Revised Proposal for Revisions to the Schedules of Civil Penalties for a Violation of a Federal Railroad Safety Law or Federal Railroad Administration Safety Regulation or Order, 57598-57656 [2010-22141]

Agencies

• Federal Railroad Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 75, Number 182 (Tuesday, September 21, 2010)]
[Proposed Rules]
[Pages 57598-57656]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-22141]



[[Page 57597]]

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Part III





Department of Transportation





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Federal Railroad Administration



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49 CFR Parts 209, 213, 214, et al.



Revised Proposal for Revisions to the Schedules of Civil Penalties for 
a Violation of a Federal Railroad Safety Law or Federal Railroad 
Administration Safety Regulation or Order; Proposed Rule

Federal Register / Vol. 75 , No. 182 / Tuesday, September 21, 2010 / 
Proposed Rules

[[Page 57598]]


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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

49 CFR Parts 209, 213, 214, 215, 217, 218, 219, 220, 221, 222, 223, 
224, 225, 227, 228, 229, 230, 231, 232, 233, 234, 235, 236, 238, 
239, 240, and 241

[Docket No. FRA-2006-25274, Notice No. 2]
RIN 2130-ZA00


Revised Proposal for Revisions to the Schedules of Civil 
Penalties for a Violation of a Federal Railroad Safety Law or Federal 
Railroad Administration Safety Regulation or Order

AGENCY: Federal Railroad Administration (FRA), Department of 
Transportation (DOT).

ACTION: Revised proposal for revisions to schedules of civil penalties, 
with request for comments.

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SUMMARY: FRA is issuing for comment a revised proposal (New Proposal) 
that, if adopted, would amend, line-by-line, FRA's schedules of civil 
penalties (``Schedules'') issued as appendices to FRA's rail safety 
regulations, as well as other guidance, in order to reflect more 
accurately the degree of safety risk associated with a violation of 
each regulatory requirement and to ensure that the civil monetary 
penalty amounts are consistent across all FRA safety regulations. The 
New Proposal represents a revision of FRA's December 2006 proposal to 
amend the Schedules for the same purposes (December 2006 Proposal or 
Initial Proposal).

DATES: Written comments must be received by October 21, 2010. Comments 
received after that date will be considered to the extent possible 
without incurring additional delay or expense.

ADDRESSES: Comments: Comments related to this Docket No. FRA 2006-
25274, Notice No. 2, may be submitted by any of the following methods:
     Fax: 202-493-2251.
     Mail: U.S. Department of Transportation, Docket 
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New 
Jersey Avenue, SE., Washington, DC 20590.
     Hand Delivery: U.S. Department of Transportation, Docket 
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New 
Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m. 
Monday through Friday, except Federal holidays.
     Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the online instructions for submitting 
comments.
    Instructions: All submissions must include the agency name and 
docket number or Regulatory Identification Number (RIN) for this 
rulemaking. Note that all comments received will be posted without 
change to https://www.regulations.gov including any personal information 
provided.
    Docket: For access to the docket to read background documents or 
comments received go to https://www.regulations.gov at any time or to 
U.S. Department of Transportation, Docket Operations, M-30, West 
Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., 
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, 
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Edward Pritchard, Director, Office of 
Safety Assurance and Compliance, Office of Railroad Safety, FRA, 1200 
New Jersey Avenue, SE., Washington, DC 20590 (telephone 202-493-6247), 
edward.pritchard @dot.gov; or Brian Roberts, Trial Attorney, Office of 
the Chief Counsel, FRA, 1200 New Jersey Avenue, SE., Mail Stop 10, 
Washington, DC 20590 (telephone 202-493-6052), brian.roberts@dot.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents for Supplementary Information

I. General Background
II. Proceedings to Date, Provision of Opportunity for Comment, 
Comparison of Initial and New Proposals
    A. Initial Proposal
    B. Subsequent Changes in the Minimum and Ordinary Maximum Civil 
Penalties
    C. Provision of Opportunity for Comment, With Comparison of the 
Initial and New Proposals
III. FRA's New Proposed Approach to Reevaluating the Schedules of 
Civil Penalties
IV. Rankings of the Rail Safety Regulatory Provisions and the Hours 
of Service Laws in the New Proposal
    A. Motive Power and Equipment Regulations (MP&E) (49 CFR Parts 
215, 218 (Partially), 223, 224, 227, 229, 230, 231, 232, 238, and 
239 (Partially))
    B. Track and Workplace Safety Regulations (49 CFR Parts 213 and 
214)
    C. Grade Crossing Signal Systems and Signal and Train Control 
Regulations (49 CFR Parts 233, 234, 235, and 236)
    D. Operating Practices Regulations (49 CFR Parts 217, 218 
(Partially), 219, 220, 221, 222, 225, 228, 239 (Partially), 240, and 
241) and the Hours of Service Laws (49 U.S.C. Chapter 211)
V. Response to Public Comment on the Schedules Proposed in December 
2006
    A. Concerns Related to Respondents That Are Small Businesses
    B. Concerns About Initially Proposed Penalty Amounts for 
Violations of 49 CFR Parts 222, 225, and 229
    C. Concerns Related to Respondents Who Are Cited as Individuals
    D. Concerns About Effects on FRA's Confidential Close Call 
Reporting Project
    E. Concerns About Proposed Monetary Increases in the Civil 
Penalty Amounts

I. General Background

    FRA last published comprehensive, line-by-line final revisions to 
the Schedules of its safety regulations on December 29, 1988. 53 FR 
52918. The revisions reflected the higher maximum penalty amounts made 
available by the enactment of the Rail Safety Improvement Act of 1988 
(Pub. L. 100-342). With the exception of the penalties relating to the 
hours of service laws (49 U.S.C. chapter 211), the Rail Safety 
Improvement Act of 1988 raised the maximum penalty for any ordinary 
violation from $2,500 to $10,000 (``the ordinary maximum'') and to 
$20,000 for a grossly negligent violation or a pattern of repeated 
violations that has created an imminent hazard of death or injury or 
caused death or injury (``the aggravated maximum''). Therefore, FRA 
published amendments to the Schedules in order to ``give effect to the 
full range of civil penalties * * * permitted to be assessed for 
violation of specific regulations.'' 53 FR 52918. These amendments 
revised not only the maximum civil penalty amount for any violation, 
but also the individual line-item penalties for specific sections or 
subsections of the regulations.
    The Rail Safety Enforcement and Review Act (``RSERA'') (Pub. L. 
102-365), which was enacted September 3, 1992, increased the maximum 
penalty for a violation of the hours of service laws, from $1,000 to 
$10,000 and in some cases to $20,000, making these penalty amounts 
uniform with those of FRA's other regulatory provisions. RSERA also 
increased the minimum penalty from $250 to $500 for all of FRA's 
regulatory provisions.
    Since the publication of the Schedules in 1988, FRA has 
periodically adjusted its minimum and its ordinary or aggravated 
maximum penalty to conform to the mandates of the Federal Civil 
Penalties Inflation Adjustment Act of 1990. 28 U.S.C. 2461 note, as 
amended (``Inflation Act''). The Inflation Act requires that an agency 
adjust by regulation each maximum penalty, or range of minimum and 
maximum penalties, within that agency's jurisdiction periodically to 
reflect inflation. In the Inflation Act, Congress found a way to 
counter the effect that inflation has had on the penalties by having 
the agencies

