immediate attention: shelf couplers, headshields and a thermal insulation.

It was also determined that we could not have a shortage of cars, so we would emphasize our biggest area on those cars in the retrofit. That is presently at this time just about complete or it is ahead of schedule.

Of course, we were looking at the suppliers having the material for the shelf coupler and the headshield available, the railroad's ability to install this and still not have a shortage of tank cars. Mr. FLORIO. Isn't it true that most of these are not railroadowned cars?

Mr. WALSH. That is true, Mr. Chairman, the large majority. Mr. FLORIO. So we're not talking about the financial health of the railroads being overly impacted. Many of these people are oil and chemical companies.

Mr. WALSH. Chemical companies own the cars.

Mr. FLORIO. My recollection is the industry is not having that much difficulty in terms of its own financial picture.

Mr. WALSH. It does not create a difficulty for the industry in that area except for the availability of people to do the work, and also the material being available and also the shortage of cars. These are three things which had been taken into consideration at the time of the retrofit.

Mr. PARSONS. Sir, there is a technical difference. At the time we did all the research and had the rule HM-144 on the 112's, you will recall that family of vehicle was 30,000-gallon-vehicles without insulation, basically the same design throughout.

So the retrofit that came out could fit the entire fleet. On the other hand, the 105's are a mixed bag. They go from 10,000 gallons up to over 22,000 gallons. They do have insulation but there are four different types. They are structural-they are jacketed but their structural design and physical strength vary. The jacketing is not consistent.

So there is a study under way right now to find out what the mix is out there and what makes sense. The same rule we put on the HM-144 would not necessarily fit this particular batch of vehicles. Mr. FLORIO. When can we foresee the rulemaking process being expanded to these other types of cars?

Mr. PARSONS. I can speak of when the research would have to be finished. Mr. Sullivan would have to speak to rulemaking. Later this year we should be in a position to prescribe to the Administrator, Mr. Santman, as to the mix of vehicles and actions that could effectively be taken.

Mr. FLORIO. Mr. Santman, is there something you would want to add to that?

Mr. SANTMAN. I am prepared to move when the technical advice coming out of the FRA studies is ripe for moving.

Mr. FLORIO. Let me ask you a question. We have had industry representatives, ironically enough, complain that the Materials Transportation Bureau has proposed standards for intermodal tank cars which are not strong enough. Have you received similar complaints?

Mr. SANTMAN. As part of the rulemaking process, and indeed I believe this is an indication that the rulemaking process is working

for a change, as compared to the past when such things as the jumbo tank car standards came into being 25 years ago, I believe our proposal has drawn from a number of the railroads some serious questions. We have considered them in the rulemaking. This indeed is an ongoing rulemaking where the comment period is closed. Basically what we are talking about here is [indicating] I think this model will give you an indication. It is the liquid counterpart of the dry cargo container handled on container ships and piggybacked on trucks and will move by rail. The development of this particular mode of transit has been largely outside the United States.

Again, unfortunately it is one of those technological areas where the Japanese and Europeans seem to have gotten a jump on us. It has been in use for about 10 years, and I believe the comments that have been offered by the AAR in our rulemaking in some part were quite sympathetic to them in terms of relief devices, that once they open, if there is an overturn, I think they're concerned about structural integrity.

There is also a heavy indication we are approaching the matter of bulk shipment of hazardous materials by rail in a much happier manner than we have in the past. When I say "we", I'm talking about shippers, carriers, and the Federal Government.

Mr. FLORIO. There are no legal prohibitions are there, for requiring drastic retrofitting if in fact it doesn't meet your standards? Mr. SANTMAN. Indeed, we have a much better handle under the 1975 act on container manufacturing than we ever had before. The law that preceded the 1975 act required us to work through the legal fiction of telling shippers and carriers what they could and could not do.

Mr. FLORIO. That is perspectively. How about equipment on the tracks right now that does not comply with what you perceive to be minimum standards?

