 annually for each party. The cost per waiver request is $483, again for each party. The total costs are shown in the summary table below.

Under the baseline, FRA expends resources to gather missing data from ( print page 85902) the waiver request that the proposed consultation should provide. Thus, some of FRA's burden and associated cost may be transferred to the petitioner under the proposed requirements in the NPRM. However, FRA assumes that the time spent by FRA post-waiver request submittal is more than the time that would be spent by the petitioner pre-waiver request submittal. FRA reasons that the petitioner has direct knowledge of the subject proposed waiver and ready access to affected stakeholders who may be employees or employee representatives on the petitioner's worksite or property.

Also under the baseline, petitioners wishing to renew a waiver are expected to provide enough information about its impacts (and under certain conditions, if so specified) to support its renewal. Proposed § 211.9(e) would require petitioners to show a waiver's effectiveness over time and compliance with the specified waiver conditions explicitly. FRA expects there will be additional data available by the time a waiver is eligible for extension or renewal to demonstrate its effectiveness; the metrics developed in proposed § 211.9(c) would assist with that effort. FRA notes not all waivers are submitted to FRA for renewal because of the age of the equipment, changes in technology, codification of waivers, or other operational reasons. Based on the Reflectorization of Rail Freight Rolling Stock: Codifying Existing Waivers NPRM,^[17] about 64 percent of waivers are eligible for renewal. Applying that percentage to the 70 waiver requests used in this analysis yields about 45 waivers eligible for renewal annually. The cost is therefore accounted by: Cost to show renewal effectiveness and compliance = time to provide data × wage rate × no. of renewals. Using 1 hour for the time, similar to § 211.9(c) for the marginal data analysis and metrics development, $89.13 to represent Professional and Administrative employees who may perform the data analysis, and 45 renewal requests, produces a cost of $4,011 annually, or $89.13 per waiver.

The schedule of NPRM costs is summarized in the table below.

Table III-2—Schedule of NPRM Costs

[2023 Dollars]

Year	§ 211.9(c) Analysis and metrics	§ 211.9(d) Consultation and documentation	§ 211.9(e) Waiver renewal effectiveness and compliance	Total
1	$6,239	$67,653	$4,011	$77,903
2	6,239	67,653	4,011	77,903
3	6,239	67,653	4,011	77,903
10	6,239	67,653	4,011	77,903
Total	62,392	676,529	40,109	779,030
PV 7%	43,821	475,166	28,171	547,158
PV 3%	53,221	577,093	34,214	664,528
PV 2%	56,044	607,698	36,028	699,770
Annualized 7%, 3%, 2%	6,239	67,653	4,011	77,903
The figures for analysis of years 4 through 9 repeat and are not shown for brevity.
Similarly, the annualized costs using discount rates of 7%, 3%, and 2% are the same.

Government Costs

FRA does not anticipate any additional significant costs under the NPRM. FRA may receive more data and analysis to evaluate, but expects it will be better organized to highlight the information needs addressed by the NPRM. Overall, FRA estimates minimal changes to the time needed for FRA's evaluation of waiver requests, which are a part of FRA's customary duties.

FRA invites comment on the inputs used to estimate the costs for the NPRM.

5. Benefits

Because FRA receives a variety of waiver requests covering different areas of the railroading environment, it is difficult to quantify the benefits of the NPRM. The benefits will depend on the increase in the quality of information FRA receives in submitted waiver requests. Generally, FRA expects more and better information that supports a waiver meets the overall statutory standard of safety vis-à-vis the criteria of “in the public interest” and “consistent with railroad safety.”

6. Other Effects

Distributional Effects

The NPRM may have positive distributional effects. Through consultation and involvement of affected stakeholders, their concerns can be accounted for in evaluating a waiver request and setting conditions for its potential use. That may avoid concentrating the benefits of a waiver in a relatively small number of petitioners, while the costs may be spread among many affected stakeholders.

7. Alternatives

FRA considered two alternatives to the NPRM. First, FRA considered extending the time provided to stakeholders to comment on waiver requests. Second, FRA considered a process in which FRA would facilitate a discussion between a petitioner for waiver and affected stakeholders, in lieu of the consultation proposed in the NPRM.

For the first alternative, FRA would continue to publish Federal Register notices concerning waiver requests as it currently does under FRA's Rules of Practice. However, FRA could extend the time provided for affected stakeholders to comment on such Federal Register notices. The goal would be to expand the opportunity for affected stakeholders to provide information and share their concerns. This option would be a straightforward, low-cost alternative. However, simply extending the comment period time would not achieve FRA's regulatory objective because FRA would still likely receive waiver requests that lack the in-depth data needed for a thorough evaluation of a waiver request in light of the statutory standard.

