Rule2026-01549
Reflectorization of Rail Freight Rolling Stock; Codifying Existing Waivers
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Published
January 27, 2026
Effective
January 27, 2026
Issuing agencies
Transportation DepartmentFederal Railroad Administration
Abstract
This rule amends the standards for Reflectorization of Rail Freight Rolling Stock (Reflectorization Standards or Part 224) to codify waivers and remove the outdated implementation schedule. The changes are expected to enhance safety, promote innovation, clarify existing requirements, and reduce unnecessary paperwork burdens. The amendments are consistent with the mandate of the Infrastructure Investment and Jobs Act (IIJA), which requires FRA to review and analyze certain longstanding waivers to determine whether incorporating the waivers into FRA's regulations is justified.
Full Text
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<title>Federal Register, Volume 91 Issue 17 (Tuesday, January 27, 2026)</title>
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[Federal Register Volume 91, Number 17 (Tuesday, January 27, 2026)]
[Rules and Regulations]
[Pages 3375-3392]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-01549]
[[Page 3375]]
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DEPARTMENT OF TRANSPORTATION
Federal Railroad Administration
49 CFR Part 224
[Docket No. FRA-2021-0080, Notice No. 2]
RIN 2130-AC77
Reflectorization of Rail Freight Rolling Stock; Codifying
Existing Waivers
AGENCY: Federal Railroad Administration (FRA), Department of
Transportation (DOT).
ACTION: Final rule.
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SUMMARY: This rule amends the standards for Reflectorization of Rail
Freight Rolling Stock (Reflectorization Standards or Part 224) to
codify waivers and remove the outdated implementation schedule. The
changes are expected to enhance safety, promote innovation, clarify
existing requirements, and reduce unnecessary paperwork burdens. The
amendments are consistent with the mandate of the Infrastructure
Investment and Jobs Act (IIJA), which requires FRA to review and
analyze certain longstanding waivers to determine whether incorporating
the waivers into FRA's regulations is justified.
DATES: This final rule is effective January 27, 2026.
ADDRESSES: 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 telephone: (202) 366-2139 or email:
<a href="/cdn-cgi/l/email-protection#71121914121a5f1a101c31151e055f161e07"><span class="__cf_email__" data-cfemail="77141f12141c591c161a3713180359101801">[email protected]</span></a>; or Michael Masci, Senior Attorney, Office of the
Chief Counsel, at telephone: (202) 493-6037 or email:
<a href="/cdn-cgi/l/email-protection#137e7a707b72767f3d7e7260707a53777c673d747c65"><span class="__cf_email__" data-cfemail="f09d99939891959cde9d91839399b0949f84de979f86">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Abbreviations and Terms Used in This Document
AAR--Association of American Railroads
ASLRRA--American Short Line and Regional Railroad Association
CFR--Code of Federal Regulations
DOT--U.S. Department of Transportation
EA--Environmental Assessment
EIS--Environmental Impact Statement
FR--Federal Register
FRA--Federal Railroad Administration
GS--General Schedule
IIJA--Infrastructure Investment and Jobs Act (Pub. L. 117-58)
IRFA--Initial Regulatory Flexibility Analysis
LED--Light-Emitting Diode
MOW--Maintenance of Way
NEPA--National Environmental Policy Act
NPRM--Notice of Proposed Rulemaking
OMB--Office of Management and Budget
PRA--The Paperwork Reduction Act
RFI--Request for Information
RIT--Run-Into-Train
RRA--Running Repair Agent
RSI--Railway Supply Institute
S-916--AAR's Standard S-916; Retroreflective Comparator Panel
Requirements
SCABT--Single Car Air Brake Test
STB--Surface Transportation Board
THEERP--Tourist, Historic, Excursion, Educational, Recreational, or
Private
TTI--Texas A&M Transportation Institute
UMLER--Universal Machine Language Equipment Register
U.S.C.--United States Code
Table of Contents for Supplementary Information
I. Executive Summary
II. Statutory and Regulatory Background
A. Existing Reflectorization Requirements
B. Waivers Excluding From Part 224 Rail Freight Rolling Stock
Used Only for Tourist, Historic, Excursion, Educational,
Recreational, or Private (THEERP) Purposes, Except for Incidental
Freight Service
C. Waivers Allowing Development and Testing of Alternative
Methods To Determine When To Replace Retroreflective Sheeting
III. Overview and Technical Discussion of the Requirements
A. Exclusion From Part 224 Rail Freight Rolling Stock Used Only
for THEERP Purposes, Except for Incidental Freight Service
B. Allowing Alternative Methods To Determine When To Replace
Retroreflective Sheeting
1. The Existing 10-Year Replacement Cycle Ensures Effective
Retroreflective Sheeting, but May Require Replacement Sooner Than
Necessary
2. FRA Worked Closely With the Association of American Railroads
(AAR) and Texas A&M Transportation Institute (TTI) To Develop a
Comparator Panel That Could Be Used With the Reflectorization
Standards
3. FRA Approved a Pilot Program To Test AAR's Standard S-916;
Retroreflective Comparator Panel Requirements (S-916) in Service
IV. Response to Comments on FRA's Proposal and AAR's Response to
DOT's RFI
V. Section-By-Section Analysis
VI. Regulatory Impact and Notices
A. Executive Order (E.O.) 12866 (Regulatory Planning and Review)
and DOT Regulatory Policies and Procedures
B. E.O. 14192 (Unleashing Prosperity Through Deregulation)
C. Regulatory Flexibility Act
D. Paperwork Reduction Act
E. Federalism Implications
F. International Trade Impact Assessment
G. Environmental Assessment
H. E.O. 13175 (Tribal Consultation)
I. Unfunded Mandates Reform Act of 1995
J. Energy Impact
I. Executive Summary
Purpose of the Regulatory Action
Consistent with E.O. 14192, Unleashing Prosperity Through
Deregulation (90 FR 9065, Feb. 6, 2025), and E.O. 14219, Ensuring
Lawful Governance and Implementing the President's ``Department of
Government Efficiency'' Deregulatory Initiative (90 FR 10583, Feb. 25,
2025), FRA is reviewing its regulatory requirements in parts 200
through 299 of title 49, Code of Federal Regulations (CFR). This final
rule is based on FRA's review of the Reflectorization Standards in part
224. This rule is expected to enhance safety, promote innovation,
reduce unnecessary costs, and clarify existing requirements.
This rule also responds to the mandate of section 22411 of IIJA
(Pub. L. 117-58), codified at 49 U.S.C. 20103(d)(4), which requires the
Secretary to review and analyze existing waivers issued under 49 U.S.C.
20103 that have been in continuous effect for a 6-year period to
determine whether issuing a rule implementing the waiver provisions is
in the public interest and consistent with railroad safety. After
conducting the appropriate analysis, if the Secretary concludes that it
would be in the public interest and consistent with railroad safety to
initiate a rulemaking to incorporate into the regulations the relevant
aspects of the waivers analyzed, section 22411 specifically authorizes
the Secretary to initiate such a rulemaking.
Summary of the Regulatory Action
Part 224, Reflectorization of Rail Freight Rolling Stock
(Reflectorization Standards or Part 224) contains minimum safety
requirements to help motor vehicle operators see rail freight rolling
stock at night and under conditions of poor visibility. Part 224 was
designed to reduce the number and severity of highway-rail grade
crossing accidents and deaths, injuries, and property damage resulting
from those accidents. Generally, FRA has provided two types of relief,
in the form of waivers, from part 224's requirements: (1) relief to
THEERP operations; \1\ and (2) relief to allow the use of a
performance-based method (comparator panels) to determine when to
replace reflectorization sheeting.\2\
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\1\ A list of active waivers FRA has issued to THEERP operations
is available in the docket. For an example, see Docket No. FRA-2019-
0047.
\2\ Docket No. FRA-2015-0105, Document No. 1 (available at
<a href="https://www.regulations.gov/document/FRA-2015-0105-0001">https://www.regulations.gov/document/FRA-2015-0105-0001</a>).
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On July 21, 2022, FRA issued an NPRM proposing to codify those
[[Page 3376]]
waivers.\3\ As explained in the NPRM, FRA proposed to codify the
waivers for two reasons, First, freight rolling stock used exclusively
for THEERP purposes do not typically travel over low visibility
highway-rail grade crossings at nighttime. Second, allowing for
performance-based methods of reflectorization evaluation and
replacement is a more reliable and accurate way to evaluate the
effectiveness of the retroreflectivity of the required sheeting than
part 224's current 10-year default replacement cycle. Codifying these
waivers is expected to enhance safety (i.e., by ensuring
retroreflective sheeting is replaced when it is no longer effective),
promote innovation, and reduce unnecessary paperwork burdens for both
industry and FRA by eliminating the need to continue to use the waiver
process for relief. Codifying these waivers will also provide the
railroad industry with regulatory certainty as to the applicability of
part 224 to equipment used for THEERP purposes.
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\3\ 87 FR 43467.
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In addition, FRA proposed to remove Sec. 224.107, which has become
outdated. Section 224.107 requires the locomotive fleet population to
be fully equipped with part 224 compliant retroreflective sheeting by
November 28, 2010, and the freight car fleet to be compliant by
November 28, 2015.\4\ FRA proposed to remove this section because the
implementation dates have passed and are no longer necessary to have in
the regulation.
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\4\ 49 U.S.C. 20148.
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Two comments to the NPRM were submitted by AAR and the Railway
Supply Institute (RSI).\5\ As discussed in more detail below, the
comments generally supported the proposal in the NPRM with some
suggested revisions. In addition, in response to DOT's April 3, 2025
request for information (RFI) related to reducing regulatory
burdens,\6\ AAR commented that FRA should finalize the NPRM and
reiterated the revisions AAR requested in their comment to the NPRM.\7\
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\5\ Docket No. FRA-2021-0080 (AAR comment at FRA-2021-0080-0002,
<a href="https://www.regulations.gov/comment/FRA-2021-0080-0002">https://www.regulations.gov/comment/FRA-2021-0080-0002</a>, and RSI
comment at FRA-2021-0080-0003, <a href="https://www.regulations.gov/comment/FRA-2021-0080-0003">https://www.regulations.gov/comment/FRA-2021-0080-0003</a>).
\6\ 90 FR 14593 (Apr. 3, 2025).
\7\ Docket No. DOT-OST-2025-0026, <a href="https://www.regulations.gov/comment/DOT-OST-2025-0026-0829">https://www.regulations.gov/comment/DOT-OST-2025-0026-0829</a>.
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FRA reviewed the comments, and in response as described in more
detail below, has clarified the inspection process for properly trained
and experienced inspectors and to allow additional flexibility to
conduct inspections in limited space. No other changes to the proposed
rule text are provided in this final rule.
This final rule is effective immediately, consistent with 5 U.S.C.
553(d)(1), as it is ``a substantive rule which grants or recognizes an
exemption or relieves a restriction.''
Costs and Benefits of the Regulatory Action
This rule eliminates the need for railroads to submit waiver
petitions (and repeated extensions of those waivers approximately every
5 years) from part 224 for certain older railroad equipment used in
THEERP operations and eliminates the Federal Government's need to
review and approve the waiver petitions and extension requests. In
addition, the rule allows railroads and private car owners to replace
retroreflective sheeting based on performance, instead of time, thus
increasing efficient use of resources and reducing environmental waste
from discarding retroreflective sheeting prior to the end of its useful
life. FRA estimates there will be minor costs for purchasing and
recalibration of the comparator panels used to evaluate retroreflective
sheeting, and training employees in their use (about 0.2 percent of
total final rule costs).
FRA expects the rule to enhance safety, promote innovation, clarify
existing requirements, and reduce unnecessary burdens. Entities that
have been operating under these waivers have not shown an increase in
accidents/incidents. Also, retroreflective sheeting that is performing
poorly will likely be replaced sooner under this rule's amendments than
under the existing 10-year replacement cycle, better ensuring continued
effectiveness of the sheeting. Overall, FRA estimates the rule will
result in net benefits. FRA's estimates of benefits for the final rule
are shown in the table below.
Table ES--1: Summary of Total Benefits Over the 20-Year Period
[2024 Dollars]
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Present value Present value
Impact Undiscounted 7% 3% Annualized 7% Annualized 3%
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Baseline Cost................... $722,686,030 $382,807,968 $537,587,568 $36,134,364 $36,134,329
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Baseline Costs consist of Visual Inspection & Replacement, 10-Year Renewal, Transportation of Cars Typically not
Interchanged, and Waivers.
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Final Rule Cost................. 549,991,943 291,377,977 409,151,953 27,504,020 27,501,438
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Final Rule Costs for Visual Inspection & Replacement; Periodic Evaluation & Retroreflective Sheeting Replacement
(Performance-Based); Transportation of Cars Typically not Interchanged; 10-Year Renewal (@15% of Cars, Provides
Flexibility for Small Entities); and Comparator Panel Purchase, Recalibration, and Employee Training.
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Net Benefits *.................. 172,694,087 91,429,991 128,435,615 8,630,344 8,632,891
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Government Cost Savings for 193,149 103,285 144,275 9,749 9,698
Waivers (from Baseline)........
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Qualitative Benefit: Reduced waste from not replacing effective reflective sheeting prematurely.
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* Net benefits from cost savings = baseline costs-final rule costs.
[[Page 3377]]
II. Statutory and Regulatory Background
A. Existing Reflectorization Requirements
As discussed in the NPRM,\8\ the Reflectorization Standards are
being updated to address two issues. First, the current requirement for
the retroreflective sheeting to be applied on the sides of rail freight
rolling stock to enhance the visibility of trains does not consider the
utility of the requirement on THEERP operations. Second, the
requirement that retroreflective sheeting be replaced every 10 years
without considering its effectiveness are overly burdensome. As the
rule was implemented, FRA's Railroad Safety Board (Board) granted a
series of waivers: (1) excluding equipment used for THEERP purposes
from the Reflectorization Standards; \9\ and (2) permitting freight
railroads to develop and implement a performance-based alternative
method to replace retroreflective sheeting when it is no longer
effective.\10\
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\8\ 87 FR 43467.
\9\ A list of active waivers FRA has issued to THEERP operations
is available in the docket.