Mr. SANTMAN. What we are talking about here is not railcars with undercarriages built outside the country. We are speaking of a portable tank, which I think you can envision, enlarged to a 40foot length, piggybacked on a trailer. The manufacturer of these, the arrival of these on the scene, has occurred in the United States under our exemption process, and we have indeed required each manufacturer, foreign manufacturer, through their designated U.S. agent, to participate in a public proceeding for the approval of the process by which they manufacture them.

What we are talking about right now is moving that into a generic rulemaking, an across-the-board set of standards for all intermodal tanks. The 10 years or so of experience which has been largely outside the United States and on vessels moving back and forth between the United States and truck movement

Mr. MATSUI. You use the word "exemption". It sounds like this is a voluntary program.

Mr. SANTMAN. No, exemption is the name that has been associated because it's used in the statute we operate under as the heading for granting administrative relief from the regulations. The regulations in some cases will say you may not do something and in other cases they may be absolutely silent.

This is an area where the regulations were silent with respect to the concept of liquid containers of this particular size. The regulations had grown up over the years largely in a reflection of what the marketplace was developing. But the AAR-RPI tank car committee had advanced forward in the movement of the state of the art with respect to large tank cars. That's how the jumbo tank cars came into being.

This type of tank [indicating] and the concepts associated with them and the techniques for fabrication have grown up in a slightly different atmosphere. They have grown up in this kind of an arrangement where largely the U.S. shippers who were interested in gaining economic advantages of shipping in this amount of bulk rather than 55-gallon drums and smaller containers saw the attractiveness of these portable tanks being used, particularly in the European community, and wanted to get in on the benefits of it. They came to us, brought the manufacturers, primarily the European manufacturers to us and said look, we would like to be able to use these kinds of containers in the United States. They're being used outside the country. They have shown themselves to be capable of surviving and working well in transportation. They have certain economic advantages.

We went through a public process, including some tests that Conrail assisted us in performing in Baltimore in May of 1979 in the actual rail mode, using these containers. And they are currently authorized for use in this country under this grant of exemption, which is a form of administrative relief from the regulations.

They did not anticipate these kinds of containers. We are now at the stage where we are establishing a frontend rule, a standardized rule for how they will be manufactured, the thickness, the testing of them, and the uses to which they may be put.

I must compliment the AAR for their active participation in that rulemaking, and I think with their help we are going to fashion a good rule which will live well over the years.

Mr. FLORIO. I have just one last question. It's been brought to the committee's attention that there are allegations about a Conrail practice of removing bad order tags or disregarding them and putting the cars back in use when in fact cars have had the need for repairs.

I assume this has been brought to your attention, and we would like to know what if anything your office is doing about looking into the validity of these allegations.

Mr. WALSH. Well, Mr. Chairman, it has been called to the attention of the Office of Safety in the more recent months, and of course the bad order tag is used in the industry not only for violations of the Federal safety standards but also for some of the railroad's own requirements, to get a car to a home shop or they have a problem flooring or some of their own problems.

We recently revised our freight car safety standards to become effective on December 31, 1979, or they were issued on December 31, 1979, to become effective March 1. There seems to be, from our inspectors going out and talking to both labor and management on Conrail, some misunderstanding as to the use of the bad order tag.

We have set up a series of conferences where we will explain to them that this tag is used by the industry. To have a tag of our own we would have to go to OMB and get their permission to make the rebutting requirement. We feel the use of the tag is proper. We have addressed it in our new regulations and changed our regulations so that where there was a vagueness in the old regulation, it has been changed.

So there should be a good understanding as to how a bad order tag would be used in reporting a violation of some of our Federal statutes. I hope that in the next few months we can resolve that so that both Conrail management, Conrail employees, and their union representatives will fully understand exactly what is in the regulation and when the tag is taken off that it is done properly.

Mr. FLORIO. Are you telling me under the present existing regulations that might be issued that the bad order tag device is something that is purely a private internal railroad monitoring device and is not relevant to Federal safety standards?

Mr. WALSH. The tag itself we address in our regulations, Mr. Chairman.

Mr. FLORIO. Existing or proposed regulations?

Mr. WALSH. Existing regulations. Those were implemented on March 1, 1980.