FRA also considered an alternative modeled after the RSAC. RSAC membership consists of railroads, suppliers, labor union representatives, ( print page 85903) public interest groups, other governmental agencies, and other interested parties—essentially potential waiver petitioners and affected stakeholders. In the same way that RSAC members discuss assigned regulatory tasks, FRA could host a similar “roundtable” meeting for a petitioner and affected stakeholders to discuss a petitioner's proposed waiver. FRA would serve as host and facilitator, acting in the same role as it currently does for RSAC meetings. However, this alternative may suggest a perception that FRA is bringing all parties together to eventually approve the waiver petition, rather than FRA serving as the arbiter of the petition. Simultaneously, in this alternative, FRA could also clarify the criteria of “in the public interest” and “consistent with railroad safety” that FRA uses to evaluate waiver requests. Similar to the NPRM, this alternative process could provide clarity, transparency, and input from stakeholders.

To account for the cost of the RSAC-like alternative, FRA reasoned that simple and routine proposed waivers could be discussed through virtual meetings, while more complex waiver requests would benefit from in-person meetings with an option to attend virtually, i.e., hybrid meetings. FRA conducts similar types of virtual and hybrid meetings for the RSAC. The costs for these meetings consist of administrative costs to plan meetings, and opportunity costs for the participants' time to attend meetings. FRA calculated the average cost of a meeting to discuss a proposed petition and multiplied it by the estimated 70 waiver requests a year for an overall cost for this alternative, as enumerated below.

The administrative costs would vary by whether a meeting is virtual or hybrid. Based on a discussion with FRA's RSAC program manager, the tasks for virtual meetings consist of scheduling the meeting, forming an agenda, and posting the meeting details on FRA's website. In addition, FRA prepares meeting minutes after the meeting. For the scheduling, agenda, and website posting tasks, FRA estimated 1 hour of labor time; for the post-meeting minutes preparation, FRA estimated 3 hours of labor time; for a total of 4 hours. For the hybrid meetings, FRA would need to arrange for meeting space, and audio/visual (A/V) equipment and personnel to operate it. FRA generally pays a fixed price for these services. FRA estimated the cost to rent meeting space, including conference room set-up, to be $5,000, and the cost for A/V equipment and the operator to be $5,000 per day, for a total of $10,000 per meeting ( i.e., per complex waiver request). For monetizing FRA time for planning the virtual meeting and for the opportunity cost to attend meetings (see below), this analysis used the General Schedule (GS) pay rate for grade GS-14, step 5 Federal employees in the Washington, DC area. This Federal employee pay rate of $71.88 was burdened by 75 percent for fringe to yield a pay rate of $125.79 per hour.^[18] The resulting administrative cost for a simple waiver request was estimated at $503 per waiver request, and $10,000 for a complex waiver request. For both virtual and hybrid meetings, FRA would bear all the administrative costs.

All parties would incur an opportunity cost to attend the meetings. FRA assumed two representatives from each party to a proposed petition would attend the consultation meeting, specifically two employees each from FRA, the petitioner, and affected stakeholders. For the petitioners and affected stakeholders, most of whom will be railroad employees, FRA used the same STB wage rates as used in the primary NPRM analysis. In general, the cost for attending a virtual or hybrid meeting is: Cost to attend meeting = meeting hours × no. of employees × wage rate, where the meeting hours will vary by type of meeting (virtual or hybrid) and the wage rate varies by type of employee (government or railroad). Using the inputs above, the FRA cost to attend a meeting for a simple waiver request would be $1,006, and would be $619 each for petitioners and stakeholders.^[19] The cost to attend a hybrid meeting for a complex waiver request is double the cost for virtual meetings because the time is doubled. Therefore, the FRA cost for a complex waiver request would be $2,013, and the petitioner and stakeholder cost would be $1,237 each.

Adding in the administrative cost to FRA's attendance cost resulted in an FRA cost per simple waiver request of $1,509, and $12,013 for a complex waiver request (with the majority of complex waiver request costs resulting from conference room rental and A/V equipment and operator fees). The average cost would be $6,761. For a petitioner and stakeholder that incur only the attendance cost, the average cost would be $928 per waiver request.^[20] Next, the respective average cost was multiplied by the estimated 70 waiver requests a year for estimated total costs for FRA, petitioner, and stakeholders. These costs would remain constant over the 10-year period of analysis. The table below shows the present values of these cost schedules. The expected benefit would be the same qualitative benefit as for the preferred NPRM option.

