Proposed Rule2023-26133
Freight Car Safety Standards Implementing the Infrastructure Investment and Jobs Act
Primary source
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Published
December 8, 2023
Issuing agencies
Transportation DepartmentFederal Railroad Administration
Abstract
FRA is proposing to amend the Freight Car Safety Standards (FCSS) to implement section 22425 of the Infrastructure Investment and Jobs Act (Act). The Act places certain restrictions on newly built freight cars placed into service in the United States (U.S.) including limiting content that originates from a country of concern (COC) or is sourced from a state-owned enterprise (SOE) and prohibiting the use of sensitive technology that originates from a COC or SOE. The Act mandates that FRA issue a regulation to monitor and enforce industry's compliance with the standards of the Act.
Full Text
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<title>Federal Register, Volume 88 Issue 235 (Friday, December 8, 2023)</title>
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[Federal Register Volume 88, Number 235 (Friday, December 8, 2023)]
[Proposed Rules]
[Pages 85561-85577]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-26133]
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DEPARTMENT OF TRANSPORTATION
Federal Railroad Administration
49 CFR Part 215
[Docket No. FRA-2023-0021, Notice No. 1]
RIN 2130-AC94
Freight Car Safety Standards Implementing the Infrastructure
Investment and Jobs Act
AGENCY: Federal Railroad Administration (FRA), Department of
Transportation (DOT).
ACTION: Notice of proposed rulemaking (NPRM).
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SUMMARY: FRA is proposing to amend the Freight Car Safety Standards
(FCSS) to implement section 22425 of the Infrastructure Investment and
Jobs Act (Act). The Act places certain restrictions on newly built
freight cars placed into service in the United States (U.S.) including
limiting content that originates from a country of concern (COC) or is
sourced from a state-owned enterprise (SOE) and prohibiting the use of
sensitive technology that originates from a COC or SOE. The Act
mandates that FRA issue a regulation to monitor and enforce industry's
compliance with the standards of the Act.
DATES: Comments on the proposed rule must be received by February 6,
2024. Comments received after that date will be considered to the
extent practicable.
ADDRESSES:
Comments: Comments related to Docket No. FRA-2023-21 may be
submitted by going to <a href="https://www.regulations.gov">https://www.regulations.gov</a> and following the
online instructions for submitting comments.
Instructions: All submissions must include the agency name and
docket number or Regulatory Identification Number (RIN) for this
rulemaking. Note that all comments received will be posted without
change to <a href="https://www.regulation.gov">https://www.regulation.gov</a>; this includes any personal
information. Please see the Privacy Act heading in the SUPPLEMENTARY
INFORMATION section of this document for Privacy Act information
related to any submitted comments or materials.
Docket: For access to the docket to read background documents or
comments received, go to <a href="https://www.regulations.gov">https://www.regulations.gov</a> and follow the
online instructions for accessing the docket.
FOR FURTHER INFORMATION CONTACT: Check Kam, Mechanical Engineer, Office
of Railroad Safety at (202) 366-2139, email: <a href="/cdn-cgi/l/email-protection#ef8c878a8c84c1848e82af8b809bc1888099"><span class="__cf_email__" data-cfemail="2a49424f494104414b476a4e455e044d455c">[email protected]</span></a>; or
Michael Masci, Senior Attorney, Office of the Chief Counsel, telephone:
(202) 302-7117, email: <a href="/cdn-cgi/l/email-protection#2c41454f444d494002414d5f4f456c484358024b435a"><span class="__cf_email__" data-cfemail="315c58525950545d1f5c5042525871555e451f565e47">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Abbreviations and Terms Used in This Document
CBP--Customs and Border Protection
CE--Categorical Exclusion
CFR--Code of Federal Regulations
COC--Country of Concern
DOT--Department of Transportation
EA--Environmental Assessment
EIS--Environmental Impact Statement
FCSS--Freight Car Safety Standards
FR--Federal Register
FRA--Federal Railroad Administration
FTA--Federal Transit Administration
GS--General Schedule
IIJA Infrastructure Investment and Jobs Act
IP--Intellectual Property
IRFA--Initial Regulatory Flexibility Analysis
[[Page 85562]]
NAFTA--North American Free Trade Agreement
NEPA--National Environmental Policy Act
NPRM--Notice of Proposed Rulemaking
OMB--Office of Management and Budget
PRA--The Paperwork Reduction Act
RSA--Rail Security Alliance
SOE--State-owned enterprise
Umler--Universal Machine Language Equipment Register
U.S.--United States
U.S. DOC--United States Department of Commerce
U.S.C.--United States Code
USITC--U.S. International Trade Commission
USMCA--United States-Mexico-Canada Agreement
USTR--U.S. Trade Representative
Table of Contents for Supplementary Information
I. Executive Summary
II. Infrastructure Investment and Jobs Act Background
III. Application of the Infrastructure Investment and Jobs Act to
Railroad Freight Car Manufacturers Including Discussions With RSA
A. The Infrastructure Investment and Jobs Act Content
Limitations Apply Only at the Time of Manufacture
B. After-Manufacture Changes Are Not Covered by the
Infrastructure Investment and Jobs Act
C. Railroad Freight Cars Already Placed in Service in the U.S.
Are Not Subject to the Infrastructure Investment and Jobs Act
D. The Infrastructure Investment and Jobs Act Requirements Apply
Only to Manufacturers, Not Railroads
IV. Overview of the Proposal To Implement the Infrastructure
Investment and Jobs Act Requirement for Freight Car Compliance
Certification
V. Section-by-Section Analysis
VI. Regulatory Impact and Notices
A. Executive Order 12866 as Amended by Executive Order 14094
B. Regulatory Flexibility Act and Executive Order 13272
C. Paperwork Reduction Act
D. Federalism Implications
E. International Trade Impact Assessment
F. Environmental Impact
G. Environmental Justice
H. Unfunded Mandates Reform Act of 1995
I. Energy Impact
J. Privacy Act Statement
I. Executive Summary
Purpose of the Regulatory Action
FRA is issuing this rulemaking as required by the Act.\1\ The Act
provides that a railroad freight car, wholly manufactured on or after
the date that is 1 year after the date of issuance of regulations, may
only operate on the U.S. general railroad system if: (1) the railroad
freight car is manufactured, assembled, and substantially transformed,
as applicable, by a qualified manufacturer in a qualified facility; (2)
none of the sensitive technology located on the railroad freight car,
including components necessary to the functionality of the sensitive
technology, originates from a COC or is sourced from a SOE; and (3)
none of the content of the railroad freight car, excluding sensitive
technology, originates from a COC or is sourced from a SOE that has
been determined by a recognized court or administrative agency of
competent jurisdiction and legal authority to have violated or
infringed valid United States intellectual property rights of another
including such a finding by a Federal district court under title 35 or
the U.S. International Trade Commission under section 337 of the Tariff
Act of 1930 (19 U.S.C. 1337).\2\
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\1\ The Infrastructure Investment and Jobs Act (IIJA), Sec.
22425, Public Law 117-58, 135 Stat. 752 (Nov. 15, 2021) (codified at
49 U.S.C. 20171) and generally referred to in this proposed rule as
the Act, or section 20171).
\2\ 49 U.S.C. 20171(b)(1).
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The Act further provides percentage limitations on freight car
contents so that not later than one year after the date of issuance of
regulations, a railroad freight car, even if complying with the
requirements in the preceding paragraph, may not operate on the U.S.
general railroad system if more than 20 percent of the content of the
railroad freight car, calculated by the net cost of all components of
the car and excluding the cost of sensitive technology, originates from
a COC or is sourced from a SOE. After three years from the date of
issuance of regulations, the percentage may not be more than 15
percent.\3\
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\3\ Id. at (b)(2).
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Summary of the Regulatory Action
The Act requires regulations to be issued to implement its mandate
and for freight car manufacturers to certify that freight cars covered
by the Act are in compliance.\4\ This regulation would codify a process
for FRA to monitor and enforce compliance with the Act. To carry out
the Act's certification requirement, FRA is proposing to require
railroad freight car manufacturers to electronically certify to FRA
that each freight car complies with the Act before it operates on the
U.S. general railroad system of transportation. The certification would
be required to identify each car being offered for operation, and
include the manufacturer's name and the name of the individual
responsible for certifying compliance with the Act. In addition, the
manufacturers would be required to maintain all records showing
information to support certification, including content calculations,
and such records would be made available to FRA upon request.
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\4\ The Act requires certification to the ``Secretary of
Transportation.'' Pursuant to 49 CFR 1.89(a), the Secretary has
delegated that authority to FRA.
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Costs and Benefits of the Proposed Regulatory Action
This proposed rule would fulfill FRA's obligation to issue a
rulemaking that would implement the Act. In section ``VI. A. Executive
Order 12866 as Amended by Executive Order 14094'' of this proposed
rule, FRA describes the benefits and costs that would come from issuing
this regulation.
Over a 10-year period of analysis, FRA quantifies the following
costs to the freight car manufacturing industry and FRA that would come
from issuing this proposed rule: (1) limiting content sourced from COCs
or SOEs; (2) prohibiting the use of sensitive technology from these
sources; (3) industry compliance costs; and (4) government
administrative monitoring and enforcement costs. As shown in table 1,
the cost from issuing the proposed rule is approximately $143,300
(undiscounted), $123,600 (present value (PV), 3%), and $89,500 (PV,
7%). The annualized net costs are approximately $14,500 (PV, 3%) and
$12,800 (PV, 7%).\5\
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\5\ All cost and benefits estimates are in 2022 dollars.
Table 1--Industry and FRA Burden From Issuing the Proposed Rule, Total Cost, Rounded ($100)
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Total cost ($) Annualized ($)
Entity -------------------------------------------------------------------------------
Undiscounted PV 3% PV 7% PV 3% PV 7%
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Industry costs.................. 40,100 34,000 23,800 4,000 3,400
FRA costs....................... 103,200 89,600 65,700 10,500 9,400
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[[Page 85563]]
Total cost.................. 143,300 123,600 89,500 14,500 12,800
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In the economic analysis section, FRA qualitatively explains the
potential benefits that may result from implementing the proposed rule.
Issuing the proposed rule would protect the U.S. rail system from risks
that come from manufacturing freight cars with sensitive technology and
technological components, necessary to the functionality of the
sensitive technology, from a COC or SOE such as potential
vulnerabilities in information security. As such, this proposed rule
would mitigate potential issues related to compromised national
security and corporate espionage. Issuing the proposed rule would also
fulfill FRA's duties as required by the Act. As mentioned in the
economic analysis section, FRA welcomes public comment to assess the
potential costs and benefits associated with implementing this proposed
rule.
II. Infrastructure Investment and Jobs Act Background
On November 15, 2021, President Biden signed the Act,\6\ which
includes a mandate that FRA issue regulations to implement it.\7\ In
general, the Act allows freight cars, wholly manufactured after a
certain date, to operate in the U.S. only if the cars are manufactured
by a ``qualified manufacturer'' in a ``qualified facility.'' \8\ The
Act defines ``qualified manufacturer'' as a ``freight car manufacturer
that is not owned or under the control of a state-owned enterprise.''
\9\ Similarly, the Act defines ``qualified facility'' as ``a facility
that is not owned or under the control of a state-owned enterprise.''
\10\ The Act defines ``state-owned enterprise'' as an entity that is
owned by, or under the control of, a government or agency of a COC or
an individual acting under the direction or influence of a government
or agency of a COC.\11\
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\6\ 49 U.S.C. 20171. See <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2021/11/15/executive-order-on-implementation-of-the-infrastructure-investment-and-jobs-act/">https://www.whitehouse.gov/briefing-room/presidential-actions/2021/11/15/executive-order-on-implementation-of-the-infrastructure-investment-and-jobs-act/</a>.
\7\ Id. at (c)(1).
\8\ Id. at (b)(1)(A).
\9\ Id. at (a)(7).
\10\ Id. at (a)(6).
\11\ Id. at (a)(10).
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The Act provides a three-pronged definition of a COC. First, to be
a COC under the Act, a country must have been identified by the U.S.
Department of Commerce as a nonmarket economy country as of the date of
enactment of the Passenger Rail Expansion and Rail Safety Act of 2021
(i.e., as of November 15, 2021).\12\ Second, a country must have been
identified by the USTR in the most recent report under section 182 of
the Trade Act of 1974 (Section 301 Report) as a foreign country
included on the ``priority watch list.'' \13\ Finally, a country must
also be subject to USTR monitoring under section 306 of the Trade Act.
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\12\ Id. at (a)(4)(A).