\10\ Docket No. FRA-2015-0105, Document No. 1 (available at
<a href="https://www.regulations.gov/document/FRA-2015-0105-0001">https://www.regulations.gov/document/FRA-2015-0105-0001</a>).
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B. Waivers Excluding From Part 224 Rail Freight Rolling Stock Used Only
for THEERP Purposes, Except for Incidental Freight Service
As discussed in the NPRM,\11\ certain railroads petitioned for
relief, because adding retroreflective sheeting to their equipment
would detract from its aesthetic or historical nature. The railroads
asserted THEERP operating conditions significantly reduce the benefit
of retroreflective sheeting, which increases visibility of trains
primarily during nighttime conditions and at passive grade crossings.
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\11\ 87 FR 43467 (Section II. B.).
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While monitoring implementation of these waivers, FRA reviewed all
accident and incident reports from railroads operating under the
waivers and identified no injuries or deaths that were attributable to
the lack of part 224 reflectorization. Given the railroad industry's
long-term success in safely operating under these waivers, FRA is
codifying them in part 224. This change eliminates the need for further
waivers and the associated employee hours spent on their documentation
and requests for renewal approximately every five years.
C. Waivers Allowing Development and Testing of Alternative Methods
(Comparator Panel Evaluation) To Determine When To Replace
Retroreflective Sheeting.
As discussed in the NPRM,\12\ AAR petitioned, and the Board
granted,\13\ a waiver extending the replacement requirement for at
least three years to develop an alternate evaluation method. AAR's
testing showed that sheeting applied to rail cars more than nine years
prior met or exceeded the Reflectorization Standards.\14\ AAR finalized
the design, specifications, and procedures for a standard comparator
panel for evaluating the effectiveness of retroreflective sheeting on
rail freight rolling stock, and the Board approved use of AAR's
comparator panel process in lieu of the 10-year replacement cycle.\15\
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\12\ 87 FR 43467 (Section II. C.).
\13\ Docket No. FRA-2015-0105, Document No. 1 (available at
<a href="https://www.regulations.gov/document/FRA-2015-0105-0001">https://www.regulations.gov/document/FRA-2015-0105-0001</a>).
\14\ Docket No. FRA-2015-0105, Document No. 9 (available at
<a href="https://www.regulations.gov/document/FRA-2015-0105-0009">https://www.regulations.gov/document/FRA-2015-0105-0009</a>).
\15\ Docket No. FRA-2015-0105, Document No. 21 (available at
<a href="https://www.regulations.gov/document/FRA-2015-0105-0021">https://www.regulations.gov/document/FRA-2015-0105-0021</a>); Docket No.
FRA-2015-0105, Document No. 22 (available at <a href="https://www.regulations.gov/document/FRA-2015-0105-0022">https://www.regulations.gov/document/FRA-2015-0105-0022</a>).
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III. Overview and Technical Discussion of Requirements
A. Exclusion From Part 224 Rail Freight Rolling Stock Used Only for
THEERP Purposes, Except for Incidental Freight Service
The Reflectorization Standards were developed because low
visibility, particularly at highway-rail grade crossings, can
contribute to motorists colliding with rail equipment (run-into train
(RIT) accidents). As discussed in the NPRM,\16\ adding reflectorization
to rail equipment reduces the likelihood of RIT accidents for
conventional freight operations. Locomotives and passenger cars used
exclusively in passenger service are excluded \17\ because the
conspicuity of equipment used in conventional passenger service is
significantly better than the conspicuity of equipment used in freight
service.\18\
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\16\ 87 FR 43467 (Section III. A.).
\17\ 49 CFR 224.3(c).
\18\ 70 FR 149.
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Similarly, retroreflective sheeting provides no clear safety
benefit for equipment used exclusively for THEERP purposes because,
like other passenger equipment, equipment used exclusively for THEERP
purposes is generally more highly visible than conventional railroad
equipment and is used in a more protected operating environment. For
these reasons, this final rule excludes equipment used for THEERP
purposes from the Reflectorization Standards.
B. Allowing Alternative Methods (Comparator Panel Evaluation or
Retroreflectometer Measurement) To Determine When To Replace
Retroreflective Sheeting.
As noted in the NPRM and described above,\19\ pursuant to a waiver
AAR developed an alternate method for evaluating the effectiveness of
retroreflective sheeting more than 10 years old.\20\ Following
development, FRA agreed to allow a pilot program for AAR to test the
comparator panel method in service.\21\ A trained railroad inspector
would place a comparator panel immediately adjacent to, or overlapping,
retroreflective sheeting installed on rail freight rolling stock and
determine its relative brightness. When the comparator panel was equal
to, or brighter than, the existing installed sheeting, the existing
sheeting was replaced. Testing showed the comparator panel is an
accurate and easy way to determine when retroreflective sheeting needs
to be replaced in compliance with the Reflectorization Standards.
Similarly, a retroreflectometer device can be used to take direct
measurements of the sheeting and be an effective performance-based
method for evaluating retroreflectivity. As such, this final rule adds
comparator panel evaluation and direct measurements with a
retroreflectometer, as alternative options to determine compliance with
the Reflectorization Standards. These methods provide flexibility for
the rail industry while, in most instances, enhancing safety because
allowing for alternative methods of reflectorization evaluation and
replacement is a more reliable and accurate way to evaluate the
effectiveness of the retroreflective sheeting than part 224's current
10-year default replacement cycle.
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\19\ 87 FR 43467 (Section III. B.).
\20\ Docket No. FRA-2015-0105, Document No. 9 (available at
<a href="https://www.regulations.gov/document/FRA-2015-0105-0009">https://www.regulations.gov/document/FRA-2015-0105-0009</a>).
\21\ Docket No. FRA-2015-0105, Document No. 22 (available at
<a href="https://www.regulations.gov/document/FRA-2015-0105-0022">https://www.regulations.gov/document/FRA-2015-0105-0022</a>).
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1. The Existing 10-Year Replacement Cycle Ensures Effective
Retroreflective Sheeting, but Often Requires Replacement Sooner Than
Necessary
As discussed in the NPRM,\22\ the 10-year replacement cycle helps
ensure rail
[[Page 3378]]
freight rolling stock is equipped with effective retroreflective
sheeting, but it may also result in railroads unnecessarily replacing
sheeting that continues to be effective beyond 10 years of service. The
pilot program confirmed AAR testing \23\ that showed the sheeting could
continue to comply with the Reflectorization Standards for a
significant amount of time beyond 10 years of service, especially when
periodically cleaned. The data also showed that not all initially
applied compliant material performs equally well throughout its
anticipated useful life and can be affected by the type of service or
commodity (salt, coal, chemicals, etc.) and environmental conditions
(multiple freeze-thaw cycles, extreme cold or heat, high humidity,
etc.) that the equipment endures. Under the more extreme of these
circumstances, samples yielded measurements, after being cleaned, that
were below the minimum comparator panel values just one to two years
after application. One cause for the poor performing samples was found
to be internal degradation of the sheeting due to damage or
delamination, which can lead to mold or mildew growth over the
microprismatic layer. Such poor performing or internally degraded
material could be identified early on through use of the comparator
panel or direct measurements with a retroreflectometer, allowing for
earlier replacement. Overall, this would lead to better performing
sheeting in service, resulting in an increase in safety compared to a
blanket application of a 10-year replacement cycle.
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\22\ 87 FR 43467 (Section III. B. 1.).
\23\ Docket No. FRA-2015-0105, Document No. 1 (available at
<a href="https://www.regulations.gov/document/FRA-2015-0105-0001">https://www.regulations.gov/document/FRA-2015-0105-0001</a>), Appendix
B: Supporting Documentation from AAR Equipment Engineering
Committee.
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To understand the efficacy of the comparator panels better, FRA
sought comments from the industry regarding the proportion of sheets
that were replaced as a direct result of not meeting the performance
criteria versus sheets that were replaced under Sec. 224.109. In
response to the NPRM, AAR provided comments which included a chart
containing the trends for when and why sheeting was replaced.\24\ AAR
created Why Made Code (WMC) 1F for sheeting replaced that did not meet
the minimum reflectivity levels per Rule 66 \25\ (7,290 sheets in 2019,
16,779 sheets in 2020, and 18,808 sheets in 2021). AAR submitted its
comment on September 16, 2022, and thus there are no data presented
after 2021 to present.
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\24\ Docket No. FRA-2021-0080, Document No. 2.
\25\ AAR Rule 66 outlines the industry standards for the
reflectorization of railway equipment. The rule provides standards
for retroreflective sheeting and inspection, repair, and replacement
of such sheeting.
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When FRA granted AAR relief from the Reflectorization Standards to
develop and test the comparator panel method, AAR estimated they avoid
unnecessarily replacing all the retroreflective sheeting on 584,500
freight cars (at least 14 retroreflective sheets per car based on
minimum required area) that would have cost approximately $79 million
during those first three years.\26\ Codifying the performance-based
method will avoid requiring railroads to replace the sheeting
unnecessarily on approximately 1.5 million freight cars over the next
10 years.
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\26\ FRA Data Request for Docket FRA-2015-0105, Document No. 23
(Nov. 3, 2020). See the table, ``Number of Freight Cars That Would
Need a Full Renewal of Retroreflective Sheeting Based on 10-Year Age
Limit.'' The figure of 584,500 freight cars is the sum of cars for
the years 2016, 2017, and 2018. This is an update from the NPRM,
which identified 584,500 ``pieces of effective retroreflective
sheeting,'' instead of freight cars. 87 FR 43467.
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In addition, as discussed in the NPRM,\27\ FRA believes railroads
may be unnecessarily replacing compliant retroreflective sheeting
because the inspection and replacement process can be cumbersome, and
detailed tracking is not required.
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\27\ 87 FR 43467.
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During the approximately 3-year period of relief from the 10-year
replacement requirement from 2015 to 2018, and prior to AAR
implementing the pilot program to test its performance-based method,
the majority of retroreflective sheeting in service on AAR-member
railroads was installed in 2005 and continued in service beyond 10
years. After reviewing pertinent records, FRA is unaware of any
reportable RIT accidents attributable to under-performing
retroreflective sheeting. Once the pilot program was approved to test
the comparator panel method on in-service equipment, all sheeting on
equipment within AAR interchange was evaluated using the comparator
panels whenever the equipment underwent the single car air brake test
(SCABT) or annual locomotive inspection and replaced as necessary when
sheeting failed the comparator evaluation. By gradually replacing
retroreflective sheeting as needed, a significant amount performed
effectively beyond 10 years and was allowed to continue in service
beyond 10 years. These findings help confirm AAR's conclusion that
retroreflective sheeting can perform effectively beyond 10 years of
service.
Only AAR-member railroads have participated in the pilot program to
test the comparator panel method, but FRA anticipates additional
railroads would choose to use it, if codified. In response to the
public notice FRA published related to AAR's waiver petition, three
commenters expressed concurrence with the proposal of an alternative
method in lieu of the 10-year replacement cycle and suggested relief
should be applied to all railroads.\28\
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\28\ Docket No. FRA-2015-0105; comments from RSI, Colorado
Springs Utilities, and North America Freight Car Association.
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FRA concludes that allowing an alternative evaluation of installed
retroreflective sheeting will better tailor the replacement
requirements to the condition of the sheeting. The retroreflective
sheeting has a finite service life, and performance-based methods of
evaluation will help ensure: (1) sheeting that continues to perform
well after the 10 years of service can remain in service; and (2)
sheeting that underperforms before the 10 years of service can be
identified and replaced on a more frequent, as needed basis. FRA
understands that not all railroads may benefit from the use of
alternative methods because of the financial burden of procuring a
comparator panel or retroreflectometer device and related training for
employees, particularly for some small railroads with limited
equipment. Such railroads may prefer to continue to utilize the 10-year
replacement cycle. Therefore, this final rule retains the 10-year
replacement cycle as an option.
2. FRA Worked Closely With AAR and TTI To Develop a Comparator Panel
That Could Be Used With the Reflectorization Standards
As discussed in the NPRM,\29\ FRA worked closely with AAR and TTI
to develop a comparator panel that could evaluate retroreflective
sheeting and determine whether it complies with existing photometric
performance requirements in the Reflectorization Standards. Based on
the existing standards, which set the current minimum photometric
performance standards at certain observation angles, AAR constructed
the comparator panel by adding a set of fine dot matrix markings such
that the target reflectivity was achieved at the desired boundary
conditions. To find an appropriate target retroreflectivity for the
comparator panel, AAR and TTI sampled part 224 compliant sheeting from
various manufacturers and gathered the retroreflectivity measurements
(with the 922 RoadVista). With the specifications for the
retroreflective comparator panels
[[Page 3379]]
established, AAR procured six sample comparator panels for evaluation
and took measurements of the retroreflectivity with the 922 RoadVista.
The results show that the comparator panels could be used effectively
with the Reflectorization Standards.
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\29\ 87 FR 43467 (Section III. B. 2.).
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3. FRA Approved a Pilot Program To Test AAR's Standard S-916;
Retroreflective Comparator Panel Requirements (S-916) in Service.
As discussed in the NPRM,\30\ the Board approved an AAR pilot
program to test its newly developed standard comparator panel and
process for using it to evaluate retroreflective sheeting for
compliance with the Reflectorization Standards instead of the 10-year
replacement cycle.\31\ To facilitate the pilot program, AAR: (1)
adopted AAR Standard S-916, Retroreflective Comparator Panel
Requirements, prescribing the requirements for comparator panels to be
used in the performance evaluation of retroreflective sheeting on
freight cars and locomotives; (2) published Specification M-944,
Retroreflective Sheeting Inspection Procedure (M-944), which provides
the process for conducting a performance evaluation of retroreflective
sheeting on railroad freight cars and locomotives using a comparator
panel or electronic handheld retroreflectometer; and (3) incorporated
the specifications of the comparator card and inspection procedures
into AAR Interchange Rule 66, Reflective Sheeting, including a new
billing repair ``Why Made Code: 1F'' related to use of the comparator
panel and replacing reflective sheeting for not meeting the minimum
reflectivity levels per Rule 66.
