Federal Railroad Administration (FRA), Department of Transportation (DOT).
Final rule.
This final rule is in response to a statutory mandate that FRA complete a rulemaking proceeding to develop a pilot program that permits a rail carrier or rail carriers that own infrastructure over which Amtrak operates certain passenger rail service routes to petition FRA to be considered as a passenger rail service provider over such a route in lieu of Amtrak for a period not to exceed five years after the date of enactment of the Passenger Rail Investment and Improvement Act of 2008. The final rule develops this pilot program in conformance with the statutory directive.
This final rule is effective on February 13, 2012.
Alexander Roth, Office of Railroad Policy and Development, FRA, 1200 New Jersey Ave. SE., Washington, DC 20590 (
By notice of proposed rulemaking (NPRM) published on September 7, 2011 (76 FR 55335), FRA proposed an alternate passenger rail service pilot program in response to a statutory mandate—specifically, § 214 of the Passenger Rail Investment and Improvement Act of 2008 (PRIIA), Public Law No. 110–432, Division B (Oct. 16, 2008). The comment period for the NPRM closed on November 7, 2011. FRA received written comments submitted by Ratp Development America, the Transportation Trades Department of the AFL–CIO, the American Short Line and Regional Railroad Association, the Association of Independent Passenger Rail Operators, Herzog Transit Services, Inc., First Transit, Veolia Transportation N.A., and two individuals.
General comments are addressed in this section, and more specific comments are addressed in the relevant sections of the preamble below. Some comments were generally supportive of the NPRM, and other comments were generally unsupportive of the NPRM.
A comment sought clarification regarding whether an eligible rail carrier under the pilot program could create a separate company to manage and operate the passenger operation, or whether it could enter into a private access rights agreement with an alternative rail passenger operator. This final rule develops a pilot program that permits a rail carrier or rail carriers that own infrastructure over which Amtrak operates certain passenger rail service routes to petition FRA to be considered as a passenger rail service provider over such a route in lieu of Amtrak. This final rule does not prohibit an eligible rail carrier from creating a separate company to manage and/or operate the passenger rail service, or from entering into an agreement with a third party to manage and/or operate the passenger rail service. However, a pilot program petition must be submitted by a rail carrier or rail carriers that own the infrastructure as described in § 269.7 of this final rule. In addition, such information regarding the management and/or operation of the service would be relevant to FRA's evaluation of the bid, and should be described in detail pursuant to § 269.9 of this final rule.
Several comments stated that the pilot program should allow a State to submit a petition (with the concurrence of the infrastructure owner), and/or that there should be a statutory role for States in the pilot program. Comments also stated that State involvement is particularly important to bidding on State-supported routes (which are eligible under the pilot program) as such routes are largely funded by States. A comment further stated that States should be able to participate in the pilot program process both out of a matter of fairness and to ensure that existing contracts between States and Amtrak would not be unconstitutionally impaired. As an initial matter, § 214 of PRIIA only provides that a rail carrier or rail carriers that own infrastructure over which Amtrak operates certain passenger rail service routes may submit a petition.
Comments stated that the pilot program should include the right-of-way owner as a full partner in the proposed service, and that the pilot program should recognize the importance of protecting the capacity required for freight operations. As an initial matter, FRA agrees that freight railroads (and commuter railroads, for that matter) are critical partners to the success of intercity passenger rail that makes use of their facilities. Furthermore, the pilot program recognizes that a bid submitted by an eligible rail carrier must describe how that rail carrier would operate over right-of-way on the route that it does not own. Specifically, § 269.9 of this final rule requires a bidder to describe the operating agreement(s) necessary for the operation of passenger service over right-of-way on the route that is not owned by the bidder.
A comment stated that FRA should solicit the opinion of States on how the pilot program, as applied to State-supported routes, could best be made to successfully work. As noted, FRA published the proposed rule in the
Another comment contested the constitutionality of § 201 of PRIIA, which defines the national railroad passenger transportation system, but did not relate the comment to the proposed rule.
Lastly, one comment generally disagreed with the NPRM and stated that a better way to meet the requirements of PRIIA would be to convert Amtrak into a § 501(c)(3) nonprofit corporation. FRA disagrees. As discussed above, the NPRM (and this final rule) was in response to a specific statutory mandate that FRA complete a rulemaking proceeding to develop an alternate passenger rail service pilot program.
This final rule is in response to a statutory mandate that FRA complete a rulemaking proceeding to develop a pilot program that permits a rail carrier or rail carriers that own infrastructure over which Amtrak operates certain passenger rail service routes to petition FRA to be considered as a passenger rail service provider over such a route in lieu of Amtrak for a period not to exceed five years after October 16, 2008 (the date of enactment of PRIIA). Section 214 further provides that those routes described in 49 U.S.C. 24102(5)(B), (C), and (D) and in 49 U.S.C. 24702 are eligible for the pilot program, and that the program not be made available to more than two routes.