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charged with enforcement responsibility administratively adjust the 
penalties. Currently FRA's minimum penalty is $650, the ordinary 
maximum is $25,000 and the aggravated maximum is $100,000 (for when a 
``grossly negligent violation or pattern of repeated violations has 
caused an imminent hazard or death or injury to individuals, or has 
caused death or injury'').
    The Inflation Act requires only that the minimum, the ordinary 
maximum, and the aggravated maximum civil penalty for a violation be 
adjusted, not that the guideline penalty amounts for a specific type of 
violation (e.g., a section of a particular regulation) be adjusted. As 
a result, FRA has not adjusted the line-item guideline penalties found 
in the Schedules in conjunction with its adjustments of the minimum, 
maximum and aggravated maximum civil penalties. FRA's practice has been 
to issue Schedules assigning to each section or subsection of the 
regulations specific dollar amounts for initial penalty assessments. 
These Schedules (and all line-item penalty amounts found within them) 
are statements of agency policy that specify the penalty that FRA will 
ordinarily assess for the violation of a particular section or 
subsection of a safety regulation, and are published to inform members 
of the regulated community of the amount that they are likely to be 
assessed for a given violation within the range of $650 to $25,000. The 
Schedules are ``meant to provide guidance as to FRA's policy in 
predictable situations, not to bind FRA from using the full range of 
penalty authority where extraordinary circumstances warrant.'' 49 CFR 
part 209, appendix A. Thus, regardless of the amounts shown in the 
Schedules, FRA continues to reserve the right to assess, within the 
range established by the rail safety statutes (49 U.S.C. chapter 213) 
or by regulation pursuant to the Inflation Act, an amount other than 
that listed in the Schedules based on the circumstances of the alleged 
violation. 73 FR 79698, Dec. 30, 2008.

II. Proceedings to Date, Provision of Opportunity for Comment, and 
Comparison of Initial and New Proposals

A. Initial Proposal

    FRA published 25 proposed Schedules with a request for comments on 
December 5, 2006, which first presented the agency's intention of once 
again comprehensively revising the civil penalty amounts. 71 FR 70590. 
In this Initial Proposal, FRA explained its approach to reevaluating 
the Schedules and explained the severity scale that was developed for 
setting line-item penalty amounts in the Schedules. The severity 
scale's penalty amounts were assessed within the statutory range for 
civil penalties at that time, which was from the minimum of $550 to the 
ordinary maximum of $11,000, as follows:

------------------------------------------------------------------------
  Severity level (explained in the        Ordinary           Willful
     Initial Proposal and below)         violations        violations
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Level A.............................            $8,500           $11,000
Level B.............................             6,500             9,000
Level C.............................             5,000             7,500
Level D.............................             3,000             4,500
Level E.............................             1,500             2,500
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B. Subsequent Changes in the Minimum and Ordinary Maximum Civil 
Penalties

    Subsequently, in 2007, pursuant to the requirements of the 
Inflation Act, FRA recalculated the ordinary maximum penalty and raised 
it from $11,000 to $16,000. 71 FR 51194, Sept. 6, 2007. Then, on 
October 16, 2008, the Rail Safety Improvement Act of 2008 (Pub. L. 110-
432, Div. A) (``RSIA'') was enacted; Section 302 of the RSIA increased 
the ordinary and aggravated maximum penalty amounts to $25,000 and 
$100,000, respectively. In a final rule published on December 30, 2008, 
FRA adjusted its minimum penalty from $550 to $650 pursuant to 
Inflation Act requirements. 73 FR 79698. In that rule FRA also 
evaluated whether it needed to increase the ordinary and aggravated 
maximum penalties pursuant to the Inflation Act; however, the enactment 
of the RSIA statutorily changed the ordinary and aggravated maximum 
penalties to $25,000 and $100,000, respectively, and therefore rendered 
any inflationary adjustments to either figure unnecessary. Instead, FRA 
adopted $25,000 as the ordinary maximum and $100,000 as the aggravated 
maximum required by the RSIA. (See also correcting amendment to the 
Schedule for 49 CFR part 232. 74 FR 15387, April 6, 2009.)

C. Provision of Opportunity for Comment, With Comparison of the Initial 
and New Proposals

    Given the large statutorily mandated increase in the ordinary 
maximum civil penalty from $11,000 to $25,000 after publication of the 
Initial Proposal, FRA is offering the public an opportunity to review 
and comment on the new higher civil penalty amounts assessed for 
violations on each severity scale level in the New Proposal.\1\ In the 
New Proposal, FRA is issuing another set of proposed Schedules and 
seeking comments from the general public. Comments on the new proposed 
Schedules will be useful to the agency's decision making process.
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    \1\ For example, the severity scale in this New Proposal has 
five levels like the severity scale proposed in the Initial 
Proposal. However, the severity scale in the New Proposal differs 
from the severity scale in the Initial Proposal in several ways. 
First, FRA has adding the word ``materially'' to the description of 
what constitutes a Level E violation in the New Proposal. Therefore, 
Level E violations in the New Proposal are violations that do not 
materially increase the likelihood that a rail equipment accident/
incident or other accident/incident will occur. This is a 
clarification from the previous definition for Level E violations in 
the Initial Proposal where Level E violations were defined as 
violations that did not increase the likelihood that a rail 
equipment accident/incident or other accident/incident would occur. 
This definition did not make sense because failure to follow any FRA 
safety regulation would have some direct or indirect impact on 
railroad safety and thereby increase, even infinitesimally, the 
likelihood of an accident or incident. As a result, the word 
``materially'' was added to the criteria for a Level E violation in 
the severity scale in this New Proposal. Second, FRA has provided 
more transparency and referenced the regulatory language found in 49 
CFR 225.19(d) to explain what FRA means when it says ``Other 
accident/incident'' in Levels A-D in the severity scale in the New 
Proposal. Third, FRA has clarified in the New Proposal that civil 
monetary penalties associated with violations of FRA Orders or 
railroad safety statutes will be assessed according to severity 
scale criteria. Finally, as stated below, FRA has modified its 
approach for establishing civil penalties in the severity scale in 
this New Proposal. FRA is taking a graduated approach to assessing 
civil penalties for ordinary (non-willful) violations while 
increasing the civil penalty amounts in steady increments for 
willful violations.
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    FRA has also slightly modified the severity scale in the New 
Proposal from the severity scale in the Initial Proposal. In the New 
Proposal, FRA has used a targeted enforcement approach for establishing 
the civil penalties for ordinary (non-willful) violations of railroad 
safety regulations. As part of the targeted enforcement approach,