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\30\ 87 FR 43467 (Section III. B. 3.).
\31\ Docket No. FRA-2015-0105, Document No. 21.
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Since late 2018, AAR's performance-based alternate method has been
widely used by the industry (specifically within interchange among AAR
member railroads). FRA understands the standard has been successful and
has no record of accidents, incidents, or noncompliance related using
the standard. FRA is codifying the current elements of the standard in
this rulemaking proceeding. FRA requested comments on whether the
elements of the standard should be codified to continue use of the
standard for complying with part 224 and make it an option for the
entire railroad industry. As discussed further below, the comments to
the NPRM support codifying the proposed performance-based alternate
method for evaluating retroreflective sheeting for the entire industry.
IV. Response to Comments on the Proposed Rule and AAR's Response to
DOT's RFI
Two comments to the NPRM were submitted to the docket for this
rulemaking proceeding.\32\ FRA reviewed the comments, and in response,
has updated proposed section 224.111(c)(2), Retroreflective comparator
panel evaluation process and criteria, to clarify the reflectorization
inspection process for properly trained and experienced inspectors, and
to allow additional flexibility to conduct inspections in limited
space. No other changes to the proposed rule text are provided in this
final rule.
---------------------------------------------------------------------------
\32\ Docket No. FRA-2021-0080.
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In the NPRM, FRA proposed to codify the current elements of AAR's
performance-based alternate method for inspecting and replacing
retroreflective sheeting. As discussed in the NPRM, AAR's performance-
based alternate method is supported by successful testing conducted
pursuant to a pilot program. The NPRM focused on AAR Specification M-
944, which was used during the pilot program and provides a procedure
for using the comparator panel comparison to evaluate sheeting. As
mentioned in the NPRM, M-944 was incorporated into Rule 66, and
therefore M-944 was no longer necessary as a standalone specification.
AAR's comment \33\ suggests that the flexibility provided by AAR Rule
66 should also be adopted in this final rule. AAR Rule 66 was also part
of the pilot program, and in 2018, as testing progressed, it allowed
properly trained and experienced employees to perform an initial visual
inspection and determine whether a further evaluation using the
comparator card is necessary.\34\ FRA agrees that this flexibility has
been effective and is adding it to this final rule.
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\33\ Docket No. FRA-2021-0080, Document No. 1.
\34\ See also AAR's comment in response to DOT's RFI in Docket
No. DOT-OST-2025-0026 (``Finalize the NPRM published in July 2022
that codifies existing waivers on reflectorization and include
revisions to allow for inspection by a light source (rather than
requiring a comparator panel) and eliminating the requirement that
performance evaluation occur at 10-20 feet.'').
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AAR also commented that FRA's proposed distance requirement for
measuring retroreflectivity should be removed because it may not be
possible for an inspector to observe the sheeting from the proposed
distances at some locations. AAR's Rule 66 \35\ recommends 15 feet for
evaluating sheeting where there is sufficient space, and that is
consistent with FRA's proposal.\36\ As discussed further below,\37\
this final rule will allow for evaluations to be performed at the next
closest alternative effective distance, when 15 feet is not
practicable. This will provide additional flexibility where space is
limited, and will maintain the current levels of safety, as it requires
an effective evaluation. If space will not permit an effective
evaluation, FRA expects the equipment to be moved to accommodate an
effective evaluation or comply with the 10-year replacement cycle, as
required by Sec. 224.111(b).
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\35\ Field Manual of the AAR Interchange Rules, Rule 66--
Reflective Sheeting.
\36\ FRA also understands there is a wider range of distances
where an effective evaluation can be performed. FRA's proposal aimed
to provide flexibility for situations where space is limited by
permitting a range of distances, 10-20 feet, where 15 feet is not
practicable. According to AAR's comment, 10-20 feet does not provide
enough flexibility, because it may not always be possible to take
the measurement from 10-20 feet.
\37\ Section V., Section-by-Section Analysis, Sec. 224.11(c).
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RSI's comment \38\ supports FRA's proposal to add comparator panel
evaluation and direct measurements with a retroreflectometer as
alternative options to determine compliance with the Reflectorization
Standards and agrees that codifying the use of a performance-based
method of retroreflective evaluation will increase safety by ensuring
that retroreflective sheeting is replaced when it is no longer
effective.
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\38\ Docket No. FRA-2021-0080, Document No. 3.
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V. Section-By-Section Analysis
Section 224.3 Applicability
Section 224.3 sets forth the scope and application of part 224, as
described further in the NPRM.\39\
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\39\ 87 FR 43467 (Section IV.).
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Section 224.107 Implementation Schedule
This final rule removes Sec. 224.107, as described further in the
NPRM.\40\
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\40\ 87 FR 43467 (Section IV.).
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Section 224.109 Inspection, Repair, and Replacement
The title is revised to ``Inspection and replacement of missing,
damaged, or obscured retroreflective sheeting.'' Paragraphs (a) and (b)
of Sec. 224.109 are revised to remove any references to Sec. 224.107,
because this final rule removes Sec. 224.107, as explained above.
Section 224.111 Renewal
This section is retitled from ``Renewal'' to ``Evaluation and
replacement of 10-year-old or underperforming retroreflective
sheeting.'' The existing title, ``Renewal,''
[[Page 3380]]
reflects the only current replacement option, which is to renew the
retroreflective sheeting after 10 years, regardless its condition. The
revised title will indicate two options for replacing the
retroreflective sheeting: the same 10-year replacement cycle; or using
a performance-based method to determine when replacement is required.
Paragraph (a) identifies two options for replacing retroreflective
sheeting: a 10-year replacement cycle; and an alternative method to
determine when replacement is required. The existing 10-year
replacement option is included in paragraph (b) and the alternative
option in paragraph (c).
The 10-year replacement option is retained in paragraph (b) because
some short line railroads or individual car owners may not want to
invest in the equipment and training needed to switch to an alternative
method. As discussed in the NPRM,\41\ it is not clear if, or how,
railroads are able to distinguish between replacement sheeting and
previously installed sheeting on the same piece of equipment. According
to AAR, Universal Machine Language Equipment Register (UMLER) \42\
system updates have been inconsistent because the railroad industry no
longer relies on the information provided by the UMLER fields. FRA
requested comment in the NPRM from the railroad industry on how records
are created and maintained to track the installation date of sheeting
when only a portion of the required sheeting is replaced prior to 10-
years from the date of original installation. In response, AAR
commented that usage of Why Made Code 1F (reflective sheeting does not
meet the minimum reflectivity levels per Rule 66) is generally how
records are created and maintained to track replacement of sheeting
because this is the billing code used. This method of recordkeeping is
sufficient to facilitate compliance with the Reflectorization
Standards, and this final rule incorporates FRA's proposal from the
NPRM.
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\41\ 87 FR 43467.
\42\ AAR's UMLER is a comprehensive system that provides data
for rail equipment, including features for registration,
maintenance, compliance with interchange rules, and reporting data.
---------------------------------------------------------------------------
Paragraph (c) requires railroads to evaluate retroreflective
sheeting during the SCABT and annual locomotive inspection. Paragraph
(c)(1) provides the specifications for an acceptable comparator panel
to carry out the evaluation. Paragraph (c)(2) sets forth the process
and criteria for evaluating the existing sheeting using a light source
and, if necessary, using a comparator panel under paragraph (c)(1).
Paragraph (c)(3) permits the use of a handheld retroreflectometer to
perform the required evaluation. As part of FRA's routine compliance
oversight, the agency expects to review railroads' inspection records
to verify an alternative evaluation was conducted.
The retroreflectivity, color, and construction requirements in
paragraph (c)(1)(i) through (iii) are the same as the current S-916.
The labeling requirement in paragraph (c)(1)(iv) is also the same as
the current S-916, with the additional requirement that a panel's label
include information on the calibration status of the panel. Based on
AAR's indication that the median time between SCABT is 25.6 months,
this rule requires comparator panels to be recalibrated at least every
two years (i.e., no more than two years from its manufactured date or
previous recalibration date, whichever is most recent). FRA sought
comment in the NPRM on this timeframe and how much downtime is expected
while a panel is out for recalibration. No comments were received, and
this final rule incorporates FRA's proposal related to recalibration
from the NPRM.
This final rule updates paragraph (c)(2) in response to AAR's
comment to establish a comparator panel evaluation process and criteria
consistent with the current AAR Rule 66 (and former M-944). Paragraph
(c)(2) is added to this final rule to clarify the process for properly
trained and experienced employees performing the evaluation. Such
employees may pass sheeting they determine to be obviously compliant
and fail sheeting they determine to be obviously non-compliant
(including obscured) based on their initial visual inspection. Sheeting
that is not determined to be obviously compliant or non-compliant shall
be evaluated further using the comparator panel comparison. This
process is consistent with Rule 66.
AAR Rule 66 recommends evaluating installed sheeting with a
comparator panel from 15 feet. FRA understands that 15 feet provides an
appropriate amount of space to perform the evaluation but also
understands that during an SCABT or locomotive annual inspection it may
not be practicable for an inspector to stand 15 feet from the
equipment. To provide flexibility, the NPRM proposed requiring sheeting
to be evaluated from a distance of between 10 and 20 feet, with a 15-
foot distance being preferable. FRA sought comment in the NPRM on
whether a range of 10 to 20 feet is sufficient to evaluate
retroreflective sheeting properly and whether the range provides
sufficient flexibility. In response to AAR's comment, paragraph
(c)(2)(v) in this final rule requires measurement from 15 feet when
practicable but permits evaluation from the next closest alternative
effective distance.
Consistent with Rule 66, paragraph (c)(2)(vi) sets forth the
process for conducting the evaluation (e.g., with a light source
positioned adjacent to the inspector's eye and directed at the sheeting
and comparator panel, the inspector compares the reflected light
intensity of the entire installed sheeting to that of the comparator
panel). Paragraph (c)(2)(vi)(A) provides that if the perceived
reflected light intensity of the entire installed sheeting appears
brighter than that of the comparator panel, the installed sheeting
passes the evaluation. Paragraph (c)(2)(vi)(B) provides that if the
perceived reflected light intensity of the entire installed sheeting
does not appear brighter than the comparator panel or if the two are
indistinguishable, the installed sheeting does not pass the evaluation.
If the two are indistinguishable, the installed sheeting is already at
or near the minimum threshold to comply with this section and would
only continue to degrade below the threshold if allowed to continue in
service until the next evaluation required by this section. Therefore,
such sheeting must be replaced.
In paragraph (c)(3), handheld reflectometers are permitted for use
to evaluate retroreflective sheeting and determine when it is required
to be replaced under this part. FRA understands that reflectometers can
be used to evaluate retroreflective sheeting easily, reliably, and
accurately. Paragraph (c)(3) requires use of an annular reflectometer,
placed directly against the retroreflective sheeting. FRA is requiring
an annular device, if a reflectometer is used, because it is easier to
ensure an accurate evaluation compared to other types of devices that
require multiple measurements from different angles to evaluate the
sheeting properly. Paragraph (c)(3)(iii) sets forth the minimum
allowable retroreflective values and necessary measurement angles if a
reflectometer is used. Due to the current high cost of a handheld
reflectometer, FRA does not anticipate widespread use of reflectometers
initially. However, if the cost diminishes over time, railroads may
prefer to use reflectometers.
[[Page 3381]]
VI. Regulatory Impact and Notices
A. E.O. 12866 (Regulatory Planning and Review) and DOT Regulatory
Policies and Procedures
FRA has considered the impact of this final rule under E.O. 12866,
Regulatory Planning and Review (58 FR 51735, Oct. 4, 1993), and DOT
Order 2100.6B, Policies and Procedures for Rulemaking (Mar. 10, 2025).
The Office of Information and Regulatory Affairs within the Office of
Management and Budget (OMB) determined that this final rule is not a
significant regulatory action under section 3(f) of E.O. 12866. FRA
estimates this rule will result in net benefits over a 20-year period
from not replacing retroreflective sheeting prior to the end of its
useful life, while potentially improving safety by replacing in less
than 10 years sheeting that has already reached the end of its useful
life.
1. Need for Regulatory Action
The Reflectorization Standards were promulgated in 2005; in the 20
years since their publication, FRA has learned that the reflective
sheeting applied to rail freight rolling stock can remain effective
beyond the 10 years initially thought at the time the Reflectorization
Standards were developed. This rulemaking updates the Reflectorization
Standards considering this new information by allowing the use of
alternative methods to evaluate retroreflective sheeting. The
alternative methods allow railroads and private car owners to replace
retroreflective sheeting as needed, based on performance, instead of a
mandatory replacement based on length of time. The final rule also
recognizes a segment of the regulated entities that operate THEERP
freight rolling stock and extends the exclusion from the
Reflectorization Standards to THEERP operations, as they pose a low
risk of highway-rail grade crossing incidents. For both stakeholders
that choose to use the alternative methods of evaluation and those that
operate THEERP freight rolling stock, this final rule promotes
regulatory certainty and efficiency. Unnecessary paperwork burdens are
also reduced by no longer needing to file waivers with FRA for relief
from part 224.
This rulemaking amends part 224 in two substantive ways. First, the
rule codifies waivers excepting THEERP operations from reflectivity
standards in Sec. 224.3. Second, the rule codifies the AAR waiver
allowing railroads to use alternative methods (i.e., comparator panel
or retroreflectometer) for determining when retroreflective sheeting
needs replacement. The comparator panel and retroreflectometer are
added as options to the existing 10-year replacement cycle under Sec.
224.111.
2. Baseline
The typical baseline scenario from which benefits and costs of the
regulation are measured is the no-action baseline, which is an
assessment of the railroad world without the rule.\43\ Without this
rule, it is likely that the railroads will continue to file waivers and
waiver renewals for using the alternative method and exclusion of
THEERP freight rolling stock from the Reflectorization Standards. One
possible baseline assumes FRA approves most of these waivers with
conditions, as it has in the past. In comparing this baseline to the
final rule, the benefit from the rule would be the removal of
unnecessary paperwork burdens of having to file future waivers and
renewals with FRA.
---------------------------------------------------------------------------
\43\ OMB, Circular A-4: Regulatory Analysis (Sept. 17, 2003).