\13\ Id. at (a)(4)(B). Section 182 of the Trade Act of 1974 (19
U.S.C. 2242), commonly known as the ``Special 301 provisions,''
requires the U.S. Trade Representative (USTR) to identify countries
that deny adequate and effective IP protections or fair and
equitable market access to U.S. persons who rely on IP protection.
The Trade Act requires the USTR to determine which, if any, of these
countries to identify as Priority Foreign Countries. Such a
designation can subject those countries to particular processes
under the Trade Act.
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In recent years, Congress has taken action concerning rail
equipment and components manufactured by or sourced from COCs or
SOEs.\14\ Generally, these laws limit the availability of Federal funds
for certain equipment or projects funded or controlled by foreign
entities. For example, the National Defense Authorization Act limits
the use of FTA funds, and in some circumstances, local funds, to
procure rolling stock from certain transit vehicle manufacturers who
``are owned or controlled by, is a subsidiary of, or is otherwise
related legally or financially to a corporation based in'' certain
foreign countries.\15\ However, because the freight rail car sector and
its equipment are privately owned, those laws do not apply to the
freight rail car industry. Congress has now extended similar
limitations on rail equipment and components manufactured by or sourced
from COCs or SOEs to the freight rail car industry by issuing the Act.
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\14\ See, e.g., the National Defense Authorization Act (49
U.S.C. 5323(u)).
\15\ Section 7613 of the National Defense Authorization Act for
Fiscal Year 2020 (NDAA 2020), Public Law 116-92 (Dec. 20, 2019),
which added a new subsection, 49 U.S.C. 5323(u), to Federal public
transportation law.
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Similarly, President Biden issued Executive Order 14005 of January
25, 2021 ``Ensuring the Future Is Made in All of America by All of
America's Workers,'' \16\ stating ``the United States Government
should, whenever possible, procure goods, products, materials, and
services from sources that will help American businesses compete in
strategic industries and help America's workers thrive.'' \17\ The
President also issued Executive Order 14028 of May 12, 2021 ``Improving
the Nation's Cybersecurity'' \18\ stating that ``prevention, detection,
assessment, and remediation of cyber incidents is a top priority and
essential to national and economic security.'' \19\ While the Act is
consistent with those Executive orders, the Act has more stringent
content limitations than those provided in the Executive orders.
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\16\ 86 FR 7475.
\17\ Id.
\18\ 86 FR 26633.
\19\ Id.
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The Act has a similar legal framework as the United States-Mexico-
Canada Agreement (USMCA),\20\ which replaced the North American Free
Trade Agreement (NAFTA). The USMCA contains a certification process for
certifying the origin of materials used in products.\21\ The Act builds
on the certification process of the USMCA, by requiring manufacturers
to certify the origins and sources of railroad freight car
components.\22\ The Act also directly borrows many terms from the
USMCA, including the definitions for ``net cost'' and ``substantially
transformed,'' two key terms that help set parameters for the
limitations built into the Act and help instruct manufacturers how to
comply with it.\23\ These similarities have helped inform FRA's
understanding of the requirements of the Act. The similarities also
help eliminate certain potential burdens
[[Page 85564]]
arising from this proposed rulemaking. As such, FRA expects that the
steps involved certifying compliance under the USMCA will be
substantially the same as those needed to certify compliance with the
Act. FRA welcomes comments to this NPRM to help further develop its
understanding of the issues.
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\20\ USMCA, July 1, 2020, <a href="https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement">https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement</a>.
\21\ USMCA chapters 4 and 5, July 1, 2020, <a href="https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement">https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement</a>.
\22\ 49 U.S.C. 20171(c)(2).
\23\ Id. at (a).
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III. Application of the Infrastructure Investment and Jobs Act to
Railroad Freight Car Manufacturers Including Discussions With RSA
To understand how railroad industry manufacturers were complying
with other Congressional requirements concerning equipment and
components manufactured by or sourced from COCs or SOEs and the
certification requirements of the USMCA, FRA conducted a series of
listening sessions with RSA, including two in person meetings on
September 26, 2022, and March 3, 2023. While the proposals in this NPRM
are FRA's alone, based on its independent assessments of the issues,
the meetings with RSA helped FRA analyze the requirements of the Act. A
summary of the meetings is in the public docket for this rulemaking
(Docket Number FRA-2023-21).
A. The Infrastructure Investment and Jobs Act Content Limitations Apply
Only at the Time of Manufacture
Section 20171(b)(2) of the Act sets forth certain content
limitations that must be met for ``railroad freight cars'' (as defined
in the statute) ``wholly'' manufactured after a certain date to operate
on the U.S. general railroad system of transportation. Understanding
this subsection within the context of the Act as a whole (49 U.S.C.
20171), FRA concluded that the Act regulates railroad freight cars by
imposing such requirements at the time of initial manufacture but does
not require FRA to ensure that the content limitations set forth in
section 20171(b)(2) are met throughout the useful life of the equipment
or at each re-entry into service following any changes to the railroad
freight car including, repair, alteration, modification, rebuild,
refurbishment, restoration, or reconstruction.
First, in the Act's definitions, Congress explicitly defined who
would be qualified to manufacture railroad freight cars eligible to
operate on the general railroad system of transportation by limiting
the manufacturing process to ``qualified manufacturers'' in ``qualified
facilities.'' \24\ The statute does not define those who would be
qualified to perform repairs or maintenance or otherwise address such
``aftermarket'' activities. References to the manufacturing process are
also found in the definition of ``substantially transformed,'' which is
a trade term of art used to describe a ``change in tariff
classification as a result of the manufacturing process.'' \25\
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\24\ Id. at (a)(7) and (6).
\25\ This term refers to the manufacturing process and is
generally used to help determine the country of origin for a product
in international trade. Generally, substantial transformation means
that the good underwent a fundamental change (normally as a result
of processing or manufacturing in the country claiming origin) in
form, appearance, nature, or character, which adds to its value an
amount or percentage that is significant in comparison to the value
which the good (or its components or materials) had when exported
from the country in which it was first made or grown. Usually a new
article of commerce--normally one with a different name--is found to
result from any process that Customs decides has brought about a
``substantial transformation'' in the pre-existing components. Thus,
leading to a change in the tariff classification of the
substantially transformed item. See <a href="https://www.trade.gov/rules-origin-substantial-transformation">https://www.trade.gov/rules-origin-substantial-transformation</a>.
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Second, the Act requires manufacturers to provide an annual
certification that any railroad freight cars they provide for operation
on the U.S. general railroad system of transportation meet the Act's
requirements.\26\ Manufacturers are capable of making such a
certification, particularly with respect to the content limitations,
only in connection with the initial manufacturing process.
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\26\ 49 U.S.C. 20171(c)(2).
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Third, the Act requires manufacturers to have a valid certification
at the time a railroad freight car begins operation.\27\ Given the
emphasis on manufacturers and the manufacturing process, it is
reasonable to interpret this phrase to mean at the time a railroad
freight car first begins operation, but not every time the car is
returned to service.
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\27\ Id. at (c)(3).
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Accordingly, reading the Act as a whole, content limitations
imposed by Congress apply to only newly-manufactured railroad freight
cars at the point when cars first enter the U.S. general railroad
system of transportation.\28\ The Act does not impose a continuing
obligation on the manufacturer to certify to the content limitations
throughout the useful life of the assets and does not require FRA to
enforce section 20171(b)(2)'s content limitations at all times a
railcar is in service.
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\28\ Id. at (b)(2).
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B. After-Manufacture Changes to a Railroad Freight Car Are Not Covered
by the Infrastructure Investment and Jobs Act
Because the Act regulates railroad freight cars at the time a
railcar first begins operation, the content limitations set forth in
section 20171(b)(2) do not apply at the time of repair. As a result,
the statute does not contemplate FRA enforcing the content limitations
at the time of repair.
The Act limits by whom and where a railroad freight car is
``manufactured, assembled, or substantially transformed.'' \29\ As
noted above, Congress focused on who may perform the manufacturing or
assembly of a railroad freight car and sought to ensure such activity
was not carried out in a facility that is owned or controlled by a
state-owned enterprise. Congress also sought to regulate who may
``substantially transform'' a component of a railroad freight car
during the manufacturing process. ``Substantially transformed'' is a
defined term of art, borrowed from trade law, that relates to tariff
classification as a result of the manufacturing process.
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\29\ Id. at (b)(1)(A).
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Requiring enforcement of the content limitations for the railroad
freight car's entire useful life--including repairs--would be a
departure from the compliance scheme dictated by the statute, which is
tied to manufacturer certifications. If Congress intended FRA to
enforce content limitations in section 20171(b)(2) throughout the life
of the railcar, including upon repair, it would have explicitly said
so.\30\ Moreover, Congress does not define or reference any type of
repair or aftermarket component replacement within the scope of the Act
at any place. Because terms like ``for the life of the asset,'' ``at
all times,'' or ``at the time of repair'' are absent from the text of
the Act, FRA has concluded that its enforcement obligation does not
extend beyond the time of manufacture for the content limitations in
section 20171(b)(2).
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\30\ Whitman v. American Trucking Ass'n, 531 U.S. 457, 468
(2001) (``Congress, we have held, does not alter the fundamental
details of a regulatory scheme in vague terms or ancillary
provisions--it does not, one might say, hide elephants in
mouseholes.'').
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C. Railroad Freight Cars Already Placed in Service in the U.S. Are Not
Subject to the Infrastructure Investment and Jobs Act
The Act requires FRA to issue regulations to implement the
requirements set forth in the Act.\31\ For purposes of this analysis,
FRA has
[[Page 85565]]
proposed to define the date on which FRA promulgates regulations as the
``Issuance Date.'' With respect to applicability, the plain language of
section 20171 states that only railroad freight cars that are wholly
manufactured on or after a date that is one year after the Issuance
Date are subject to Act's requirements.\32\ Thus, if FRA promulgates
regulations on June 1, 2023, the only railroad freight cars that are
wholly manufactured on or after June 1, 2024, are subject to the Act's
requirements. Using this hypothetical issuance date of June 1, 2023, as
an example, existing railroad freight cars manufactured prior to June
1, 2024, and new railroad freight cars that were partially manufactured
prior to June 1, 2024, are not subject to the Act. Thus, railroad
freight cars that are currently in-use are not subject to the Act,
including when parts are replaced during maintenance or repair; because
the Act only imposes forward-looking requirements.
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\31\ 49 U.S.C. 20171(c)(1).
\32\ Id. at (b)(1) and (2).
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D. The Act's Requirements Apply Only to Manufacturers, Not Railroads
The Act imposes certification and compliance obligations on
manufacturers, not railroads. Specifically, the certification
requirement set forth in section 20171(c)(2) and the prohibition on
false registration in Umler \33\ both attach to a railroad freight car
manufacturer.\34\ Further, FRA is permitted to prohibit a railroad
freight car manufacturer from providing additional railroad freight
cars for operation in the U.S. if the manufacturer is a repeat violator
of section 20171.\35\ The statute does not impose obligations on a
railroad to ensure the railroad freight cars meet content limitations
nor does the statute require FRA to hold railroads accountable for
compliance with the Act. FRA requests comments on whether a railroad
should be responsible for the operation of freight cars known to be in
noncompliance with the Act.
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\33\ Railinc Corp.'s Umler system is an electronic resource that
contains critical data for the North American rail fleet, such as
internal and external dimensions, cubic or gallon capacity, and
weight information for each unit. See Association of American
Railroads Rule 93 and UMLER Data Specification Manual; see also The
Umler[supreg] System at https://public.railinc.com/products-
services/umler-
system#:~:text=Umler%C2%AE%20is%20the%20source,to%20logistics%20partn
ers%20and%20customers.
\34\ 49 U.S.C. 20171(c)(2) and 20171(c)(3).
\35\ Id. at (c)(4).
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IV. Overview of the Proposal To Implement the Infrastructure Investment
and Jobs Act Requirement for Freight Car Compliance Certification
The Act requires manufacturers to annually certify to FRA, as
delegated by the Secretary, that any railroad freight cars it offers
for operation on the U.S. general railroad system of transportation
meet the requirements of the Act.\36\ This rulemaking proposes to
incorporate the certification requirement into the FCSS \37\ and
establish a process for FRA to access necessary information to
determine compliance with the Act.
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\36\ Id. at (c)(3).
\37\ 49 CFR part 215.