Table III-3—Alternative Option: Summary of Costs Over the 10-Year Period

[2023 Dollars]

Proposed waiver party	Undiscounted	*PV 7%	PV 3%	PV 2%	**Annualized 7%, 3%, 2%
FRA (Gov't)	$4,737,742	$3,324,080	$4,037,125	$4,251,226	$473,274
Petitioner	649,468	456,159	554,009	583,390	64,947
Stakeholder	649,468	456,159	554,009	583,390	64,947
Total Cost	6,031,678	4,236,398	5,145,144	5,418,006	603,168
Total Cost without FRA	1,298,936	912,318	1,108,019	1,166,781	129,894
* PV = Present Value. ( print page 85904)
** Because the schedule of costs by year are the same, the annualized values are the same.

To compare the RSAC-like alternative to the preferred NPRM option, the estimated annualized cost is highlighted. The annualized cost (without FRA) for this alternative of $129,804 exceeds the cost of the NPRM option cost of $77,903. The cost of the alternative including FRA costs is much greater than the preferred NPRM option cost. Thus, the alternative would not reduce costs in comparison to the NPRM option.

7. Sensitivity Analysis

The costs are dependent on the number of waiver requests per year and the estimate of time to address the proposed requirements. The largest category of costs presented in Table III-2 is for the consultation and documentation provision in proposed § 211.9(d). FRA assumed an equal number of simple and complex waiver requests and therefore used a straight average to estimate the time required. If the stakeholders submit and therefore consult on simple or routine waiver requests more than complex waiver requests, then that cost might be overstated; the converse is true if petitioners and stakeholders consider relatively more complex waiver requests.

FRA's count of 70 waiver petitions a year may underestimate the amount of consultation because when petitioners are added to existing umbrella or blanket waivers, there may not be additional discrete Federal Register notices (upon which the estimate of 70 waiver petitions was based). On the other hand, such additional consultations for an existing waiver would be familiar and similar to previous consultations on the same blanket waiver, i.e., they would impose only a small burden. The number of blanket waiver requests is also small (3 waiver requests). Additionally, existing blanket waiver requests include an HS waiver,^[21] for which FRA expects consultation already occurs, mitigating the potential overestimate of costs.

8. Conclusion

In this NPRM, FRA is clarifying terms and proposing changes to provide more complete information for FRA's waiver proceedings. The NPRM addresses proposed waiver petitions received by FRA that lack description of the full range of impacts.

FRA estimated the NPRM would result in costs with a present value of about $547,000 using a 7 percent discount rate and $665,000 using a 3 percent discount rate, over a 10-year period of analysis in 2023 dollars. The benefits are described qualitatively because the specific benefits would depend on the waiver under consideration. In general, FRA expects the proposed waivers it receives would include more and better information reflecting the impacts to affected stakeholders. The NPRM would establish a way to gather this information potentially more efficiently before a waiver proposal is submitted to FRA instead of FRA, petitioner, and stakeholders working to gather this information post-waiver request submittal to FRA. The additional information would facilitate FRA determining whether that waiver request meets the statutory standard in 49 U.S.C. 20103(d). FRA would also be better able to balance the interests of a petitioner and stakeholders in the overarching interest of public safety.

B. Regulatory Flexibility Act

The Regulatory Flexibility Act of 1980 ((RFA), 5 U.S.C. 601 et seq.) and E.O. 13272 (67 FR 53461, Aug. 16, 2002) require agency review of proposed and final rules to assess their impacts on small entities. When an agency issues a rulemaking proposal, the RFA requires the agency to “prepare and make available for public comment an initial regulatory flexibility analysis” which will “describe the impact of the proposed rule on small entities.” 5 U.S.C. 603(a).

1. Reasons for Considering Agency Action

In this NPRM, FRA is proposing changes to its waiver procedures so waiver petitions submitted to FRA contain more complete information and FRA is informed by sufficient coordination with potential affected stakeholders. As discussed above, this NPRM would apply to waiver requests and other safety-related proceedings for regulatory relief, including BSAPs, and waiver renewal requests. FRA has found that some petitions incompletely describe the impacts of a proposed waiver because they do not address its potential impacts on affected stakeholders. The lack of sufficient information often requires extensive efforts by FRA, the petitioner, and affected stakeholders to gather this information after a waiver petition has been submitted to FRA or may result in dismissal of a petition due to lack of sufficient information. FRA is therefore proposing that petitioners requesting a waiver consult with affected stakeholders before submitting a waiver request to FRA. Petitioners would also need to provide documentation of consultation with affected stakeholders in their waiver request. See proposed § 211.9(d).