Available: <a href="https://www.whitehouse.gov/wp-content/uploads/2025/08/CircularA-4.pdf">https://www.whitehouse.gov/wp-content/uploads/2025/08/CircularA-4.pdf</a>.
---------------------------------------------------------------------------
However, another baseline might offer more information about the
impacts of the rule. The waiver to use the comparator panel is
relatively recent (2018), and many of the THEERP waivers are also less
than 10 years old. The comparator-panel waiver covers almost all the
rail freight rolling stock. Another baseline describes a scenario
absent the comparator-panel waiver, that is, in which approval of the
waiver is uncertain and reflective sheeting is replaced per the 10-year
renewal cycle in existing Sec. 224.111. The baseline used for this
analysis is the 10-year renewal cycle outlined in existing Sec.
224.111, which requires that all retroreflective sheeting be replaced
every 10 years. This baseline is being used to estimate the substantive
impacts of the rule better. The baseline scenario under existing Sec.
224.111 is accounted for as a separate alternative under the Costs
section below. Then the baseline scenario is compared to the final rule
alternative in which waivers would not be necessary. FRA invited
comment in the NPRM on the appropriate baseline to use for the
regulatory analysis, which is discussed below.
Comments Filed on the Regulatory Analysis
FRA requested and received comments on its regulatory analysis.
Comments were filed by AAR and RSI. Part of AAR's comments concerned
the labor rate used to account for the costs and benefits of the
rulemaking. RSI agreed with the conclusion of the regulatory analysis
that the benefits outweigh the costs.
AAR commented that the labor rate FRA used was significantly lower
that the labor rate AAR provided to FRA in its prior information
request.\44\ AAR stated that FRA excluded overhead costs such as
supervision, administration, procuring retroreflective sheeting, car
cleaning supplies, business insurance, facility costs, and employer
taxes.
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\44\ AAR, FRA Data Request, 2020.
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FRA responds that it bases its labor rate on compensation and work
hours reported by the Class I railroads and Amtrak to the Surface
Transportation Board (STB), as noted in the NPRM. In consideration of
an AAR comment to an earlier rulemaking, FRA has added a burden rate of
75 percent to the straight time labor rate.\45\ FRA applies this labor
rate across its regulatory analyses providing a consistent and
transparent metric. A consistent rate avoids confusion and facilitates
comparison within and across rulemakings. FRA's rate is also within the
range of burden factors used by other U.S. DOT agencies. For example,
the Federal Aviation Administration (FAA) typically uses the Bureau of
Labor Statistics (BLS) data to estimate a wage multiplier.
---------------------------------------------------------------------------
\45\ Docket No. FRA-1999-6689, Document No. 0054. Available:
<a href="https://www.regulations.gov/document/FRA-1999-6689-0054">https://www.regulations.gov/document/FRA-1999-6689-0054</a>. In this
comment, the ratio of AAR's suggested hourly wage of $32.59 to the
base wage of $18.86 is 1.73, which was rounded to 1.75 or a 75
percent increase.
---------------------------------------------------------------------------
Regarding the cost of overhead items such as supplies and tools
used, AAR's Rule 66 requires only basic supplies. Rule 66 stipulates,
``[c]leaning as referred to in this rule will be performed with a rag
and water or suitable alternatives as directed by the sheeting
manufacturer.'' \46\ A railroad would likely already have these items.
Therefore, adding a marginal cost for using these common supplies and
tools would be a de minimis cost. Further, the cost of the
retroreflective sheeting was already accounted for and based on data
AAR provided. Adding overhead costs would be appropriate if FRA
required use of unusual or expensive supplies and tools for this final
rule. For example, if FRA required using the retroreflectometer, which
is expensive and not widely used, then it would be appropriate to add
additional overhead costs. The cost of the retroreflectometer, if
required, would be a direct cost attributable to this final rule.
---------------------------------------------------------------------------
\46\ Rule 66(E)(9), p. 576.
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Some of the other costs items listed by AAR, such as insurance cost
and taxes, represent (private) financial costs and not necessarily
(societal) economic costs. FRA understands railroads may
[[Page 3382]]
use these for accounting purposes; however, the economic analysis seeks
to estimate the real resource costs of this rule, in this case, of
labor costs. The real resource cost represents the opportunity cost of
labor, i.e., if an employee did not have to inspect and replace
retroreflective sheeting in compliance with this final rule, the
employee could perform other duties for the railroad. Specifically for
insurance payments and taxes, OMB Circular A-4 advises not to include
these transfer payments in estimating costs and benefits, because they
represent monetary payments that may not reflect the availability of
real resources.\47\
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\47\ OMB, Circular A-4, 2003. See section on Other Key
Considerations, The Difference between Costs (or Benefits) and
Transfer Payments.
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Consistent with OMB Circular A-4, FRA addressed the effect of using
AAR's labor rate in its NPRM Regulatory Impact and Notices Sensitivity
Analysis section. The NPRM Sensitivity Analysis briefly noted that the
effect of using the higher AAR wage rate would not affect the overall
results of the analysis. For the final rule, FRA expands this
discussion. In addition, FRA had presented AAR's data and estimated
costs in the NPRM Overview and Technical Discussion of Requirements
section. The Overview and Technical Discussion ``showed its work'' with
supporting calculations enabling readers to use the higher labor rate
if they so desired. As FRA's labor rate is a consistent metric sourced
in publicly accessible data, and better reflects real resource costs,
FRA continues to use it for its economic analysis.
In its comment, RSI concurred with the cost-benefit analysis. RSI
noted that the final rule will expand the benefits of using the
alternative comparator panel method to all car owners, beyond those who
are members of AAR. RSI also agreed that the baseline for the analysis
was appropriate.
3. Costs
a. Methodology
Because the retroreflective sheeting is applied per rail car, this
analysis used the per-car cost as the basis to estimate much of the
costs related to retroreflective sheeting. The costs for preparing
waiver petitions were estimated based on the labor costs of those
employees preparing the waivers.
FRA requested data from AAR about the railroads' experiences under
the approved waiver using the comparator panel. FRA reviewed the data
supplied by AAR and incorporated it into the cost estimates below. AAR
provided data for before and after the comparator panel waiver.\48\
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\48\ AAR, FRA Data Request for Docket FRA-2015-0105, Document
No. 23 (Nov. 3, 2020).
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In its estimates, AAR used an average labor rate of $140.38 per
hour or $2.34 per minute, in 2020 dollars, which may be based on
interchange billing rates. For its regulatory analyses, however, FRA
uses standardized labor rates which the Class I railroads report to the
STB. These rates are burdened by 75 percent for any fringe
benefits.\49\ For this analysis FRA used the STB wage rates for the
relevant employee groups. These are STB Group 200 employees consisting
of Executives, Officials, & Staff Assistants who likely complete waiver
petitions for the railroads, and Group 400 Maintenance of Equipment &
Stores employees who inspect and apply the reflective sheeting. The
Executives, Officials, & Staff Assistants burdened rate is $90.19 per
hour or $1.50 per minute, and the Maintenance of Equipment & Stores
employees burdened rate is $72.01 per hour or $1.20 per minute.\50\
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\49\ The Class I railroads report service hours and compensation
to the STB under 49 CFR 1245.2.
\50\ STB, Quarterly Wage Form A&B Data (2024). Compiled from
Class I railroad data reported on Wage Form A&B for year 2024.
Calculated as: Wage ($/hour) = sum of compensation for time worked
and paid for straight time rates ($) for Class I railroads / sum of
service hours for time worked and paid for straight time rates
(hours) for Class I railroads. Available: <a href="https://www.stb.gov/reports-data/economic-data/quarterly-wage-ab-data/">https://www.stb.gov/reports-data/economic-data/quarterly-wage-ab-data/</a>. Calculations for
burdened wage: For Group 200 employees, $51.54 per hour STB average
straight time rate x 1.75 fringe benefit multiplier = $90.19 per
hour burdened wage rate. Similarly, for Group 400 employees, $41.15
x 1.75 = $72.01 per hour burdened wage rate.
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To estimate Government costs and benefits resulting from reviewing
and approving waivers, FRA used the General Schedule (GS) pay rates for
grade GS-14 step 5 employees in the Washington, DC area. The Federal
pay rate was also burdened by 75 percent yielding a Federal pay rate of
$132.48 per hour.\51\
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\51\ Office of Personnel Management, Salary Table 2024-DCB (Jan.
2024). Available: <a href="https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2024/DCB_h.pdf">https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2024/DCB_h.pdf</a>. Calculation:
$75.70 per hour GS-14 Step 5 rate x 1.75 fringe benefit multiplier =
$132.48 per hour burdened rate.
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AAR provided counts of the maintenance of way (MOW) cars and
locomotives that would be covered under part 224; however, FRA focused
on freight rail cars to simplify the analysis. Given that MOW cars and
locomotives represent a small portion of all freight rail cars (about
2.5 percent and 1.6 percent respectively), including them in the
analysis would not significantly affect the results.
FRA used a 20-year period of analysis for this rulemaking because
retroreflective sheeting appears to have an effective service life
beyond 10 years (based on data from the AAR comparator panel waiver).
FRA also identified one study that estimated prismatic sheeting used on
traffic signs may last 15 to 30 years, which may be a reasonable proxy
for similar sheeting used on rail cars.\52\ However, for the rail
freight rolling stock used in THEERP operations, a 10-year period of
analysis may be a better ``fit'' because overage equipment may only be
actively used for an additional 5 to 10 years. Because the provision
permitting use of the comparator panel covers most of the rail car
fleet, FRA chose to use a 20-year period of analysis.
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\52\ Preston, Howard, Traffic Sign Life Expectancy (St. Paul,
MN: 2014). Report No. MN/RC 2014-20. Minnesota Dept. of
Transportation. Available: <a href="https://www.lrrb.org/pdf/201420.pdf">https://www.lrrb.org/pdf/201420.pdf</a>.
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First, the costs for the baseline scenario under Sec. 224.111 and
the 10-year renewal cycle were determined, followed by the final rule
costs. The difference between the two costs represents the estimated
net benefits (or costs) of the final rule: Baseline costs-final rule
costs = Net benefits (or costs).
The costs and benefits associated with the final rule are
summarized in Table V-1 below.
Table V-1--Summary of Total Benefits Over the 20-Year Period
[2024 Dollars]
----------------------------------------------------------------------------------------------------------------
Present value Present value
Impact Undiscounted 7% 3% Annualized 7% Annualized 3%
----------------------------------------------------------------------------------------------------------------
Baseline Cost................... $722,686,030 $382,807,968 $537,587,568 $36,134,364 $36,134,329
Final Rule Cost................. 549,991,943 291,377,977 409,151,953 27,504,020 27,501,438
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Net Benefits................ 172,694,087 91,429,991 128,435,615 8,630,344 8,632,891
[[Page 3383]]
Government Cost Savings for 193,149 103,285 144,275 9,749 9,698
Waivers (from Baseline)........
----------------------------------------------------------------------------------------------------------------
Qualitative Benefit: Reduced waste from not replacing effective reflective sheeting prematurely.
The impacts are described in detail below.
b. Baseline Costs Under Sec. 224.111 Following the 10-Year Renewal
Cycle
Absent this final rule, both THEERP and other rail operations to
which the Reflectorization Standards apply will incur costs for the
following requirements:
<bullet> Cost for inspection and replacement of missing, damaged,
or obscured retroreflective sheeting (``sheeting'') under Sec.
224.109.
<bullet> Cost to renew, i.e., replace sheeting no later than 10
years after installation under Sec. 224.111. The baseline assumes
sheeting will be replaced periodically every 10 years.
<bullet> Incidental cost for transporting rail cars that would not
typically appear on a repair track or shop for an SCABT to renew
sheeting under Sec. 224.111.
<bullet> Cost of petitioning FRA for waivers from the
Reflectorization Standards.
These cost elements may be represented by the equation: Baseline
cost = Visual inspection & sheeting replacement + 10-year renewal +
Transport + Waiver.
The cost for inspection and replacement of missing, damaged, or
obscured sheeting was determined by the cost of a visual inspection and
sheeting replacement multiplied by the number of cars undergoing an
SCABT. The SCABT serves as the triggering event for the inspection and
replacement of sheeting under Sec. 224.109. To determine the number of
cars undergoing an SCABT per month, FRA used the median time between
SCABTs of 25.6 months, and the average annual number of freight cars of
1,658,334 (an average over the period 2016-2020).\53\ The cars per
month were multiplied by 12 months to yield an estimated 765,385 cars
per year undergoing an SCABT.\54\
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\53\ FRA is using the same number of cars for the final rule as
in the NPRM. Using currently available data from 2019-2023 yields
only a small difference of-0.2 percent cars from the 2016-2020
average, and the 2016-2020 period better represents the period under
the waiver for which AAR provided data.
\54\ Calculation: 1,658,334 fleet size/26 months = 63,782 SCABT
cars per month. Then 63,782 cars per month x 12 months = 765,385
cars per year that undergo an SCABT, or about 46 percent of the
fleet. Source: FRA Data Request, 2020.
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Further, the cost of the visual inspection and sheeting replacement
was determined by the sum of the cost of the visual inspection and cost
to replace missing, damaged, or obscured sheeting. AAR indicated the
time for a visual inspection was 0.83 minutes, the time to replace the
first sheet per side was 9.3 minutes, the average number of sheets
replaced during SCABTs was 0.71 sheets, and the cost per sheet was
$1.31; a recent market price check shows the cost per sheet at about
$2.95 in 2024 dollars.\55\ Accounting for the labor time using the STB
Maintenance of Equipment & Stores wage rate of $1.20 per minute results
in a per-car cost of $14.21. Then the cost under Sec. 224.109 was
calculated by multiplying the estimated cars undergoing an SCABT by the
cost per car, resulting in a cost of $10,877,266 per year.\56\
---------------------------------------------------------------------------
\55\ W.W. Grainger, Inc., average of white and yellow
retroreflective sheeting, 4''x18'' 3M series 983-10 and 983-17. See
for example Locomotives/Rail Cars, White, Premium Grade Reflective
Tape--4TDU4<radical>983-10--Grainger and Locomotives/Rail Cars,
Yellow, Reflective Tape--38XP42[verbar]983-71--Grainger. Average of
$3.00 per sheet in 2025 dollars adjusted to 2024 dollars using GDP
Deflator available at U.S. Bureau of Economic Analysis, ``Table
1.1.9. Implicit Price Deflators for Gross Domestic Product''
(accessed June 15, 2025).