Section 214 also provides for, among other things, the following: The establishment of a petition, notification, and bid process through which FRA would evaluate bids to provide passenger rail service over particular routes by interested rail carriers and Amtrak; FRA's selection of a winning bidder by, among other things, evaluating the bids against the financial and performance metrics developed under section 207 of PRIIA; FRA's execution of a contract with the winning bidder awarding the right and obligation to provide passenger rail service over the route, along with an operating subsidy, as well as requiring compliance with the minimum standards established under section 207 of PRIIA, among other things; that Amtrak must provide access to its reservation system, stations, and facilities to a winning bidder; that employees used in the operation of a route under the pilot program would be considered an employee of that rail carrier and would be subject to the applicable Federal laws and regulations governing similar crafts or classes of employees of Amtrak; that the winning bidder must provide hiring preference to displaced qualified Amtrak employees; that the winning bidder would be subject to the grant conditions under 49 U.S.C. 24405; and that, if a winning bidder ceases to operate the service or to otherwise fulfill their obligations, the FRA Administrator, in collaboration with the Surface Transportation Board, would take any necessary action to enforce the contract and to ensure the continued provision of service.
Section 214 provides that, before FRA may take any action allowed under 49 U.S.C. 24711, the Secretary of Transportation (Secretary) must certify that the FRA Administrator has sufficient resources that are adequate to undertake the pilot program. FRA understands this requirement to mean that FRA may not proceed with any action under a pilot program developed by this final rule until the Secretary has issued such a certification.
It should also be noted that section 214 requires FRA to award to a winning bidder, among other things, an operating subsidy. 49 U.S.C. 24711(a)(5)(B). PRIIA did not authorize funds for FRA to use to pay for any such operating subsidy, or any other costs arising from the proposed pilot program; nor did Congress appropriate funds for the pilot program.
Comments stated that the pilot program should allow for the transfer of current and existing service subsidies made by FRA to Amtrak to operators selected under the pilot program. However, FRA does not have the authority to transfer any such existing subsidies. Other comments stated that there should be a mechanism for FRA to award an operating subsidy to pay for costs associated with the pilot program. As described above, no funds have been appropriated to the FRA to provide such financial assistance.
A comment also stated that a mechanism needs to be created to clearly identify the route by route subsidy and the method of transfer, and that such information would be critical to a fair bidding process. The comment goes on to suggest that FRA analyze and rank all Amtrak routes (national and State-supported). In addition, the comment notes that the cost allocation methodology of § 209 of PRIIA should be the basis for determining the appropriate subsidy amount for these routes. FRA notes that useful route-by-route Amtrak cost information is published in the Quarterly Report on the Performance and Service Quality on Intercity Passenger Train Operations (available at
This final rule incorporates the adequate resources certification requirement by providing, in § 269.3(a), that part 269 is not applicable to any railroad, unless and until, the Secretary certifies that FRA has sufficient resources that are adequate to undertake the pilot program. Only upon such certification does the pilot program become available. As described below,
A comment stated that the Secretary must quickly certify that FRA has adequate resources to undertake the program; the comment further provided that substantial FRA resources would not be required for the pilot program. The Secretary will issue this certification when appropriate. In addition, it must be noted that FRA will expend valuable resources in administering the pilot program, especially in the thorough evaluation of each of the petitions and bid packages that may be received.
The final rule establishes deadlines for filing petitions, filing bids, and FRA's execution of contract(s) with any winning bidders. As to the filing of petitions, § 269.7(b) of the final rule requires a petition to be filed with FRA no later than 45 days after FRA provides notice of the Secretary's certification that the FRA Administrator has sufficient resources that are adequate to undertake the pilot program. This deadline is necessary in order to comply with the statutory mandate. Specifically, 49 U.S.C. 24711(a)(4) requires FRA to, as relevant here, “give preference in awarding contracts to bidders seeking to operate routes that have been identified as one of the five worst performing Amtrak routes under section 24710” of title 49 of the United States Code. In order to comply with this statutory directive to “give preference” to “the five worst performing Amtrak routes,” FRA must be able to evaluate all bids at the same time. Section 269.7(b)'s petition deadline enables FRA to evaluate all bids at the same time and to “give preference” where appropriate as directed by the statute.
In addition, §§ 269.3(c) and 269.7(d) of the final rule also take into consideration the possibility that the period during which a railroad may provide passenger rail service under this pilot program, which is currently set by statute to expire on October 16, 2013, is extended by statute. In that event, the final rule requires petitions to be filed with FRA no later than 60 days after the enactment of such statutory authority and requires such petitions to otherwise comply with the requirements of this part.
A comment stated that the “worst performing routes” criteria must be modified to assure that other routes, including State-supported routes, be eligible for the pilot program. Another comment sought clarification regarding whether petitions for routes which were not one of the worst performing routes would be permitted to compete against one of the worst performing routes. Section 214 of PRIIA mandates which routes are eligible for the pilot program, as follows: Those routes described in 49 U.S.C. 24102(5)(B), (C), or (D) and 49 U.S.C. 24702.