To aid petitioners requesting a waiver in providing the type of information sought by FRA, FRA is proposing to define the terms “in the public interest” and “consistent with railroad safety.” See proposed § 211.1(b)(6) and (7). The statute authorizing FRA to waive or suspend regulatory requirements uses these terms in setting the standard that FRA must use in its decision whether to grant a waiver request. However, these terms are not defined in the statute. 49 U.S.C. 20103(d).

Under the NPRM, a waiver request must contain analysis demonstrating how the proposed waiver would impact the overarching standard of safety. A waiver request also would need to describe the metrics used to measure its effectiveness. See proposed § 211.9(c). A waiver renewal request would be held to same standard, and the petitioner would be required to use data and metrics to show a waiver was effective from approval to request for renewal. See proposed § 211.9(e).

2. A Succinct Statement of the Objectives of, and Legal Basis for, the Proposed Rule

The proposed rule seeks to provide clarity for petitioners requesting a waiver, and result in waiver requests submitted to FRA that provide more in-depth information upon which to base its evaluation. The proposed definitions of “in the public interest” and “consistent with railroad safety” would clarify for the regulated community and the public the criteria FRA uses in deciding whether to grant a waiver request. Furthermore, the proposed requirement to include analysis and metrics in addition to the existing requirement to include relevant safety data would help show how a proposed waiver meets these two criteria. The safety data, analysis, and metrics would ultimately aid FRA in evaluating that a proposed waiver is in the public interest and consistent with railroad safety. Also, the proposed section requiring petitioners to consult with affected stakeholders prior to submitting a waiver request will help ensure the ( print page 85905) petition captures more complete information about a proposed waiver's impacts. FRA intends such a consultation would be a “two-way street,” serving to gather information from, but also inform, affected stakeholders who otherwise may have minimal knowledge about the proposed waiver. Finally, the proposed requirements for waiver renewal requests would align with the proposed greater information needs for waiver requests, to show the original waivers were effective.

Regarding the legal basis, this NPRM would define the terms “in the public interest” and “consistent with railroad safety” to help gather information from petitioners facilitating FRA to implement the statutory standard (when determining whether to waive or suspend compliance with rules or regulations). 49 U.S.C. 20103(d). Furthermore, the statute requires FRA to consider issuing rules codifying waivers that have been in effect for 6 years. For codification, these 6-year-old waivers must also meet the criteria of being “in the public interest” and “consistent with railroad safety;” the data and metrics proposed in the NPRM will help FRA determine if these waivers meet the statutory standard. 49 U.S.C. 20103(d)(4).

3. A Description of and, Where Feasible, an Estimate of the Number of Small Entities to Which the Proposed Rule Applies

The RFA requires a review of proposed and final rules to assess their impact on small entities, unless the Secretary certifies that the rule would not have a significant economic impact on a substantial number of small entities. “Small entity” is defined in 5 U.S.C. 601 as a small business concern that is independently owned and operated and is not dominant in its field of operation. The U.S. Small Business Administration (SBA) has authority to regulate issues related to small businesses, and stipulates in its size standards that a “small entity” in the railroad industry includes a for-profit “line-haul railroad” that has fewer than 1,500 employees and a “short line railroad” with fewer than 1,500 employees.^[22]

Federal agencies may adopt their own size standards for small entities in consultation with SBA and in conjunction with public comment. Under that authority, FRA has published a final statement of agency policy that formally establishes “small entities” or “small businesses” as railroads, contractors, and hazardous materials shippers that meet the revenue requirements of a Class III railroad as set forth in 49 CFR part 1201, General Instruction 1-1, which is $20 million or less in inflation-adjusted annual revenues; and commuter railroads or small governmental jurisdictions that serve populations of 50,000 or less.^[23] The $20 million limit is based on the STB's revenue threshold for a Class III railroad carrier. Railroad revenue is adjusted for inflation by applying a revenue deflator formula in accordance with 49 CFR part 1201, General Instruction 1-1. The current threshold is $46.4 million.^[24] FRA is using this definition for the proposed rule.