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ordinary violations occurring at the middle and lower levels of the 
severity scale are assessed smaller civil penalties in relation to the 
ordinary maximum while the highest penalty amounts are assessed for 
ordinary Level A violations where serious injuries, deaths, or other 
railroad accidents or incidents are most likely to occur. FRA did not 
take a targeted enforcement approach for establishing the civil penalty 
amounts for willful violations in the New Proposal. Instead, the civil 
penalty amounts for willful violations increase up the severity scale 
in steady dollar amounts, not in graduated percentage increases like 
the civil penalties for ordinary violations.
    Higher penalty amounts for violations of Federal railroad safety 
laws and regulations are necessary because many of FRA's civil 
penalties have not been changed in real terms for many years. As a 
result, inflation has somewhat eroded the deterrent effects of most of 
FRA's civil penalties because the amounts have not been increased to 
account for the effects of inflation. While many of the penalty amounts 
in the New Proposal would represent large increases in penalty amounts 
even after adjusting for inflation, some penalty amounts for violations 
would remain unchanged (e.g., 49 CFR 219.205(b), 222.49(b), 229.71, and 
239.301(c)(1)) if adopted by FRA because of the uniform rating of FRA's 
existing penalties on the severity scale. The new penalty amounts in 
this New Proposal will maintain the deterrent effects of FRA's rail 
safety penalties, aiding the success of FRA's mission to make the 
United States rail system safer.
    FRA has also reexamined how it had ranked individual rail safety 
violations on the severity scale in the Initial Proposal. Upon second 
review of the severity scale rankings, FRA is proposing to move certain 
regulatory provisions to higher or lower levels on the severity scale 
in order to refine the agency's application of the severity scale to 
the various violations. For example, FRA is proposing to raise the 
severity scale ranking of 49 CFR 219.3 (``Application: Railroad does 
not have required program''), in this New Proposal from a ``C'' level 
penalty to a ``B'' level penalty. This change is necessary because the 
failure of a railroad covered by 49 CFR part 219 to have an alcohol and 
drug testing program is more likely than not to cause a rail equipment 
accident/incident or other accident/incident involving death, injury, 
or occupational illness rather than just substantially increase the 
likelihood that one of these events could occur. Conversely, in this 
New Proposal, FRA would lower the severity scale ranking of 49 CFR 
225.35 (``Access to records and reports''), from an ``A'' level penalty 
to a ``D'' level penalty. This proposed change in severity scale level 
reflects FRA's judgment that denying its inspectors access to records 
and reports required by 49 CFR part 225 is not extremely likely to lead 
to a railroad accident/incident or other accident/injury including 
death, injury, or occupational illness, but could slightly increase the 
likelihood of one of the above mentioned occurrences if FRA is not 
provided access to accident reporting records and reports. FRA expects 
that these proposed changes to the severity scale rankings of some of 
its violations in the Initial Proposal better refine the agency's 
application of the Severity Scale to the various violations.
    In addition, FRA is proposing minor changes to its Schedules in 
this New Proposal to correct errors and omissions and to reflect more 
accurately FRA's current enforcement practices. Such errors include 
obvious spelling or typographical errors that were caught during the 
review process. Omissions corrected include line-item penalties for any 
existing section or subsection that had been inadvertently omitted from 
an existing Schedule, such as 49 CFR 213.110. Other proposed minor 
revisions to the Schedules include, but are not limited to, adding or 
deleting a suggested penalty for a violation (e.g., 49 CFR 213.109(c), 
214.343(a)(2), 220.38, and 240.201(b)), rewording a line-item 
description for a violation (e.g., 49 CFR 219.23(f) and 233.9), 
renumbering violation subsections (e.g., 49 CFR 214.343(b)(1), 236.587, 
236.905(d), and 236.913(j)), and adding or revising footnotes to the 
Schedules (e.g., 49 CFR parts 214, 232, and 239). For example, FRA is 
proposing to add a footnote 3 to the Schedule for 49 CFR part 214 to 
clarify that FRA will consult the suggested penalty amounts under 49 
CFR 214.343 (``Training and qualification, general:'') when assessing 
penalties for the training violations in 49 CFR 214.345 through 
214.355, as the suggested penalty amounts for these sections had been 
left blank in previous versions of part 214's penalty schedule. FRA is 
hopeful these proposed minor changes updating its Schedules would 
provide a more accurate picture to the regulated community of FRA's 
actual enforcement practices.
    New suggested penalty amounts have also been proposed for 
violations of subparts that had not been mentioned in the existing 
penalty schedules: 49 CFR part 218, subpart E (``Protection of Occupied 
Camp Cars''); 49 CFR part 228, subpart D (``Electronic 
Recordkeeping''); 49 CFR part 232, subpart G (``Electronically 
Controlled Pneumatic (ECP) Braking Systems''); and 49 CFR part 236, 
subpart I (``Positive Train Control Systems'') are also included. FRA 
is also suggesting new penalty amounts for 49 CFR part 227 
(``Occupational Noise Exposure'') which was not ranked in the severity 
scale in the Initial Proposal because the final rule creating part 227 
was published on October 27, 2006, but not effective until February 26, 
2007. 71 FR 63066. In addition, FRA will also be accepting comments on 
the new penalties in 49 CFR part 237 that were published in a bridge 
safety standards final rule on July 15, 2010 and will become effective 
on September 13, 2010. 75 FR 41282.
    Further, FRA is proposing to add language to 49 CFR part 228, 
appendix A, to state its proposed guideline penalty amounts for both 
non-willful and willful violations of the hours of service laws (49 
U.S.C. chapter 211). In addition, this New Proposal would also add or 
change language in the portion of 49 CFR part 209, appendix A, entitled 
``Penalty Schedules: Assessment of Maximum Penalties,'' to reflect the 
new minimum, ordinary maximum, and aggravated maximum civil penalties 
of $650, $25,000, and $100,000 respectively. Finally, FRA is also 
proposing to add the language ``or orders'' in two places within this 
portion of part 209, appendix A to update the language to reflect FRA's 
already existing policy of establishing civil penalty schedules and 
recommended civil penalty amounts applicable to violations of various 
orders issued by FRA (such as emergency orders under 49 U.S.C. 20104) 
when necessary to advance the agency's safety mission.