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FRA proposes to require manufacturers' certifications to be
submitted electronically to FRA's Office of Railroad Safety. The
certifications would include the manufacturer's name and address, the
name, signature and contact information for the person responsible for
certifying compliance, and a car identification number for each car
being certified. Manufacturers would be required to maintain records to
support their compliance and FRA would be able to access those records
upon request. FRA expects freight car manufacturers to certify groups
of cars together coinciding with bulk orders for equipment. For
convenience, manufacturers may submit the certification to FRA at the
same time as they request a safety appliance drawing review and/or
courtesy sample base car inspection for the same build order.\38\ At
its discretion, FRA may request the percentage break down on the
content for a specific car, as needed, to determine compliance for that
car.\39\
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\38\ FRA performs sample car inspections as a courtesy to the
manufacturers, to better ensure equipment is built in accordance
with all applicable Federal railroad safety laws. Generally,
manufacturers that desire to have FRA review their equipment for
compliance with safety appliance standards are to submit their
safety appliance arrangement drawings, prints, etc., to FRA's Office
of Railroad Safety, Office of Railroad Infrastructure and Mechanical
Equipment for review, at least 60 days prior to construction. FRA
reviews the documents submitted and advises the manufacturer if any
specifications laid out in the drawings do not conform with the
applicable regulation(s). The sample base car inspection generally
provides the manufacturer an opportunity to make any necessary
changes in the design or manufacturing process to meet compliance
before building the remaining cars of that order. See <a href="https://railroads.dot.gov/sites/fra.dot.gov/files/2020-05/MPEComplianceManual2013.pdf">https://railroads.dot.gov/sites/fra.dot.gov/files/2020-05/MPEComplianceManual2013.pdf</a>.
\39\ The percentage breakdown for evaluating content is the net
cost of materials (excluding the cost of sensitive technology)
compared to total cost of the freight car.
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FRA is also proposing that manufacturers maintain records showing
the calculations made to support certification under this section and
such records shall be made available to FRA upon request. This would
provide FRA access to the information necessary to determine the
percentage of components originating form COCs and SOE for each freight
car. FRA understands that manufacturers currently generate such a break
down for their cars to comply with the USMCA and does not anticipate
that assembling the information will result in an additional burden to
the industry.
FRA anticipates that certain documents submitted by manufacturers
pursuant to 49 U.S.C. 20171(c)(3) may contain proprietary or other
confidential business information. Manufacturers should follow the
procedures in 49 CFR 209.11 to ensure proper handling of such
information, and manufacturers may redact portions of submitted
information so long as FRA is able to accurately ascertain the
manufacturer's compliance with the Act. However, FRA retains the right
to make its own determinations regarding disclosure of submitted
information. In making these determinations, FRA will consider all
exemptions to Freedom of Information Act disclosure, including the
exemption on disclosure of commercial or financial information and
privileged or confidential information.\40\
---------------------------------------------------------------------------
\40\ 5 U.S.C. 552(b)(4).
---------------------------------------------------------------------------
V. Section-by-Section Analysis
This section-by-section analysis is intended to explain the
rationale for each revised or new provision FRA is proposing to
incorporate into the FCSS. The proposed regulatory changes are
organized by section number. FRA seeks comments on all proposals in
this NPRM.
Section 215.5 Definitions
FRA proposes to incorporate several new, defined terms into the
FCSS, most pulled directly from the Act and some proposed as necessary
to effectively implement the Act. FRA also proposes to organize the
existing FCSS definitions along with the newly proposed definitions in
alphabetical order to conform with FRA's other regulations. The Act's
definition for the term ``railroad freight car'' mirrors the definition
for the same term in the current FCSS. Accordingly, this rulemaking
would keep the definition in the FCSS unchanged. The new definitions
FRA proposes to add are discussed below:
Component is defined by the Act,\41\ and FRA is proposing to adopt
it in the
[[Page 85566]]
FCSS. Although the proposed definition does not identify specific parts
and subassemblies of freight cars as ``components,'' FRA believes
Congress intends this definition to include the major components of
freight cars (e.g., trucks, wheel sets, center sills, draft gears,
couplers, walkways, running boards) when calculating content
limitations under proposed section 49 CFR 215.401(b)(1). FRA does not
intend the definition of ``component'' to include smaller parts that do
not significantly impact manufacturing costs (e.g., wear plates, roof
liners, or small pieces of hardware such as screws). FRA welcomes
comment on how freight car items fit into this definition.
---------------------------------------------------------------------------
\41\ 49 U.S.C. 20171(a)(1).
---------------------------------------------------------------------------
Control is defined by the Act,\42\ and FRA is proposing to adopt it
in the FCSS. This definition relates to the definitions of ``qualified
facility'' and ``qualified manufacturer'' discussed below.
---------------------------------------------------------------------------
\42\ Id. at (a)(2).
---------------------------------------------------------------------------
Cost of sensitive technology is defined by the Act,\43\ and FRA is
proposing to adopt it in the FCSS.
---------------------------------------------------------------------------
\43\ Id. at (a)(3).
---------------------------------------------------------------------------
Country of concern is defined by the Act \44\ and FRA is proposing
to adopt it in the FCSS.\45\ As noted in the Infrastructure Investment
and Jobs Act Background section above a country must meet all three
criteria to qualify as a ``country of concern.'' Each of the criteria
within the definition of ``country of concern'' are separated by
``and'' instead of ``or,'' meaning a country must meet all three
criteria to meet the definition.
---------------------------------------------------------------------------
\44\ Id. at (a)(4).
\45\ These same criteria are used to define ``country of
concern'' in 49 U.S.C. 5323(u) (placing limitations on certain
rolling stock procurements for public transportation that qualify
for financial assistance), and the FTA has published Frequently
Asked Questions Regarding Section 7613 of the National Defense
Authorization Act for Fiscal Year 2020 that discusses the criteria
and the definition of ``country of concern.'' <a href="https://www.transit.dot.gov/funding/procurement/frequently-asked-questions-regarding-section-7613-national-defense">https://www.transit.dot.gov/funding/procurement/frequently-asked-questions-regarding-section-7613-national-defense</a>.
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First, to qualify as a ``country of concern'' under section 20171,
the U.S. DOC must have identified that country as a nonmarket economy
country pursuant to the Tariff Act of 1930 at the date of enactment
(i.e., as of Nov. 15, 2021).\46\ In 2021, when the Act became law, the
U.S. DOC had named eleven countries as nonmarket economy countries:
Armenia, Azerbaijan, Belarus, China, Georgia, Kyrgyzstan, Moldova,
Tajikistan, Turkmenistan, Uzbekistan, and Vietnam.\47\ FRA notes that
this criterion is tied to the Passenger Rail Expansion and Rail Safety
Act of 2021 enactment date and accordingly, the countries that meet
this first prong of the definition will not change.
---------------------------------------------------------------------------
\46\ 49 U.S.C. 20171(a)(4)(A).
\47\ Int'l Trade Admin, Countries Currently Designated by
Commerce as Non-Market Economy Countries, <a href="https://www.trade.gov/nme-countries-list">https://www.trade.gov/nme-countries-list</a> (identifying the Federal Register notices wherein a
country was designated as a non-market economy country).
---------------------------------------------------------------------------
Second, to constitute a ``country of concern,'' the USTR must also
name that country on the priority watch list in the most recent report
required by the Trade Act of 1974.\48\ In the most recently required
report, the USTR identified seven countries on the priority watch list:
Argentina, Chile, China, India, Indonesia, Russia, and Venezuela.\49\
---------------------------------------------------------------------------
\48\ 49 U.S.C. 20171(a)(4)(B).
\49\ Office of the U.S. Trade Rep., 2022 Special 301 Report, 5
(2022), (2022 Special 301 Report.pdf (<a href="http://ustr.gov">ustr.gov</a>)).
---------------------------------------------------------------------------
Third, a country is deemed a ``country of concern'' only if it is
subject to monitoring by the USTR under section 306 of the Trade Act of
1974.\50\ In the 2022 Special 301 Report, the USTR identifies seven
countries that are on the priority watch list: Argentina, Chile, China,
India, Indonesia, Russia, and Venezuela. Of these seven, only China is
monitored pursuant to section 306.
---------------------------------------------------------------------------
\50\ 49 U.S.C. 20171(a)(4)(C). See Office of the U.S. Trade
Rep., 2022 Special 301 Report, 44 (2022), <a href="https://ustr.gov/issue-areas/intellectual-property/special-301/2022-special-301-review">https://ustr.gov/issue-areas/intellectual-property/special-301/2022-special-301-review</a>,
(listing countries included on the priority watch list and whether
such countries are subject to monitoring under section 306 of the
Trade Act of 1974).
---------------------------------------------------------------------------
Accordingly, China is currently the only country that meets all
three criteria and therefore is the only ``country of concern'' as
defined in the Act.
Net cost is defined by the Act,<SUP>51 52</SUP> and FRA is
proposing to adopt it in the FCSS. Currently, chapter 4 of the USMCA
defines net cost.\53\
---------------------------------------------------------------------------
\51\ USMCA chapter 4, July 1, 2020, <a href="https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement">https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement</a>.
\52\ 49 U.S.C. 20171(a)(5).
\53\ Uniform Regulations Regarding the Interpretation,
Application, and Administration of Chapter 4 (Rules or Origin) and
Related Provisions in Chapter 6 (Textile and Apparel Goods) of the
Agreement Between the United States of America, The United Mexican
States, and Canada. <a href="https://ustr.gov/sites/default/files/files/agreements/usmca/UniformROO.pdf">https://ustr.gov/sites/default/files/files/agreements/usmca/UniformROO.pdf</a>.
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Qualified facility is defined by the Act,\54\ and FRA is proposing
to adopt it in the FCSS. When read in combination with the definition
of the term control the Act provides, FRA finds that the Act intends
for general corporate law principles to apply to determine whether a
particular railroad freight car or component manufacturer is ``owned or
controlled by, is a subsidiary of, or is otherwise related legally or
financially to a corporation based in'' a country that meets the
statutory criteria.
---------------------------------------------------------------------------
\54\ 49 U.S.C. 20171(a)(6).
---------------------------------------------------------------------------
Qualified manufacturer is defined by the Act,\55\ and FRA is
proposing to adopt it in the FCSS. For the purpose of this definition,
a supplier, component and repair part manufacturer, or other entity may
be a railroad freight car manufacturer, if it manufactures, assembles,
of substantially transforms a freight car, as described in proposed 49
CFR 215.401(a)(1). Like the definition of qualified facility, when read
in combination with the Act's definition of the term control, FRA again
finds that the Act intends for general corporate law principles to
apply to determine whether a particular railroad freight car or
component manufacturer is ``owned or controlled by, is a subsidiary of,
or is otherwise related legally or financially to a corporation based
in'' a country that meets the statutory criteria.
---------------------------------------------------------------------------
\55\ Id. at (a)(7).
---------------------------------------------------------------------------
Sensitive technology is defined by the Act,\56\ and FRA is
proposing to adopt it in the FCSS. While FRA understands the list of
devices included in this definition to be examples that can be
considered sensitive technology, FRA is not currently aware of any
additional devices that should be included in the list.
---------------------------------------------------------------------------
\56\ Id. at (a)(9).
---------------------------------------------------------------------------
State-owned enterprise is defined by the Act,\57\ and FRA is
proposing to adopt it in the FCSS.
---------------------------------------------------------------------------
\57\ Id. at (a)(10).
---------------------------------------------------------------------------
Substantially transformed is defined by the Act,\58\ and FRA is
proposing to adopt it in the FCSS. FRA understands that a manufacturing
process which changes an article's name, character, or use will often
result in a change in the article's tariff classification. Accordingly,
FRA understands the Act's definition of substantially transformed to
mean a manufacturing process that changes an article's name, character,
or use. FRA notes that the U.S. Customs and Border Protection (CBP) is
an implementing agency for USMCA and although CBP uses a slightly
different definition of substantially transformed than that provided in
the Act, CBP explains that substantial transformation ``occurs when, as
a result of manufacturing processes, a new and different article
emerges, having a distinctive name, character, or use, which is
different from that originally possessed by the article or material
before being subject to the manufacturing process.'' \59\ FRA finds
that the definition of substantially
[[Page 85567]]
transformed provided in the Act and CBP's definition of the same term
are compatible in that a manufacturing process which changes an
article's name, character, or use will often also result in a change in
the article's tariff classification.
---------------------------------------------------------------------------
\58\ Id. at (a)(11).
\59\ <a href="https://www.trade.gov/rules-origin-substantial-transformation">https://www.trade.gov/rules-origin-substantial-transformation</a>.
---------------------------------------------------------------------------
USMCA is defined by the Act,\60\ and FRA is proposing to adopt it
in the FCSS.
---------------------------------------------------------------------------
\60\ 49 U.S.C. 20171(a)(12).