As to the filing of bids, § 269.9 requires the Petitioner and Amtrak to both file bids with FRA no later than 60 days after the petition deadline established by § 269.7(b). Section 269.9(b) articulates the bid requirements. The 60-day time period gives a bidder sufficient time to prepare a bid that satisfies the bid requirements, while also limiting the duration of the bid process.
One comment stated that a petitioner's failure to submit a bid within the timeline established by this final rule should result in an automatic disqualification of that party from bidding on the route at issue. The comment stated that late bids would defeat what is already a short-duration program, and would allow a party to game the process. The final rule is clear that under § 269.9 both the petitioner and Amtrak must file bids with FRA no later than 60 days after the petition deadline established by § 269.7(b). No allowance is made for exceptions to this deadline. Furthermore, § 269.13 requires FRA to execute a contract with the winning bidder(s) no later than 90 days after the bid deadline established by § 269.9.
Lastly, as to the award and execution of contracts with winning bidders, § 269.13 requires FRA to execute a contract with the winning bidder(s) no later than 90 days after the bid deadline established by § 269.9. Section 214 of PRIIA requires FRA to “execute a contract within a specified, limited time.” 49 U.S.C. 24711(a)(5). The 90-day time period is a limited period for FRA and the winning bidder(s) to execute an agreement(s) that satisfies the requirements of § 269.13, including FRA's obligation of an operating subsidy in compliance with the statutory requirements.
This section provides that the final rule carries out the statutory mandate set forth in 49 U.S.C. 24711 that requires FRA to develop a pilot program that permits a rail carrier or rail carriers that own infrastructure over which Amtrak operates a passenger rail service route to petition FRA to be considered as a passenger rail service provider over that route in lieu of Amtrak.
A comment sought clarification regarding the meaning of the term “own” as it is used in this section (and as it is used in § 269.7(a) of this final rule). The comment further stated that the party responsible for maintenance of such infrastructure under 49 CFR part 213 should be considered an owner for purposes of this section. However, § 214 of PRIIA is clear in that only a rail carrier or rail carriers that own such infrastructure may submit a petition under the pilot program.
Paragraph (a) of this section provides that the final rule does not apply to any railroad, unless and until, the Secretary certifies that FRA has sufficient resources that are adequate to undertake the pilot program. This section also states that, upon receipt, FRA will provide notice of the certification on the FRA public Web site. This paragraph is based on the statutory directive in 49 U.S.C. 24711(e). In addition, as discussed in § 269.7(a), FRA's notice of the Secretary's certification will trigger the 45-day deadline by which an eligible railroad may petition FRA under the pilot program.
Paragraph (b) of this section provides that the pilot program will not be made available to more than two Amtrak intercity passenger rail routes. This paragraph is based on the statutory directive contained in 49 U.S.C. 24711(b).
Paragraph (c) of this section provides that any rail carrier or rail carriers awarded a contract to provide passenger
Several comments stated that the pilot program should be extended to allow for a longer program period (
This section contains the definitions for the final rule. This section defines the following terms: Act; Administrator; Amtrak; File and filed; Financial plan; FRA; Operating plan; Passenger rail service route; Petitioner; Railroad, and Secretary. Among other definitions, this section defines “passenger rail service route” to mean those routes described in 49 U.S.C. 24102(5)(B), (C), and (D) and in 49 U.S.C. 24702. This definition is based on the statutory directive contained in 49 U.S.C. 24711(a)(1). In addition, this section defines “railroad” to mean a rail carrier or rail carriers, as defined in 49 U.S.C. 10102(5). This definition is based on the statutory directive contained in 49 U.S.C. 24711(a)(1) and (c)(3).
This section also defines “financial plan” to mean a plan that contains, for each Federal fiscal year fully or partially covered by the bid: An annual projection of the revenues, expenses, capital expenditure requirements, and cash flows (from operating activities, investing activities, and financing activities, showing sources and uses of funds) attributable to the route; and a statement of the assumptions underlying the financial plan's contents. In addition, this section defines “operating plan” to mean a plan that contains, for each Federal fiscal year fully or partially covered by the bid: A complete description of the service planned to be offered, including the train schedules, frequencies, equipment consists, fare structures, and such amenities as sleeping cars and food service provisions; station locations; hours of operation; provisions for accommodating the traveling public, including proposed arrangements for stations shared with other routes; expected ridership; passenger-miles; revenues by class of service between each city-pair proposed to be served; and a statement of the assumptions underlying the operating plan's contents. The final rule requires bidders to include a financial plan and an operating plan—as those terms are defined here—in their bids. These definitions will ensure that bids contain sufficient information to be evaluated.