\56\ Calculations: Per-car cost for visual inspection and sheet
replacement = 0.83 min. x $1.20 per min. visual inspection + 9.3
min. x $1.20 per min. sheeting replacement + 0.71 sheets x $2.95 per
sheet = $14.21. Total cost for visual inspection and sheeting
replacement = 765,385 cars x $14.21 per car = $10,877,206 per year.
---------------------------------------------------------------------------
Similarly, the cost to renew the sheeting after 10 years was
determined by the number of cars affected multiplied by the cost of
renewal. The average number of cars that would need full renewal was
154,800 per year based on the average over the years 2016 to 2020.\57\
That represents about 10 percent of the fleet per year, which is
expected given the 10-year renewal period. The cost for sheeting
material per car was estimated given 14 sheets (of 0.5 square-foot
each) would be needed for 2 sides of the rail car (less than 50-foot
car, seven sheets per side), for a cost of $41.34 per car. AAR provided
that the time to apply the sheeting was 9.3 minutes for the first sheet
per side, and 2.6 minutes for each additional sheet, totaling almost 50
minutes for both sides of a rail car and $60 in labor costs (using the
STB Maintenance of Equipment & Stores wage rate of $1.20 per minute).
The cost per car for sheeting renewal is the sum of the material cost
and labor application costs ($41.34 + $59.97 = $101.31 per car). Then
the renewal cost for all affected cars is $15,682,399 annually.\58\
---------------------------------------------------------------------------
\57\ FRA Data Request, 2020.
\58\ Calculation: Cost to renew sheeting after 10 years =
154,800 cars x $101.31 per car = $15,682,399 per year on average.
---------------------------------------------------------------------------
To model the impacts more accurately under the baseline, FRA
estimated the potential costs for transporting rail cars, that in their
normal operations, would not appear on a repair track or shop (for an
SCABT). These cars may be owned by private car owners that do not own
repair shops, MOW cars that are not regularly interchanged, older cars
that are not regularly interchanged, stored cars, and seasonally used
cars. These cars may incur additional expense for transportation to a
repair shop when their sheeting needs renewal after 10 years. However,
this situation is mitigated by mobile repair units or a railroad's
Running Repair Agent (RRA) that can perform SCABTs and replace
sheeting.\59\ Nevertheless, FRA accounted for the transportation costs
for some cars that may need to be moved for sheeting replacement
because of scheduling issues with mobile repair agents or operational
issues. As a proxy estimate for the number of cars requiring transport,
FRA used the 23,000 freight cars that have interchange restrictions as
reported by AAR; these cars are usually older cars.\60\ Another way to
estimate the number of affected cars is to consider the conditional
probability of not undergoing an SCABT on a repair track or shop and
cars that would need full sheeting renewal. The probability of not
undergoing an SCABT was found by dividing the number of cars undergoing
an SCABT by the average fleet size, then subtracting from 1, for a
result of 0.54 or about 50
[[Page 3384]]
percent.\61\ From the discussion above, the probability of renewal for
a car is about 10 percent or 0.1. The conditional probability is the
product of the two probabilities, equaling about 0.05 or 5 percent of
the fleet, and representing 89,295 rail cars. Qualitatively, the
majority of these cars can be serviced by mobile repair agents and
RRAs, and FRA used 23,000 cars as a reasonable estimate.
---------------------------------------------------------------------------
\59\ Railinc, Running Repair Agents--Active. Available: <a href="https://findusrail.railinc.com/#/home">https://findusrail.railinc.com/#/home</a>.
\60\ AAR, Railroad Facts: 2020 Edition (Washington: 2020) 53.
\61\ Calculation: 1-765,385 SCABT cars/1,658,334 average fleet
size = 1-0.46 = 0.54, or about 50 percent of cars not likely to
appear on a repair track or shop for an SCABT.
---------------------------------------------------------------------------
For the transportation cost per car, FRA estimated the expected
transportation cost as the probability that a car would need
transportation for sheeting renewal multiplied by its transportation
cost. FRA estimated a range of $3,570 for $4,750 to transport an empty
car, or an average cost of $4,160 per car; the expected cost in any one
year is $416.\62\ Then, the transportation cost for the rail car fleet
is the estimated 23,000 affected cars multiplied by the expected
transportation cost of $416, for an overall transportation cost of
$9,568,071 annually. Given the uncertainty about the number of cars
affected, there is a higher degree of uncertainty about this cost
estimate and FRA invited comment on the inputs used. In its comment to
the NPRM, RSI generally agreed with estimated impacts in the analysis
when considering the rule's effects for all private car owners.
---------------------------------------------------------------------------
\62\ Calculation: Expected (transportation cost per car) =
probability (car would need 10-year sheeting renewal) x
transportation cost = 0.1 x $4,160 = $416.)
---------------------------------------------------------------------------
The last cost element in the baseline scenario is the cost of
petitioning FRA for waivers from the Reflectorization Standards. When
approved, waivers generally provide regulatory relief for five years.
For this analysis, FRA distinguished between waiver extensions and
waiver renewals. Waiver extensions permit the railroad or individual
car owners to continue to operate under the original waiver for another
five years. After 10 years, the railroad or individual car owner can no
longer apply for an extension but must instead request a renewal of the
waiver.\63\ The baseline waiver cost is the estimated number of new
waivers plus waiver extensions and renewals, multiplied by the cost of
filing waivers. This analysis estimated the waiver costs for both
THEERP operations and the performance-based (i.e., comparator-panel)
waiver.
---------------------------------------------------------------------------
\63\ FRA has updated its waiver procedures requiring it to
publish a Federal Register notice for a waiver extension and waiver
renewal. The change affects only Government costs and may lead to
slightly larger Government cost-savings to account for fewer Federal
Register notices per year on average under the final rule.
---------------------------------------------------------------------------
In the case of waivers for THEERP operations, FRA has received and
reviewed 23 waivers over 16 years, for a rate of 1.4 new waivers per
year, which is rounded to 1.5 waivers for analysis. Therefore, over the
20-year period of analysis (years 2022 to 2041), FRA expects 30 new
waiver petitions. Based on historical experience and FRA subject matter
expert estimates, FRA has found that waiver extensions and renewals are
subject to the following three conditions:
<bullet> Railroads or individual car owners will likely not operate
overage equipment beyond 10 years.
<bullet> Railroads or individual car owners have not asked for
renewals of waivers beyond 10 years.
<bullet> FRA has approved 15 out of 23 waivers for an approval rate
of 65 percent (i.e., 65 percent of 1.5 new waivers is about 1 new
waiver per year). Moreover, there were seven dismissed or denied
waivers, one double-counted waiver, and 1 additional waiver received in
2020 unaccounted for in the NPRM to complete the set of 23 THEERP
waivers).
Applying these conditions to the number of new waivers, FRA
estimated 15 waiver extensions over the period of analysis. As
explanation, new waivers approved during years 1 through 5 of the
period of analysis (from calendar years 2022 through 2026) will likely
receive extensions during years 6 through 10 of the period of analysis
(from calendar years 2027 through 2031) respectively, resulting in 5
extensions.\64\ Similarly, new waivers approved during years 6 through
10 of the analysis will likely receive extensions during years 11
through 15 of the analysis (from 2032 through 2036) respectively,
resulting in an additional 5 extensions. Finally, new waivers approved
during years 11 through 15 of the analysis will likely receive
extensions during years 16 through 20 of the analysis (from 2037
through 2041) respectively, resulting in five more extensions. In
total, FRA expects 15 waiver extensions.
---------------------------------------------------------------------------
\64\ After 10 years, requests for waiver renewals are not likely
under the first two conditions above.
---------------------------------------------------------------------------
Also, THEERP operations that currently have waivers may request
extensions resulting in an additional seven waiver extensions. Of the
15 approved THEERP waivers, four did not request a waiver renewal and
expired before year 2022 (waiver docket numbers FRA-2010-0148, FRA-
2010-0156, FRA-2008-0021, and FRA-2014-0082). Of the remaining 11
approved THEERP waivers, one was potentially due for an extension in
year one of the analysis, i.e., calendar year 2022 (waiver docket
number FRA-2016-0110--approved in 2017). Four approved waivers were
potentially due for extensions in year three of the analysis, i.e.,
year 2024 (waiver docket numbers FRA-2018-0026, FRA-2018-0086, FRA-
2019-0008, FRA-2019-0047--all approved in 2019). Finally, two approved
waivers are potentially due for extensions in year four of the
analysis, i.e., year 2025 (waiver docket numbers FRA-2020-0046 and FRA-
2020-0023--both approved in 2020). In sum, FRA expects seven waiver
extensions. Five of the 11 approved waivers may request waiver renewals
during the period of analysis but are unlikely to do so based on the
above conditions.
Thus, FRA expects THEERP operations to file 30 new waivers, 15
extensions of these new waivers, and seven extensions of existing
waivers. FRA estimated each new THEERP waiver petition requires 40
hours of labor, and each extension requires eight hours of labor.
Accounting for these labor hours at the STB Executives, Officials, &
Staff Assistants burdened wage rate yields a new waiver cost of $3,608
per waiver, and a corresponding cost of $5,412 for 1.5 new waivers per
year.\65\ The cost for a waiver extension is $722 per extension. The
costs are scheduled according to the frequency of occurrence of new
THEERP waivers (1.5 per year), new THEERP waiver extensions (one per
year starting in year six of the analysis), and currently approved
THEERP waiver extensions (one in year one of the analysis, four in year
three, and two in year four). The cost schedule also accounts for
extensions and renewals of the performance-based waiver at $1,849 per
extension or renewal (see below, one extension expected in year two of
the analysis, and thereafter one renewal per each year in years seven,
12, and 17). As an example, in year two of the analysis, FRA expects
1.5 new THEERP waivers ($5,412), and 1 alternative waiver extension
($1,849), for a total estimated cost of $7,261.
---------------------------------------------------------------------------
\65\ Calculation: Cost for one waiver = 40 hrs. x $90.19 =
$3,608. Then 1.5 new waivers x $3,608 per waiver = $5,412.
---------------------------------------------------------------------------
For regulated entities petitioning to use alternative methods to
evaluate sheeting, FRA is not aware of any new methods in development
and expects no new waiver filings. If a new performance-based waiver
was filed, the cost to file such a waiver would be qualitatively high
because it would likely involve extensive development
[[Page 3385]]
and in-service testing like the comparator panel. Given the research to
develop the comparator panel, FRA expects AAR will continue to file for
extensions and renewals to extend the waiver's relief. Over the period
of analysis, FRA estimated four extension and renewals, requiring 20.5
hours each at the same Executives, Officials, & Staff Assistants wage
rate for a per-waiver cost of $1,849. FRA estimated the performance-
based waiver extension requires more labor time than the THEERP-
operations waiver extension because Class I railroads' operations are
more complex. (A THEERP-operations waiver renewal, however, may involve
detailed descriptions of the subject equipment that may add to the time
to file a potential renewal.)
Furthermore, the Federal Government expends resources to review
these waiver petitions. Depending on the waiver, FRA's review will
involve legal personnel, subject matter experts, administrative
personnel, and railroad inspectors. FRA estimated these costs using the
same respective labor hours as for THEERP-operations waivers and
performance-based waivers above. For the wage rate, instead of using an
average wage rate for the variety of personnel involved, FRA used a
representative burdened wage rate for GS-14 step five employees of
$132.48 per hour. The resulting FRA costs are $5,299 for a new THEERP-
operations waiver, $1,060 for a THEERP-operations waiver extension, and
$2,716 for the comparator-panel waiver extension and renewal.
The following table presents the estimated baseline scenario cost
elements.
Table V-2--Baseline Scenario Costs (2024 Dollars) Under Sec. 224.111 10-Year Renewal Cycle
----------------------------------------------------------------------------------------------------------------
Present value Present value
Baseline cost impact Undiscounted 7% 3% Annualized 7% Annualized 3%
----------------------------------------------------------------------------------------------------------------
Visual Inspection & Replacement $217,545,315 $115,233,908 $161,826,248 $10,877,266 $10,877,266
(Sec. 224.109)...............
10-Year Renewal (Sec. 224.111) 313,647,798 166,139,462 233,314,361 15,682,390 15,682,390
Transportation for Non-SCABT 191,361,415 101,364,278 142,348,732 9,568,074 9,568,071
Cars...........................
Waivers......................... 131,503 70,321 98,227 6,638 6,602
-------------------------------------------------------------------------------
Total Baseline.............. 722,686,030 382,807,968 537,587,568 36,134,364 27,037,415
Government Costs for Waivers 193,149 103,285 144,275 9,749 9,698
\66\...........................
----------------------------------------------------------------------------------------------------------------
c. Final Rule Costs
The first substantive change under the final rule will add freight
rolling stock used for THEERP operations to the list of excepted
equipment under Sec. 224.3. These operations will no longer need to
file waivers and waiver extension requests with FRA and thus save the
associated paperwork costs. The benefits would equal the baseline costs
for waivers (when taken together with the similar type of benefits from
codifying the comparator panel waiver).
---------------------------------------------------------------------------
\66\ The government costs are not included in the total baseline
costs.
---------------------------------------------------------------------------
The largest change under the final rule will be evaluating rail
cars with a comparator panel instead of replacing sheeting under the
10-year renewal cycle. THEERP operations and other railroads to which
the Reflectorization Standards apply will incur costs for the following
requirements:
<bullet> Cost for inspection and replacement of missing, damaged,
or obscured retroreflective sheeting under Sec. 224.109. This
requirement is unchanged from the baseline except for removing old
implementation dates.
<bullet> Cost to evaluate and replace sheeting under Sec. 224.111.
The final rule retains the option to use the 10-year replacement cycle.