---------------------------------------------------------------------------
Section 215.401 Requirements for Railroad Freight Cars Placed Into
Service in the United States
This section proposes to incorporate the requirements of paragraph
(b)(1) of the Act into the FCSS. Paragraph (b)(1) of the Act provides
that for a railroad freight car to operate on the U.S. general railroad
system of transportation: (1) any car wholly manufactured after a
certain date must be manufactured, assembled, and substantially
transformed by a qualified manufacturer in a qualified facility; (2)
none of the sensitive technology located on the car may originate from
a COC or be sourced from a SOE; and (3) none of the content of the car
(except sensitive technology) may originate from a COC or be sourced
from a SOE with a history of problematic trade practices or respect for
IP rights.
Proposed paragraph (a)(1) mirrors paragraph (b)(1)(A) of the Act
and mandates that any railroad freight car to be operated on the U.S.
general railroad system of transportation and wholly constructed one
year from a final rule in this proceeding, must be manufactured,
assembled, and substantially transformed by a qualified manufacturer or
a qualified facility.
Sensitive Technology Prohibition
Proposed paragraph (a)(2) mirrors paragraph (b)(1)(B) of the Act
and addresses sensitive technology. This paragraph proposes to
incorporate the Act's general prohibition on operating a freight car on
the U.S. general railroad system of transportation, if any of its
``sensitive technology'' or ``components necessary to the functionality
of the sensitive technology'' originates from a COC or is sourced from
a SOE.
As noted above, the Act defines ``sensitive technology,'' but does
not define or provide any guidance on what constitutes ``components
necessary to the functionality of the sensitive technology.'' FRA
understands this phrase to generally include the active components that
work with the sensitive technology, because they may also be able to
collect and transmit data. Passive components are excluded from this
phrase because they cannot collect or transmit data. Examples of active
components include, but are not limited to, any type of processor,
transmitter, receiver, or data storage device. While the passive
components are still necessary for the device to function as a whole,
these components do not play a vital role in the storage, collection,
exchange, transmittal, or manipulation of any data. Examples of passive
components include, but are not limited to, printed circuit boards,
power supplies, temperature sensors, pressure gauges, resistors,
capacitors, etc. FRA welcomes comments to this NPRM about what
constitutes ``components necessary to the functionality of the
sensitive technology'' under the Act.
Intellectual Property Infringement Prohibition
Proposed paragraph (a)(3) mirrors paragraph (b)(1)(C) of the Act
and addresses IP infringement. This language forbids the inclusion in
any railroad freight car of any content from a COC or SOE ``that has
been determined by a recognized court or administrative agency of
competent jurisdiction and legal authority to have violated or
infringed valid U.S. intellectual property rights of another.'' The Act
includes both ``a finding by a Federal district court under title 35''
and a finding by the U.S. International Trade Commission (ITC) under
section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) as
determinations sufficient to trigger the prohibition.
For the purposes of this requirement, the ITC makes a finding that
an entity has violated or infringed valid U.S. IP rights when the ITC
issues a final determination under section 337. Under ITC procedure, an
administrative law judge, who concludes that an entity violated section
337 of the Tariff Act, first files an initial determination.\61\ This
initial determination becomes a final determination of the ITC 60 days
after it is filed, unless the ITC orders review of the initial
determination, in which case the ITC's ultimate finding would be the
final determination.\62\ These determinations are available on the
ITC's website.\63\ FRA does not anticipate tracking determinations on
an ongoing basis; manufacturers seeking certification are responsible
for researching determinations against their own suppliers.
---------------------------------------------------------------------------
\61\ 19 CFR 210.42(a)(1)(i).
\62\ Id. at (h)(2).
\63\ <a href="https://usitc.gov/intellectual_property/337_determinations.htm">https://usitc.gov/intellectual_property/337_determinations.htm</a>.
---------------------------------------------------------------------------
As an example, in October 2009, the ITC issued a 10-year Limited
Exclusion Order against two Chinese companies (Tianrui Group Company
Limited and Tianrui Group Foundry Company Limited) and two U.S.
companies (Standard Car Truck Company, Inc. and Barber Tianrui Railway
Supply, LLC) that an administrative law judge determined had violated
section 337.\64\ The U.S. Court of Appeals for the Federal Circuit
upheld the ITC's decision on October 11, 2021.\65\
---------------------------------------------------------------------------
\64\ See In the matter of Certain Cast Steel Railway Wheels, et
al. USITC Inv. No. 337-TA-655 (U.S. Intern. Trade Com'n), 2009 WL
10693128.
\65\ Tianrui Group Co. Ltd. v. Intl. Trade Comm'n, 661 F.3d 1322
(Fed. Cir. 2011).
---------------------------------------------------------------------------
Furthermore, FRA finds that section 20171(b)(1)(C)'s prohibition
applies not only to the entity determined to be the IP infringer, but
to the content of that infringement as well. For example, in 2009, the
ITC determined that four respondents violated section 337 of the Tariff
Act by misappropriating numerous Amsted trade secrets relating to the
manufacture of cast steel railway wheels, importing into the U.S. cast
steel railway wheels and substantially injuring, and threatening
substantial injury to, Amsted's domestic cast steel railway wheel
operations, which manufacture Amsted's Griffin[supreg] wheels.\66\ The
ITC determination excluded any such steel railway wheels from entering
into the U.S. for ten years. On appeal, the Federal Circuit upheld the
ITC's decision.\67\ FRA understands that section 20171(b)(1)(C) would
prohibit a railroad freight car to be equipped with steel wheels that
were manufactured using the stolen IP that was the subject of this
case. The Act does not expressly provide a timeframe for the
prohibitions under this section or connect it to the length of the ITC
exclusion or any other time limitations. As such, FRA understands the
prohibition to be permanent.
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\66\ In the matter of Certain Cast Steel Railway Wheels, et al.
USITC Inv. No. 337-TA-655 (U.S. Intern. Trade Com'n), 2009 WL
4261206.
\67\ Tianrui Group Co. Ltd. v. Intl. Trade Comm'n, 661 F.3d 1322
(Fed. Cir. 2011).
---------------------------------------------------------------------------
Content Limitations
Proposed paragraph (b) mirrors section 20171(b)(2) of the Act and
addresses content limitations from COCs and SOEs generally. Consistent
with the Act, beginning 1 year after this regulation is issued,
proposed paragraph (b)(1)(i) would initially prohibit newly
manufactured freight cars from operating on the U.S. general railroad
system of transportation if more than 20 percent of the car's content
originates from a COC or is sourced from a SOE. After 3 years, proposed
paragraph (b)(1)(ii) would reduce that threshold to
[[Page 85568]]
no more than 15 percent. Cars not meeting these thresholds would be
noncompliant and the manufacturer would be subject to civil penalties
under proposed Sec. 215.407. Consistent with the Act, as proposed, the
percent of content is measured by the net cost of materials (excluding
the cost of sensitive technology).\68\ Proposed paragraph (b)(2)
mirrors paragraph (b)(2)(B) of the Act and explains that the content
limitations provided in the Act shall apply notwithstanding any
apparent conflict with provisions of chapter 4 of the USMCA. Chapter 4
of the USMCA and the Act both establish rules for the country of origin
for a product in international trade. This paragraph clarifies that
compliance with chapter 4 of the USMCA does not constitute, or in any
way affect, the content limitations in the Act, which apply
independently.
---------------------------------------------------------------------------
\68\ The proposed definition of ``net cost'' is provided in
section 215.5 of this proposed rule. For a discussion of ``net
cost,'' see the section-by-section analysis above.
---------------------------------------------------------------------------
Section 215.403 Certification of Compliance
This proposed section incorporates the requirements of paragraph
(c) of the Act and includes requirements designed to help FRA monitor
and enforce the Act's standards.
Consistent with paragraph (c)(2) of section 20171, proposed
paragraph (a) requires railroad freight car manufacturers to annually
certify to FRA, as delegated by the Secretary of Transportation, that
any railroad freight car it provides for operation in the United
States, meets the requirements of section 20171.
Proposed paragraph (a)(1) would require railroad freight car
manufacturers to submit a certification report to FRA, identifying and
certifying compliance for, each freight car before it can operate on
the U.S. general railroad system of transportation. Each certification
report submitted to FRA may identify a single freight car or multiple
freight cars based on the manufacturer's preference. For convenience, a
manufacturer may submit its certification report directly to the Office
of Railroad Safety along with any customary request to FRA for a sample
base car inspection or safety appliance arrangement drawing review.
Paragraph (a)(1)(i) would require the report to include a statement
certifying compliance, the manufacturer's name, the individual
responsible for certifying compliance with the Act and this rule, and
the car identification number for each car being certified. Paragraph
(a)(1)(ii) would require the freight car manufacturer to maintain all
records showing the information, including calculations, made to
support certification under this section and such records shall be made
available to FRA upon request.
Section 215.405 Prohibition on Registering Noncompliant Railroad
Freight Cars
This section proposes to incorporate the requirements in 49 U.S.C.
20171(c)(3)(B) into the FCSS. FRA will review registration records when
there is evidence of noncompliance with the Act. For example, when FRA
determines a railroad freight car manufacturer is not in compliance
with the Act's substantive requirements (e.g., it is equipped with
sensitive technology, or 20 percent or 15% of its components, sourced
from an SOE and operating on the U.S. general railroad system of
transportation), FRA would request documentation to determine whether
the freight car was registered with the Umler system. If the freight
car was so registered, the freight car would also be in noncompliance
with this section.
Section 215.407 Civil Penalties
This section proposes to incorporate the requirements in 49 U.S.C.
20171(c)(4) into the FCSS. The Act specifies penalty amounts for
violations of its substantive requirements and specifies that the unit
of violation is the freight car. FRA anticipates utilizing the Railroad
Safety Enforcement Procedures to enforce these penalties in the same
manner as other civil penalties enforced by FRA.\69\
---------------------------------------------------------------------------
\69\ 49 CFR part 209.
---------------------------------------------------------------------------
VI. Regulatory Impact and Notices
A. Executive Orders 12866 as Amended by Executive Order 14094
This proposed rule is not a significant regulatory action within
the meaning of Executive Order (E.O.) 12866 (``Regulatory Planning and
Review''), as amended by Executive Order 14094, Modernizing Regulatory
Review,\70\ and DOT Order 2100.6A (``Rulemaking and Guidance
Procedures''). This proposed rule aims to enforce the Act's
restrictions on content and technology originating from COCs and SOEs
in newly built freight cars entering service on the U.S. general
railroad system of transportation. Issuing this proposed rulemaking
would authorize FRA to monitor and enforce industry compliance with the
Act. This section qualitatively explains benefits and quantitatively
explains costs for the freight car industry and FRA associated with
implementing this proposed rule over a 10-year period, considering
discount rates of 7 percent and 3 percent.\71\
---------------------------------------------------------------------------
\70\ 88 FR 21879 (April 6, 2023) located at <a href="https://www.federalregister.gov/documents/2023/04/11/2023-07760/modernizing-regulatory-review">https://www.federalregister.gov/documents/2023/04/11/2023-07760/modernizing-regulatory-review</a>.
\71\ All costs are expressed in 2022 base year dollars.
---------------------------------------------------------------------------
FRA has concluded that the Act does not impose a continuing
obligation on manufacturers or railcar owners related to certifying
content and technology limitations throughout the useful life of each
freight car. As such, the proposed rule would not require FRA to
enforce the requirements set forth in the Act at all times a freight
railcar is in service on the U.S. general railroad system of
transportation. Therefore, this proposed rule would only impact
original freight car manufacturers related to the initial entry of
freight cars into service in the U.S. general railroad system of
transportation.
Based on discussions with FRA subject matter experts in the Office
of Motive Power and Equipment, this analysis estimates that the
proposed rule would impact six freight car manufacturers that have
manufacturing facilities within North America. This proposed rule would
not significantly impact any other entity. Over a 10-year period, this
analysis estimates the impact of issuing this proposed rule on freight
car manufacturing industry and FRA related to: (1) limiting content
sourced from COCs or SOEs; (2) prohibiting the use of sensitive
technology and components necessary to the functionality of the
sensitive technology from a COC or SOE; (3) compliance costs; and (4)
government administrative costs associated with enforcing this proposed
rule. Additionally, this analysis provides a summary of the regulatory
impact and describes some alternative regulatory options that FRA
considered.