Paragraph (a) of this section provides that a railroad that owns infrastructure over which Amtrak operates a passenger rail service route may petition FRA to be considered as a passenger rail service provider over that route in lieu of Amtrak for a period of time consistent with the time limitations described in section 269.3(c). This paragraph is based on the statutory directive contained in 49 U.S.C. 24711(a)(1). This paragraph does not require that a railroad own all of the infrastructure over which Amtrak operates a passenger rail service route in order to file a petition.
Comments sought clarification regarding the routes that are eligible under the pilot program (one comment sought confirmation that all current non-Northeast Corridor Amtrak-operated routes are eligible for the pilot program, whether part of Amtrak's national system or State-supported, and regardless of the length of the route). A related comment sought clarification regarding the eligibility of routes which connected with or utilized Northeast Corridor or other Amtrak-owned infrastructure. As discussed above, PRIIA and this final rule provide that all of the routes described in 49 U.S.C. 24102(5)(B), (C), and (D) and in 49 U.S.C. 24702 are eligible.
Another comment asked whether the proposed rule “exercise[s] any jurisdiction” over the process in which a State enters into a contract with a party other than Amtrak to operate a State-supported intercity passenger route (or whether such a situation more appropriately falls under § 217 of PRIIA). Section 214 of PRIIA does not address this issue, nor does this final rule.
In seeking clarification regarding the meaning of the term “passenger rail service route” as used in Paragraph (a) of this section, a comment questioned whether the Chicago-Milwaukee route 21 Hiawatha is included as part of the route 25 Empire Builder because it uses the same trackage, and whether route 25, which has two destinations, Seattle and Portland, is one route or two. Determination of these site-specific details can only be made in response to specific petitions. For this final rule to address every such situation—of which the national rail network could present more than one—would add needless complexity and would delay the rulemaking process.
A comment questioned FRA's authority to permit a rail carrier that does not own all of the infrastructure on a particular eligible route to access that portion of the infrastructure owned by another party. This comment misconstrues the proposed rule. Under the NPRM and this final rule, a railroad that owns infrastructure over which Amtrak operates certain passenger rail service routes may petition FRA. As noted, a railroad does not have to own all of the infrastructure over which Amtrak operates in order to file a petition. However, in that event, FRA would expect the railroad to describe in its bid the agreement(s) necessary to operate over right-of-way that is not owned by the bidding railroad, in compliance with § 269.9(b) of this final rule.
A comment also stated that a railroad should be able to offer service over a shorter route (as compared to the Amtrak route) if the omitted section of the route would continue to be provided with service by another passenger train. However, § 214 of PRIIA and this final rule require that a railroad selected to provide rail passenger service over a route under the pilot program must continue to provide passenger rail service on the route that is no less frequent, nor over a shorter distance, than Amtrak provided on that route before the award.
Paragraph (b) of this section provides that a petition submitted to FRA under this rule must: Be filed with FRA no later than 45 days after FRA provides notice of the Secretary's certification pursuant to proposed § 269.3(a); describe the petition as a “Petition to Provide Passenger Rail Service under 49 CFR part 269”; and describe the route or routes over which the petitioner wants to provide passenger rail service and the Amtrak service that the petitioner wants to replace. This paragraph is intended to ensure that a petition provides clear notice to FRA.
Paragraph (c) of this section provides that, in the event that a later statute extends the time period under which a railroad may provide passenger rail service pursuant to the pilot program, petitions would have to be filed with FRA no later than 60 days after the later of the enactment of such statutory authority or the Secretary's issuance of the certification under § 269.3(a), and that the petition must otherwise comply with the requirements of the pilot program. This paragraph takes into consideration the possibility that the 5-year limitations period established in PRIIA is extended by statute.
Paragraph (a) of this section provides that FRA will notify Amtrak of any eligible petition filed with FRA no later than 30 days after FRA's receipt of such petition. This paragraph is based on the statutory directive contained in 49 U.S.C. 24711(a)(2).
A comment stated that Amtrak should be required to provide any bidder under the pilot program with route performance information for the previous five years (including ridership, passenger-miles, and revenues by class of service between each city-pair). However, such a requirement is beyond the authority created by § 214 of PRIIA.
A comment also stated that FRA and Amtrak should work with bidders under the pilot program to develop a proposal that is mutually beneficial to all parties (
A comment sought clarification regarding whether Amtrak is restricted to bidding its current fully-allocated financial performance under the route profitability system, or whether Amtrak could be allowed to propose anything materially different from its current performance. That comment went on to state that Amtrak should not be able to make a bid materially different from its current fully-allocated financial and performance metrics and that Amtrak should not be able to make a bid based on incremental costs because its overhead is devoted to servicing these passenger routes. However, § 214 of PRIIA and this final rule are intended to foster improved and more competitive passenger rail service. The comment's proposed restrictions would stifle innovation and work against that very purpose. Moreover, all bidders have an inherent interest in minimizing the cash losses of the service in question: Amtrak, because it operates under a limited Federal operating grant; and the competing bidder(s), which would need to minimize both the subsidy requirement and the cash drain on their corporate finances (so as to both win the bid and safeguard their profitability). FRA believes that these inherent factors will prohibit bids that do not cover their full costs, and in any event, FRA will be carefully evaluating all bids for their viability.
