Federal Register / Vol. 88, No. 235 / Friday, December 8, 2023 / Proposed Rules 85561 

station and space station sides must 

engage in potentially duplicative 

coordination can be streamlined. The 

Commission also considered whether or 

not to expand timeframes for filing 

license renewal applications in efforts to 

provide small and other entities 

flexibility, and further streamline the 

application process. The Commission 

considers whether or not to expand the 

renewal filing window of the existing 

term for earth and space station 

operators. 

39. The Commission also considers 

the possibility of allowing applicants to 

file STAs concurrently with an initial 

application, which may reduce filing 

burdens on small entities in particular. 

And the Commission is considering 

several possibilities for expanding the 

universe of operators who could access 

a streamlined process for adding 

satellite points of communication, 

which could also provide a benefit to a 

greater number of entities. And in 

considering timelines for taking action, 

including possible shot clocks, the 

Commission asks several questions to 

consider whether timeframes, and 

which timeframes are appropriate. 

40. The Commission projects that the 

changes considered in the FNPRM will 

be cost-neutral or result in lower costs 

for small entities and other operators. 

Additionally, while the Commission 

believes the possible rule changes 

considered in the FNPRM will generally 

reduce costs and burdens for the 

regulated community, the Commission 

seeks comment on whether any of the 

costs associated with any possible rule 

changes would have a significant 

negative economic impact on small 

entities. The Commission expects to 

more fully consider the economic 

impact and alternatives for small 

entities based on its review of the record 

and any comments filed in response to 

the FNPRM and this IRFA. 

F. Federal Rules That May Duplicate, 

Overlap, or Conflict With the Proposed 

Rules 

41. None. 

V. Ordering Clauses 

42. It is ordered, pursuant to Sections 

4(i), 7(a), 301, 303, 307, 309, 310, and 

332 of the Communications Act of 1934, 

as amended, 47 U.S.C. 154(i), 157(a), 

301, 303, 307, 309, 310, 332, that this 

Further Notice of Proposed Rulemaking 

is adopted. 

43. It is further ordered that the Office 

of the Secretary, shall send a copy of 

this Further Notice of Proposed 

Rulemaking, including the Initial 

Regulatory Flexibility Analyses, to the 

Chief Counsel for Advocacy of the Small 

Business Administration, in accordance 

with Section 603(a) of the Regulatory 

Flexibility Act, 5 U.S.C. 601 et seq. 

Federal Communications Commission. 

Marlene Dortch, 

Secretary. 

For the reasons discussed in the 

document, the Federal Communications 

Commission proposes to amend 47 CFR 

parts 1 and 25 as follows: 

PART 1—PRACTICE AND 

PROCEDURE 

■ 1. The authority citation for part 1 

continues to read as follows: 

Authority: 47 U.S.C. chs. 2, 5, 9, 13; 28 

U.S.C. 2461. 

■ 2. Amend § 1.1206 by adding 

paragraph (a)(14) to read as follows: 

§ 1.1206 Permit-but-disclose proceedings. 

(a) * * * 

(14) Applications for space and earth 

station authorizations, including 

requests for U.S. market access through 

non-U.S. licensed space stations. 

* * * * * 

PART 25—SATELLITE 

COMMUNICATIONS 

■ 3. The authority citation for part 25 

continues to read as follows: 

Authority: 47 U.S.C. 154, 301, 302, 303, 

307, 309, 310, 319, 332, 605, and 721, unless 

otherwise noted. 

§ 25.110 [Amended] 

■ 4. Amend § 25.110 by removing and 

reserving paragraph (e). 

[FR Doc. 2023–26700 Filed 12–7–23; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF TRANSPORTATION 

Federal Railroad Administration 

49 CFR Part 215 

[Docket No. FRA–2023–0021, Notice No. 1] 

RIN 2130–AC94 

Freight Car Safety Standards 

Implementing the Infrastructure 

Investment and Jobs Act 

AGENCY: Federal Railroad 

Administration (FRA), Department of 

Transportation (DOT). 