(1) Limit Content Sourced From COCs or SOEs
Based on conversations with RSA and FRA subject matter experts, all
six freight car manufacturers currently comply with the 15 percent
content limitation, which would be required three years after this
proposed rule's implementation date. Also, absent FRA issuing this
proposed rule, over the next 10 years, this analysis forecasts that no
freight car manufacturer plans to change its materials sourcing whereby
a freight car manufacturer would not be in compliance with the content
limitation set forth in this proposed rule. Lastly, this analysis does
not anticipate any
[[Page 85569]]
new freight car manufacturers entering the North American freight car
industry over the next 10 years (during the period of analysis).
Therefore, related to complying with content limitation, issuing this
proposed rule would not result in any costs or benefits. FRA welcomes
public comment related to this conclusion.
(2) Prohibit the Use of Sensitive Technology From COCs or SOEs
As explained earlier in this NPRM, FRA understands the prohibition
on the use of sensitive technology that originates from a COC or SOE to
also include any active technological components necessary to the
functionality of the sensitive technology (excluding passive
technological components) that originates from a COC or SOE. Based on
this understanding and input from the RSA and FRA subject matter
experts, all six freight car manufacturers currently comply with the
limitations on use of sensitive technological components as set forth
in this proposed rule. Also, absent FRA issuing this proposed rule,
over the next 10 years, this analysis forecasts that no freight car
manufacturer plans to change its materials sourcing whereby a freight
car manufacturer would not comply with the sensitive technology
limitation set forth in this proposed rule. Further, over the next 10
years (during the period of analysis), this analysis does not
anticipate any new freight car manufacturer entering the North American
freight car industry. Therefore, the provision that would prohibit the
use of sensitive technology, or active technological components
necessary to the functionality of the sensitive technology that
originates from a COC or SOE for freight cars entering service in the
U.S. general railroad system of transportation would not result in any
costs. FRA welcomes public comment related to this conclusion.
However, issuing this provision (prohibiting the use of sensitive
technology from COCs or SOEs) may provide benefit. That is, issuing
this proposed rule would mitigate concerns related to compromised
national security and potential corporate espionage that exists if
newly built freight cars with sensitive technology and active
technological components necessary to the functionality of the
sensitive technology from COC or SOE enter service into the U.S.
general railroad system of transportation. FRA welcomes public comment
related to these conclusions.
(3) Compliance Costs
Issuing the proposed rule would create a few compliance burdens for
freight car manufacturers including affirming compliance with this
proposed rule, submitting an annual certification, and participating in
periodic audits.
Manufacturers Affirm Compliance Prior to a Freight Car Entering Service
Prior to a manufacturer providing a freight car for operation on
the U.S. general railroad system of transportation, a manufacturer
would affirm that the freight car is compliant with this regulation.
Currently, FRA provides a courtesy safety appliance drawing review and/
or sample car inspection to freight car manufacturers that request it
for all freight cars that they intend to manufacture for operation on
the U.S. general system. FRA anticipates that manufacturers would
affirm compliance with the Act by certifying at the time of their
safety appliance drawing review and/or sample car inspection.\72\
---------------------------------------------------------------------------
\72\ A freight car manufacture may also certify compliance with
Act by submitting an independent document to FRA for any build order
(e.g., for subsequent orders of the same car builds utilizing the
same safety appliance arrangement that have already been reviewed
and/or inspected by FRA). This analysis concluded that the cost to
submit an independent document to affirm compliance with the Act
follows similarly to including such affirmation along with safety
appliance review and/or sample car inspection request package.
---------------------------------------------------------------------------
Based on input from FRA subject matter experts, this analysis
estimates that each year manufacturers introduce approximately 35
freight car orders. Based on FRA subject matter expert input, this
analysis assumes that an administrative professional in the freight
car's contract office would draft the document affirming compliance
with the Act (1 hour) and a vice-president of engineering would review
and sign the letter (15 minutes).\73\ Each year, the burden on
manufacturers to affirm compliance with the Act for all newly built
freight cars intended for operation on the U.S. general railroad system
of transportation is $3,438.\74\ Over the 10-year period of analysis,
the industry burden is approximately, $34,400 (undiscounted), $29,200
(present value (PV), 3%), and $20,400 (PV, 7%).
---------------------------------------------------------------------------
\73\ U.S. Bureau of Labor Statistics, Occupational Employment
and Wage Statistics, National Industry-Specific Occupational
Employment and Wage Statistics, May 2023 NAICS 336500 Railroad
Rolling Stock Manufacturing ``Sales and Related Occupations'' $40.45
(mean wage), ``Top Executives'' ($62.74) [May 2023] <a href="https://www.bls.gov/oes/current/naics4_336500.htm">https://www.bls.gov/oes/current/naics4_336500.htm</a>. When estimating labor
burden, this analysis added a compensation factor of 1.75, so the
administrative employee's hourly burden rate is $70.79 and the VP of
engineering's hourly burden rate is $109.80.
\74\ Industry burden for affirming compliance, annual = Number
of freight cars introduced (35) * [time to write the document
affirming compliance with the Act (1 hour) * administrative
professional's hour compensation rate ($70.79) + time to review and
sign the document (15 minutes) * VP of engineering compensation rate
($109.80)] = $3,438.
---------------------------------------------------------------------------
Periodic Audit of Freight Car Manufacturers
As part of FRA's enforcement of the proposed rule, FRA expects to
randomly audit freight car manufacturers to ensure compliance with the
Act. Based on input from FRA subject matter experts, FRA would likely
randomly audit one-third of the freight car manufacturers each year
(approximately two freight car manufacturers each year). Based on FRA
subject matter expert input, the likely audit process would compromise
of FRA selecting one freight car order from the manufacturer's product
line and have the freight car manufacturer provide evidence of
compliance. FRA would audit the bill of materials to determine if the
manufacturer complied with this regulation. If the freight car
manufacturer provides sufficient evidence to show its freight car is
complaint with the rule, FRA would take no further action. Based on FRA
subject matter expert input, FRA anticipates that the results of FRA's
random audit is that FRA will find all freight car manufacturers
compliant with the proposed rule.
Based on input from FRA subject matter experts, this analysis
estimates that it would take four hours for a freight car manufacturer
to retrieve existing information that shows compliance with this
proposed rule and provide it to an FRA inspector. This analysis placed
a relatively low hourly burden for the periodic audit because this
proposed rule requires freight railroads to maintain records that show
compliance. Thus, other than retrieving records that should already
exist, freight car manufacturers would have no additional burden. With
an estimated two audits per year, the audit burden for all freight car
manufacturers is 8 hours
[[Page 85570]]
or $566.\75\ Over the 10-year period of analysis, the burden periodic
audits of freight car manufacturers is approximately $5,700
(undiscounted), $4,800 (PV, 3%), and $3,400 (PV, 7%).
---------------------------------------------------------------------------
\75\ Freight car manufacturers, participating in an audit,
annual = Number of annual audits (2) * hours to prepare and
participate in an audit (4 hours) * freight car administrative
employee compensation rate ($70.78) = $566.
---------------------------------------------------------------------------
Total Cost and Benefit for Industry
As shown, in table 2, over the 10-year period of analysis, the
industry burden is approximately $44,800 (undiscounted), $38,200 (PV,
3%), and $30,900 (PV, 7%).
Table 2--Freight Car Industry, Total Cost, Round ($100)
----------------------------------------------------------------------------------------------------------------
Total cost ($) Annualized ($)
Type of cost -------------------------------------------------------------------------------
Undiscounted PV 3% PV 7% PV 3% PV 7%
----------------------------------------------------------------------------------------------------------------
Compliance certification........ 34,400 29,200 20,400 3,400 2,900
Periodic audit.................. 5,700 4,800 3,400 600 500
-------------------------------------------------------------------------------
Total....................... 40,100 34,000 23,800 4,000 3,400
----------------------------------------------------------------------------------------------------------------
FRA is issuing this regulation as required by the Act. In this
economic analysis, FRA qualitatively explains the potential benefits
that may result from implementing the proposed rule. FRA requests
public comment regarding these cost estimates and the benefit that
would come from issuing the proposed rule.
(4) Governmental Administrative Costs
Issuing the proposed rule would create enforcement costs for FRA,
including the review of freight car manufacturers certifying
compliance, periodic audits of freight car manufacturers, and creating
an annual report to Congress.
Review of Certification of Compliance Reports
Based on input from FRA subject matter experts, this analysis
estimates that each year manufacturers introduce approximately 35
freight car orders and certify to FRA that their freight cars comply
with this Act. FRA staff would spend approximately 30 minutes to review
each of the 35 submissions. Therefore, FRA's annual burden related to
reviewing the manufacturer's is $2,201.<SUP>76 77</SUP> Over the 10-
year period of analysis, the total burden is approximately $22,00
(undiscounted), $18,700 (present value (PV), 3%), and $13,000 (PV, 7%).
---------------------------------------------------------------------------
\76\ FRA headquarters staff salary estimated at the GS-14 step 5
rate Washington, DC) of $71.88 with a burden rate of 1.75 for an
hourly burden rate of $125.79. See <a href="https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2023/general-schedule/">https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2023/general-schedule/</a>.
\77\ FRA burden for affirming compliance, annual = Number of
freight cars introduced (35) * [time to review affirmation (0.5
hour) * FRA headquarters employee compensation rate ($125.79) =
$2,201.
---------------------------------------------------------------------------
FRA Periodic Audit of Freight Car Manufacturers
As explained in the above section that describes industry burden,
each year FRA expects to audit approximately two freight car
manufacturers as part of FRA's enforcement efforts. To minimize
compliance costs, FRA would use FRA field staff who have duty stations
in close proximity to the freight car manufacturing facility. However,
based on subject matter expert input, in the first five years of
implementation of the proposed rule, FRA expects that it would send
both an FRA field inspector and FRA headquarters employee to conduct
the audit. Beginning with the sixth year, FRA expects that only FRA
field inspectors would conduct audits.
Based on FRA subject matter expert input, FRA's burden related to
periodic audits of freight car manufacturers is 20 hours for FRA
headquarters staff (4 hours to prepare for audit, 4 hours to conduct
audit, and 12 hours of travel time) and 12 hours for FRA field staff (4
hours to prepare for audit, 4 hours to conduct audit, and 4 hours
travel time). In addition, FRA will incur travel expenses of $500 for
FRA headquarters staff and $100 for FRA field staff per audit. In the
first year of analysis, the cost related to conducting two audit is
$8,121.<SUP>78 79</SUP> Over the 10-year period of analysis, FRA's
burden for conducting periodic audits is $51,000 (undiscounted),
$45,300 (PV, 3%), and $34,800 (PV, 7%).
---------------------------------------------------------------------------
\78\ FRA headquarters staff salary estimated at the GS-14 step 5
rate Washington DC) of $71.88 with a burden rate of 1.75 for an
hourly burden rate of $125.79. FRA field staff salary estimated at
the GS-12 step 5 rate (Rest of United States) of $44.98 with a
burden rate of 1.75 for an hourly burden rate of $78.72. See <a href="https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2023/general-schedule/">https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2023/general-schedule/</a>.
\79\ FRA audit burden, annual = number of audits per year (2
audits) * [FRA headquarters staff time per audit (20 hours) * FRA
headquarters staff compensation rate ($125.79) + FRA headquarters
staff travel expense ($500) + FRA field staff time per audit (12
hours) * FRA field staff compensation rate ($78.72) + FRA field
staff travel expense ($100)] = 2 * $4,060 = $8,121.
---------------------------------------------------------------------------
Preparing an Annual Report to Congress
After the final rule becomes effective, FRA expects that it will
prepare and submit an annual report to Congress that would summarize
all certification submissions that FRA received from all the
manufacturers during the calendar year. FRA anticipates that it may
include this report within its existing Fiscal Year Enforcement Report
to Congress. Based on input from subject matter experts, it would take
FRA staff approximately 24 hours to prepare and submit an annual report
with an associated cost of $3,019.\80\ Over the 10-year period of
analysis, the costs of preparing and submitting annual reports to
Congress is $30,200 (undiscounted), $25,600 (present value (PV), 3%),
and $17,900 (PV, 7%).
---------------------------------------------------------------------------
\80\ Prepare and submit annual report to Congress, annual = FRA
staff hourly labor burden rate ($125.79) * hours to complete and
submit report (24 hours) = $3,019.
---------------------------------------------------------------------------
Total FRA Burden
As shown, in table 3, over the 10-year period of analysis, FRA's
enforcement burden is approximately $103,200 (undiscounted), $89,600
(PV, 3%), and $65,700 (PV, 7%).