Mr. FLORIO. Prior to March 1, 1980, which was just a couple of days ago, there was no systematic governmentally dictated bad order tag process?

Mr. WALSH. In the old regulations we addressed it but it wasn't what we felt was clear. There was a misunderstanding so we have taken what we thought was the misunderstood portion and emphasized it in the new regulations.

Mr. FLORIO. When you say you addressed it, did you address it in terms of governmental authority or did you address it as being an industry practice you were giving suggestions about?

Mr. WALSH. It is in the new regulations as how the tag will be used.

Mr. FLORIO. But that's not my point. I am talking about the process prior to the first of March. Was there a federally required Federal tag order process?

Mr. WALSH. No, Mr. Chairman, there never was an actual Federal tag. It has always been the industry which has supplied this tag, and they used it to identify Federal defects as well as their own defects. This seems to have been a problem to the employees in completing understanding whether it was a Federal defect or just a railroad

Mr. FLORIO. So if a railroad did not want to use a bad order tag system for identifying what they perceived to be the defects for the Federal system or their own internal defects, they didn't have to do it. Is that correct?

Mr. WALSH. They had to use some means of identifying those defects and it was a way in our regulation of getting them from where the inspector found the defect to a repair facility to correct the defect. And in some instances I am told the railroad inspector would find a defect and would put a tag on the car and that allowed it to go to the home railroad facilities for repair. This allowed it sometimes to run across country.

So as we are revising our regulations we took this into consideration and we made it so that when these defects were found they would then be tagged and taken to one of the facilities.

The biggest thing is the car could not be placed for loading once it became empty.

Mr. FLORIO. Gentlemen, thank you very much.

Mr. SULLIVAN. Thank you, sir.

Mr. FLORIO. Our next witness is Mr. James B. King, Chairman of the National Transportation Safety Board.

Mr. King, welcome to the committee. Your testimony has been received. It will be entered into the record in its entirety and you may proceed as you see fit.

STATEMENT OF JAMES B. KING, CHAIRMAN, NATIONAL TRANSPORTATION SAFETY BOARD, ACCOMPANIED BY WILLIAM H. GOSSARD, TRANSPORTATION SAFETY SPECIALIST, OFFICE OF EVALUATIONS AND SAFETY OBJECTIVES, AND ELMER GARNER, CHIEF, RAILROAD ACCIDENT DIVISION, BUREAU OF ACCIDENT INVESTIGATION

Mr. KING. Thank you, Mr. Chairman. We are pleased to be here to present testimony on behalf of the National Transportation Safety Board dealing with rail safety and reauthorization of the Federal Railroad Safety Act of 1970.

Before I begin I would like to introduce members of the Safety Board's staff with me today. On my right is Mr. William Gossard, transportation safety specialist, Office of Evaluations and Safety Objectives, and on my left is Mr. Elmer Garner, Chief, Railroad Accident Division, Bureau of Accident Investigation.

The National Transportation Safety Board is an independent agency created by the Congress to investigate major transportation accidents and to issue safety recommendations to prevent a recurrence of similar accidents.

In carrying out this mandate the Safety Board investigates all railroad accidents in which there is a fatality, substantial property damage of at least $150,000 or involves a passenger train with damage of $10,000 or more. In the last year the Board investigated 512 railroad accidents and issued 85 safety recommendations. Thirty-two percent of these were directed to the Federal Railroad Administration.

In addition to its work involving individual accidents, the Board's broader oversight responsibility also makes it concerned with safety trends. In this respect, the Board has been alarmed at the steady growth in the number of railroad accidents over the last 12 years. When the Federal Railroad Administration first reported rail safety statistics in 1967, shortly after the FRA assumed rail safety responsibility from the Interstate Commerce Commission, American railroads registered 7.72 train accidents for every million train-miles. In a little more than a decade, that rate has doubledin 1978 the rate was 14.99.

There is agreement in both industry and Government on the single most powerful force in this upward surge of train accident rates-that force is deferred maintenance of way. What is lacking is agreement on causes and effective solutions.