<bullet> Incidental cost for transporting rail cars that would not
typically appear on a repair track or shop for an SCABT to renew
sheeting under Sec. 224.111. This cost occurs under the baseline too
but is adjusted for relief from the 10-year replacement cycle, and
longer expected sheeting life.
<bullet> Small entities that may use the 10-year replacement cycle
option under Sec. 224.111 (estimated at 15 percent of small entities).
<bullet> Cost of the comparator panel.
<bullet> Cost to recalibrate the comparator panel under Sec.
224.111.
<bullet> Employee training to use the comparator panel as described
in AAR Field Manual Rule 66. (The comparator panel inspection of
reflective sheeting will become part of the SCABT and annual locomotive
inspection.)
These cost elements may be represented by the equation: final rule
Cost = Visual inspection & sheeting replacement + Periodic evaluation &
sheeting replacement + Transport + 10-year renewal option estimated for
small entities + Comparator panel + Comparator panel recalibration +
Employee training.
The cost for visual inspection and replacement of missing, damaged,
or obscured sheeting remained the same as under the baseline scenario
because FRA is only removing the references to the outdated
implementation schedule. The substantive requirements remain the same.
The primary change will be evaluating the sheeting on rail cars
with a comparator panel. The cost of using the comparator panels is
determined by the number of cars undergoing an SCABT and evaluated with
the comparator panel multiplied by the material and labor costs per
car. Based on data supplied by AAR, FRA estimated 571,750 cars will be
evaluated, a preliminary inspection will require 2.8 minutes, cleaning
will take 3.3 minutes, and the time to apply one sheet will require 9.3
minutes. AAR also found an average of 0.72 sheets renewed during their
waiver at a cost of $2.95 per sheet (base year cost of $1.31 as updated
and adjusted for 2024 dollars). FRA applied the STB Group 400
Maintenance of Equipment and Stores burdened employee wage rate to
estimate a cost per car of $20.50, and $11,718,090 per year for the
affected cars. In contrast, the estimated cost per car for sheeting
renewal under the baseline scenario was $101.38 per car.\67\
---------------------------------------------------------------------------
\67\ Calculation: Material cost per car = 0.72 sheets x $2.95
per sheet = $2.14. Labor cost per car = (2.8 min. inspection + 3.3
min. cleaning + 9.3 min. first sheet application) x $1.20 per min.
burdened wage rate = $18.36. Material and labor costs per car =
$2.14 + $18.36 = $20.50. Cost for evaluated cars = 571,750 cars x
$20.50 per car = $11,718,090.
---------------------------------------------------------------------------
The final rule also allows use of a handheld retroreflectometer to
directly evaluate the performance of sheeting. The retroreflectometer
may be easier to use than the comparator panel, but given its current
high cost ($10,000), its use will likely be minimal at this time.
As in the baseline scenario, some rail cars may incur a
transportation cost to renew sheeting because they may not periodically
undergo an SCABT at a repair shop or track or receive service from a
mobile service agent. However, given the experience under the AAR
comparator panel waiver showing
[[Page 3386]]
reflective sheeting can likely remain effective beyond 10 years, these
cars would need to be transported less frequently. These cars would no
longer be subject to the 10-year renewal cycle. FRA used the estimates
from Preston (2014) of an average reflector service life of about 20
years to calculate the reduced impact of cars needing transport for
reflective sheeting replacement under the NPRM. Using a 20-year service
life reduced the probability that cars would need transport by half to
five percent, and the resulting expected cost per car from $416 to
$208. Given the same number of cars needing transport as under the
baseline scenario (23,000 cars), yielded a transportation cost of
$4,784,035 per year.
The final rule contains an option for railroad car owners to
continue using a 10-year replacement cycle for sheeting. FRA assumes
that a portion of small entities will be most likely to choose this
option to reduce their investment in the comparator panel and
associated costs to implement it (such as training employees). FRA
estimated 15 percent of small entities will use the 10-year replacement
option. To count the number of rail cars owned by small entities, FRA
subtracted Class I railroad owned cars in North America, Class II
railroad owned cars, and privately-owned cars from all freight cars--to
estimate Class III railroads own 54,766 rail cars on average (over the
years 2016 to 2020). Thus, 15 percent of these Class III railroad cars
is 8,215 cars. FRA used AAR Railroad Facts books and Progressive
Railroading magazine ``Fleet Stats'' for various years to determine car
ownership.\68\ Using the same percent of cars that would need full
renewal under the baseline scenario of 10 percent means about 821 cars
per year would need sheeting renewal. FRA applied the same cost per car
for 10-year sheeting replacement as under the baseline scenario
($101.38 per car) and estimated a cost of $83,223 per year under the
final rule.
---------------------------------------------------------------------------
\68\ AAR, Railroad Facts (Washington: multiple editions 2017-
2020) 65-80. Foran, Pat, & Stagl, Jeff, eds., ``Fleet Stats,''
Progressive Railroading (multiple editions 2016-2019, and 2021).
Year 2020 not available, 2019 Railroad Car Owners data carried over
to 2020. Available: <a href="https://www.progressiverailroading.com/keywords/keywords.aspx?id=0&keywords=Fleet+Stats&year=2017">https://www.progressiverailroading.com/keywords/keywords.aspx?id=0&keywords=Fleet+Stats&year=2017</a>. (May require log-
in for some years.)
---------------------------------------------------------------------------
To estimate the number of comparator panels that may be purchased,
FRA used the difference between the average number of shops and
locations qualified to perform an SCABT and evaluate sheeting using a
comparator panel, before and after the comparator panel waiver. AAR
estimated an average of 1,570 shops and locations qualified for SCABTs
before the waiver, and 1,063 shops and locations equipped with a
comparator panel after the waiver; the difference of about 500 shops
and locations represents the shops and locations that may purchase a
comparator panel. AAR notes its estimates include shops and locations
that performed five or more SCABT tests, so the actual counts may be
higher. In addition, FRA internally estimated 300 shops and locations
may need to purchase a comparator panel. FRA used an average of the two
estimates for analysis, or 400 shops and locations. FRA assumed one
comparator panel purchased per shop or location and applied the $246
cost per panel (updated and adjusted from the NPRM cost of $190 per
panel) to estimate a marginal cost of $98,291 for acquiring comparator
panels. Furthermore, AAR offers these comparator panels may need
replacement every four years (years one, five, nine, 13, and 17 of the
20-year period of analysis).
These comparator panels are also required to be periodically
recalibrated (not later than two years) so that an accurate number of
retroreflective sheets are replaced on rail cars. Given the four-year
average life of a comparator panel, a comparator panel will be
typically recalibrated one time during its useful life. For example, if
a comparator panel is purchased in year 1 of the period of analysis, it
would be recalibrated in year three, and a new comparator panel
purchased in year five. Over the period of analysis, recalibration
would occur in in years three, seven, 11, 15, and 19. In addition, AAR
estimated a recalibration cost of $95.09 per panel with a discount if
multiple panels are recalibrated per shop (adjusted from 2020 base year
cost of $80 using U.S. Bureau of Economic Analysis, Table 1.1.9.
Implicit Price Deflator). As FRA does not know how many shops own
multiple comparator panels, the cost of recalibrating one panel was
used to estimate a cost of $38,035 for recalibrating 400 comparator
panels.
Employees inspecting and replacing reflective material likely would
need training and instruction in these procedures. Rule 66, Reflective
Sheeting, of the AAR Field Manual contains instructions for inspecting
sheeting using the comparator panels. A manufacturer of comparator
panels also provides step-by-step instructions on its website.\69\ FRA
assumed these comparator panel instructions will be combined with
existing training sessions on performing SCABTs and locomotive
inspections. FRA estimated a marginal training cost using the same
amount of time estimated to inspect reflective sheeting using a
comparator panel of 2.8 minutes, applied to 17,537 STB Group 400
Maintenance of Equipment and Stores employees (in 2024) at their wage
rate, to calculate a training cost of $58,036. Only the first year of
training is considered because the cost of subsequent training is
covered under the training rule, 49 CFR part 243.\70\
---------------------------------------------------------------------------
\69\ Avery Dennison, available: RR-Comparison-Panel-
Kit_Overview.pdf (<a href="http://averydennison.com">averydennison.com</a>).
\70\ Calculation: 2.8 min. marginal training time x $1.20 per
min. x 17,537 employees = $58,036.
---------------------------------------------------------------------------
The following table presents the estimated final rule cost
elements.
Table V-3--Final Rule Costs
[2024 Dollars]
----------------------------------------------------------------------------------------------------------------
Present value Present value
Final rule cost impact Undiscounted 7% 3% Annualized 7% Annualized 3%
----------------------------------------------------------------------------------------------------------------
Visual Inspection & Replacement $217,545,315 $115,233,908 $161,826,248 $10,877,266 $10,877,266
(Sec. 224.109)...............
Periodic Evaluation & Sheeting 234,361,799 124,141,612 174,335,589 11,718,090 11,718,800
Replacement (Sec. 224.111)...
Transportation for Non-SCABT 95,680,707 50,682,139 71,174,366 4,784,035 4,784,035
Cars...........................
10-Year Renewal Option est. for 1,664,461 881,666 1,238,149 83,223 83,223
Small Entities.................
Comparator Panel................ 491,453 287,307 381,944 27,120 25,673
Comparator Panel Recalibration.. 190,173 97,106 117,210 7,712 7,878
Employee Training............... 58,036 54,239 56,345 5,120 3,787
-------------------------------------------------------------------------------
Total Final Rule............ 549,991,943 291,377,977 409,151,953 27,504,020 27,501,438
----------------------------------------------------------------------------------------------------------------
[[Page 3387]]
4. Alternatives
FRA considered a few regulatory alternatives before deciding to
offer stakeholders the option of using the 10-year replacement cycle or
the alternative methods (comparator panels or retroreflectometers). As
a presumably lower-cost alternative, FRA considered eliminating the 10-
year replacement cycle completely, given that most of the industry is
using the comparator panel waiver. However, FRA assessed that some
entities might incur higher costs for evaluating sheeting on MOW cars
and other privately-owned cars using the comparator panel because these
cars may not appear at a repair shop or on a repair track regularly for
an SCABT. Some smaller entities with fewer cars may also find it easier
to replace the retroreflective sheeting on their cars every 10 years. A
pre-determined schedule for replacing sheeting provides regulatory
simplicity for these entities and may be easier to implement than a
comparator panel-based standard. Overall, including both alternatives
increases regulatory flexibility for railroads and car owners.
FRA also considered stricter alternatives that would help FRA
enforce the Reflectorization Standards. For example, FRA could mandate
railroads and private-car owners record and report when retroreflective
sheeting is changed. FRA could also require the industry to report
which standard for evaluation and replacement they are following (i.e.,
either the alternative replacement or the 10-year replacement cycle).
As noted in the Overview section above, under the approved waiver for
using the comparator panel, the industry has not been consistently
recording in UMLER when and why sheeting is replaced. That makes it
difficult to determine how much of the sheeting was replaced because of
damage, and how much because of the passage of time. Given the size of
the fleet and frequency of SCABTs, the recordkeeping and reporting
costs could be somewhat significant. Railroads would need to record and
report information that is not currently required, including when the
sheeting is replaced, why it is replaced (obscured, damaged, or
missing), and how much of the rail car sheeting was replaced. FRA
estimates this would cost at least $201,088 annually.\71\ In return,
better records could facilitate FRA enforcement, for example, to check
if the overall rate of sheeting replacement under the final rule is in-
line with expectations for the service life of sheeting in various
operations and environments. Given the low accident risk under the
waivers historically, FRA has determined that a less costly alternative
is appropriate; enforcement will generally rely on FRA inspectors
visually inspecting sheeting and SCABT data. For example, if an
inspector observes sheeting to be in poor condition and requests
records from the railroad that list a recent SCABT, it will provide an
indication the sheeting may not have been replaced when required.
---------------------------------------------------------------------------
\71\ The Paperwork Reduction Act (PRA) analysis for this final
rule estimates a cost of $201,088 for recording and reporting
obscured, damaged, or missing sheeting under Sec. 224.109. This
analysis assumes the stricter alternative would require railroads to
record and report additional data. As an approximation, the
additional burden is another 5 minutes, or $201,088 annually. Also,
Railinc would incur a cost for programming changes to the UMLER
database to accommodate the new data fields. FRA inspectors would
also spend more time reviewing these more detailed records.
---------------------------------------------------------------------------
5. Sensitivity Analysis
The cost and benefit estimates could change if the analysis's
underlying assumptions or inputs were to change. The largest categories
of costs presented in Table V-3 are the pre-existing requirements to
inspect visually and replace sheeting (Sec. 224.109), periodically
evaluate and replace sheeting (Sec. 224.111), and transport cars that
would not typically appear on a repair track or shop for an SCABT. The
costs to inspect visually and replace sheeting, and to evaluate
periodically and replace sheeting, depend primarily on the number of
cars. The number of cars is about 750,000 and 500,000 respectively for
these cost estimates. If the number of cars used in calculating these
estimates were to increase, then the estimated net business benefits
would increase too. The number of active freight cars may increase if
economic growth continues in the short run, likely increasing the
demand for freight transportation. FRA used an average of recent
freight cars counts (2016-2020) as a reasonable estimate in its cost
estimates.
Furthermore, for the cost to evaluate periodically and replace
sheeting, if the cost for purchasing a retroreflectometer decreases
over time, or a cheaper substitute method of directly measuring the
reflectivity becomes available, the labor time to evaluate the sheeting
on a car will decrease. The benefits from using an alternative method
will then increase as well.
For the transportation cost, the cost per car is a significant
factor. FRA applied the probability of sheeting renewal to estimate
this cost. As the actual service life of sheeting in different railroad
operations and environments becomes better known, the need to transport
cars to replace sheeting may further decrease, reducing this cost. In
addition, as mentioned, FRA used a proxy to estimate the number of cars
that may need transportation, which is a source of uncertainty in the
estimate, but conceptually represents the type of cars that may need
transportation.
FRA also used STB wage rates in its estimates, based on the Class I
railroads' reports to the STB. Using AAR wage rates will affect the
scale of costs, but not the resources used in terms of capital (i.e.,
the number of cars and comparator panels), and labor time used to
comply with the regulation.