Paragraph (b) of this section describes the bid requirements, including a requirement that such bids must be filed with FRA no later than 60 days after the petition deadline established by § 269.7. Paragraph (b) further provides that such bids must: (1) Provide FRA with sufficient information to evaluate the level of service described in the proposal, and to evaluate the proposal's compliance with the requirements described in § 269.13(b); (2) describe how the bidder would operate the route (including an operating plan, a financial plan and, if applicable, any agreement(s) necessary for the operation of passenger service over right-of-way on the route that is not owned by the railroad), and, if the bidder intends to generate any revenues from ancillary activities (
FRA is making one technical change to the rule text in Paragraph (b)(6) in order to permit FRA to better compare and evaluate bids. Paragraph (b)(6) provides that a bid must describe how the passenger rail service would comply with the financial and performance metrics developed pursuant to § 207 of PRIIA, and then proceeds to list what that description must include. The last item in that list is the net cash used in operating activities per passenger-mile. FRA is making one technical change here by further stating that the net cash must be both before and after the application of any expected public subsidies. This clarification is consistent with the statutory mandate and the metrics developed pursuant to § 207 of PRIIA, and allows for FRA to be able to compare the net cash numbers provided by Amtrak and a rail carrier.
Paragraph (c) of this section provides that FRA may request supplemental information from a petitioner and/or Amtrak where FRA determines such information is needed to evaluate a bid. In such a request, FRA will establish a deadline by which the supplemental information must be submitted to FRA. This paragraph allows FRA to request additional information where the information provided in a bid prevents FRA from adequately evaluating the proposal.
This section provides that FRA will select a winning bidder by evaluating the bids against the financial and
Paragraph (a) of this section provides that FRA will execute a contract with the winning bidder(s) consistent with the requirements of § 269.13 and as FRA may otherwise require, no later than 90 days after the bid deadline established by § 269.9(b). This paragraph also provides that FRA will provide timely notice of these selections to all petitioners and to Amtrak. This paragraph is based on the statutory directive contained in 49 U.S.C. 24711(a)(5).
Paragraph (b) of this section provides that, among other things, such a contract will: (1) Award to the winning bidder the right and obligation to provide passenger rail service over that route subject to such performance standards as FRA may require, consistent with the standards developed under section 207 of PRIIA; (2) award to the winning bidder an operating subsidy for the first year at a level not in excess of the level in effect during the fiscal year preceding the fiscal year in which the petition was received, adjusted for inflation, and for any subsequent years at such level, adjusted for inflation; (3) condition the operating and subsidy rights upon the winning bidder continuing to provide passenger rail service on the route that is no less frequent, nor over a shorter distance, than Amtrak provided on that route before the award; (4) condition the operating and subsidy rights upon the winning bidder's compliance with the minimum standards established under section 207 of PRIIA and such additional performance standards as FRA may establish; and (5) subject the winning bidder to the grant conditions established by 49 U.S.C. 24405. This paragraph is based on the statutory directive contained in 49 U.S.C. 24711(a)(5), (c)(1), and (c)(4).
A comment stated that FRA should mandate contractual provisions for liability and insurance that are consistent for all parties. However, the statutory mandate does not authorize such a requirement. It should be noted that § 214 and this final rule do require that a winning bidder under the pilot program shall be subject to the grant conditions under 49 U.S.C. 24405.
Paragraph (c) of this section provides that the winning bidder will make their staffing plan, submitted as required by § 269.9(b)(4), available to the public after the bid award. This paragraph is based on the statutory directive contained in 49 U.S.C. 24711(a)(6).
Paragraph (a) of this section provides that, if an award under § 269.13 is made to a rail carrier other than Amtrak, Amtrak must provide access to its reservation system, stations, and facilities directly related to operations to the winning bidder awarded a contract, in accordance with § 217 of PRIIA, necessary to carry out the purposes of the final rule. This paragraph is based on the statutory directive contained in 49 U.S.C. 24711(c)(2).
A comment stated that the rolling stock, stations, and reservation systems that Amtrak uses need to be available to pilot program operators at no cost. As discussed, § 214 of PRIIA requires that Amtrak provide access to its reservation system, stations, and facilities.
A comment sought clarification regarding how FRA would establish an equitable cost basis for third party access to Amtrak's reservation system, stations, and facilities in a timely manner. As required by statute and this final rule, Amtrak is required to provide such access in accordance with § 217 of PRIIA, which provides a process by which a cost is agreed upon by the parties.
A comment also sought clarification as to whether such access includes access to services provided by Amtrak employees, including reservation agents, redcaps, gate agents, Qualified Maintenance Persons or Qualified Persons. The statute and this final rule only provide that Amtrak shall be required to provide access to its reservation system, stations, and facilities; the statute does not authorize access to services performed by Amtrak employees.
