1. The Rail Safety Improvement Act of 2008 Issues For Rail Industry Contractors Kevin M. Sheys Partner K&L Gates LLP kevin.sheys@klgates.com January 9, 2009

2. 1 RSIA - General Points  The new requirements pertaining to contractors also apply to subcontractors at all levels. (Here, no further references to subcontractors).  Many of the items we will cover are relevant not because they apply to contractors, but because they apply to your customers; and they might ask you to help them comply.

3. 2 RSIA - General Points (continued)  90 or so Action Items  Different forms:  New substantive requirements.  New rules coming.  Reports to Congress from FRA.  Studies.  Pilot programs.

4. 3 RSIA - General Points (continued)  Many of the new requirements apply in the following categories:  All railroads & their contractors – Freights, commuter rail and intercity (i.e., Amtrak and any successors) and contractors providing services that would be covered if they were provided by railroad employees.  All railroads – Freights, commuter rail and Amtrak.  All freights.

5. 4 RSIA - General Points (continued)  Class I freights only.  Commuter rail and Amtrak (e.g., timing of changes to Hours of Service Act). (After this page, few separate references to Amtrak).  Amtrak only – (§ 503 – Amtrak plan to Gov’t on needs of families involved in major accidents).

6. 5 RSIA - General Points (continued)  Calculating deadlines: the President signed the Act into law on October 16, 2008. That is the effective date. Some of the deadlines are tied to the effective date.

7. 6 RSIA - General Points (continued)  What has happened so far:  RSAC Meeting on December 10 th.  RSAC Task 08-04 – PTC Implementation.  RSAC Task 08-05 – Bridge Safety.  RSAC Task 08-06 – HSA Recordkeeping for Freight.  RSAC Task 08-07 – Conductor Certification.  Next full RSAC Meeting – April 2nd.

8. 7 RSIA - General Points (continued)  Yes, you need to read the whole thing.

9. 8 Section 108 – Hours of Service Act (“HSA”) Reform  New provisions for §§ 21103 and 21104.  Applies to Contractors.  Summary – The Act establishes new hours of service rules for freight railroad train and signal employees, effective in nine months. (§ 108(a), (c), and (g))

10. 9 Section 108 – Hours of Service Act (“HSA”) Reform (continued)  Scope:  Freight rail “train employees.”  Retains the on-duty time limit of 12 consecutive hours but increases off-duty time from 8 to 10 consecutive hours in a 24-hour period.  Requires 48 consecutive hours off-duty if a train employee works six consecutive days.

11. 10 Section 108 – Hours of Service Act (“HSA”) Reform (continued)  Freight rail “train employees” (continued):  Requires 72 consecutive hours off-duty if a train employee works seven consecutive days.  Caps limbo time to 40 hours per month during the first year after enactment of the Act, and 30 hours per month thereafter.  Railroad carriers are prohibited from communicating with train employees during their off-duty time.

12. 11 Section 108 – Hours of Service Act (“HSA”) Reform (continued)  Commuter rail train employees – Old § 21103 applies to a “train employee,” defined in § 21101(5) to mean an individual engaged in or connected with the movement of a train, including a hostler.  Train employees providing commuter rail or intercity rail passenger transportation will be governed by the pre-Act requirements of 49 U.S.C. § 21103 until the earlier of the effective date of new hours of service requirements promulgated by the FRA or three years after enactment of the Act.

13. 12 Section 108 – Hours of Service Act (“HSA”) Reform (continued)  New § 21104 applies to “signal employees” the definition of which has been expanded to make the employees of signal contractors subject to the HSA.  It also retains the 12 consecutive hours on-duty limit and increases the rest period from 8 to 10 consecutive hours in a 24-hour period.  Railroad carriers are prohibited from communicating with signal employees during their off-duty time.

14. 13 Section 108 – Hours of Service Act (“HSA”) Reform (continued)  Regulations – FRA has the authority to promulgate regulations reducing the maximum hours of service, increasing minimum rest periods or further limiting or eliminating limbo time.

15. 14 Section 108 – Hours of Service Act (“HSA”) Reform (continued)  Effective date – Except for commuter rail and Amtrak, the signal and train employee changes all become effective nine months after enactment.  The FRA has a mandate to revise the HSA recordkeeping and reporting requirements within the next six months.

