Appendix C to Part 209 - FRA's Policy Statement Concerning Small Entities
49:4.1.1.1.4.8.5.1.3 : Appendix C
Appendix C to Part 209 - FRA's Policy Statement Concerning Small
Entities
This policy statement required by the Small Business Regulatory
Enforcement Fairness Act of 1996 (Pub. L. 104-121) (SBREFA)
explains FRA's communication and enforcement policies concerning
small entities subject to the federal railroad safety laws. These
policies have been developed to take into account the unique
concerns and operations of small businesses in the administration
of the national railroad safety program, and will continue to
evolve to meet the needs of the railroad industry. For purposes of
this policy statement, the Regulatory Flexibility Act (5 U.S.C.
601, et seq.), and the “excessive demand” provisions of the
Equal Justice Act (5 U.S.C. 504 (a)(4), and 28 U.S.C. 2412
(d)(1)(D)), Class III railroads, contractors and hazardous
materials shippers meeting the economic criteria established for
Class III railroads in 49 CFR 1201.1-1, and commuter railroads or
small governmental jurisdictions that serve populations of 50,000
or less constitute the class of organizations considered “small
entities” or “small businesses.”
FRA understands that small entities in the railroad industry
have significantly different characteristics than larger carriers
and shippers. FRA believes that these differences necessitate
careful consideration in order to ensure that those entities
receive appropriate treatment on compliance and enforcement
matters, and enhance the safety of railroad operations. 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.
Small Entity Communication Policy
It is FRA's policy that all agency personnel respond in a timely
and comprehensive fashion to the inquiries of small entities
concerning rail safety statutes, safety regulations, and
interpretations of these statutes and regulations. Also, FRA
personnel provide guidance to small entities, as needed, in
applying the law to specific facts and situations that arise in the
course of railroad operations. These agency communications take
many forms, and are tailored to meet the needs of the requesting
party.
FRA inspectors provide training on the requirements of all
railroad safety statutes and regulations for new and existing small
businesses upon request. Also, FRA inspectors often provide
impromptu training sessions in the normal course of their
inspection duties. FRA believes that this sort of preventive,
rather than punitive, communication greatly enhances railroad
safety. FRA's Office of Safety and Office of Chief Counsel
regularly provide oral and written responses to questions raised by
small entities concerning the plain meaning of the railroad safety
standards, statutory requirements, and interpretations of the law.
As required by the SBREFA, when FRA issues a final rule that has a
significant impact on a substantial number of small entities, FRA
will also issue a compliance guide for small entities concerning
that rule.
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. In some regions of the country where the concentration
of small entities is particularly high, FRA Regional Administrators
have established programs in which all small entities in the region
meet with FRA regional specialists on a regular basis to discuss
new regulations, persistent safety concerns, emerging technology,
and compliance issues. Also, FRA regional offices hold periodic
conferences, in which specific blocks of time are set aside to meet
with small businesses and hear their concerns.
In addition to these communication practices, FRA has instituted
an innovative partnership program that expands the extent to which
small entities participate in the development of policy and
process. The Railroad Safety Advisory Committee (RSAC) has been
established to advise the agency on the development and revision of
railroad safety standards. The committee consists of a wide range
of industry representatives, including organizations that represent
the interests of small business. The small entity representative
groups that sit on the RSAC may appoint members of their choice to
participate in the development of new safety standards. This
reflects FRA's policy that small business interests must be heard
and considered in the development of new standards to ensure that
FRA does not impose unnecessary economic burdens on small
businesses, and to create more effective standards. Finally, FRA's
Web site (http://www.fra.dot.gov) makes pertinent agency
information available instantly to the public.
FRA's longstanding policy of open communication with small
entities is apparent in these practices. FRA will make every effort
to develop new and equally responsive communication procedures as
is warranted by new developments in the railroad industry.
Small Entity Enforcement Policy
FRA has adopted an enforcement policy that addresses the unique
nature of small entities in the imposition of civil penalties and
resolution of those assessments. Pursuant to FRA's statutory
authority, and as described in 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
addition to the seriousness of the violation and the person's
history of compliance, FRA inspectors consider “such other factors
as the immediate circumstances make relevant.” In the context of
violations by small entities, those factors include whether the
violations were made in good faith e.g., based on an honest
misunderstanding of the law), and whether the small entity has
moved quickly and thoroughly to remedy the violation(s). In
general, the presence of both good faith and prompt remedial action
militates against taking a civil penalty action, especially if the
violations are isolated events. On the other hand, violations
involving willful actions and/or posing serious health, safety, or
environmental threats should ordinarily result in enforcement
actions, regardless of the entity's size.
Once FRA has assessed a civil penalty, it is authorized to
adjust or compromise the initial penalty claims based on a wide
variety of mitigating factors, unless FRA must terminate the claim
for some reason. FRA has the discretion to reduce the penalty as it
deems fit, but not below the statutory minimums. The mitigating
criteria FRA evaluates are found in the railroad safety statutes
and SBREFA: 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 impacts an
assessment might exact on the entity's continued business; and
evidence that the entity acted in good faith. FRA staff attorneys
regularly invite small entities to present any information related
to these factors, and reduce civil penalty assessments based on the
value and integrity of the information presented. Staff attorneys
conduct conference calls or meet with small entities to discuss
pending violations, and explain FRA's view on the merits of any
defenses or mitigating factors presented that may have resulted or
failed to result in penalty reductions. Among the “other factors”
FRA considers at this stage is the promptness and thoroughness of
the entity's remedial action to correct the violations and prevent
a recurrence. Small entities should be sure to address these
factors in communications with FRA concerning civil penalty cases.
Long-term solutions to compliance problems will be given great
weight in FRA's determinations of a final settlement offer.
Finally, under FRA's Safety Assurance and Compliance Program
(SACP), FRA identifies systemic safety hazards that continue to
occur in a carrier or shipper operation, and in cooperation with
the subject business, develops an improvement plan to eliminate
those safety concerns. Often, the plan provides small entities with
a reasonable time frame in which to make improvements without the
threat of civil penalty. If FRA determines that the entity has
failed to comply with the improvement plan, however, enforcement
action is initiated.
FRA's small entity enforcement policy is flexible and
comprehensive. FRA's first priority in its compliance and
enforcement activities is public and employee safety. However, FRA
is committed to obtaining compliance and enhancing safety with
reasoned, fair methods that do not inflict undue hardship on small
entities.
[68 FR 24894, May 9, 2003]