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: FRA is proposing to amend 

the Freight Car Safety Standards (FCSS) 

to implement section 22425 of the 

Infrastructure Investment and Jobs Act 

(Act). The Act places certain restrictions 

on newly built freight cars placed into 

service in the United States (U.S.) 

including limiting content that 

originates from a country of concern 

(COC) or is sourced from a state-owned 

enterprise (SOE) and prohibiting the use 

of sensitive technology that originates 

from a COC or SOE. The Act mandates 

that FRA issue a regulation to monitor 

and enforce industry’s compliance with 

the standards of the Act. 

DATES: Comments on the proposed rule 

must be received by February 6, 2024. 

Comments received after that date will 

be considered to the extent practicable. 

ADDRESSES: 

Comments: Comments related to 

Docket No. FRA–2023–21 may be 

submitted by going to https://

www.regulations.gov and following the 

online instructions for submitting 

comments. 

Instructions: All submissions must 

include the agency name and docket 

number or Regulatory Identification 

Number (RIN) for this rulemaking. Note 

that all comments received will be 

posted without change to https://

www.regulation.gov; this includes any 

personal information. Please see the 

Privacy Act heading in the 

SUPPLEMENTARY INFORMATION section of 

this document for Privacy Act 

information related to any submitted 

comments or materials. 

Docket: For access to the docket to 

read background documents or 

comments received, go to https://

www.regulations.gov and follow the 

online instructions for accessing the 

docket. 

FOR FURTHER INFORMATION CONTACT: 

Check Kam, Mechanical Engineer, 

Office of Railroad Safety at (202) 366– 

2139, email: check.kam@dot.gov; or 

Michael Masci, Senior Attorney, Office 

of the Chief Counsel, telephone: (202) 

302–7117, email: michael.masci@

dot.gov. 

SUPPLEMENTARY INFORMATION: 

Abbreviations and Terms Used in This 

Document 

CBP—Customs and Border Protection 

CE—Categorical Exclusion 

CFR—Code of Federal Regulations 

COC—Country of Concern 

DOT—Department of Transportation 

EA—Environmental Assessment 

EIS—Environmental Impact Statement 

FCSS—Freight Car Safety Standards 

FR—Federal Register 

FRA—Federal Railroad Administration 

FTA—Federal Transit Administration 

GS—General Schedule 

IIJA Infrastructure Investment and Jobs Act 

IP—Intellectual Property 

IRFA—Initial Regulatory Flexibility Analysis 


khammond on DSKJM1Z7X2PROD with PROPOSALS
85562 Federal Register / Vol. 88, No. 235 / Friday, December 8, 2023 / Proposed Rules 

1The Infrastructure Investment and Jobs Act 

(IIJA), Sec. 22425, Public Law 117–58, 135 Stat. 752 

(Nov. 15, 2021) (codified at 49 U.S.C. 20171) and 

generally referred to in this proposed rule as the 

Act, or section 20171). 

2 49 U.S.C. 20171(b)(1). 

3 Id. at (b)(2). 4The Act requires certification to the ‘‘Secretary 

of Transportation.’’ Pursuant to 49 CFR 1.89(a), the 

Secretary has delegated that authority to FRA. 

5All cost and benefits estimates are in 2022 

dollars. 