A comment stated that Amtrak should not be able to prevent operation of a route by a private rail carrier by withholding services directly related to Amtrak's control of its facilities, stations, or reservation systems. FRA agrees that Amtrak must comply with the requirements of the statute and this final rule. In providing access to its reservation system, stations, and facilities, Amtrak would need to allow the third-party to successfully use the reservation system, stations and facilities.
A comment sought clarification regarding whether the term “facilities” as used in paragraph (a) of this section encompasses Amtrak's contracted right to use facilities it does not own and provided the hypothetical example of whether a bidder for the Vermonter route would have access to the portion of the Northeast Corridor between New Haven and New York City owned by Metro North. That comment went on to state that the definition should be broad and should encompass all facilities to which Amtrak has access through ownership, lease or contract. Section 214 of PRIIA does not authorize such a broad definition. Putting aside circumstances in which Amtrak owns the infrastructure and § 217 of PRIIA may apply, neither the statute nor this final rule require that owners of right-of-way not owned by a bidding railroad must provide access to their infrastructure. As described above, pursuant to the statutory mandate, the pilot program developed by this final rule only permits a rail carrier or rail carriers that own infrastructure to petition FRA. In the event that a bidder does not own all of the infrastructure on the route, the bid must describe the operating agreements necessary for operation on the right-of-way not owned by the railroad.
Paragraph (b) of this section provides that the employees of any person used by a rail carrier in the operation of a route under the final rule will be considered an employee of that carrier and subject to the applicable Federal laws and regulations governing similar crafts or classes of employees of Amtrak, including provisions under § 121 of the Amtrak Reform and Accountability Act of 1997 relating to employees that provide food and beverage service. This paragraph is based on the statutory directive contained in 49 U.S.C. 24711(c)(3).
Paragraph (c) of this section provides that a winning bidder will provide hiring preference to qualified Amtrak employees displaced by the award of the bid, consistent with the staffing plan submitted by the winning bidder. This paragraph is based on the statutory directive contained in 49 U.S.C. 24711(c)(4).
This section provides that, if a rail carrier awarded a route under this rule ceases to operate the service or fails to
This final rule has been evaluated in accordance with existing policies and procedures and determined to be non-significant under Executive Orders 12866 and 13563, and U.S. Department of Transportation (DOT) policies and procedures.
As part of a RIA, FRA generally assesses quantitative measurements of the cost and benefit streams expected to result from the adoption of a rule. However, in this case, due to the limited number of routes that can be awarded under the pilot program (only two routes can be awarded), and the short timeframe in which this pilot program will operate (until 2013), it is not feasible to perform an analysis for an extended period. There are no alternate service provider railroad regulatory costs because the program is voluntary with respect to such rail carriers. Regulatory costs will be triggered for Amtrak if one or more alternative service providers bid on a route(s). For informational purposes, FRA included in the RIA appendices detailing the estimated average costs for both a railroad and Amtrak to participate in the pilot program. FRA estimates the average cost for each individual railroad to participate in the program and to submit the required bid proposal (the majority of the cost) at about $300,000 per route, and the average cost for Amtrak at about $150,000 per route (regardless of how many individual railroads bid on the individual Amtrak route). Non-Amtrak railroads that participate voluntarily will do so because they consider the benefits to exceed the costs. Thus, any participation will be net-beneficial with respect to the voluntary participant. Any costs to Amtrak are regulatory costs incurred solely due to the requirements of this final rule, and will primarily be associated with costs associated with developing bids.
Given that this pilot program is voluntary for alternate service providers and is not currently funded by Congress, FRA estimates that this regulation will not result in any benefits or costs.
To ensure potential impacts of rules on small entities are properly considered, FRA developed this final rule in accordance with Executive Order 13272 (“Proper Consideration of Small Entities in Agency Rulemaking”) and DOT's procedures and policies to promote compliance with the Regulatory Flexibility Act (5 U.S.C. 601
As noted earlier in this final rule, the purpose of this rulemaking is to respond to a statutory mandate to develop a pilot program that permits a rail carrier or rail carriers that own infrastructure over which Amtrak operates certain passenger rail service routes to petition FRA to be considered as a passenger rail service provider over such a route in lieu of Amtrak for a period not to exceed 5 years after the date of enactment of the Passenger Rail Investment and Improvement Act of 2008 (PRIIA). The final rule develops this pilot program in conformance with the statutory directive.
The Regulatory Flexibility Act of 1980 (5 U.S.C. 601
FRA is initiating this final rule in response to a statutory mandate set forth in Section 214 of the PRIIA. Section 214 requires FRA to complete a rulemaking proceeding to develop a pilot program that permits a rail carrier or rail carriers that own infrastructure over which Amtrak operates certain passenger rail service routes to petition FRA to be considered as a passenger rail service provider over such a route in lieu of Amtrak for a period not to exceed 5 years after the date of enactment of the PRIIA. This final rule develops this pilot program in conformance with the statutory directive.