[[Page 85571]]
Table 3--FRA Enforcement Burden From Issuing the Proposed Rule, Total Cost, Round ($100)
----------------------------------------------------------------------------------------------------------------
Total cost ($) Annualized ($)
Type of cost -------------------------------------------------------------------------------
Undiscounted PV 3% PV 7% PV 3% PV 7%
----------------------------------------------------------------------------------------------------------------
Review affirmations............. 22,000 18,700 13,000 2,200 1,900
Periodic audit.................. 51,000 45,300 34,800 5,300 5,000
Annual report to Congress....... 30,200 25,600 17,900 3,000 2,500
-------------------------------------------------------------------------------
Total cost.................. 103,200 89,600 65,700 10,500 9,400
----------------------------------------------------------------------------------------------------------------
(5) Summary of Regulatory Impact
As shown below in table 4, the total impact that would come from
issuing the proposed rule including the impact on industry and FRA is
approximately $143,300 (undiscounted), $123,600 (PV, 3%), and $89,500
(PV, 7%). In this economic analysis, FRA qualitatively explains the
potential benefits that may result from implementing the proposed rule,
including addressing concerns related to compromised national security
and potential corporate espionage if newly built freight cars with
sensitive technology and active technological components necessary to
the functionality of the sensitive technology from COC or SOE enter
service into the U.S. general railroad system of transportation. FRA
welcomes public comment related to the potential costs and benefits
associated with implementing this proposed rule.
Table 4--Industry Compliance Burden and FRA's Enforcement Burden, Total Cost, Round ($100)
----------------------------------------------------------------------------------------------------------------
Total cost ($) Annualized ($)
Entity -------------------------------------------------------------------------------
Undiscounted PV 3% PV 7% PV 3% PV 7%
----------------------------------------------------------------------------------------------------------------
Industry costs.................. 40,100 34,000 23,800 4,000 3,400
FRA costs....................... 103,200 89,600 65,700 10,500 9,400
-------------------------------------------------------------------------------
Total cost.................. 143,300 123,600 89,500 14,500 12,800
----------------------------------------------------------------------------------------------------------------
(6) Alternatives Considered
FRA considered different ways to interpret the Act related to
satisfying its duties of issuing a rule. The following alternatives,
the baseline alternative and reoccurring annual certification
alternatives, provide insight into FRA's decision-making process
related to issuing this proposed rule pursuant to implementing the Act.
Baseline Alternative
The core of a regulatory impact analysis is an assessment of the
benefits and costs of regulation in comparison to a ``without
regulation'' (or ``no action'') baseline. If FRA did not issue this
proposed rule, FRA would not implement the Act and would not codify a
process for FRA to monitor and enforce industry compliance with the
Act.
If FRA failed to follow the statutory requirement of the Act, the
Act may not be binding and FRA would not meet its statutory
obligations.
Reoccurring Annual Certification Alternative
FRA considered alternative interpretations of the statutory
requirement in the Act, with the aim of ensuring that freight cars on
the U.S. general railroad system of transportation comply with the Act.
The first interpretation would require that freight car owners submit
annual certifications for each of the approximately 1.6 million freight
cars in service on the U.S. general railroad system of transportation.
The second interpretation would grandfather in existing freight cars
and only require owners of freight cars built after the rule's
implementation date to submit annual certifications. The third
interpretation would grandfather in existing freight cars but require
any freight car owner that adds or replaces sensitive technology
(including the active components within) on a freight car to submit an
annual certification that the sensitive technology in each augmented
freight car complies with the sensitive technology provision of the
proposed rule.
Under the first interpretation, each year freight car owners would
need to ensure that all their freight cars comply with the Act. Not
only would this interpretation not comport with FRA's understanding
that the Act applies to freight car manufacturers and not freight car
owners, but it would also be problematic because existing freight car
owners are unlikely to know the percentage of content of each freight
car that comes from COCs or SOEs and whether the existing sensitive
technology in each freight car was sourced from a COC or SOE. FRA
determined that car owners lacked sufficient information to comply with
this alternative.
Under the second interpretation, owners of freight cars entering
service after the implementation date would need to ensure that all
aftermarket reconfigurations and repairs comply with the Act (both the
content limitation and the sensitive technology sourcing provisions).
Owners of freight cars would need to maintain records of the source
origin for all parts in each augmented freight car. This alternative
might help ensure that aftermarket reconfigurations of freight cars
entering service after the implementation date would not use sensitive
technology (including the active technological components within) that
originate from a COC or SOE, this alternative would impose a
significantly greater burden on both the industry (railroads and
private car owners) and FRA as compared to the proposed rule. FRA is
also concerned about how such an interpretation would impact Class III
railroads and small private car owners. FRA welcomes public comment on
this alternative.
Under a third alternative, FRA would require that any freight car
owner that adds or replaces sensitive technology (including the active
technological components within) on a freight car submit an annual
certification to affirm that the freight car maintained compliance with
the sensitive
[[Page 85572]]
technology limitations of the proposed rule. While this alternative may
help protect the U.S. general railroad system of transportation from
safety risks and data breaches, this alternative would impose a
significantly greater burden on both the industry (railroads and
private car owners) and FRA as compared to the proposed rule. Moreover,
this alternative would not comport with FRA's understanding that the
Act applies to freight car manufacturers and not freight car owners.
FRA welcomes public comment on this alternative.
FRA concluded that the proposed rule strikes an appropriate balance
between enhancing the safety and security of the U.S. general railroad
system of transportation while minimizing the burden.
B. Regulatory Flexibility Act and Executive Order 13272
The Regulatory Flexibility Act of 1980 \81\ and E.O. 13272 \82\
require agency review of proposed and final rules to assess their
impacts on small entities. An agency must prepare an Initial Regulatory
Flexibility Analysis (IRFA) unless it determines and certifies that a
rule, if promulgated, would not have a significant economic impact on a
substantial number of small entities. FRA has not determined whether
this proposed rule would have a significant economic impact on a
substantial number of small entities and provides the following IRFA.
---------------------------------------------------------------------------
\81\ 5 U.S.C. 601 et seq.
\82\ 67 FR 53461 (Aug. 16, 2002).
---------------------------------------------------------------------------
1. Reasons for Considering Agency Action
The Act mandates that FRA issue a regulation to monitor and enforce
freight car manufacturers'' compliance with the standards of the Act.
FRA's implementation of this regulation would carry out the Act's
mandate.
2. A Succinct Statement of the Objectives of, and the Legal Basis for,
the Proposed Rule
On November 15, 2021, President Biden signed the Act,\83\ which
includes a mandate that FRA issue regulations to implement the
statute.\84\ The Act provides that freight cars wholly manufactured
after a certain date may only operate on the U.S. general railroad
system of transportation if the cars are manufactured by a ``qualified
manufacturer'' in a ``qualified facility.'' Further the Act prohibits
newly built freight cars from being operated on the U.S. general
railroad system of transportation, if they are manufactured: (1) with
sensitive technology originating from a COC or sourced from a SOE; (2)
with any components originating from a COC or sourced from a SOE with a
history of problematic trade practices or respect for IP rights; or,
(3) with components originating from a COC or sourced from a SOE
exceeding 20 percent of the freight car after 1 year from the date of
issuance of regulations or 15 percent of the freight car after 3 years
from the date of issuance of regulations. The Act requires
manufacturers to annually certify that they meet the requirements of
the Act.\85\
---------------------------------------------------------------------------
\83\ 49 U.S.C. 20171. See <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2021/11/15/executive-order-on-implementation-of-the-infrastructure-investment-and-jobs-act/">https://www.whitehouse.gov/briefing-room/presidential-actions/2021/11/15/executive-order-on-implementation-of-the-infrastructure-investment-and-jobs-act/</a>.
\84\ Id. at (c)(1).
\85\ Id. at (c)(2).
---------------------------------------------------------------------------
3. A Description of, and Where Feasible, an Estimate of the Number of
Small Entities to Which the Proposed Rule Would Apply
Freight car manufacturers are classified within NAICS 336510
Railroad rolling stock manufacturing.\86\ The SBA size standard for
NAICS 336510 is 1,500 employees.\87\ Based on FRA subject matter expert
input, three of the six freight car manufacturers are considered small
entities.
---------------------------------------------------------------------------
\86\ This NAICS classification compromises establishments
primarily engaged in one or more of the following: (1) manufacturing
and/or rebuilding locomotives, locomotive frames, and parts; (2)
manufacturing railroad, street, and rapid transit cars and car
equipment for operation on rails for freight and passenger service;
and (3) manufacturing rail layers, ballast distributors, rail
tamping equipment, and other railway track maintenance equipment.
<a href="https://www.census.gov/naics/?input=336510&year=2022&details=336510">https://www.census.gov/naics/?input=336510&year=2022&details=336510</a>.
\87\ ``Table of Small Business Size Standard'', U.S. Small
Business Administration, Size Standards effective as of March 17,
2023, p. 16 of 41 <a href="https://www.sba.gov/document/support-table-size-standards">https://www.sba.gov/document/support-table-size-standards</a>.
---------------------------------------------------------------------------
Census data shows that there are 153 establishments \88\ classified
within NAICS 336510. Therefore, because freight car manufacturers that
produce newly built freight railcars compromise of about four percent
(6 of 153 establishments) of establishments classified within NAICS
336510, a breakdown of small entities using Census data for NAICS
336510 would not yield a reliable distribution of small firms by firm
size (number of employees).
---------------------------------------------------------------------------
\88\ An establishment is a fixed physical location or permanent
structure where some form of business activity is conducted.
---------------------------------------------------------------------------
Based on input from FRA subject matter experts, this analysis
concludes that the three small freight car manufacturers currently
comply with the proposed requirements in this rule related to content
and sensitive technology limitations. Therefore, this analysis
concludes that the provisions related to content and sensitive
technology limitations would not create a cost or benefit that would be
borne by the three small freight car manufacturers.
With respect to the three small freight car manufacturers, the
proposed rule would create compliance costs \89\ related to: (1)
affirming newly designed freight cars comply with the Act; (2) annual
certification of compliance letter; and (3) participation in a periodic
audit of freight car manufacturers.
---------------------------------------------------------------------------
\89\ These compliance cost estimates follow from the estimates
in ``VI. A. Executive Orders 12866.''
---------------------------------------------------------------------------
Based on input from FRA subject matter experts, this analysis
estimates that each year small manufacturers introduce approximately
six unique freight car design builds. For each of these introductions,
the small manufacturer would need to inform FRA that the new designs
are compliant with the Act. Based on FRA subject matter expert input,
this analysis assumes that an administrative professional in the
freight car's contract office would draft a document certifying
compliance with the Act (1 hour) and a vice-president of engineering
would review and sign the letter (15 minutes).\90\ Each year, the
industry burden for small entities is $589,\91\ or approximately $200
per small manufacturer. Over the 10-year period of analysis, the
industry burden is approximately $5,900 (undiscounted), $5,000 (present
value (PV), 3%), and $4,000 (PV, 7%).
---------------------------------------------------------------------------
\90\ U.S. Bureau of Labor Statistics, Occupational Employment
and Wage Statistics, National Industry-Specific Occupational
Employment and Wage Statistics, May 2023 NAICS 336500 Railroad
Rolling Stock Manufacturing ``Sales and Related Occupations'' $40.45
(mean wage), ``Top Executives'' ($62.74) [May 2023] <a href="https://www.bls.gov/oes/current/naics4_336500.htm">https://www.bls.gov/oes/current/naics4_336500.htm</a>. When estimating labor
burden, this analysis added a compensation factor of 1.75, so the
administrative employee's hourly burden rate is $70.79 and the VP of
engineering's hourly burden rate is $109.80.
\91\ Industry burden for affirming compliance, annual = Number
of freight car designs introduced (6) * [time to write the document
affirming compliance with the Act (1 hour) * administrative
professional's hour compensation rate ($70.79) + time to review and
sign the document (15 minutes) * VP of engineering compensation rate
($109.80)] = $589.
---------------------------------------------------------------------------
Based on input from FRA subject matter experts, FRA expects to
audit approximately one small freight car manufacturer each year, which
would result in an annual burden on small manufacturers of 4 hours or
$283,\92\ or approximately $90 per small freight car
[[Page 85573]]
manufacturer. Over the 10-year period of analysis, the burden of
periodic audits on small manufacturers is $2,800 (undiscounted), $2,400
(PV, 3%), and $1,900 (PV, 7%).
---------------------------------------------------------------------------
\92\ Freight car manufacturers, participating in an audit,
annual (undiscounted) = Number of annual audits (1) * hours to
prepare and participate in an audit (4 hours) * freight car employee
compensation rate ($70.79) = $283.