Based on railroads that report to FRA under 49 CFR part 225 (Railroad Accidents/Incidents), FRA estimated the universe of small railroads consists of 812 Class III railroads. Because any railroad may request a waiver, all 812 Class III railroads may be affected by this proposed rule. Considering waiver requests actually submitted to FRA in the year 2023, about 40 percent of petitioners were small railroads, or on average about 28 out of the estimated 70 annual waiver petitions. As mentioned in the regulatory analysis for the NPRM, there are several categories of waiver requests that already require consultation and will mitigate the number of affected railroads. For example, about 215 Class III railroads participate in a waiver granting relief from provisions of 49 U.S.C. 21103(a)(4), regarding the required number of hours off-duty before initiating an on-duty period for train employees. When the association representing Class III railroads, the American Short Line and Regional Railroad Association (ASLRRA), petitioned to add more of its members to this waiver, ASLRRA noted the railroads had sought input from employees.^[25] In addition, other rulemakings may codify waivers so that a small railroad would not need to submit a waiver request for the regulatory part covered by that rulemaking, making consultation unnecessary. For example, the Reflectorization of Rail Freight Rolling Stock (Reflectorization) NPRM would provide relief to railroads operating equipment used in Tourist, Historic, Excursion, Educational, Recreational, or Private (THEERP) operations. These are primarily small tourist railroads. As of 2022, FRA had received waiver requests from 12 railroads operating THEERP equipment; these railroads would not need to file waiver renewals under the Reflectorization rule. FRA also estimated the Reflectorization rulemaking could positively affect 123 tourist railroads.^[26]

FRA is also not aware of any commuter railroads that serve cities of less than 50,000 people and would thus qualify as small entities. As noted in the regulatory analysis for the proposed rule, waiver requests to establish a quiet zone under 49 CFR part 222 already would involve extensive discussions between the local public authority and railroad. Therefore, FRA expects few affected communities under the proposed rule. However, there may be situations where small communities adjacent to railroad property for which a railroad requests a waiver, may need to be consulted; FRA expects these situations to be minimal.

Another class of affected small entities may be small railroad suppliers that request a waiver. FRA estimated the North American Industry Classification System (NAICS) code 336510 Railroad Rolling Stock Manufacturing would best represent these suppliers because that classification includes firms engaged in manufacturing rail cars and equipment for both freight and passenger service.^[27] The SBA size standard for NAICS code 336510 is 1,500 employees.^[28] Combined with U.S. Census data, in this industry there are 119 out of 137 firms that would qualify as small entities.^[29] Based on FRA's experience, FRA expects most suppliers that request waivers would be either large manufacturers or associated with large manufacturers that would exceed the employment threshold to qualify as a small entity. For example, suppliers such as Wabtec Corp. and New York Air Brake are a part of the larger firms GE Transportation and Knorr-Bremse, respectively. However, suppliers may include small entities ( print page 85906) such as small electronics equipment manufacturers.

Overall, a substantial number of small railroads may be affected by this NPRM, although that number is reduced by existing consultation requirements and codification of waivers under rulemakings. FRA invites comment on the number of small entities affected.

4. A Description of the Projected Reporting, Recordkeeping, and Other Compliance Requirements of the Rule, Including an Estimate of the Class of Small Entities That Will Be Subject to the Requirements and the Type of Professional Skill Necessary for Preparation of the Report or Record

For this NPRM, the compliance costs for affected small entities mirror the costs for all affected entities. The cost categories remain the same as in the regulatory analysis and the cost is represented by: Cost per waiver = cost of analysis and metrics + cost of consultation and documentation + cost to show waiver renewal effectiveness and compliance. Using the same assumptions and inputs for time, number of employees, and wage rates as used in the regulatory analysis, the cost per waiver request is calculated by: Cost per waiver = $89.13 + $483.24 + 483.24 + $89.13 = $1,145 per waiver request. Given that almost all Class III railroads that submit a waiver request submit 1 waiver request per year, the cost per waiver equals the cost per small railroad per year. FRA expects the cost per small railroad supplier will be similar. The cost is the same $1,145 per waiver request in annualized terms at 7 percent, 3 percent, and 2 percent if the same cost is used over a 10-year period of analysis.

ASLRRA reports that the average Class III railroad has an annual average revenue of $4.75 million.^[30] Thus, the estimated cost of the proposed rule per small entity is less than 0.05 percent of revenues. FRA determined that the cost would not represent a significant economic impact. FRA realizes the average revenues likely represent a wide variety of Class III railroads in terms of employment and annual revenues. Given these are private firms, it is difficult to further classify or “break down” these railroads by employment and revenue categories to assess the impact of the NPRM in more detail. FRA requests comment on how many Class III railroads may be classified by finer ranges of employees or revenues or both.