This final rule is applicable to railroads that own infrastructure upon which Amtrak operates those routes described in 49 U.S.C. 24102(5)(B), (C), and (D) and in 49 U.S.C. 24702, which may include small railroads. “Small entity” is defined in 5 U.S.C. 601 as including 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 is a for profit “line-haul railroad” that has fewer than 1,500 employees, a “short line railroad” with fewer than 500 employees, or a “commuter rail system” with annual
Small railroads face the same requirements for entry in the pilot program as other railroads. The railroad must own infrastructure upon which Amtrak operates those routes described in 49 U.S.C. 24102(5)(B), (C), and (D), and in 49 U.S.C. 24702.
The purpose of this economic analysis is to provide pertinent information on the effects of the regulation, 49 CFR Part 269, Alternate Passenger Rail Service Pilot Program. FRA believes that the regulation will not have any effect on small railroads since participation in the pilot program is voluntary, only two routes are available for award, the program expires in 2013, and it is unlikely that Federal funding not currently available will be available for the program. FRA does not anticipate that any small railroads will be interested in taking over such an existing, eligible Amtrak route.
This regulation is voluntary for all rail carriers, except Amtrak, which will be impacted only if another carrier petitions to participate in the pilot program. Therefore, there are no mandates placed on large or small railroads. Consequently, this regulation will not affect a substantial number of small entities, and most likely will not impact any small entities.
The factual basis for the certification that this final rule will not have a significant economic impact on a substantial number of small entities is that the pilot program is voluntary for all rail carriers except Amtrak; and no small entities are anticipated to apply. Therefore, this regulation is not expected to have a significant economic impact on a substantial number of small entities.
FRA notes that this regulation does not disproportionately place any small railroads that are small entities at a significant competitive disadvantage. Small railroads are not excluded from participation, so long as they are eligible. This regulation and the underlying statute are aimed at railroads taking over an entire route. If Amtrak uses 30 miles of a small railroad's infrastructure in a route that is 750 miles long, the small railroad could not apply to take over just its own segment, but will have to apply to take over the whole route. Thus, the ability to bid on a route is not constrained by a railroad's size.
FRA invited comments from all interested parties on this certification. FRA also requested comments on the regulatory impact analysis and its underlying assumptions. FRA particularly encouraged small entities that could potentially be impacted by the proposed regulation to participate in the public comment process by submitting comments on this assessment or this rulemaking to the official DOT docket. Although FRA received comments on the proposed rule, none were related to either economic analysis.
Pursuant to the Regulatory Flexibility Act (5 U.S.C. 605(b)), FRA certifies that this final rule will not have a significant economic impact on a substantial number of small entities. The final rule does not require, or otherwise impose, any requirements upon any small entities. Instead, this final rule develops a pilot program under which an eligible small entity may voluntarily elect to participate. Furthermore, the final rule establishes a very limited pilot program that applies to no more than two Amtrak routes.
According to the Paperwork Reduction Act of 1995 and OMB's Implementing Guidance at 5 CFR 1320.3(c), “collection of information means, except as provided in section 1320.4, the obtaining, causing to be obtained, soliciting, or requiring the disclosure to an agency, third parties or the public of information by or for an agency by means of identical questions posed to, or identical reporting, recordkeeping, or disclosure requirements imposed on, ten or more persons, whether such collection of information is mandatory, voluntary, or required to obtain or retain a benefit.” FRA expects that the requirements of this final rule will affect less than 10 railroads or “persons” as defined in 5 CFR 1320.(c)(4). Consequently, no information collection submission is necessary, and no approval is being sought from the Office of Management and Budget (OMB) at this time.
FRA has evaluated this final rule in accordance with its “Procedures for Considering Environmental Impacts” (FRA's Procedures) (64 FR 28545, May 26, 1999) as required by the National Environmental Policy Act (42 U.S.C. 4321
Executive Order 13132, “Federalism” (64 FR 43255, Aug. 4, 1999), requires FRA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” are defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Under Executive Order 13132, the agency may not issue
FRA has analyzed this final rule in accordance with the principles and criteria contained in Executive Order 13132. This final rule will not have a substantial direct effect on the States, on the relationship between the Federal government and the States, or on the distribution of power and responsibilities among the various levels of government. In addition, this final rule will not impose substantial direct compliance costs on State and local governments. Therefore, the consultation and funding requirements of Executive Order 13132 do not apply. As explained, FRA has determined that this final rule has no federalism implications. Accordingly, FRA has determined that preparation of a federalism summary impact statement for this final rule is not required.
