(a) General. Except as provided in paragraphs (b) and (c) of this section, this part applies to—

(1) Railroads that operate rolling equipment on standard gage track which is part of the general railroad system of transportation; and

(2) Railroads that provide commuter or other short-haul rail passenger service in a metropolitan or suburban area (as described by 49 U.S.C. 20102) in the United States.
...

For example, all of FRA's regulations exclude from their reach railroads whose entire operations are confined to an industrial installation (i.e., “plant railroads”), such as those in steel mills that do not go beyond the plant's boundaries. E.g., 49 CFR 225.3(a)(1) (accident reporting regulations). Some rules exclude passenger operations that are not part of the general railroad system (such as some tourist railroads) only if they meet the definition of “insular.” E.g., 49 CFR 225.3(a)(3) (accident reporting) and 234.3(c) (grade crossing signal safety). Other regulations exclude not only plant railroads but all other railroads that are not operated as a part of, or over the lines of, the general railroad system of transportation. E.g., 49 CFR 214.3 (railroad workplace safety).

By “general railroad system of transportation,” FRA refers to the network of standard gage track over which goods may be transported throughout the nation and passengers may travel between cities and within metropolitan and suburban areas. Much of this network is interconnected, so that a rail vehicle can travel across the nation without leaving the system. However, mere physical connection to the system does not bring trackage within it. For example, trackage within an industrial installation that is connected to the network only by a switch for the receipt of shipments over the system is not a part of the system.

Moreover, portions of the network may lack a physical connection but still be part of the system by virtue of the nature of operations that take place there. For example, the Alaska Railroad is not physically connected to the rest of the general system but is part of it. The Alaska Railroad exchanges freight cars with other railroads by car float and exchanges passengers with interstate carriers as part of the general flow of interstate commerce. Similarly, an intercity high speed rail system with its own right of way would be part of the general system although not physically connected to it. The presence on a rail line of any of these types of railroad operations is a sure indication that such trackage is part of the general system: the movement of freight cars in trains outside the confines of an industrial installation, the movement of intercity passenger trains, or the movement of commuter trains within a metropolitan or suburban area. Urban rapid transit operations are ordinarily not part of the general system, but may have sufficient connections to that system to warrant exercise of FRA's jurisdiction ( see discussion of passenger operations, below). Tourist railroad operations are not inherently part of the general system and, unless operated over the lines of that system, are subject to few of FRA's regulations
....

" The NNRy seems to be in better shape now than it has been in years. Any local can tell you that. I say that with exception. It has brought more out-of-state train weirdos than I care to see in Ely. Every time I go down there some yuppie from out of state takes it upon himself to explain to me about where I live. They don't even get it right half of the time. ..."

I know some of what is happening in Ely, and I have been involved in similar disputes, so I won't comment on the fracas....one side or another. Regarding the FRA.....usually, USUALLY, if an operation has 15 or fewer employees it can be exempt from FRA mandated drug testing. The operation cannot enforce FRA mandated drug testing if it has fewer than 15 (train/rail service) employees, but may have a testing regimen voluntarily.

As a former employee of the Nevada Northern Railway, I can tell you first hand that the FRA does consider the NNRy to be part of the general system and therefore must comply with drug testing part 219 and part 240 engineer qualifications. Neither of these two are being met by the railroad.