August 24, 2016

On August 11, the Federal Transit Administration (FTA) published a final rule in the Federal Register establishing a public transportation safety program. The rule applies to all recipients of federal funding under chapter 53 of title 49 U.S.C. but does not apply to commuter railroads regulated under the safety standards that apply to rail transportation for interstate commerce, which have long been under direct authority of the Federal Railroad Administration.

This is not the only jurisdictional awkwardness here. An earlier focus of Congressional policy towards mass transit safety was to encourage and enable state-level safety oversight bodies (referred to in the rule as State Safety Oversight Agencies (SSOAs). The new rule does not get rid of SSOAs, but it does allow the FTA to overrule them.

The new rule will be a new part 670 of title 49 CFR. One big authority: “The Administrator may conduct investigations, inspections, audits and examinations, and test the equipment, facilities, rolling stock and operations of a recipient’s public transportation system” (§670.11).

The FTA is also allowed to set safety standards (called directives), both generally and specifically. Under the rule, the Administrator sets generally applicable standards but the Deputy Administrator can issue locally-specific standards:

The Administrator may issue a general directive under this part that is applicable to all recipients or a subset of recipients for the following reasons—

(1) The Administrator determines that an unsafe condition or practice, or a combination of unsafe conditions and practices, exists such that there is a risk of death or personal injury, or damage to property or equipment; or

(2) For any other purpose where the Administrator determines that the public interest requires the avoidance or mitigation of a hazard or risk. (§670.25)

………

The Deputy Administrator may issue a special directive under this part to one or more named recipients for the following reasons—

(1) The Deputy Administrator has reason to believe that a recipient is engaging in conduct, or there is evidence of a pattern or practice of a recipient’s conduct, in violation of the Public Transportation Safety Program or any regulation or directive issued under those laws for which the Administrator exercises enforcement authority for safety;

(2) The Deputy Administrator determines that an unsafe condition or practice, or a combination of unsafe conditions and practices exists such that there is a substantial risk of death or personal injury, or damage to property or equipment; or

(3) For any other purpose where the Deputy Administrator determines that the public interest requires the avoidance or mitigation of a hazard or risk through immediate compliance. (§670.27)

Under the new rule, FTA can give orders either to the SSAO or to the transit agency itself. FTA can “Require more frequent oversight of a recipient by a State Safety Oversight Agency that has jurisdiction over the recipient” (§670.21(a)) or may “Order a recipient to develop and carry out a corrective action plan” (§670.21(c)).

In instances where a directive seems too strong, the FTA can issue an advisory instead:

In any instance in which the Administrator determines there are hazards or risks to public transportation, the Administrator may issue an advisory which recommends corrective actions, inspections, conditions, limitations or other actions to avoid or mitigate any hazards or risks. (§670.29)

In order for standards and directives to have meaning, there must be some kind of penalty for non-compliance, and under the rule, the penalty is financial and involves withholding up to 25 percent of a transit agency’s urbanized area formula money:

Except as provided under 49 CFR part 674, the Administrator may withhold not more than twenty-five (25) percent of funds apportioned under 49 U.S.C. 5307 from a recipient when the Administrator has evidence that the recipient has engaged in a pattern or practice of serious safety violations, or has otherwise refused to comply with the Public Transportation Safety Program, as codified at 49 U.S.C. 5329, or any regulation or directive issued under those laws for which the Administrator exercises enforcement authority for safety. (§670.23(b))

For example, New York City’s fiscal 2016 §5307 apportionment was $573 million, so the maximum withholding for that city would be about $143 million.

Of course, if the safety violations stem from a lack of financial resources, then taking away money may not be the best option – but it is the only option available to FTA under existing law. The FRA, on the other hand, has the statutory authority to levy civil penalties against railroads and against individuals – see their FY 2015 enforcement report here.

The FTA can also “require a recipient to use Chapter 53 funds to correct safety violations identified by the Administrator or a State Safety Oversight Agency before such funds are used for any other purpose” (§670.23(a)).

The FTA Q&A document notes that although final rule “establishes Safety Management Systems (SMS) as FTA’s foundational safety policy,” the final rule does not require transit agencies to adopt a SMS. Instead, a different proposed rule that is still pending finalization would “each operator of public transportation that receives Federal financial assistance under 49 U.S.C. Chapter 53 would be required to develop and implement an Agency Safety Plan based on the principles of Safety Management System (SMS). FTA anticipates publishing a Public Transportation Safety Plan Final Rule later this year.”