16. 15 Section 401 – Minimum Training Standards and Plans  New § 20162.  Summary – Within one year, the FRA will establish minimum training standards for each class and craft of safety-related railroad employee.  Includes operating, track maintenance, rolling stock inspection, repair and maintenance employees, and any other employee who directly affects railroad safety as determined by the FRA.

17. 16 Section 401 – Minimum Training Standards and Plans (continued)  The standards will apply to equivalent employees of railroad contractors.  The standards also will require railroads and contractors to qualify or otherwise document the proficiency of such employees with respect to federal railroad safety laws and regulations, and rules and procedures.

18. 17 Section 401 – Minimum Training Standards and Plans (continued)  Track and Equipment Inspection Employees – Within one year, FRA must establish minimum training, testing and skills criteria for track and equipment inspection employees. (§ 20162(a))

19. 18 Section 401 – Minimum Training Standards and Plans (continued)  Plans – Railroads and contractors must develop and submit for FRA approval training and qualification plans to implement the training standards. (§§ 20162(a) and (b))

20. 19 Section 402 –Certification of Certain Crafts or Classes of Employees  New § 20163.  Train Conductor Certification – Within eighteen months, FRA must prescribe regulations requiring the certification of train conductors.  The train conductor standards must conform to the training standards in § 20162.  The train conductor standards may conform to the locomotive engineer certification standards of 49 U.S.C. § 20135. (§ 20163(a))

21. 20 Section 402 –Certification of Certain Crafts or Classes of Employees (continued)  Report Regarding Certification of Other Crafts and Classes – Within six months, the FRA will issue a report to Congress about whether certification of other crafts or classes is necessary to reduce accidents and improve safety. (§ 20163(b) and (c))

22. 21 Section 402 –Certification of Certain Crafts or Classes of Employees (continued)  The report must consider:  Car repair and maintenance employees;  On board service workers (other than conductors, covered above);  Rail welders;  Dispatchers;  Signal repair and maintenance employees; and  Any other crafts or class of employees that FRA determines to be appropriate.

23. 22 Section 402 –Certification of Certain Crafts or Classes of Employees (continued)  Regulations – The FRA may prescribe regulations requiring these additional certifications. (§ 20163(d))

24. 23 Section 412 – Alcohol and Drug Testing for Maintenance-of-Way Employees  Summary – Within two years, the FRA must complete a rulemaking to revise regulations on drug and alcohol testing in order to cover all employees and contractors who perform maintenance-of-way activities.

25. 24 Section 103 – Railroad Safety Risk Reduction Program  New § 20156.  Summary – The FRA will issue regulations within four years requiring Class I freight railroads, commuter railroads and Amtrak to develop a railroad safety risk reduction program (“RRP”).  That systematically evaluates railroad safety risks and manages those risks in order to reduce the number and rate of railroad accidents, incidents, injuries, and fatalities.

26. 25 Section 103 – Railroad Safety Risk Reduction Program (continued)  The RRP must be reviewed and approved by the FRA. § 20156(a). Railroad customers likely will ask contractors to assist in the preparation, approval, implementation of and compliance with the program.  The RRP requirement also applies to any non-Class I freight railroad that FRA determines to have an inadequate safety record.

27. 26 Section 103 – Railroad Safety Risk Reduction Program (continued)  Risk Analysis – The RRP must include an analysis of rules and practices, infrastructure, equipment, employee levels and schedules, safety culture, management structure, employee training and other matters including those not covered by railroad safety regulations or other federal regulations that impact railroad safety. § 20156(c)

28. 27 Section 103 – Railroad Safety Risk Reduction Program (continued)  Other Key Program Elements:  Technology Implementation Plan (§ 20156(e)) – The RRP must include a ten-year technology implementation plan for development, adoption, implementation, maintenance and use of current, new or novel technologies to reduce safety risks identified under the RRP.  Any updates to the technology plan are subject to review and approval by the FRA and there is an affirmative obligation to periodically update the plan. A PTC system pursuant to the RRP must be implemented by December 31, 2018.

29. 28 Section 103 – Railroad Safety Risk Reduction Program (continued)  Other Key Program Elements (continued):  The technology plan must include analysis of the safety impact, feasibility, and cost and benefits of implementing technologies, including:  Processor-based technologies;  Positive train control systems;  Electronically controlled pneumatic brakes;  Rail integrity inspection systems;

30. 29 Section 103 – Railroad Safety Risk Reduction Program (continued)  Other Key Program Elements (continued):  The technology plan must include (continued):  Rail integrity warning systems;  Switch position monitors and indicators;  Trespasser prevention technology; and  Highway-rail grade crossing technology.