III. FRA's New Proposed Approach to Reevaluating the Schedules of Civil 
Penalties

    The Federal Railroad Administrator is authorized as the delegate of 
the Secretary of Transportation to enforce the Federal railroad safety 
statutes (49 U.S.C. chapters 201-213) regulations, and orders, 
including the statutory civil penalty provisions at 49 U.S.C. chapter 
213. 49 CFR 1.49. FRA currently has 26 parts of regulations that 
contain Schedules.\2\ With this New Proposal,

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FRA is proposing to amend each of the line-item guideline penalty 
amounts contained within the Schedules for each of the regulations and 
to add guideline penalty amounts for violations of the hours of service 
laws to 49 CFR part 228, appendix A (collectively, Penalty Guidelines). 
In reevaluating the penalty amounts in the Schedules, FRA has developed 
a new proposed severity scale (``New Proposed Severity Scale'') for 
setting the line-item penalty amounts for each violation of the safety 
regulations and for violations of the hours of service laws. The 
severity scale FRA is proposing to adopt in this New Proposal is 
described in the following section.
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    \2\ However, as previously stated, FRA recently published a 
final rule on bridge safety standards on July 15, 2010. 75 FR 41282. 
As part of that final rule, FRA created new regulations and 
penalties under 49 CFR part 237, which was previously an unused part 
of the CFR. Therefore after the September 13, 2010 effective date 
for the final rule, FRA will have 27 parts of regulations that 
contain Schedules. In this New Proposal, FRA is also accepting 
comments on the new penalties contained in the final rule.
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New Proposed Severity Scale for Setting Line-Item Penalty Amounts in 
FRA Penalty Guidelines

    FRA's rail safety regulations and the rail safety statutes are 
intended either to prevent a railroad accident/incident or to mitigate 
the consequences if one were to occur. For the most severe ratings on 
the scale, FRA concentrated on the degrees of likelihood that an 
accident/incident \3\ will occur or that graver consequences of an 
accident/incident will occur as a result of failing to comply with the 
section. The following New Proposed Severity Scale is intended to 
reflect this focus:
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    \3\ ``Accident/incident'' is defined at 49 CFR 225.5. Accidents/
incidents are divided into three categories: highway-rail grade 
crossing accidents/incidents, rail equipment accidents/incidents; 
and accidents/incidents resulting in death, injury, or occupational 
illness. 49 CFR 225.19(c). A highway-rail grade crossing accident/
incident is ``[a]ny impact between railroad on-track equipment and 
an automobile, bus, truck, motorcycle, bicycle, farm vehicle, or 
pedestrian at a highway-rail grade crossing.'' 49 CFR 225.5, read in 
light of 49 CFR 225.19(c). Rail equipment accidents/incidents are 
defined in 49 CFR 225.19(c) to include ``collisions, derailments, 
fires, explosions, acts of God, and other events involving the 
operation of on-track equipment (standing or moving) * * * that 
result in damage to railroad property that is greater than the 
reporting threshold.'' Currently the reporting threshold is $9,200. 
74 FR 65458 (Dec. 10, 2009).

    Level A-Very High Probability--Failure of a railroad to comply 
with this section or subsection of the Code of Federal Regulations 
(``CFR''), this FRA order, or this rail safety statute is extremely 
likely to result in one or more of the following events, but does 
not create an imminent hazard of death or injury to individuals or 
cause an actual death or injury \4\:
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    \4\ FRA has statutory authority to assess civil penalties in the 
range of $650 (minimum) to $25,000 (ordinary maximum) for ordinary 
violations of its regulations. FRA may assess a penalty at the 
statutory aggravated maximum of $100,000 only ``when a grossly 
negligent violation or a pattern of repeated violations has caused 
an imminent hazard of death or injury to individuals, or has caused 
death or injury.'' A $100,000, statutory aggravated maximum penalty 
is the equivalent of a Level A Plus and is, therefore, off the 
scale. The standard of ``imminent hazard'' of death or injury (the 
standard for a civil penalty at the aggravated maximum penalty) is 
different from the standard of ``extremely likely'' to result in 
death or injury (the standard for Level A penalties on the severity 
scale). Imminent hazards are hazards that are likely to occur 
without delay or that actually may be occurring at the time the 
violation is taken. In contrast, a hazard that is extremely likely 
to result in a railroad accident/incident or another accident/
incident causing death, injury, or occupational disease has a high 
probability of causing one or more of those adverse events sooner or 
later, but is not necessarily likely to occur without delay or 
contemporaneously when the violation is taken.

1. Rail equipment accident/incident
2. Other accident/incident (including death, injury, or occupational 
illness)\5\
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    \5\ See 49 CFR 225.19(d).
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FRA is proposing to issue a penalty guideline for Level ``A'' of 
$19,500 for an ordinary violation and $25,000 for a willful 
violation of the regulation, order, or statute.

    Level B--High Probability--Failure of railroad to comply with 
this section or subsection of the CFR, this FRA order, or this rail 
safety statute is more likely than not to result in the occurrence 
of:
    1. Rail equipment accident/incident; or
    2. Other accident/incident (including death, injury, or 
occupational illness).
    FRA is proposing to issue a penalty guideline for Level ``B'' of 
$13,000 for an ordinary violation and $20,500 for a willful 
violation of the regulation, order, or statute.

    For the following levels, FRA is not only addressing the likelihood 
that noncompliance will or could contribute to an accident or 
aggravated consequences if an accident occurred, but also the 
importance of maintaining compliance in order to prevent violations of 
these regulatory or statutory sections or subsections from becoming 
leading accident causes in the future.

    Level C--Moderate Probability--Failure of railroad to comply 
with this section or subsection of the CFR, this FRA order, or this 
rail safety statute substantially increases the likelihood that one 
of the following will occur:
    1. Rail equipment accident/incident; or
    2. Other accident/incident (including death, injury, or 
occupational illness).
    FRA is proposing to issue a penalty guideline for Level ``C'' of 
$9,500 for an ordinary violation and $17,000 for a willful violation 
of the regulation, order, or statute.
    Level D--Minor Probability--Failure of the railroad to comply 
with this section or subsection of the CFR, this FRA order, or this 
rail safety statute slightly increases the likelihood that one of 
the following will occur:
    1. Rail equipment accident/incident; or
    2. Other accident/incident (including death, injury, or 
occupational illness).
    FRA is proposing to issue a penalty guideline for Level ``D'' of 
$5,500 for an ordinary violation and $10,000 for a willful violation 
of the regulation, order, or statute.
    Level E--Minimal Probability--Failure to comply with this 
section or subsection of the CFR, this FRA order, or this rail 
safety statute does not materially increase the likelihood that a 
rail equipment accident/incident or other accident/incident will 
occur, except in special circumstances, such as if the noncompliance 
is willful or widespread. Nevertheless, noncompliance with any one 
of these provisions undercuts the effectiveness of the Federal 
railroad safety program, and could compromise the safety of rail 
operations.
    Example: Violation of Sec.  225.13--Late Reports--Submitting a 
late accident/incident report to FRA does not increase the 
likelihood that a rail equipment accident/incident or other 
accident/incident will occur. Widespread noncompliance with that 
provision, however, could lead to inaccuracies in Federal accident 
databases, which in turn could delay FRA's response to emerging 
safety problems.
    FRA is proposing to issue a penalty guideline for Level ``E'' of 
$2,500 for an ordinary violation and $5,000 for a willful violation 
of the regulation, order, or statute.