---------------------------------------------------------------------------
The total cost for small freight car manufacturers is approximately
$8,700 (undiscounted),\93\ $7,400 (PV, 3%), and $5,200 (PV, 7%). The
annualized burden for small freight cars related to participating in an
FRA audit is approximately $900 (PV, 3%), or approximately $300 per
small freight car manufacturer. Based on subject matter expert input,
each of the three small freight car manufacturers have annual revenue
exceeding $1 million. Therefore, issuing the proposed rule would result
in an annual burden for each of the small freight car manufacturers of
less than one-tenth of one-percent of its annual revenue. FRA has not
determined whether this proposed rule would have a significant economic
impact on a substantial number of small entities. FRA welcomes public
comment on these findings and conclusion.
---------------------------------------------------------------------------
\93\ Total cost, small manufacturers (undiscounted) = affirming
newly built cars comply with Act ($5,900) + participation in
periodic audit ($2,800) = $8,700.
---------------------------------------------------------------------------
4. A Description of the Projected Reporting, Recordkeeping, and Other
Compliance Requirements of the Rule, Including an Estimate of the Class
of Small Entities That Would Be Subject to the Requirements and the
Type of Professional Skill Necessary for Preparation of the Report or
Record
The proposed rule would create three reporting, recordkeeping, and
other compliance requirements. The three affected freight car
manufacturers would need to make a dedicated service notification to
FRA, submit an annual certification of compliance to FRA, and maintain
and make available to FRA records that affirm compliance with the Act.
The types of professional skills necessary for preparing and
maintaining these reports include administrative professional skills
(basic accounting, writing, organizing) and clerical skills.
5. Identification, to the Extent Practicable, of All Relevant Federal
Rules That May Duplicate, Overlap, or Conflict With the Proposed Rule
For a list of all Federal rules that may duplicate, overlap, or
conflict with this proposed rule, please see the rules described in
section II. above.
6. A Description of Significant Alternatives to the Rule
FRA considered three significant alternative interpretations to the
proposed rule with the aim of ensuring that freight cars on the U.S.
general railroad system of transportation comply with the Act. The
first interpretation would require that all freight car owners submit
annual certifications for each of the approximately 1.6 million freight
cars in service on U.S. general railroad system of transportation. The
second interpretation would grandfather in existing freight cars and
only require owners of freight cars built after the rule's
implementation date to submit annual certifications with the Act. The
third interpretation would grandfather in existing freight cars, but
require any freight car owner that adds or replaces sensitive
technology (including the active components within) on a freight car to
submit an annual certification with the Act; specifying that the
sensitive technology in each augmented freight car complies with the
sensitive technology provision of the proposed rule. As explained in
section VI. Regulatory Impact and Notices A. Executive Order 12866, FRA
concluded that the primary alternative is preferred to each of these
significant alternatives.
C. Paperwork Reduction Act
The information collection requirements in this proposed rule are
being submitted for approval to OMB \94\ under the Paperwork Reduction
Act of 1995.\95\ The information collection requirements and the
estimated time to fulfill each requirement are as follows:
---------------------------------------------------------------------------
\94\ FRA will be using the OMB control number (OMB No. 2130-
0502) that was issued with when the previous NPRM was issued in 1979
for this information collection.
\95\ 44 U.S.C. 3501 et seq.
----------------------------------------------------------------------------------------------------------------
Average time Total cost
CFR section Respondent Total annual per response Total annual equivalent in
universe responses (hours) burden hours U.S. dollars
(A) (B) (C) = (A * B) (D) = (C *
wage rates)
\96\
----------------------------------------------------------------------------------------------------------------
215.5(d)(6)--Dedicated 784 railroads... 4 notifications 1 4.00 $311.64
Service--Notification to FRA.
215.403(a)(1)--Certification 6 manufacturers. 35 Affirmations 1.25 43.75 2,786.00
of Compliance--Manufacturers
to electronically certify to
FRA that the cars comply
with the requirements of
this subpart (New
requirement).
--(a)(1)(ii) Records and such 6 manufacturers. 0.33 report.... 6 1.98 126.09
records shall be made
available to FRA upon
request (New requirement).
----------------------------------------------------------------------------------
Total \97\............... 784 railroads + 39.33 N/A 49.73 3,223.73
6 manufacturers. notifications.
----------------------------------------------------------------------------------------------------------------
All estimates include the time for reviewing instructions;
searching existing data sources; gathering or maintaining the needed
data; and reviewing the information. Pursuant to 44 U.S.C.
3506(c)(2)(B), FRA solicits comments concerning: whether these
information collection requirements are necessary for the proper
performance of
[[Page 85574]]
the functions of FRA, including whether the information has practical
utility; the accuracy of FRA's estimates of the burden of the
information collection requirements; the quality, utility, and clarity
of the information to be collected; and whether the burden of
collection of information on those who are to respond, including
through the use of automated collection techniques or other forms of
information technology, may be minimized. Organizations and individuals
desiring to submit comments on the collection of information
requirements or to request a copy of the paperwork package submitted to
OMB should contact Ms. Arlette Mussington, Information Collection
Clearance Officer, at email: <a href="/cdn-cgi/l/email-protection#d3b2a1bfb6a7a7b6fdbea6a0a0babdb4a7bcbd93b7bca7fdb4bca5"><span class="__cf_email__" data-cfemail="9bfae9f7feefeffeb5f6eee8e8f2f5fceff4f5dbfff4efb5fcf4ed">[email protected]</span></a> or telephone:
(571) 609-1285 or Ms. Joanne Swafford, Information Collection Clearance
Officer, at email: <a href="/cdn-cgi/l/email-protection#412b2e202f2f246f32362027272e332501252e356f262e37"><span class="__cf_email__" data-cfemail="a4cecbc5cacac18ad7d3c5c2c2cbd6c0e4c0cbd08ac3cbd2">[email protected]</span></a> or telephone: (757) 897-
9908.
---------------------------------------------------------------------------
\96\ The dollar equivalent cost is derived from U.S. Bureau of
Labor Statistics, 2021 NAICS 336500--Railroad Rolling Stock
Manufacturing; 13-1000 Business Operations Specialist median wage
$63.68 ($36.39 + 1.75 overhead costs. The one exception is section
215.5(d)(6), which is derived from the Surface Transportation
Board's Full Year Wage 2021, group 200 Professional and
Administrative.
\97\ Totals may not add due to rounding.
---------------------------------------------------------------------------
OMB is required to make a decision concerning the collection of
information requirements contained in this proposed rule between 30 and
60 days after publication of this document in the Federal Register.
Therefore, a comment to OMB is best assured of having its full effect
if OMB receives it within 30 days of publication. The final rule will
respond to any OMB or public comments on the information collection
requirements contained in this proposal. FRA is not authorized to
impose a penalty on persons for violating information collection
requirements that do not display a current OMB control number, if
required.
D. Federalism Implications
Executive Order 13132, Federalism,\98\ requires FRA to develop an
accountable process to ensure ``meaningful and timely input by State
and local officials in the development of regulatory policies that have
federalism implications.'' ``Policies that have federalism
implications'' are defined in the Executive order to include
regulations that have ``substantial direct effects on the States, on
the relationship between the national government and the States, or on
the distribution of power and responsibilities among the various levels
of government.'' Under Executive Order 13132, the agency may not issue
a regulation with federalism implications that imposes substantial
direct compliance costs and that is not required by statute, unless the
Federal Government provides the funds necessary to pay the direct
compliance costs incurred by State and local governments or the agency
consults with State and local government officials early in the process
of developing the regulation. Where a regulation has federalism
implications and preempts State law, the agency seeks to consult with
State and local officials in the process of developing the regulation.
---------------------------------------------------------------------------
\98\ 64 FR 43255 (Aug. 10, 1999).
---------------------------------------------------------------------------
FRA has analyzed this proposed rule in accordance with the
principles and criteria contained in Executive Order 13132. FRA has
determined that this proposed rule has no federalism implications,
other than the possible preemption of State laws under 49 U.S.C. 20106.
Therefore, the consultation and funding requirements of Executive Order
13132 do not apply, and preparation of a federalism summary impact
statement for the proposed rule is not required.
E. International Trade Impact Assessment
The Trade Agreements Act of 1979 prohibits Federal agencies from
engaging in any standards or related activities that create unnecessary
obstacles to the foreign commerce of the United States. Legitimate
domestic objectives, such as safety, are not considered unnecessary
obstacles. The statute also requires consideration of international
standards and, where appropriate, that they be the basis for U.S.
standards. This proposed rule is not expected to affect trade
opportunities for U.S. firms doing business overseas or for foreign
firms doing business in the United States.
F. Environmental Impact
FRA has evaluated this proposed rule consistent with the National
Environmental Policy Act (NEPA; 42 U.S.C. 4321 et seq.), the Council of
Environmental Quality's NEPA implementing regulations at 40 CFR parts
1500 through 1508, and FRA's NEPA implementing regulations at 23 CFR
part 771 and determined that it is categorically excluded from
environmental review and therefore does not require the preparation of
an environmental assessment (EA) or environmental impact statement
(EIS). Categorical exclusions (CEs) are actions identified in an
agency's NEPA implementing regulations that do not normally have a
significant impact on the environment and therefore do not require
either an EA or EIS.\99\ Specifically, FRA has determined that this
proposed rule is categorically excluded from detailed environmental
review pursuant to 23 CFR 771.116(c)(15), ``[p]romulgation of rules,
the issuance of policy statements, the waiver or modification of
existing regulatory requirements, or discretionary approvals that do
not result in significantly increased emissions of air or water
pollutants or noise.''
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\99\ 40 CFR 1508.4.
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The main purpose of this rulemaking is to revise FRA's FCSS to
reduce unnecessary costs and provide regulatory flexibility while
maintaining safety. This rulemaking would not directly or indirectly
impact any environmental resources and would not result in
significantly increased emissions of air or water pollutants or noise.
In analyzing the applicability of a CE, FRA must also consider whether
unusual circumstances are present that would warrant a more detailed
environmental review.\100\ FRA has concluded that no such unusual
circumstances exist with respect to this proposed rule and it meets the
requirements for categorical exclusion under 23 CFR 771.116(c)(15).
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\100\ 23 CFR 771.116(b).
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Pursuant to section 106 of the National Historic Preservation Act
and its implementing regulations, FRA has determined this undertaking
has no potential to affect historic properties.\101\ FRA has also
determined that this rulemaking does not approve a project resulting in
a use of a resource protected by section 4(f).\102\
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\101\ See 16 U.S.C. 470.
\102\ See Department of Transportation Act of 1966, as amended
(Pub. L. 89-670, 80 Stat. 931); 49 U.S.C. 303.
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G. Environmental Justice
Executive Order 12898, ``Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations'' require
DOT agencies to achieve environmental justice as part of their mission
by identifying and addressing, as appropriate, disproportionately high
and adverse human health or environmental effects, including
interrelated social and economic effects, of their programs, policies,
and activities on minority populations and low-income populations. DOT
Order 5610.2C (``U.S. Department of Transportation Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations'') instructs DOT agencies to address compliance with
Executive Order 12898 and requirements within DOT Order 5610.2C in
rulemaking activities, as appropriate, and also requires consideration
of the benefits of transportation programs, policies, and
[[Page 85575]]
other activities where minority populations and low-income populations
benefit, at a minimum, to the same level as the general population as a
whole when determining impacts on minority and low-income
populations.\103\ FRA has evaluated this proposed rule under Executive
Orders 12898, 14096 and DOT Order 5610.2C and has determined it would
not cause disproportionate and adverse human health and environmental
effects on communities with environmental justice concerns.
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\103\ Executive Order 14096 ``Revitalizing Our Nation's
Commitment to Environmental Justice,'' issued on April 26, 2023,
supplements Executive Order 12898, but is not currently referenced
in DOT Order 5610.2C.
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H. Unfunded Mandates Reform Act of 1995
Under section 201 of the Unfunded Mandates Reform Act of 1995,\104\
each Federal agency ``shall, unless otherwise prohibited by law, assess
the effects of Federal regulatory actions on State, local, and tribal
governments, and the private sector (other than to the extent that such
regulations incorporate requirements specifically set forth in law).''
Section 202 of the Act (2 U.S.C. 1532) further requires that ``before
promulgating any general notice of proposed rulemaking that is likely
to result in promulgation of any rule that includes any Federal mandate
that may result in the expenditure by State, local, and tribal
governments, in the aggregate, or by the private sector, of
$100,000,000 or more (adjusted annually for inflation) in any 1 year,
and before promulgating any final rule for which a general notice of
proposed rulemaking was published, the agency shall prepare a written
statement'' detailing the effect on State, local, and tribal
governments and the private sector. This proposed rule would not result
in the expenditure, in the aggregate, of $100,000,000 or more (as
adjusted annually for inflation) in any one year, and thus preparation
of such a statement is not required.
