Wednesday, December 30, 1998 (Washington, DC)

The Federal Railroad Administration (FRA) and the Surface Transportation Board (STB) today issued a joint proposed rule for railroads governing certain mergers, consolidations, or acquisitions of control. The proposed rule would require railroads seeking to engage in these transactions to file a Safety Integration Plan (SIP) with FRA and STB for review and approval.

A SIP is a written document submitted by the railroads detailing their safety plans prior to and during the implementation of the proposed merger.

"Safety is President Clinton’s highest transportation priority, and this joint proposal would promote safety in the railroad industry," U.S. Transportation Secretary Rodney E. Slater said. "Our goal is zero tolerance of safety hazards."

Under FRA’s portion of the rule, railroads seeking to implement a covered transaction would be required to file a proposed SIP with FRA. The agency would then review the SIP and advise the STB as to whether it provides a reasonable assurance of safety for the transaction. The rule would further require a railroad to have an approved SIP by FRA after consultation with the Board before it could commence operations over property subject to the transaction.

"FRA welcomes its partnership with the Surface Transportation Board on this unprecedented rulemaking action," said FRA Administrator Jolene Molitoris. "This proposed rule will ensure coordinated consideration of safety."

Correspondingly, FRA would coordinate with the STB on transactions that would be evaluated by the Board. FRA intends to play a principal role in analyzing SIPs filed by rail carriers by providing comments to the Board on the SIPs. Should the Board approve of a transaction, FRA would monitor the railroad’s implementation of the SIP, consult with the Board at all appropriate stages of implementation, and advise the Board when the proposed integration has been safely completed. FRA would be authorized to exercise its full enforcement remedies should either FRA or the STB reject the proposed SIP or a railroad fails to implement the terms of an approved SIP.

The proposed rule is entitled "Regulations on Safety Integration Plans Governing Railroad Consolidations, Mergers, Acquisitions of Control, and Start Up Operations; and Procedures for Surface Transportation Board Consideration of Safety Integration Plans in Cases Involving Railroad Consolidations, Mergers, and Acquisitions of Control."

The proposed rule will be published in tomorrow’s Federal Register. Comments should be submitted before March 1, 1999.