    Like the Initially Proposed Severity Scale, the New Proposed 
Severity Scale shows, there are five different levels of probabilities, 
ranging from ``A'' (the most severe) to ``E'' (the least severe of the 
types of violations). In developing the rankings (``A'' through ``E''), 
FRA concentrated on the degrees of likelihood that an accident/incident 
will occur or that graver consequences will occur as a result of the 
failure to comply with the particular section or subsection of the 
safety regulations or with the statute. Using the New Proposed Severity 
Scale, FRA then assigned a ranking (from ``A'' to ``E'') to each of the 
provisions of the particular rail safety regulations and to the hours 
of service statute, which the agency has responsibility for 
administering and enforcing. The resulting proposed line-item penalty 
amounts for violations of each of the sections or subsections of the 
safety regulations affected and for violations of the hours of service 
laws reflect FRA's determination, based on safety data and industry 
knowledge, of how likely the violation of a particular provision is to 
result in a rail equipment accident/incident or another type of 
accident/incident. Due to the increase in the ordinary maximum from 
$11,000 to $25,000 since the Initial Proposal, the new proposed civil 
penalty amounts have increased in most instances, but in some cases the 
new proposed civil penalty amount would remain the same (e.g., 49 CFR 
219.205(b), 222.49(b), 229.71, and 239.301(c)(1)) if adopted by FRA. 
Nonetheless, a determination by FRA that violation of a provision does 
not increase the likelihood that a rail equipment accident/incident or 
other accident will occur, however, does not mean that the provision is 
inconsequential to the effectiveness of

[[Page 57602]]

the Federal railroad safety program or to the overall safety of 
railroad operations.
    Currently, each Schedule is in the form of a table consisting of 
three columns with one or more footnotes. Like the initially proposed 
Schedules, the new proposed Schedules would continue to be structured 
in this fashion and to provide guideline penalty amounts for two 
categories of violations: Ordinary (non-willful) and willful. Each new 
proposed Schedule lists the CFR section or subsection in the left-hand 
column, sometimes with additional designations to distinguish different 
types of violations (penalty codes) of the section or subsection in 
order to facilitate the assessment of civil penalties. The only 
exception continues to be 49 CFR part 231; the left-hand column of the 
new proposed Schedule lists the FRA defect codes \6\ for that part, and 
not the corresponding CFR sections. The reason for this continues to be 
the fact that the defect codes are organized by the type of safety 
appliance, which makes them easier to use, than the section numbers of 
part 231, which are organized primarily by car or locomotive type. 
Nevertheless, if necessary, every defect code can be traced to a 
specific regulatory provision in part 231 or statutory provision in 49 
U.S.C. chapter 203, or both. The corresponding penalties for each 
violation are listed in the middle and right-hand columns: The 
guideline penalty amount for an ordinary violation and then the 
guideline penalty amount for a willful violation. The ordinary 
penalties apply to railroads or other respondents, except individuals, 
while the ``willful'' column applies to willful violations committed by 
railroads or individuals.
---------------------------------------------------------------------------

    \6\ Defect codes were developed by FRA in order to facilitate 
computerization of inspection data generated by FRA inspectors by 
providing a digital format for every CFR section. Defect codes are 
analytical tools only and are subject to change without notice.
---------------------------------------------------------------------------

    The following chart summarizes the new proposed guideline amounts 
for ordinary and willful violations by severity level:

------------------------------------------------------------------------
                                                  Ordinary     Willful
      Severity level under new  Proposal         violations   violations
------------------------------------------------------------------------
Level A.......................................      $19,500      $25,000
Level B.......................................       13,000       20,500
Level C.......................................        9,500       17,000
Level D.......................................        5,500       10,000
Level E.......................................        2,500        5,000
------------------------------------------------------------------------

IV. Rankings of the Rail Safety Regulatory Provisions and the Hours of 
Service Laws in the New Proposal

    Although the railroad industry's overall safety record has improved 
over the last decade, significant train accidents/incidents continue to 
occur. As a result, the FRA's safety program is being guided by careful 
analysis of accident/incident, inspection, and other safety data. FRA 
has also directed both its regulatory and compliance efforts toward the 
areas that involve the highest of safety risks, in order to reduce the 
number and severity of accidents/incidents caused by a failure to 
comply with those safety regulations. Therefore, the goal of the new 
proposed line-item penalty amounts for each of the Schedules and the 
new proposed penalty amount for violations of the hours of service 
statute is to reflect the different degrees of probability that a 
violation of a particular regulatory section or subsection, order, or 
statute will result in a rail equipment accident/incident or other 
accident/incident, in order to improve the overall safety of railroad 
operations.

A. Motive Power and Equipment Regulations (MP&E) (49 CFR Parts 215, 218 
(Partially), 223, 224, 227, 229, 230, 231, 232, 238, and 239 
(Partially))

    In reevaluating the current line-item penalty amounts for each of 
the CFR sections or subsections found in 49 CFR parts 215, 218 
(partially), 223, 224, 227, 229, 230, 231, 232, 238, and 239 
(partially) of the CFR, FRA took into consideration, among other 
factors, the nationwide list of ``Top 10'' MP&E defects. The defects 
are listed in the table below, in descending order, according to the 
number of times that each defect was determined to have caused a rail 
equipment accident/incident, excluding highway-rail grade crossing 
accidents/incidents that are also classified as rail equipment 
accidents/incidents (``train accidents''), between January 2005 and 
December 2009.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Journal (roller bearing)             Damaged flange or tread (build up)--
 overheated--(143)                    (60)
Pantograph defect (locomotive)--     Coupler retainer pin/cross key
 (121)                                missing--(57)
Side bearing clearance               Rigging down or dragging--(49)
 insufficient--(86)
Broken rim--(80)                     Other coupler/draft system defects;
                                      Worn Flange (tie)--(38)
Truck bolster stiff--(67)            Center sill broken or bent--(36)
------------------------------------------------------------------------

    The CFR sections or subsections that relate to these defects have 
received higher proposed rankings in the Schedules compared to other 
MP&E defects and as such now carry higher penalty amounts. For example, 
a violation of 49 CFR 215.103(d)(3), which involves a defective wheel 
rim with a crack of one inch or more, received a proposed ``A'' 
severity ranking (and a proposed guideline penalty amount of $19,500) 
because of the high safety risk that the defect will cause a broken rim 
that, in turn, causes a derailment. In addition, FRA applied the New 
Proposed Severity Scale in order to determine the degrees of likelihood 
that any type of accident/incident will occur as a result of 
noncompliance with the regulations.