Pursuant to Section 201 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4, 2 U.S.C. 1531), each Federal agency “shall, unless otherwise prohibited by law, assess the effects of Federal regulatory actions on State, local, and tribal governments, and the private sector (other than to the extent that such regulations incorporate requirements specifically set forth in law).” Section 202 of the Act (2 U.S.C. 1532) further requires that “before promulgating any general notice of proposed rulemaking that is likely to result in the promulgation of any rule that includes any Federal mandate that may result in expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year, and before promulgating any final rule for which a general notice of proposed rulemaking was published, the agency shall prepare a written statement” detailing the effect on State, local, and tribal governments and the private sector. This monetary amount of $100,000,000 has been adjusted to $140,800,000 to account for inflation. This final rule will not result in the expenditure of more than $140,800,000 by the public sector in any one year, and thus preparation of such a statement is not required.
Executive Order 13211 requires Federal agencies to prepare a Statement of Energy Effects for any “significant energy action.” 66 FR 28355 (May 22, 2001). Under the Executive Order, a “significant energy action” is defined as any action by an agency (normally published in the
Interested parties should be aware that anyone is able to search the electronic form of all written communications and comments received into any agency docket by the name of the individual submitting the document (or signing the document, if submitted on behalf of an association, business, labor union,
Railroads; Railroad employees.
For the reasons discussed in the preamble, FRA amends chapter II, subtitle B of title 49, Code of Federal Regulations, by adding part 269 to read as follows:
Sec. 214, Div. B, Pub. L. 110–432; 49 U.S.C. 24711; and 49 CFR 1.49.
The purpose of this part is to carry out the statutory mandate set forth in 49 U.S.C. 24711 requiring FRA to develop a pilot program that permits a railroad that owns infrastructure over which Amtrak operates a passenger rail service route to petition FRA to be considered as a passenger rail service provider over that route in lieu of Amtrak.
(a)
(b)
(c)
As used in this part—
(a)
(b)
(1) Be filed with FRA no later than 45 days after FRA provides notice of the Secretary's certification pursuant to § 269.3(a) of this part using the following method: email to
(2) Describe the petition as a “Petition to Provide Passenger Rail Service under 49 CFR part 269”; and
(3) Describe the route or routes over which the petitioner wants to provide passenger rail service and the Amtrak service that the petitioner wants to replace.
(c)
(a)
(b)
(1) Provide FRA with sufficient information to evaluate the level of service described in the proposal, and to evaluate the proposal's compliance with the requirements described in § 269.13(b) of this part;
(2) Describe how the bidder would operate the route. This description must include, but is not limited to, an operating plan, a financial plan and, if applicable, any agreement(s) necessary for the operation of passenger service over right-of-way on the route that is not owned by the railroad. In addition, if the bidder intends to generate any revenues from ancillary activities (
(3) Describe what Amtrak passenger equipment would be needed, if any;
(4) Describe in detail, including amounts, timing, and intended purpose, what sources of Federal and non-Federal funding the bidder would use, including but not limited to any Federal or State operating subsidy and any other Federal or State payments;
(5) Contain a staffing plan describing the number of employees needed to operate the service, the job assignments and requirements, and the terms of work for prospective and current employees of the bidder for the service outlined in the bid; and
(6) Describe how the passenger rail service would comply with the financial and performance metrics developed pursuant to section 207 of the Act. At a minimum, this description must include, for each Federal fiscal year fully or partially covered by the bid: a projection of the route's expected on-time performance and train delays according to the metrics developed pursuant to section 207 of the Act; and the net cash used in operating activities per passenger-mile (both before and after the application of any expected public subsidies) attributable to the route.
(c)
FRA will select a winning bidder by evaluating the bids against the financial and performance metrics developed under section 207 of the Act and the requirements of this part, and will give preference in awarding contracts to bidders seeking to operate routes that have been identified as one of the five worst performing Amtrak routes under 49 U.S.C. 24710.
(a)
(b)
(1) Award to the winning bidder the right and obligation to provide passenger rail service over that route subject to such performance standards as FRA may require, consistent with the standards developed under section 207 of the Act, for a duration consistent with § 269.3(c) of this part;
(2) Award to the winning bidder an operating subsidy for the first year at a level not in excess of the level in effect during the fiscal year preceding the fiscal year in which the petition was received, adjusted for inflation, and for any subsequent years at such level, adjusted for inflation;
(3) Condition the operating and subsidy rights upon the winning bidder continuing to provide passenger rail service on the route that is no less frequent, nor over a shorter distance,
(4) Condition the operating and subsidy rights upon the winning bidder's compliance with the minimum standards established under section 207 of the Act and such additional performance standards as FRA may establish; and
(5) Subject the winning bidder to the grant conditions established by 49 U.S.C. 24405.
(c)
(a)
(b)
(c)
If a railroad awarded a route under this part ceases to operate the service or fails to fulfill its obligations under the contract required under § 269.13 of this part, the Administrator, in collaboration with the Surface Transportation Board, shall take any necessary action consistent with title 49 of the United States Code to enforce the contract and ensure the continued provision of service, including the installment of an interim service provider and re-bidding the contract to operate the service. The entity providing service shall either be Amtrak or a railroad eligible for this pilot program under § 269.7 of this part.