5. Identification, to the Extent Practicable, of All Relevant Federal Rules That May Duplicate, Overlap, or Conflict With the Proposed Rule

Although waiver request notifications are currently published in the Federal Register and open for comment, addressing these information needs early in the waiver development process would potentially result in a more streamlined and efficient waiver request “workflow,” i.e., waiver disposition procedure. It would also assist FRA in adhering to the waiver review timeframe as stated in part 211.

FRA has issued guidance to characterize consultation in reference to the regulations for the Risk Reduction Program (RRP), System Safety Program (SSP), and Fatigue Risk Management Program (FRMP).^[31] That guidance refers to the terms “in good faith” and “best efforts” that are specifically noted in the statute requiring those regulations. 49 U.S.C. 20156. The terms referenced for this NPRM, “in the public interest” and “consistent with railroad safety” are different. Also, while the overall intent is for substantive “good” consultations, the information to be discussed in the consultation for this NPRM is different than the information for consultation for RRP, SSP, and FRMP. Therefore, the consultations that would be required in this NPRM would not be duplicative of the consultations described in the guidance.

6. A Description of Significant Alternatives to the Proposed Rule

In the regulatory evaluation, FRA considered an alternative modeled after its Railroad Safety Advisory Committee. In this scenario, FRA would serve as host and facilitator for potential petitioners and affected stakeholders to discuss a waiver request. FRA could clarify the terms “in the public interest” and “consistent with railroad safety” and engage parties to the waiver request for meaningful consultation. However, because FRA would be involved, rather than the petitioner and affected stakeholder communicating directly with each other, the alternative would have higher costs. In addition, for more complex waivers, the rental costs for meeting space and audio/visual equipment to enable a hybrid meeting would increase costs. Thus, the alternative would have higher total costs than the proposed rule.

C. Paperwork Reduction Act

The changes in this proposed rule, if adopted, would result in a burden increase for petitions for regulatory relief under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). FRA reports burden hours for waivers processed in accordance with part 211 of the CFR in each of the relevant individual information collection submissions. The current number of burden hours reported for waiver submissions over 17 information collections is 674 hours. The additional hours estimated from this NPRM are 164 hours (838−674 = 164). The Office of Management and Budget (OMB) control numbers that would have revised requirements, as proposed in this NPRM, are listed in the table below and reflect the revised estimated burden hours. The revised burden requirements for each OMB number listed in the table will be updated in each of the relevant individual information collections, after issuance of the final rule.

OMB control No.	Title	Total annual waiver requests	Average time per waiver	Total annual burden hours	Wage rate	Total cost equivalent in U.S. dollars
		(A)	(B)	(C = A * B)		(D = C * wage rates)
2130-0010	Track Safety Standards	10	4.25	42.50	89.13	$3,788.03
2130-0526	Control of Alcohol and Drug Use in Railroad Operations	3	4.25	12.75	89.13	1,136.41
2130-0524	Railroad Communications	2	3.25	6.50	89.13	579.35
2130-0560	Use of Locomotive Horns at Highway Rail Grade Crossings	2	6.25	12.50	89.13	1,114.13
2130-0566	Reflectorization of Freight Rolling Stock	10	10.25	102.50	89.13	9,135.83
( print page 85907)
2130-0571	Occupational Noise Exposure for Railroad Operating Employees	0.3	3.25	0.98	89.13	86.90
2130-0005	Hours of Service	2	26.25	52.50	89.13	4,679.33
2130-0505	Inspection and Maintenance of Steam Locomotives	1	3.25	3.25	89.13	289.67
2130-0594	Railroad Safety Appliance Standards	3	18.25	54.75	89.13	4,879.87
2130-0008	Brakes Safety Standards	2	166	332.00	89.13	29,591.16
2130-0586	Bridge Safety Standards	0.3	6.25	1.88	89.13	167.12
2130-0544	Passenger Equipment Safety Standards	12	8.25	99.00	89.13	8,823.87
2130-0545	Passenger Train Emergency Preparedness	1	12.25	12.25	89.13	1,091.84
2130-0533	Certification of Locomotive Engineers	10	3.25	32.50	89.13	2,896.73
2130-0525	Certification of Glazing Materials	1	6.25	6.25	89.13	557.06
2130-0596	Conductor Certification	9	5.25	47.25	89.13	4,211.39
2130-0610	Risk Reduction Program	1	18.25	18.25	89.13	1,626.62
Total		70		838		74,655.29