B. Track and Workplace Safety Regulations (49 CFR Parts 213 and 214)

    In recent years, most of the serious accidents/incidents (train 
collisions or derailments resulting in a release of hazardous materials 
or harm to rail passengers, rail employees, or the general public) 
resulted from human factor or track causes. Over the last five years, 
31.9 percent of train accidents were caused by track defects. In an 
effort to reduce track accidents, FRA is focusing its track inspections 
on the areas of highest risks and encouraging inspectors to recommend 
enforcement action on the kinds of violations that are considered 
leading causes of track-caused train accidents. Therefore, in 
evaluating the line-item penalty amounts for all the sections or 
subsections, FRA took into consideration the leading causes of track-
related train accidents when applying the New Proposed Severity Scale 
to the Track Safety Standards. For example, violations of 49 CFR 213.53 
``Gage'' received a new proposed ``A'' ranking (and new proposed 
penalty guideline amounts of $19,500 for an ordinary violation and 
$25,000 for a willful violation) because improper gage is one of the 
leading causes of track-related train accidents.
    In ranking the sections or subsections of 49 CFR part 214 
(``Railroad Workplace Safety''), FRA took into consideration not only 
the probability that an accident/incident could result if a violation 
occurred, but also the fact that

[[Page 57603]]

the accident/incident could result in serious injury or death. One 
example of the rankings for part 214 is the ranking for the second type 
of violation of 49 CFR 214.103, coded 214.103(ii), ``Failure to use 
fall protection.'' This violation designated 214.103(ii) received a 
proposed ranking of ``A'' (and a proposed guideline penalty of $19,500 
for an ordinary violation and $25,000 for a willful violation) because 
the violation could result in serious injury or death, as evidenced by 
the several bridge worker fatalities in the past 10 years due to the 
failure to use fall protection.

C. Grade Crossing Signal Systems and Signal and Train Control 
Regulations (49 CFR Parts 233, 234, 235, and 236)

    FRA applied the New Proposed Severity Scale to each of the sections 
in 49 CFR parts 233, 234, 235, and 236, in order to determine the 
appropriate proposed rankings for each of the sections or subsections 
of the regulations. In the area of signal and train control (S&TC), FRA 
followed the New Proposed Severity Scale, which concentrates on the 
potential for an accident/incident resulting from noncompliance. S&TC 
systems are vital to the safe functioning of the general railroad 
system because train crews and highway motorists rely on the accuracy 
of the information provided by these systems to make safe movements on 
the railway system and through highway-rail grade crossings. While 
there are relatively few train accidents and highway-rail grade 
crossing accidents/incidents associated with S&TC causes that have 
occurred in recent years, the consequences of an S&TC-caused accident 
can be catastrophic. Therefore, it is imperative that the Schedules put 
into effect by FRA reflect the levels of risks associated with the 
violation of these CFR sections or subsections, in order to prevent 
future S&TC-caused accidents.

D. Operating Practices Regulations (49 CFR Parts 217, 218 (Partially), 
219, 220, 221, 222, 225, 228, 239 (Partially), 240, and 241) and Hours 
of Service Laws (49 U.S.C. Chapter 211)

    Over the five years from January 2005 to December 2009, human-
factor-related causes accounted for 34.2 percent of all train 
accidents. A review of the FRA's Office of Railroad Safety database 
indicated that in 2009 the top four human factor causes contributing to 
train accidents were improperly lined switches; employees absent on, 
at, or ahead of a shoving movement; failure to control during a shoving 
movement; and failure to comply with restricted speed or its equivalent 
when not in connection with a block or interlocking signal. These top 
causes are often involved in violations of such regulations as 49 CFR 
part 220 (``Railroad Communications''). A review of the top four causes 
for human factor train accidents between January 2005 and December 2009 
showed that these causes accounted for 1,812 reportable train 
accidents/incidents (including 13 employee fatalities, 463 employee 
injuries, and over $96 million in damages). Therefore, when applying 
the New Proposed Severity Scale to the regulatory provision or statute, 
FRA considered all of this safety information in order to ensure that 
each new proposed line-item penalty amount reflected the likelihood 
that noncompliance would result in a train accident/incident, or that 
graver consequences would occur as a result of failing to comply with 
the statute or section or subsection of the regulations.

V. Response to Public Comment on the Schedules Proposed in December 
2006

    As previously stated, the existing Schedules are statements of 
agency policy, which FRA has authority to amend or replace without 
having to provide prior notice and opportunity for comment under the 
Administrative Procedure Act, 5 U.S.C. 553(b)(3)(A). Nevertheless, FRA 
provided members and representatives of the regulated community and the 
general public with an opportunity to comment on the proposed line-item 
penalty amounts published on December 5, 2006. FRA received six 
comments on the Schedules proposed in December 2006. FRA has considered 
the comments received and now responds to the questions and concerns 
raised in them.

A. Concerns Related to Respondents That Are Small Businesses

    The Small Railroad Business Owners of America (``SRBOA'') commented 
that FRA's December 2006 proposed civil penalty policy does not 
adequately take into account the interests of small businesses. The 
commenter suggested that doubling certain civil penalties for smaller 
railroads is unfair, especially because most of the accidents/incidents 
occur on larger railroads. The commenter also asked that FRA provide 
additional training and assistance to smaller railroads in 
comprehension and application of the rail safety regulations.
    In addition, the American Short Line and Regional Railroad 
Association (``ASLRRA'') commented that the proposed statement of 
agency policy ignores the effect that proposed amounts would have on 
small railroads. ASLRRA suggested that FRA move instead, towards a 
sliding scale system of civil penalties based on the class of track 
under 49 CFR part 213 that is involved in the violation. In the 
alternative, ASLRRA suggested that FRA take the time to codify a 
second, lower schedule of penalties for small railroads.
    In response to these concerns, FRA would like to emphasize appendix 
C to 49 CFR part 209, where FRA has published its policy statement 
concerning small business entities. FRA understands that small entities 
in the rail industry have significantly different characteristics from 
larger carriers and shippers. Therefore, FRA has developed programs to 
respond to compliance-related inquiries of small entities, and to 
ensure proper handling of civil penalty and other enforcement actions 
against small businesses. FRA inspectors provide training on the 
requirements of all railroad safety statutes for new and existing small 
businesses upon request. Also, it is FRA's policy to maintain frequent 
and open communications with the national representatives of the 
primary small entity associations and to consult with these 
organizations before embarking on new policies that may impact the 
interests of small businesses. Additionally, FRA has posted all of its 
manuals electronically for compliance with the rail safety disciplines 
at https://www.fra.dot.gov.
    FRA employs an enforcement policy that addresses the unique nature 
of small entities in the imposition of civil penalties and resolution 
of those assessments. Pursuant to appendix A to 49 CFR part 209, it is 
FRA's policy to consider a variety of factors in determining whether to 
take enforcement action against persons, including small entities, who 
have violated the safety laws and regulations. In general, the presence 
of both good faith and prompt remedial action on the part of the small 
entity militates against taking a civil penalty action, especially if 
the violation is an isolated event. Once FRA has assessed a civil 
penalty, FRA may adjust or compromise the initial penalty claim based 
on a wide variety of mitigating factors. The mitigating criteria that 
FRA applies are found in the railroad safety statutes at 49 U.S.C. ch. 
213 and in the Small Business Regulatory Enforcement Fairness Act of 
1996 (Pub. L. 104-121) (``SBREFA''); these factors include the severity 
of the safety or health risk presented; the existence of alternative 
methods of eliminating the safety hazard; the entity's culpability; the 
entity's compliance history; the entity's ability to pay the 
assessment; the impact an assessment might exact on the