AAR commented that FRA's labor rate was much lower than the rate
AAR provided ($59.89 and $140.38 respectively). FRA retains its labor
rate as an input for the primary analysis as explained above. However,
FRA recalculates the costs and benefits to illustrate the ways in which
the results of the analysis change with respect to the labor rate.
Though throughout the primary analysis FRA has updated its labor rates
to 2024 dollars, FRA does not have information on the elements in AAR's
labor rate beyond the straight-time wage rates reported to the STB to
update the AAR labor rate. Therefore, for the sensitivity analysis
below, the 2020 wage rates are used.
Table V-4--Summary of Total Benefits Over the 20-Year Period (2020 Dollars) Using AAR Labor Rate *
----------------------------------------------------------------------------------------------------------------
Present value Present value
Impact Undiscounted 7% 3% Annualized 7% Annualized 3%
----------------------------------------------------------------------------------------------------------------
Baseline Cost................... $955,578,923 $506,171,261 $710,830,329 $47,778,986 $47,778,964
Final Rule Cost................. 879,222,742 465,795,626 654,071,216 43,967,812 43,963,860
[[Page 3388]]
Net Benefits.................... 76,356,181 40,375,635 56,759,114 3,811,174 3,815,104
----------------------------------------------------------------------------------------------------------------
* Uses AAR provided labor rate of $140.38 per hour instead of FRA labor rate of $59.89 per hour for STB Group
400 Maintenance of Equipment & Stores employees. Government Costs and Qualitative Benefit remain the same as
in Table V-1 and are not duplicated here.
As presented in Table V-4, using AAR's labor rate decreases
estimated net benefits by about 30 percent when comparing the present
values of costs using a seven percent interest rate ($55.4 million
using FRA's rate to $40.4 million using AAR's rate). In addition, in
the baseline scenario, the cost of the primary task of sheeting renewal
under Sec. 224.111 increases from $68.21 per car (using FRA's labor
rate) to $135.24 per car (using AAR's labor rate), or about double.
Similarly, the final rule's cost for evaluating and applying
retroreflective sheeting under Sec. 224.111 by using the comparator
panel increases from $16.21 to $36.74 per car. The resulting benefits
increase from $52 to $98.50 per car, again, about double. To reiterate,
the labor time to accomplish these tasks does not change.
6. Conclusion
As shown in Table V-1 above, FRA estimates the final rule results
in net benefits with a present value of $91 million using a seven
percent discount rate and $128 million using a three percent discount
rate (over a 20-year period of analysis in 2024 dollars). In annualized
terms, the net benefits are $8.6 million per year using a seven percent
discount rate and a similar $8.6 million using a three percent discount
rate. In addition, the Federal Government would save the cost of
reviewing and analyzing waivers of about $103,285 (present value, seven
percent discount rate); $144,275 (present value, three percent discount
rate), or about $9,700 (annualized, both seven and three percent
discount rates).
FRA also estimates there may be ancillary benefits of the final
rule in terms of reduced environmental impact from disposing of
reflective sheeting prematurely. Given reflective sheeting can remain
effective more than 10 years, there would be less reflective sheeting
replaced under this rule during the period of analysis. Based on the
Preston (2014) study, if reflective sheeting lasts 15 to 20 years, then
there would be 50 percent to 100 percent less reflective sheeting
replaced and disposed of in comparison to the mandatory 10-year
replacement. The benefit would be less waste. Though FRA has not
quantified this benefit, it could be important given the large number
of rail cars affected. As in the regulation before this rulemaking,
reflective sheeting will still need replacement earlier than 10 years
if damaged or obscured. Also, in the long run, the reflective sheeting
applied on all cars would need replacement and disposal eventually. FRA
invited comment in the NPRM on these environmental benefits. As part of
its comments to the NPRM, RSI concurred that the NPRM may have
incidental environmental benefits.
B. E.O. 14192 (Unleashing Prosperity Through Deregulation)
E.O. 14192, Unleashing Prosperity Through Deregulation (90 FR 9065,
Jan. 31, 2025), requires that for ``each new [14192 regulatory action]
issued, at least ten prior regulations be identified for elimination.''
\72\ Implementation guidance for E.O. 14192 issued by OMB (Memorandum
M-25-20, Mar. 26, 2025) defines two different types of E.O. 14192
actions: an E.O. 14192 deregulatory action, and an E.O. 14192
regulatory action.\73\
---------------------------------------------------------------------------
\72\ Executive Office of the President. Executive Order 14192,
Unleashing Prosperity Through Deregulation, 90 FR 9065-9067 (Feb. 6,
2025).
\73\ Executive Office of the President, OMB, Guidance
Implementing Section 3 of Executive Order 14192, Titled ``Unleashing
Prosperity Through Deregulation,'' Memorandum M-25-20 (Mar. 26,
2025).
---------------------------------------------------------------------------
An E.O. 14192 deregulatory action is defined as ``an action that
has been finalized and has total costs less than zero.'' This final
rulemaking is expected to have total costs less than zero, and
therefore it would be considered an E.O. 14192 deregulatory action.
This final rule will have an estimated cost savings of $91 million at a
seven percent discount rate over a 20-year span.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) and
E.O. 13272, ``Proper Consideration of Small Entities in Agency
Rulemaking,'' (67 FR 53461 (Aug. 16, 2002)) 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 certifies that a rule, if promulgated, would not have a
significant economic impact on a substantial number of small entities.
To help the public comment on the potential small entity impacts of the
rulemaking, FRA prepared an IRFA to accompany the NPRM.
In this final rule, FRA is codifying two types of waivers that
entities have submitted for relief from the Reflectorization Standards.
First, the rule excludes from the Reflectorization Standards those
entities that operate rail freight rolling stock used exclusively in
THEERP operations except for incidental freight service. FRA has found
these operations do not operate their equipment under low-light
conditions (i.e., at night) over highway-rail grade crossings.
Therefore, these operations pose a low safety risk in terms of grade
crossing accidents/incidents preventable by retroreflective sheeting.
Second, the final rule codifies a waiver granted to AAR to use
alternative methods to determine when to replace retroreflective
sheeting. Using the alternative methods allows retroreflective sheeting
to be replaced as needed, instead of under a 10-year cycle, resulting
in reduced costs and waste. The alternative methods may also result in
greater safety by replacing degraded or otherwise substandard sheeting
sooner than it would have been under the 10-year replacement cycle. The
final rule retains the option to use the 10-year replacement cycle for
retroreflective sheeting if an entity prefers to use that option.
FRA did not receive comments directly related to the IRFA.
Considering comments received on the NPRM, FRA made changes to the
final rule that will increase flexibility for all entities that use the
comparator panel, including small entities. The final rule clarifies
the process to evaluate retroreflective sheeting for properly trained
and experienced employees and allows evaluations to be performed at the
next closest effective distance where the recommended distance of 15
feet is not practicable.
[[Page 3389]]
Description of Small Entities Impacted by the Final Rule
Federal agencies may adopt their own size standards for small
entities in consultation with SBA and in conjunction with public
comment. Under that authority, FRA has published a final statement of
agency policy that formally establishes ``small entities'' or ``small
businesses'' as railroads, contractors, and hazardous materials
shippers that meet the revenue requirements of a Class III railroad as
set forth in 49 CFR part 1201, General Instruction 1-1, which is $20
million or less in inflation-adjusted annual revenues; and commuter
railroads or small governmental jurisdictions that serve populations of
50,000 or less.\74\ The $20 million limit is based on the STB's revenue
threshold for a Class III railroad carrier. The current threshold is
$47.3 million.\75\ FRA is using this definition for the final rule.
---------------------------------------------------------------------------
\74\ 68 FR 24891 (May 9, 2003) (codified at appendix C to 49 CFR
part 209).
\75\ The Class III railroad revenue threshold is $48.2 million
or less for 2024. (The Class II railroad threshold is between $48.2
million and $1.07 billion, and the Class I railroad threshold is
$1.07 billion or more.) See STB, Data Issued in Regulatory
Proceedings. Revenue Deflators. Available: <a href="https://www.stb.gov/reports-data/economic-data/">https://www.stb.gov/reports-data/economic-data/</a>.
---------------------------------------------------------------------------
Based on railroads that reported to FRA under 49 CFR part 225
(Railroad Accidents/Incidents) in 2024, FRA estimates the universe of
small railroads consists of 745 Class III railroads. The final rule's
provision codifying waivers related to rail cars used in THEERP
operations affects primarily the tourist railroads. FRA estimates there
are 146 tourist railroads that are Class III railroads to which the
final rule will apply. For the provision codifying the alternative
method to evaluate retroreflective sheeting, FRA estimates 85 percent
of the Class III railroads will use the comparator panel to evaluate
sheeting and will be affected, or about 633 small railroads. Therefore,
this rule will impact a substantial number of small railroads.
In addition, FRA knows of one manufacturer of comparator panels,
specifically Avery Dennison Corp. Avery Dennison employs more than 750
persons, the SBA \76\ benchmark for large businesses. There are other
manufacturers of retroreflective sheeting; FRA is aware of ORAFOL
Americas, Inc, a subsidiary of the ORAFOL Group, that has purchased
Reflexite Corp., and the 3M Co. Both manufacturers currently do not
make comparator panels and are large businesses.
---------------------------------------------------------------------------
\76\ North American Industry Classification System (NAICS) Code
326113 signifies the Unlaminated Plastics Film and Sheet (except
Packaging) Manufacturing firms that would be affected by this final
rule. Per SBA, any firm under NAICS code 326113 that employs more
than 750 employees cannot qualify as a small business. U.S. SBA,
Table of Small Business Size Standards Matched to North American
Industry Classification Codes (Jan. 2019). Available: <a href="https://www.sba.gov/document/support-table-size-standards">https://www.sba.gov/document/support-table-size-standards</a>.
---------------------------------------------------------------------------
Economic Impacts on Small Entities
FRA determined that the impact on small entities affected by the
final rule will not be significant but will result in cost savings.
Small entities that operate rail freight rolling stock used in THEERP
operations will no longer need to file waivers for relief from the
Reflectorization Standards and save the cost associated with filing
these waivers. In annualized terms using a seven percent discount rate,
the final rule results in estimated paperwork reduction benefits of
$6,638 per year. When divided by the class of 146 tourist railroads,
each tourist railroad would save $45.46 per year.\77\
---------------------------------------------------------------------------
\77\ Under the final rule, railroads that operate equipment used
in THEERP operations would save the cost of evaluating and applying
retroreflective sheeting to their rail cars too, but since FRA has
historically approved the majority of these waivers, the analysis
accounts primarily for the savings from not having to file waivers.
---------------------------------------------------------------------------
For the provision of the final rule allowing use of an alternative
method to evaluate and replace retroreflective sheeting, the compliance
requirements for the small entities are the same as for all entities
accounted for in the regulatory analysis above. The annualized cost for
using a comparator panel was estimated at $7.07 per car, in comparison
to a baseline 10-year replacement cost of $9.46 per car, a savings of
about $2.39 per car.\78\ The costs for purchasing and recalibrating the
comparator panel are negligible when divided by the many cars in the
fleet.
---------------------------------------------------------------------------
\78\ Calculation: Final rule cost for Sec. 224.111 =
$11,718,090/1,658,334 avg. cars per year = $7.07 per car. Baseline
cost (for 10-year replacement) = $15,682,390/1,658,334 = $9.46.
Savings = $9.46-$7.07 = $2.39 per car (annualized, 7 percent).
---------------------------------------------------------------------------
In annualized terms at seven percent, the estimated total
compliance costs under the final rule are $13.15 per car, compared to
baseline costs (i.e., without the final rule) of $16.30 per car, a
savings of $3.155.20 per car. FRA estimated Class III railroads own
54,766 cars on average over the years 2016 through 2020. Thus, the
estimated benefit for the small entities is $285,099. When divided by
the 633 railroads that would use the comparator panel method, each
railroad would save about $450 per year (inclusive of waiver savings).
These costs were estimated on a per-car basis. The benefits per small
entity depend on the number of cars it operates.
Certification
FRA has determined the impact of the final rule will be to allow
small railroads to reduce costs by relieving them of the need to file
waivers from the Reflectorization Standards. Furthermore, under the
final rule, small railroads will reduce costs to evaluate and replace
retroreflective sheeting. Accordingly, FRA certifies that this rule
will not have a significant economic impact on a substantial number of
small entities.
D. Paperwork Reduction Act
FRA is submitting the information collection requirements in this
rule to OMB for approval under the Paperwork Reduction Act of 1995.\79\
The sections that contain the new or revised information collection
requirements and the estimated time to fulfill each requirement are as
follows:\80\
---------------------------------------------------------------------------
\79\ 44 U.S.C. 3501 et seq.
\80\ STB, Quarterly Wage Form A&B Data (2024). Compiled from
Class I railroad data reported on Wage Form A&B for year 2024.
Calculated as: Wage ($/hour) = sum of compensation for time worked
and paid for straight time rates ($) for Class I railroads / sum of
service hours for time worked and paid for straight time rates
(hours) for Class I railroads. Available: <a href="https://www.stb.gov/reports-data/economic-data/quarterly-wage-ab-data/">https://www.stb.gov/reports-data/economic-data/quarterly-wage-ab-data/</a>.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total cost
CFR section Respondent universe Total annual responses Average time per response Total annual equivalent in
burden U.S. dollar
(A)..................... (B)........................ (C = A * B) (D = C * wage
rates) \80\
--------------------------------------------------------------------------------------------------------------------------------------------------------
224.7--Waivers (Revised requirement 727 railroads and freight 1 petition.............. 8 hours.................... 8 $721.52
due to revision under Sec. 224.3). car owners.
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 3390]]
224.15(b)--Special approval 2 manufacturers.......... 1 petition.............. 40 hours................... 40 3,607.60
procedures--Petitions for special
approval of alternative standard.
-----------------------------------------------------------------------------------------------------------------
--(d)(3) Hearing on the petition FRA does not believe that it will not need any additional information to consider any submitted petitions under
in accordance with the procedures the above requirement. Consequently, there is no burden associated with this provision.
provided in Sec. 211.25.