NAFTA—North American Free Trade 

Agreement 

NEPA—National Environmental Policy Act 

NPRM—Notice of Proposed Rulemaking 

OMB—Office of Management and Budget 

PRA—The Paperwork Reduction Act 

RSA—Rail Security Alliance 

SOE—State-owned enterprise 

Umler—Universal Machine Language 

Equipment Register 

U.S.—United States 

U.S. DOC—United States Department of 

Commerce 

U.S.C.—United States Code 

USITC—U.S. International Trade 

Commission 

USMCA—United States-Mexico-Canada 

Agreement 

USTR—U.S. Trade Representative 

Table of Contents for Supplementary 

Information 

I. Executive Summary 

II. Infrastructure Investment and Jobs Act 

Background 

III. Application of the Infrastructure 

Investment and Jobs Act to Railroad 

Freight Car Manufacturers Including 

Discussions With RSA 

A. The Infrastructure Investment and Jobs 

Act Content Limitations Apply Only at 

the Time of Manufacture 

B. After-Manufacture Changes Are Not 

Covered by the Infrastructure Investment 

and Jobs Act 

C. Railroad Freight Cars Already Placed in 

Service in the U.S. Are Not Subject to the 

Infrastructure Investment and Jobs Act 

D. The Infrastructure Investment and Jobs 

Act Requirements Apply Only to 

Manufacturers, Not Railroads 

IV. Overview of the Proposal To Implement 

the Infrastructure Investment and Jobs 

Act Requirement for Freight Car 

Compliance Certification 

V. Section-by-Section Analysis 

VI. Regulatory Impact and Notices 

A. Executive Order 12866 as Amended by 

Executive Order 14094 

B. Regulatory Flexibility Act and Executive 

Order 13272 

C. Paperwork Reduction Act 

D. Federalism Implications 

E. International Trade Impact Assessment 

F. Environmental Impact 

G. Environmental Justice 

H. Unfunded Mandates Reform Act of 1995 

I. Energy Impact 

J. Privacy Act Statement 

I. Executive Summary 

Purpose of the Regulatory Action 

FRA is issuing this rulemaking as 

required by the Act.1 The Act provides 

that a railroad freight car, wholly 

manufactured on or after the date that 

is 1 year after the date of issuance of 

regulations, may only operate on the 

U.S. general railroad system if: (1) the 

railroad freight car is manufactured, 

assembled, and substantially 

transformed, as applicable, by a 

qualified manufacturer in a qualified 

facility; (2) none of the sensitive 

technology located on the railroad 

freight car, including components 

necessary to the functionality of the 

sensitive technology, originates from a 

COC or is sourced from a SOE; and (3) 

none of the content of the railroad 

freight car, excluding sensitive 

technology, originates from a COC or is 

sourced from a SOE that has been 

determined by a recognized court or 

administrative agency of competent 

jurisdiction and legal authority to have 

violated or infringed valid United States 

intellectual property rights of another 

including such a finding by a Federal 

district court under title 35 or the U.S. 

International Trade Commission under 

section 337 of the Tariff Act of 1930 (19 

U.S.C. 1337).2

The Act further provides percentage 

limitations on freight car contents so 

that not later than one year after the date 

of issuance of regulations, a railroad 

freight car, even if complying with the 

requirements in the preceding 

paragraph, may not operate on the U.S. 

general railroad system if more than 20 

percent of the content of the railroad 

freight car, calculated by the net cost of 

all components of the car and excluding 

the cost of sensitive technology, 

originates from a COC or is sourced 

from a SOE. After three years from the 

date of issuance of regulations, the 

percentage may not be more than 15 

percent.3

Summary of the Regulatory Action 

The Act requires regulations to be 

issued to implement its mandate and for 

freight car manufacturers to certify that 

freight cars covered by the Act are in 

compliance.4 This regulation would 

codify a process for FRA to monitor and 

enforce compliance with the Act. To 

carry out the Act’s certification 

requirement, FRA is proposing to 

require railroad freight car 

manufacturers to electronically certify 

to FRA that each freight car complies 

with the Act before it operates on the 

U.S. general railroad system of 

transportation. The certification would 

be required to identify each car being 

offered for operation, and include the 

manufacturer’s name and the name of 

the individual responsible for certifying 

compliance with the Act. In addition, 

the manufacturers would be required to 

maintain all records showing 

information to support certification, 

including content calculations, and 

such records would be made available 

to FRA upon request. 