[[Page 57604]]

entity's continued business; and evidence that the entity acted in good 
faith. 49 CFR part 209, appendix C.
    FRA's enforcement policy with respect to small entities is flexible 
and comprehensive, but FRA's first priority in its compliance and 
enforcement activities is public and employee safety. FRA notes that an 
accident on a small railroad could have the same consequences as an 
accident on a large railroad. Therefore, small railroads are 
responsible for compliance with the railroad safety statutes and 
regulations.
    Finally, the Small Railroad Business Owners' Association of America 
(``SRBOA'') commented that FRA's civil penalties were higher than those 
used by the Federal Motor Carrier Safety Administration (``FMCSA'') for 
enforcing commercial motor vehicle driver and trucking safety, and 
suggested that FRA should impose civil penalties for smaller railroads 
only if discussing the situation with them does not work first.
    As explained above, FRA's rail safety inspectors take into account 
a variety of factors in determining whether to take enforcement 
actions. They have the option of citing the railroads for defects, 
which in their judgment do not merit civil penalties before citing them 
for violations, which do carry civil penalty recommendations. Also, FRA 
does not believe it is appropriate to compare FRA's rail safety 
penalties to FMCSA's penalties for driver and trucking safety. The 
safety considerations in the trucking and rail industries are very 
different. An accident involving a train is potentially far more 
catastrophic and costly than a similar accident involving a truck. For 
example, one railroad tank car could contain many truckloads of 
hazardous material, and one train could consist of many such railroad 
tank cars.

B. Concerns About Initially Proposed Penalty Amounts for Violations of 
49 CFR Parts 222, 225, and 229

    The Association of American Railroads (``AAR'') stated that, in 
several cases, the penalties proposed in December 2006 are 
disproportionate to the severity of the violation. Specifically, AAR 
took exception to penalties proposed for noncompliance with 49 CFR 
parts 222, 225, and 229.
    With regard to part 222 (the train horn rule), AAR contended that a 
``D'' level penalty for a violation of Sec.  222.21(b) is 
unsubstantiated, as the sounding of a horn for more than 20 seconds 
will not increase the likelihood of an accident or incident.
    FRA provides that the train horn rule focuses on public and 
community interests. To remain true to the intention of the rule, FRA 
must take the interests of the community into account when determining 
the penalty amount that a violation merits. FRA believes that it is 
important that sufficient warning be provided to the motorist who needs 
time to recognize the audible signal, understand its message, initiate 
a reaction, and take appropriate action when at a grade crossing. See 
71 FR 47618, Aug. 17, 2006. If the train horn is sounded more than 25 
seconds before the train enters the train crossing, motorists might 
well begin to doubt the credibility of the train horn as an indicator 
of the train's immediacy to the grade crossing. As a result, motorists 
will be more likely to take the risk of traveling through the crossing 
even when the train horn is sounded.
    The rule text for Sec.  222.21(b) also provides a ``good faith'' 
exception for the required length of time that the horn is sounded. The 
section permits additional flexibility by stating that the engineer 
shall not be in violation of Sec.  222.21(b) if the engineer sounds the 
horn not more than 25 seconds before the crossing, if in good faith the 
engineer cannot precisely estimate the arrival time of the train at the 
crossing. FRA has determined that the interests of avoiding an accident 
or incident as well as the interests of the community have been taken 
into account in assessing violations of Sec.  222.21(b) as a proposed 
``D'' level penalty with the exception of ``failure to sound the horn 
at least 15 seconds and less than \1/4\-mile before a crossing,'' which 
is assessed as a proposed ``C'' level penalty.
    Additionally, AAR stated that routine sounding of the horn at a 
grade crossing within a quiet zone, pursuant to Sec.  222.45, will not 
increase the likelihood of an accident or incident.
    With regard to AAR's comment on Sec.  222.45, although sounding the 
train horn in a quiet zone may not substantially increase the 
likelihood of an accident the first time or the first few times, trains 
that routinely sound their horns at quiet-zone grade crossings might 
cause motorists to doubt the credibility of signs marking a grade 
crossing as a quiet-zone grade crossing and whether a particular grade 
crossing is actually a quiet-zone grade crossing. Therefore, if routine 
violations of a quiet zone continue, motorists will begin to expect the 
warning of a train horn when a train is preparing to enter quiet-zone 
grade crossings where routine violations of the quiet zone occur. That 
could predictably lead to fatal accidents.
    In addition, violations of Sec.  222.45 increase the annoyance 
level of the communities surrounding the grade crossing. A fundamental 
feature of this rule was to balance driver and pedestrian safety with 
community noise concerns. Decreasing the civil monetary penalty would 
reduce the incentive to comply with the part and potentially increase 
noise for the surrounding communities. FRA maintains that the initial 
and new proposed ``D'' level penalty for a violation of Sec.  222.45 
sufficiently addresses the concerns that brought about the part 222 
rulemaking. See 71 FR 47614, Aug. 17, 2006.
    AAR also argued that a ``B'' level penalty for a violation of 49 
CFR 225.13 was unmerited, as a railroad's filing of a report one day 
late would not be more likely to cause an accident or incident.
    FRA has taken into consideration AAR's comments involving FRA's 
regulations on accident/incident reporting, 49 CFR part 225. FRA 
acknowledges the merits in AAR's comments with regard to Sec.  225.13, 
and FRA has revised the proposed penalty ranking for a violation of 
Sec.  225.13 from a ``B'' to an ``E.'' Upon reevaluating how part 225 
violations were ranked on the severity scale in the Initial Proposal, 
FRA has lowered many of the proposed severity scale rankings for 
violations of this part. For example, FRA has determined to change the 
ranking of a Sec.  225.11 violation (failure to submit monthly report 
of accidents/incidents) from a proposed ``B'' to a proposed ``D'' level 
penalty. At the same time, FRA has determined that a violation of Sec.  
225.9, failure to report certain accidents or incidents, immediately 
via telephone to the National Response Center, would be more 
detrimental to railroad safety, because the failure could prevent FRA 
from learning about the event and deciding whether or not the agency 
should commence an investigation. Even delayed notification could 
compromise such an investigation and prevent FRA from obtaining 
information that could identify safety problems that could cause future 
accidents or incidents. FRA has, therefore, changed the penalty amount 
from a proposed ``E'' to a proposed ``C'' level penalty.
    Finally, AAR stated that a ``C'' level penalty for a violation of a 
provision of the Locomotive Safety Standards, 49 CFR 229.137(a)(3), was 
uncalled for, as the lack of a toilet in the lead locomotive will not 
``substantially increase the likelihood of an accident or incident.''
    When FRA promulgated the notice of proposed rulemaking for the 
locomotive cab sanitation standards, FRA determined that serious health 
consequences may result if railroad employees are exposed to unsanitary 
conditions or lack access to facilities. In fact, it is widely known 
that exposure to

[[Page 57605]]

human fecal matter or untreated sewage waste can lead to diarrheal 
diseases such as amebiasis, giardiasis, shigellosis, and viral diseases 
such as hepatitis. See 66 FR 137, Jan. 2, 2001. FRA notes that any one 
of these mentioned conditions would fulfill the reporting requirements 
under the definition of an ``occupational illness'' pursuant to 49 CFR 
225.19(d) and therefore be considered an accident/incident within the 
meaning of the initially proposed Severity Scale and the New Proposed 
Severity Scale. FRA also notes that an engineer who contracts one of 
those diseases on duty might well be unable to operate his or her train 
safely.