-----------------------------------------------------------------------------------------------------------------
--(e) Disposition of petitions.... Exempted from PRA under 5 CFR 1320.4(2).
224.101--General requirements......... The burden for this requirement is covered under Sec. 224.15.
224.103(d)--Characteristics There would be no burden involved for new cars. In addition, the cost for stamping, etching, molding, printing
retroreflective sheeting-- is included as part of the manufacturing process and consequently there is no burden associated.
Certification.
224.103(e)--Characteristics The burden for this requirement is covered under Sec. 224.15.
retroreflective sheeting--Alternative
standards.
-----------------------------------------------------------------------------------------------------------------
224.109(a)--Inspection and replacement AAR/400 car shops........ 33,510 notifications of 5 minutes.................. 2,793 201,087.93
of missing, damaged, or obscured defect and restriction.
retroreflective sheeting--Railroad
freight cars--Railroads notification
to person responsible for reporting
mark after visual inspection for
presence and condition when freight
car on either side has less than 80%
reflective sheeting of the damaged,
obscured, or missing sheeting
(revised text, section heading).
--(b) Locomotive record of freight 727 railroads and freight 2,460 records of defect 5 minutes.................. 205 hours 14,762.05
retroreflective sheeting defects car owners. and restriction.
found after inspection kept in
locomotive cab or in railroad
accessible electronic database
that FRA can access upon request.
224.111(c)--Evaluation and replacement The burden for this requirement is covered under 49 CFR 232.305 (OMB Control Number 2130-0008), or a locomotive
of 10-year-old or underperforming receives an annual inspection required by 49 CFR 229.27 (OMB Control Number 2130-0004).
retroreflective sheeting--Performance-
based replacement.
-----------------------------------------------------------------------------------------------------------------
224.111(c)(1)(iv)--Evaluation and The cost of labeling is included as part of the manufacturing process and consequently there is no burden
replacement--Labeling. associated.
-----------------------------------------------------------------------------------------------------------------
Total \81\........................ 727 railroads and 400 car 35,972 responses........ N/A........................ 3,046 220,179.10
shops.
--------------------------------------------------------------------------------------------------------------------------------------------------------
All estimates include the time for reviewing instructions;
searching existing data sources; gathering or maintaining the needed
data; and reviewing the information. For information or a copy of the
paperwork package submitted to OMB, contact Ms. Arlette Mussington,
Information Collection Clearance Officer, at 571-609-1285 or Ms. Joanne
Swafford, Information Collection Clearance Officer, at 757-897-9908.
---------------------------------------------------------------------------
\81\ Totals may not add due to rounding.
---------------------------------------------------------------------------
OMB is required to make a decision concerning the collection of
information requirements contained in this 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.
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. The current OMB control number is 2130-
0566.
E. Federalism Implications
This final rule will not have a substantial effect 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. Thus, in accordance with E.O. 13132,
``Federalism'' (64 FR 43255, Aug. 10, 1999), preparation of a
Federalism Assessment is not warranted.
F. International Trade Impact Assessment
The Trade Agreement Act of 1979 prohibits Federal agencies from
engaging in any standards or related activities that create unnecessary
obstacles to the foreign commerce of the U.S. 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
rulemaking is purely domestic in nature and is not expected to affect
trade opportunities for U.S. firms doing business overseas or for
foreign firms doing business in the U.S.
G. Environmental Assessment
FRA has analyzed this rule for the purposes of the National
Environmental Policy Act of 1969 (NEPA). In accordance with 42 U.S.C.
4336 and DOT NEPA Order 5610.1D, FRA has determined that this rule is
categorically excluded pursuant to 23 CFR 771.116(c)(15). There are no
unusual or extraordinary circumstances present in connection with this
rulemaking.
H. E.O. 13175 (Tribal Consultation)
FRA has evaluated this final rule in accordance with the principles
and criteria contained in E.O. 13175, Consultation and Coordination
with Indian Tribal Governments, (Nov. 6, 2000). The final rule would
not have a substantial direct effect on one or more Indian tribes,
would not impose substantial direct compliance costs on Indian tribal
governments, and would not preempt tribal laws. Therefore, the funding
and consultation requirements of E.O. 13175 do not apply, and a tribal
summary impact statement is not required.
[[Page 3391]]
I. Unfunded Mandates Reform Act of 1995
This final rule will not result in the expenditure, in the
aggregate, of $100,000,000 or more, adjusted for inflation, in any one
year by State, local, or Indian Tribal governments, or the private
sector. Thus, consistent with section 202 of the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104-4, 2 U.S.C. 1532), FRA is not required
to prepare a written statement detailing the effect of such an
expenditure.
J. Energy Impact
E.O. 13211, Actions Concerning Regulations that Significantly
Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001),
requires Federal agencies to prepare a Statement of Energy Effects for
any ``significant energy action.'' FRA has evaluated this rule in
accordance with E.O. 13211 and determined that this rule is not a
``significant energy action'' within the meaning of E.O. 13211.
List of Subjects in 49 CFR Part 224
Penalties, Railroad safety, Reflectorization standards.
The Final Rule
For the reasons stated above, FRA amends part 224 of chapter II,
subtitle B of title 49, Code of Federal Regulations, as follows:
PART 224--REFLECTORIZATION OF RAIL FREIGHT ROLLING STOCK
0
1. The authority citation for part 224 continues to read as follows:
Authority: 49 U.S.C. 20103, 20107, 20148 and 21301; 28 U.S.C.
2461 note; and 49 CFR 1.89.
0
2. Amend Sec. 224.3 by revising paragraphs (c) and (d) and adding
paragraph (e) to read as follows:
Sec. 224.3 Applicability.
* * * * *
(c) Locomotives and passenger cars used exclusively in passenger
service;
(d) Freight rolling stock that is subject to a reflectorization
requirement promulgated by another Federal agency; or
(e) Freight rolling stock used for only for tourist, historic,
excursion, educational, recreational, or private purposes, except for
incidental freight service.
Sec. 224.107 [Removed and Reserved]
0
3. Remove and reserve Sec. 224.107.
0
4. Revise Sec. 224.109 to read as follows:
Sec. 224.109 Inspection and replacement of missing, damaged, or
obscured retroreflective sheeting.
(a) Railroad freight cars. Retroreflective sheeting on railroad
freight cars subject to this part must be visually inspected for
presence and condition whenever a car undergoes a single car air brake
test required under 49 CFR 232.305. If at the time of inspection less
than 80 percent of the amount of sheeting required under Sec. 224.105
on either side of a car is present, not damaged, and not obscured, the
inspecting railroad or contractor shall promptly notify the person
responsible for the reporting mark, as indicated in the Universal
Machine Language Equipment Register, of the damaged, obscured, or
missing sheeting (unless the inspecting railroad or contractor is the
person responsible for the reporting mark). The inspecting railroad or
contractor shall retain a written or electronic copy of each such
notification made for at least two years from the date of the notice
and shall make these records available for inspection and copying by
the FRA upon request. Any person notified of a defect under this
section shall have nine months (270 calendar days) from the date of
notification to repair or replace the damaged, obscured, or missing
sheeting. Where the inspecting railroad or contractor is the person
responsible for the reporting mark, the person shall have nine months
(270 calendar days) from the date of the inspection to repair or
replace the damaged, obscured, or missing sheeting.
(b) Locomotives. Retroreflective sheeting must be visually
inspected for presence and condition when the locomotive receives the
annual inspection required under 49 CFR 229.27. If at the time of
inspection, less than 80 percent of the amount of sheeting required
under Sec. 224.105 on either side of a locomotive is present, not
damaged, and not obscured, the damaged, obscured, or missing sheeting
must be repaired or replaced within nine months (270 calendar days)
from the date of inspection, provided a record of the defect is
maintained in the locomotive cab or in a secure and accessible
electronic database to which FRA is provided access on request.
0
5. Revise Sec. 224.111 to read as follows:
Sec. 224.111 Evaluation and replacement of 10-year-old or
underperforming retroreflective sheeting.
(a) Replacement process. Retroreflective sheeting required by this
part shall comply with the replacement process in either paragraph (b)
or (c) of this section.
(b) 10-year replacement cycle. Regardless of condition,
retroreflective sheeting required by this part shall be replaced with
new, undegraded, sheeting no later than 10 years after the initial
installation date. At the time of replacement, it is not necessary to
remove the previously installed sheeting unless it interferes with the
placement of the replacement sheeting, as required by Sec. 224.106,
but the previously installed sheeting shall not be considered in
calculating the required minimum area of retroreflective material
required as shown in Table 2 to this subpart.
(c) Replacement based on retroreflective comparator panel. Except
as provided in paragraphs (c)(2)(ii) and (c)(3) of this section,
retroreflective sheeting shall be evaluated using a properly calibrated
comparator panel, manufactured to the specifications outlined under
paragraph (c)(1) of this section, whenever a car undergoes a single car
air brake test required by 49 CFR 232.305, or a locomotive receives an
annual inspection required by 49 CFR 229.27.
(1) Retroreflective comparator panel specifications--(i)
Retroreflectivity. Retroreflective comparator panels shall have the
minimum (and maximum, if applicable) retroreflectivity values as
outlined in Table 1 to paragraph (c)(1)(iv) of this section.
(ii) Color. Retroreflective comparator panels shall be yellow or
white as outlined in Sec. 224.103(b).
(iii) Construction. Retroreflective comparator panels shall be 4
inches wide by 4 inches high, be constructed with glass-beaded material
or other material that displays uniform appearance when rotated and
viewed with a light source, and have a magnetic backing so that the
panel can be attached to rail freight rolling stock.
(iv) Labeling. Retroreflective comparator panels shall have a
waterproof and dust-proof label affixed to the backing. The label shall
contain: the phrase ``Retroreflective Comparator Panel--Yellow'' or
``Retroreflective Comparator Panel--White;'' and the name of the
manufacturer, the part, model, or serial number, the date the panel was
manufactured, the target retroreflectivity level to which the panel was
manufactured (measured in cd/lx/m\2\), and a space provided for the
certified recalibration date. Retroreflective comparator panels shall
be recalibrated at least every two years and the date of a panel's most
recent recalibration must appear in the space provided on the label.
[[Page 3392]]
Table 1 to Sec. 224.111(c)(1)(iv)--Retroreflective Comparator Panel Requirements
[Retroreflective Comparator Panel Requirements]
----------------------------------------------------------------------------------------------------------------
Required retroreflectivity (cd/ Required retroreflectivity
lx/m\2\) at -4[deg] entrance (cd/lx/m\2\) at 30[deg]
and of 0.2[deg] observation entrance and of 0.5[deg]
Color angles observation angles
------------------------------------------------------------
Minimum Maximum Minimum
----------------------------------------------------------------------------------------------------------------
White.............................................. 250 285 60
Yellow............................................. 150 170 35
----------------------------------------------------------------------------------------------------------------
(2) Retroreflective comparator panel evaluation process and
criteria. Each retroreflective sheeting on rail freight rolling stock
shall be evaluated on its performance. The evaluation procedure shall
consist of the following:
(i) Retroreflective sheeting shall be visually evaluated with the
use of a light source. The light source must be of sufficient intensity
to illuminate and overcome ambient lighting conditions. A brighter
light source (LED) is recommended in daylight conditions.
(ii) Properly trained and experienced persons may pass sheeting
that they determine to be obviously compliant and fail sheeting they
determine to be obviously noncompliant (including obscured) based on
their initial visual inspection. Any sheeting that they do not
determine to be obviously compliant or noncompliant, shall be evaluated
using a retroreflective comparator panel comparison.
(iii) Retroreflective comparator panels shall conform to the
requirements outlined in paragraph (c)(1) of this section, and the
panel's color shall match the color of the installed sheeting being
evaluated.
(iv) The comparator panel shall be placed directly adjacent to, or
overlapping, the retroreflective sheeting being evaluated. The
retroreflective sheeting shall also be cleaned, as necessary, before
the evaluation begins.
(v) Retroreflective sheeting and the comparator panel shall be
evaluated from a position perpendicular to the installed sheeting,
preferably from a distance of 15 feet from the installed sheeting and
the comparator panel. In the event conducting the evaluation from 15
feet away is not practicable, the evaluation may be conducted from the
next closest alternative distance that still permits effective
evaluation.
(vi) The light source shall be positioned adjacent to the
inspector's eye (left or right) and directed at the sheeting and
comparator panel, and a comparison of the reflected light intensity of
the entire installed sheeting to that of the comparator panel shall be
made. The installed sheeting shall pass or fail based on the following
criteria:
(A) If the perceived reflected light intensity of the entire
installed sheeting appears brighter than that of the comparator panel,
the installed sheeting passes the evaluation.
(B) If the perceived reflected light intensity of the entire
installed sheeting does not appear brighter than that of the comparator
panel, or if it cannot be discerned if one is brighter than the other,
the sheeting fails the evaluation and shall be replaced prior to the
equipment returning to service.
(C) Installed sheeting that is damaged, obscured, or missing,
cannot be evaluated with the comparator panel and shall be replaced
prior to the equipment returning to service.
(3) Handheld retroreflectometers. A properly calibrated handheld
retroreflectometer may be used in lieu of a comparator panel, subject
to the following conditions:
(i) The handheld retroreflectometer shall be an annular device. A
single measurement on a strip of sheeting shall suffice with an annular
device, provided that the sheeting is not damaged, obscured, or
missing.
(ii) The handheld device shall be placed directly against the
reflective sheeting, and the measurement shall be made based on the
device manufacturer's recommendation.
(iii) The minimum allowable retroreflective value is 150 cd/lx/m\2\
for yellow sheeting and 250 cd/lx/m\2\ for white sheeting, when
measured at the -4[deg] entrance angle and 0.2[deg] observation angle
configuration. Sheeting that does not meet these minimum allowable
retroreflectivity values shall be replaced prior to the equipment
returning to service.
Issued in Washington, DC.
Robert Andrew Feeley,
Deputy Administrator.
[FR Doc. 2026-01549 Filed 1-26-26; 8:45 am]
BILLING CODE 4910-06-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on January 27, 2026.
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.