31. 30 Section 103 – Railroad Safety Risk Reduction Program (continued)  Fatigue Management Plan (§ 20156(f)) –  Designed to reduce the fatigue experienced by safety- related railroad employees and the likelihood of accidents, and injuries caused by fatigue:  Employees subject to the Hours of Service Act;  Other operating, track maintenance, rolling stock inspection, repair and maintenance employees; and  Any other employee who directly affects railroad safety as determined by FRA.

32. 31 Section 103 – Railroad Safety Risk Reduction Program (continued)  Fatigue Management Plan (continued):  Must be updated every two years.  Must include:  Employee education and training on factors that affect fatigue;  Strategies to reduce or mitigate the effects of fatigue;  Opportunities for treatment of any medical condition that may affect alertness or fatigue, including sleep disorders;  The effects on employee fatigue of an employee’s short term or sustained response to emergency situations or other intensive working conditions;

33. 32 Section 103 – Railroad Safety Risk Reduction Program (continued)  Fatigue management Plan/Must Include (continued):  Scheduling practices; on-duty call practices;  Work and rest cycles;  Increased consecutive days off for employees;  Changes in shift patterns;  Changes in duties;  Alertness strategies, such as policies on napping; and  Avoidance of abrupt changes in rest cycles for employees.

34. 33 Section 104 – Positive Train Control  New § 20157.  PTC Defined – A PTC system is a system designed to prevent train-to-train collisions, overspeed derailments, incursions into established work zones limits, and the movement of a train through a switch left in the wrong position. § 20157(i)(3)

35. 34 Section 104 – Positive Train Control (continued)  PTC Plan – Within eighteen months, Class I railroads, Amtrak and commuter railroads must develop and submit to FRA a plan for implementing positive train control by December 31, 2015. § 20157(a)

36. 35 Section 104 – Positive Train Control (continued)  Geographic Scope of Mandate – The PTC mandate covers the “main line” over which rail transportation is provided.  “Main line” is defined to mean a segment or route of trackage over which 5 million or more gross tons of railroad traffic is transported annually. § 20157(a)(1)(C) and (i)(2)

37. 36 Section 104 – Positive Train Control (continued)  Interoperability – A PTC system must be operable with other PTC systems.  “Interoperability” is defined to mean the ability to “control locomotives of the host railroad and tenant railroad to communicate with and respond to the positive train control system, including uninterrupted movements over property boundaries.” § 20157(i)(1)

38. 37 Section 104 – Positive Train Control (continued)  Timetable – Although the deadline for a plan for PTC implementation is December 31, 2015, the statute gives FRA discretion to shorten the deadline. § 20157(f)  The PTC Plan requires railroads, to the extent practical, to implement PTC in a manner that addresses areas of greater risk before areas of lesser risk. § 20157(a)(2)

39. 38 Section 104 – Positive Train Control (continued)  Regulations – FRA is obligated to issue regulations to implement the PTC mandate. FRA’s regulations likely will be issued in draft very soon, because of the eighteen month deadline for preparation of a PTC Plan. § 20157(g)

40. 39 Section 204 – National Crossing Inventory  New § 20160.  Summary – Within one year for existing crossings and within six months after a new crossing becomes operational, all railroad carrier must report to FRA information specified by FRA (including information about warning devices and signage) regarding each previously unreported crossing through which it operates.

41. 40 Section 204 – National Crossing Inventory (continued)  Such crossing information must be updated within two years and thereafter annually by September 30th.  The reporting responsibility falls on the entity dispatching traffic on the relevant line.

42. 41 Section 204 – National Crossing Inventory (continued)  Regulations – The FRA will issue regulations to implement this requirement. (§ 20160(c))

43. 42 Section 204 – National Crossing Inventory (continued)  Scope/Definition of Crossings – The definition of “crossing” includes grade-separated crossings and any explicitly authorized pedestrian, bicycle or other crossing (including private crossings). (§ 20160(d))

44. 43 Section 205 – Crossing Malfunctions  Summary – Within eighteen months, railroad carriers must establish a toll-free service to receive calls regarding malfunctions of signals, crossing gates and other devices, disabled vehicles, obstructions to the view of pedestrians or vehicle operators, and other safety information.