C. Concerns Related to Respondents Who Are Cited as Individuals

    The Brotherhood of Locomotive Engineers and Trainmen (``BLET'') had 
a number of comments on civil penalties against individuals for rail 
safety violations. The BLET raised concern that FRA's conclusions on 
the data indicate a ``lack of discipline by the workers.'' Also, the 
commenter suggested that the December 2006 proposed statement of agency 
policy suffers from ``the same infirmity as the railroad operating 
rules NPRM (notice of proposed rulemaking).'' Overall, the BLET seemed 
very concerned with the effect that a larger penalty would have on an 
individual as opposed to a railroad.
    FRA responds that civil penalties assessed against individuals 
pursuant to the rail safety statutes, regulations, and orders may be 
assessed administratively only if FRA determines that the individual's 
conduct was willful in nature. 49 U.S.C. 21304. ``FRA considers a 
`willful' violation to be one that is an intentional, voluntary act 
committed either with knowledge of the relevant law or reckless 
disregard for whether the act violated the requirements of the law.'' 
49 CFR part 209, appendix A. FRA continues to hold that the higher 
penalties for a willful violation serve to deter an individual from 
engaging in this type of egregious behavior. Further, FRA assesses rail 
safety civil penalties against railroads at a substantially higher 
frequency than against individuals. As neither the Initial Proposal nor 
the New Proposal addresses the issues covered in ``Railroad Operating 
Rules: Program of Operational Tests and Inspections; Railroad Operating 
Practices: Handling Equipment, Switches and Fixed Derails,'' FRA 
declines to respond in this proposal to comments regarding that 
rulemaking, in which a final rule was published on June 16, 2008. 73 FR 
33888.

D. Concerns About Effects on FRA's Confidential Close Call Reporting 
Project

    The BLET also provided comments exhibiting a concern as to how the 
proposed penalty schedule in the Initial Proposal would impact FRA's 
Confidential Close Call Reporting Pilot Project (``Close Call 
Project''). The Close Call Project involves encouraging employees from 
its participating railroads to report ``close call'' incidents 
voluntarily and anonymously. A ``close call'' is an event in which a 
death, a personal injury, or property damage is narrowly averted. Thus, 
a ``close call'' presents an opportunity to improve safety practices in 
a situation or incident that has potential for more serious 
consequences by allowing the people involved to report the event in 
detail without fear of adverse consequences, thereby providing FRA with 
vital data about precursors to accidents or incidents that FRA might 
otherwise not receive. The information collected from the Close Call 
Project provides an opportunity to identify and correct weaknesses in a 
railroad's safety system before an accident/incident or other unsafe 
event occurs. The system can also be used to monitor changes in safety 
over time and to uncover hidden unsafe conditions that were previously 
unreported.
    FRA does not agree with BLET's comment that the Initial Proposal 
would nullify the incentive for voluntary submission of information in 
this pilot program. The employees participating in the Close Call 
Project are protected from carrier discipline, decertification, and FRA 
enforcement action in the same manner regardless of whether the civil 
penalties are increased. Before a Close Call Project may be initiated, 
the employing railroad and the employees' union representatives sign a 
memorandum of understanding (``MOU'') that specifies each party's 
rights and responsibilities. Revising the Schedules would not impact 
any MOU that has been implemented, and would not affect any MOU that is 
to be implemented in the future, as they would not expand FRA's 
enforcement authority.

E. Concerns About Proposed Monetary Increases in the Civil Penalty 
Amounts

    Commenters measured the change between the current penalties and 
the initially proposed penalties in nominal terms. That is, commenters 
calculated the price change between the initially proposed penalties 
and the current penalties without first adjusting the current penalty 
amounts for inflation. Inflation erodes the purchasing power of money 
over time. As previously stated in this New Proposal, the enforcement 
and deterrent effects of the current penalties have decreased over time 
as they had not been increased line by line to account for the effects 
of inflation. A better, ``apples-to-apples'' comparison would be to 
compare the proposed penalties to the inflation-adjusted, or real, 
current penalties. Adjusting for inflation allows comparison of the 
penalties using dollars with the same purchasing power.
    Given that inflation-adjusted, current penalties serve as the 
proper baseline for measuring change, it is significant that many of 
the current penalties have not changed in nominal terms for many years.
    As previously stated, in undertaking this effort to revise the 
Schedules comprehensively after many years, FRA is focusing on areas 
that pose greater safety risks, and maintaining enforcement in other 
regulatory areas per its authority to set penalty guidelines within the 
minimum, ordinary maximum, and aggravated maximum statutory penalties. 
With the New Proposal, some of the proposed penalty amounts if adopted 
by FRA will indeed show large increases, even after adjusting for 
inflation.\7\ However, as previously stated, some newly proposed 
penalty amounts for violations would remain unchanged (e.g., 49 CFR 
219.205(b), 222.49(b), 229.71, and 239.301(c)(1)). Again, the penalty 
amounts in the New Proposal reflect the

[[Page 57606]]

reanalyzed risk basis for the penalty amounts and the new ordinary 
maximum statutory penalty. FRA believes that these new proposed 
Schedules will maintain and increase the effect of the civil monetary 
penalties, fostering a higher overall level of safety.
---------------------------------------------------------------------------

    \7\ For example, BLET stated that the penalty for 49 CFR 
214.103(ii) (``Failure to use fall protection'') would increase 340 
percent. Expressing the original penalty amounts in 2006 dollars 
(for consistency with the first proposed penalty schedules that were 
published on December 5, 2006), the increase would actually have 
been 204 percent; however, with the proposed penalties in this 
notice, the increase in real dollars would be 559 percent. 
Similarly, for 49 CFR 218.22(c)(5) (``Utility employees: Assignment 
conditions: Performing functions not listed''), BLET found an 87.5 
percent increase. Measured in 2006 dollars, the difference between 
the current penalties and the originally-proposed revised penalties 
would have been 15 percent, and with the proposed penalties in this 
notice, the real difference would be about 46 percent. For 49 CFR 
219.11(b)(1) (``General conditions for chemical tests: Employee 
unlawfully refuses to participate in testing''), BLET calculated a 
120 percent increase, the change in real dollars from the original 
proposal would have been 41 percent. With the proposed penalties in 
this New Proposal, the increase would be about 22 percent (Upon 
reevaluating the severity scale rankings in the Initial Proposal, 
FRA lowe