Costs and Benefits of the Proposed 

Regulatory Action 

This proposed rule would fulfill 

FRA’s obligation to issue a rulemaking 

that would implement the Act. In 

section ‘‘VI. A. Executive Order 12866 

as Amended by Executive Order 14094’’ 

of this proposed rule, FRA describes the 

benefits and costs that would come from 

issuing this regulation. 

Over a 10-year period of analysis, 

FRA quantifies the following costs to 

the freight car manufacturing industry 

and FRA that would come from issuing 

this proposed rule: (1) limiting content 

sourced from COCs or SOEs; (2) 

prohibiting the use of sensitive 

technology from these sources; (3) 

industry compliance costs; and (4) 

government administrative monitoring 

and enforcement costs. As shown in 

table 1, the cost from issuing the 

proposed rule is approximately 

$143,300 (undiscounted), $123,600 

(present value (PV), 3%), and $89,500 

(PV, 7%). The annualized net costs are 

approximately $14,500 (PV, 3%) and 

$12,800 (PV, 7%).5

TABLE 1—INDUSTRY AND FRA BURDEN FROM ISSUING THE PROPOSED RULE, TOTAL COST, ROUNDED ($100) 

Entity 

Total cost ($) Annualized ($) 

Undiscounted PV 3% PV 7% PV 3% PV 7% 

Industry costs ....................................................................... 40,100 34,000 23,800 4,000 3,400 

FRA costs ............................................................................ 103,200 89,600 65,700 10,500 9,400 


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6 49 U.S.C. 20171. See https://

www.whitehouse.gov/briefing-room/presidentialactions/2021/11/15/executive-order-onimplementation-of-the-infrastructure-investmentand-jobs-act/. 

7 Id. at (c)(1). 

8 Id. at (b)(1)(A). 

9 Id. at (a)(7). 

10 Id. at (a)(6). 

11 Id. at (a)(10). 

12 Id. at (a)(4)(A). 

13 Id. at (a)(4)(B). Section 182 of the Trade Act of 

1974 (19 U.S.C. 2242), commonly known as the 

‘‘Special 301 provisions,’’ requires the U.S. Trade 

Representative (USTR) to identify countries that 

deny adequate and effective IP protections or fair 

and equitable market access to U.S. persons who 

rely on IP protection. The Trade Act requires the 

USTR to determine which, if any, of these countries 

to identify as Priority Foreign Countries. Such a 

designation can subject those countries to particular 

processes under the Trade Act. 

14See, e.g., the National Defense Authorization 

Act (49 U.S.C. 5323(u)). 

15Section 7613 of the National Defense 

Authorization Act for Fiscal Year 2020 (NDAA 

2020), Public Law 116–92 (Dec. 20, 2019), which 

added a new subsection, 49 U.S.C. 5323(u), to 

Federal public transportation law. 

16 86 FR 7475. 

17 Id. 

18 86 FR 26633. 

19 Id. 

20USMCA, July 1, 2020, https://ustr.gov/tradeagreements/free-trade-agreements/united-statesmexico-canada-agreement. 

21USMCA chapters 4 and 5, July 1, 2020, https:// 

ustr.gov/trade-agreements/free-trade-agreements/ 

united-states-mexico-canada-agreement. 

22 49 U.S.C. 20171(c)(2). 

23 Id. at (a). 

TABLE 1—INDUSTRY AND FRA BURDEN FROM ISSUING THE PROPOSED RULE, TOTAL COST, ROUNDED ($100)— 

Continued 

Entity 

Total cost ($) Annualized ($) 

Undiscounted PV 3% PV 7% PV 3% PV 7% 

Total cost ...................................................................... 143,300 123,600 89,500 14,500 12,800 

In the economic analysis section, FRA 

qualitatively explains the potential 

benefits that may result from 

implementing the proposed rule. Issuing 

the proposed rule would protect the 

U.S. rail system from risks that come 

from manufacturing freight cars with 

sensitive technology and technological 

components, necessary to the 

functionality of the sensitive 

technology, from a COC or SOE such as 

potential vulnerabilities in information 

security. As such, this proposed rule 

would mitigate potential issues related 

to compromised national security and 

corporate espionage. Issuing the 

proposed rule would also fulfill FRA’s 

duties as required by the Act. As 

mentioned in the economic analysis 

section, FRA welcomes public comment 

to assess the potential costs and benefits 

associated with implementing this 

proposed rule. 

