Congress, the Federal Railroad Administration (FRA), and railroads face a showdown with dramatic implications for shippers and the US economy as Congress considers Sarah Feinberg's nomination as FRA administrator.
As acting FRA administrator since January, Feinberg has promised to stand strong on the 31 December deadline to implement positive train control (PTC), mandated by Congress in 2008. But most of the operating railroads will not meet the deadline until years later, and warn that they will begin embargoing shipments and halting commuter trains on many of their lines even weeks before the deadline.
The Senate Commerce, Science and Transportation Committee that is considering her nomination received strong confirmation this week from Feinberg that railroads will face fines and other penalties if Congress does not extend the looming regulatory deadline. PTC is a computerized train control technology designed to avoid certain types of derailments and accidents, required on lines that ship hazardous chemicals and passengers.
At her 17 September confirmation hearing, committee chairman senator John Thune (R-South Dakota) reiterated the need for Congress to pass an extension. He questioned Feinberg on what actions FRA has taken.
Feinberg said that FRA does not have authority to extend the deadline, and her agency has no choice but to take enforcement actions against non-compliant railroads on 1 January if Congress is unable to extend the deadline, because of how the present law is written.
Thune asked Feinberg whether commuter agencies and other railroad operators could be spared fines if they showed a good-faith effort to install PTC in time.
She said that many railroads have made such an effort, "but the law and the statute, the deadline, is very black-and-white and in our read does not give flexibility to railroads that are working diligently versus ones that are not."
She also said the railroads would be in violation of the law even if they are not shipping hazardous chemicals or passengers over the lines where PTC is required.
"We will enforce the deadline and the law," she told Thune.
In a policy shift for FRA, Feinberg told the committee she was not in favor of Congress granting her agency authority to grant case-by-case extensions to the deadline. That approach had been favored by the Department of Transportation and former FRA head Joe Szabo, but was consistently resisted by legislators in the House and Senate in years past. Feinberg said that approach would lead to 40 separate negotiations with each individual railroad, essentially a "choose your own deadline" scenario.
BNSF and CSX have already said they are evaluating their options and could be forced to suspend or significantly curtail their operations if the deadline is not extended. Norfolk Southern said it might be required to cease shipping hazardous commodities and hosting passenger trains on 1 January.
As the deadline approaches Congress appears to be trying to shift responsibility for the situation toward Feinberg regarding flexibility about the deadline and penalties, but she has continually stated that these impacts were mandated by Congress, and FRA's role is clearly to enforce it. She also would not recommend what length of extension would be appropriate.
Senators are hoping to attach the PTC extension to a broader extension of surface transportation programs, but it increasingly looks as though that bill will not pass this year as focus shifts to keeping the government operating and the 2016 presidential election cycle.
Despite support from senators on both sides of the aisle in the commerce committee, the plan has been unable to find a home in other "must-pass" legislation as other committees seek to keep bills funding the government and raising the debt limit free of so-called policy riders. The lack of a legislative vehicle and limited amount of time remaining in the session have cast doubt on Congress' ability to get an extension through, and forced railroads and regulators to examine what happens if it is not extended.
Feinberg said penalties that will be imposed include "significant fines" ranging from $15-25,000/day along with additional operating restrictions. Some of the operating restrictions could include requiring additional employees to be present in the cab of locomotives for trains that are operating.
Senators asked for clarity on railroads' common carrier obligation and other implications of the mandate if Congress "inexplicably" refuses to act on an extension of the deadline before the end of the year. Feinberg said the common carrier obligation of railroads is a question for the Surface Transportation Board, despite that agency's deferral to FRA in its own recent letter to Congress.
Feinberg said her agency is tasked primarily with safety and it does look at the economic side of things as it makes decisions, and most of the affected hazardous material and commuter traffic would shift to trucks if the railroads shut down.
It will be several more weeks before the committee decides whether to send her nomination to the full Senate for a floor vote. Congressional sources said a committee vote is unlikely to come before the chamber's recess in early October.
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