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\104\ Public Law 104-4, 2 U.S.C. 1531.
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I. Energy Impact
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use,'' requires
Federal agencies to prepare a Statement of Energy Effects for any
``significant energy action.'' \105\ FRA evaluated this proposed rule
under Executive Order 13211 and determined that this regulatory action
is not a ``significant energy action'' within the meaning of Executive
Order 13211.
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\105\ 66 FR 28355 (May 22, 2001).
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J. Privacy Act Statement
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the
public to better inform its rulemaking process. DOT posts these
comments, without edit, to <a href="http://www.regulations.gov">www.regulations.gov</a>, as described in the
system of records notice, DOT/ALL-14 FDMS, accessible through
<a href="http://www.dot.gov/privacy">www.dot.gov/privacy</a>. To facilitate comment tracking and response, we
encourage commenters to provide their name, or the name of their
organization; however, submission of names is completely optional.
Whether or not commenters identify themselves, all timely comments will
be fully considered. If you wish to provide comments containing
proprietary or confidential information, please contact the agency for
alternate submission instructions.
List of Subjects in 49 CFR Part 215
Freight cars, Infrastructure Investment and Jobs Act.
The Proposed Rule
For the reasons discussed in the preamble, FRA proposes to amend
part 215 of chapter II, subtitle B of title 49, Code of Federal
Regulations, as follows:
PART 215--RAILROAD FREIGHT CAR SAFETY STANDARDS
0
1. The authority citation for part 215 is revised to read as follows:
Authority: 49 U.S.C. 20171(c)(1), 49 U.S.C. 20102-03, 20107,
20133, 20137-38, 20143, 20701-03, 21301-02, 21304; 28 U.S.C. 2401,
note; and 49 CFR 1.49.
0
2. Revise Sec. 215.5 to read as follows:
Sec. 215.5 Definitions.
As used in this part:
Break means a fracture resulting in complete separation into parts;
Component means a part or subassembly of a railroad freight car;
Control means the power, whether direct or indirect and whether or
not exercised, through the ownership of a majority or a dominant
minority of the total outstanding voting interest in an entity;
representation on the board of directors of an entity; proxy voting on
the board of directors of an entity; a special share in the entity; a
contractual arrangement with the entity; a formal or informal
arrangement to act in concert with an entity; or any other means, to
determine, direct, make decisions, or cause decisions to be made for
the entity;
Cost of sensitive technology means the aggregate cost of the
sensitive technology located on a railroad freight car.
Country of concern means a country that--
(1) Was identified by the Department of Commerce as a nonmarket
economy country (as defined in section 771(18) of the Tariff Act of
1930 (19 U.S.C. 1677(18))) as of November 15, 2021;
(2) Was identified by the United States Trade Representative in the
most recent report required by section 182 of the Trade Act of 1974 (19
U.S.C. 2242) as a foreign country included on the priority watch list
(as defined in subsection (g)(3) of such section); and
(3) Is subject to monitoring by the Trade Representative under
section 306 of the Trade Act of 1974 (19 U.S.C. 2416).
Dedicated service means the exclusive assignment of cars to the
transportation of freight between specified points under the following
conditions:
(1) The cars are operated--
(i) Primarily on track that is inside an industrial or other non-
railroad installation; and
(ii) Only occasionally over track of a railroad;
(2) The cars are not operated--
(i) At speeds of more than 15 miles per hour; and
(ii) Over track of a railroad--
(A) For more than 30 miles in one direction; or
(B) On a round trip of more than 60 miles;
(3) The cars are not freely interchanged among railroads;
(4) The words ``Dedicated Service'' are stenciled, or otherwise
displayed, in clearly legible letters on each side of the car body;
(5) The cars have been examined and found safe to operate in
dedicated service; and
(6) The railroad must--
(i) Notify FRA in writing that the cars are to be operated in
dedicated service;
(ii) Identify in that notice--
(A) The railroads affected;
(B) The number and type of cars involved;
(C) The commodities being carried; and
(D) The territorial and speed limits within which the cars will be
operated; and
(iii) File the notice required by this paragraph (6)(iii) of the
definition not less than 30 days before the cars operate in dedicated
service;
In service when used in connection with a railroad freight car,
means each railroad freight car subject to this part unless the car:
(1) Has a ``bad order'' or ``home shop for repairs'' tag or card
containing the
[[Page 85576]]
prescribed information attached to each side of the car and is being
handled in accordance with Sec. 215.9;
(2) Is in a repair shop or on a repair track;
(3) Is on a storage track and is empty; or
(4) Has been delivered in interchange but has not been accepted by
the receiving carrier.
Net cost has the meaning given such term in chapter 4 of the USMCA
or any subsequent free trade agreement between the United States,
Mexico, and Canada.
Qualified facility means a facility that is not owned or under the
control of a state-owned enterprise.
Qualified manufacturer means a railroad freight car manufacturer
that is not owned or under the control of a state-owned enterprise.
Railroad means all forms of non-highway ground transportation that
run on rails or electromagnetic guideways, including:
(1) Commuter or other short-haul rail passenger service in a
metropolitan or suburban area, and
(2) High speed ground transportation systems that connect
metropolitan areas, without regard to whether they use new technologies
not associated with traditional railroads. Such term does not include
rapid transit operations within an urban area that are not connected to
the general railroad system of transportation.
Railroad freight car means a car designed to carry freight or
railroad personnel by rail, including--
(1) A box car;
(2) A refrigerator car;
(3) A ventilator car;
(4) An intermodal well car;
(5) A gondola car;
(6) A hopper car;
(7) An auto rack car;
(8) A flat car;
(9) A special car;
(10) A caboose car;
(11) A tank car; and
(12) A yard car.
Sensitive technology means any device embedded with electronics,
software, sensors, or other connectivity, that enables the device to
connect to, collect data from, or exchange data with another device,
including--
(1) Onboard telematics;
(2) Remote monitoring software;
(3) Firmware;
(4) Analytics;
(5) Global positioning system satellite and cellular location
tracking systems;
(6) Event status sensors;
(7) Predictive component condition and performance monitoring
sensors; and
(8) Similar sensitive technologies embedded into freight railcar
components and sub-assemblies.
State inspector means an inspector who is participating in
investigative and surveillance activities under section 206 of the
Federal Railroad Safety Act of 1970 (45 U.S.C. 435).
State-owned enterprise means--
(1) An entity that is owned by, or under the control of, a
national, provincial, or local government of a country of concern, or
an agency of such government; or
(2) An individual acting under the direction or influence of a
government or agency described in paragraph (1) of this definition.
Substantially transformed means a component of a railroad freight
car that undergoes an applicable change in tariff classification as a
result of the manufacturing process, as described in chapter 4 and
related annexes of the USMCA or any subsequent free trade agreement
between the United States, Mexico, and Canada.
USMCA. The acronym `USMCA' has the meaning given the term in
section 3 of the United States-Mexico-Canada Agreement Implementation
Act (19 U.S.C. 4502).
0
3. Add subpart E to part 215 to read as follows:
Subpart E--Manufacturing
Sec.
215.401 Requirements for railroad freight cars placed into service
in the United States.
215.403 Certification of compliance.
215.405 Prohibition on registering noncompliant railroad freight
cars.
215.407 Civil penalties.
Subpart E--Manufacturing
Sec. 215.401 Requirements for railroad freight cars placed into
service in the United States.
(a) Limitation on railroad freight cars. A railroad freight car
wholly manufactured on or after [DATE 365 DAYS AFTER DATE OF
PUBLICATION OF THE FINAL RULE IN THE FEDERAL REGISTER] may only operate
on the United States general railroad system of transportation if:
(1) The railroad freight car is manufactured, assembled, and
substantially transformed, as applicable, by a qualified manufacturer
in a qualified facility;
(2) None of the sensitive technology located on the railroad
freight car, including components necessary to the functionality of the
sensitive technology, originates from a country of concern or is
sourced from a state-owned enterprise; and
(3) None of the content of the railroad freight car, excluding
sensitive technology, originates from a country of concern or is
sourced from a state-owned enterprise that has been determined by a
recognized court or administrative agency of competent jurisdiction and
legal authority to have violated or infringed valid United States
intellectual property rights of another including such a finding by a
Federal district court under title 35 or the U.S. International Trade
Commission under section 337 of the Tariff Act of 1930 (19 U.S.C.
1337).
(b) Limitation on railroad freight car content. (1) Percentage
limitation--
(i) Initial limitation. Not later than [DATE 365 DAYS AFTER DATE
THE FINAL RULE IS ISSUED], a railroad freight car described in
paragraph (a) of this section may operate on the United States general
railroad system of transportation only if not more than 20 percent of
the content of the railroad freight car, calculated by the net cost of
all components of the car and excluding the cost of sensitive
technology, originates from a country of concern or is sourced from a
state-owned enterprise.
(ii) Subsequent limitation. Effective beginning on [DATE 1461 DAYS
AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER], a railroad freight
car described in paragraph (a) of this section may operate on the
United States general railroad system of transportation only if not
more than 15 percent of the content of the railroad freight car,
calculated by the net cost of all components of the car and excluding
the cost of sensitive technology, originates from a country of concern
or is sourced from a state-owned enterprise.
(2) Conflict. The percentages specified in the clauses in
paragraphs (b)(1)(i) and (ii) of this section, as applicable, shall
apply notwithstanding any apparent conflict with provisions of chapter
4 of the USMCA.
Sec. 215.403 Certification of compliance.
(a) Certification required. To be eligible to provide a railroad
freight car for operation on the United States general railroad system
of transportation, the manufacturer of such car shall certify, at least
annually, to the Railroad Administrator that any railroad freight cars
to be so provided comply with the 49 U.S.C. 20171.
(1) Certification procedure. Prior to providing any cars for
operation on the United States general railroad system of
transportation, each freight car manufacturer shall certify to FRA that
the cars comply with the 49 U.S.C.
[[Page 85577]]
20171. Such certification shall be submitted via electronic mail by an
authorized representative of the manufacturer to <a href="/cdn-cgi/l/email-protection#eaacb8aba7baccafaa8e859ec48d859c"><span class="__cf_email__" data-cfemail="014753404c51274441656e752f666e77">[email protected]</span></a>. A
manufacturer may submit this certification to FRA annually provided it
covers all cars to be provided in the relevant year, or a manufacturer
may submit separate certifications throughout the year.
(i) The certification shall include the statement ``I certify that
all freight cars that will be provided for operation on the United
States general railroad system of transportation will comply with the
49 U.S.C. 20171, and the implementing regulations at 49 CFR part 215''
and contain:
(A) The manufacturer's name and address;
(B) The name, signature, and contact information for the person
designated to certify compliance with this subpart; and
(C) A car identification number for each car being certified.
(ii) Manufacturers shall maintain records showing the information,
including the calculations, made to support certification under this
section and such records shall be made available to FRA upon request.
(2) Valid certification required. At the time a railroad freight
car begins operation on the United States general railroad system of
transportation, the manufacturer of such railroad freight car shall
have valid certification described in paragraph (a) of this section for
the year in which such car begins operation.
(b) [Reserved]
Sec. 215.405 Prohibition on registering noncompliant railroad
freight cars.
(a) Cars prohibited. A railroad freight car manufacturer may not
register, or cause to be registered, a railroad freight car that does
not comply with the requirements under this subpart in the Umler
system.
(b) [Reserved]
Sec. 215.407 Civil penalties.
(a) In general. A railroad freight car manufacturer that has
manufactured a railroad freight car for operation on the United States
freight railroad interchange system that the Secretary of
Transportation determines, after written notice and an opportunity for
a hearing, has violated this subpart is liable to the United States
Government for a civil penalty of at least $100,000, but not more than
$250,000, for each such violation for each railroad freight car.
(b) Prohibition for violations. The Secretary of Transportation may
prohibit a railroad freight car manufacturer with respect to which the
Secretary has assessed more than 3 violations under this section from
providing additional railroad freight cars for operation on the United
States freight railroad interchange system until the Secretary
determines:
(1) Such manufacturer is in compliance with this section; and
(2) All civil penalties assessed to such manufacturer pursuant to
this section have been paid in full.
Issued in Washington, DC.
Amitabha Bose,
Administrator.
[FR Doc. 2023-26133 Filed 12-7-23; 8:45 am]
BILLING CODE 4910-06-P
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</html>Indexed from Federal Register on December 8, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.