II. Infrastructure Investment and Jobs 

Act Background 

On November 15, 2021, President 

Biden signed the Act,6 which includes 

a mandate that FRA issue regulations to 

implement it.7 In general, the Act allows 

freight cars, wholly manufactured after 

a certain date, to operate in the U.S. 

only if the cars are manufactured by a 

‘‘qualified manufacturer’’ in a ‘‘qualified 

facility.’’ 8 The Act defines ‘‘qualified 

manufacturer’’ as a ‘‘freight car 

manufacturer that is not owned or under 

the control of a state-owned 

enterprise.’’ 9 Similarly, the Act defines 

‘‘qualified facility’’ as ‘‘a facility that is 

not owned or under the control of a 

state-owned enterprise.’’ 10 The Act 

defines ‘‘state-owned enterprise’’ as an 

entity that is owned by, or under the 

control of, a government or agency of a 

COC or an individual acting under the 

direction or influence of a government 

or agency of a COC.11

The Act provides a three-pronged 

definition of a COC. First, to be a COC 

under the Act, a country must have been 

identified by the U.S. Department of 

Commerce as a nonmarket economy 

country as of the date of enactment of 

the Passenger Rail Expansion and Rail 

Safety Act of 2021 (i.e., as of November 

15, 2021).12 Second, a country must 

have been identified by the USTR in the 

most recent report under section 182 of 

the Trade Act of 1974 (Section 301 

Report) as a foreign country included on 

the ‘‘priority watch list.’’ 13 Finally, a 

country must also be subject to USTR 

monitoring under section 306 of the 

Trade Act. 

In recent years, Congress has taken 

action concerning rail equipment and 

components manufactured by or 

sourced from COCs or SOEs.14

Generally, these laws limit the 

availability of Federal funds for certain 

equipment or projects funded or 

controlled by foreign entities. For 

example, the National Defense 

Authorization Act limits the use of FTA 

funds, and in some circumstances, local 

funds, to procure rolling stock from 

certain transit vehicle manufacturers 

who ‘‘are owned or controlled by, is a 

subsidiary of, or is otherwise related 

legally or financially to a corporation 

based in’’ certain foreign countries.15

However, because the freight rail car 

sector and its equipment are privately 

owned, those laws do not apply to the 

freight rail car industry. Congress has 

now extended similar limitations on rail 

equipment and components 

manufactured by or sourced from COCs 

or SOEs to the freight rail car industry 

by issuing the Act. 

Similarly, President Biden issued 

Executive Order 14005 of January 25, 

2021 ‘‘Ensuring the Future Is Made in 

All of America by All of America’s 

Workers,’’ 16 stating ‘‘the United States 

Government should, whenever possible, 

procure goods, products, materials, and 

services from sources that will help 

American businesses compete in 

strategic industries and help America’s 

workers thrive.’’ 17 The President also 

issued Executive Order 14028 of May 

12, 2021 ‘‘Improving the Nation’s 

Cybersecurity’’ 18 stating that 

‘‘prevention, detection, assessment, and 

remediation of cyber incidents is a top 

priority and essential to national and 

economic security.’’ 19 While the Act is 

consistent with those Executive orders, 

the Act has more stringent content 

limitations than those provided in the 

Executive orders. 

The Act has a similar legal framework 

as the United States-Mexico-Canada 

Agreement (USMCA),20 which replaced 

the North American Free Trade 

Agreement (NAFTA). The USMCA 

contains a certification process for 

certifying the origin of materials used in 

products.21 The Act builds on the 

certification process of the USMCA, by 

requiring manufacturers to certify the 

origins and sources of railroad freight 

car components.22 The Act also directly 

borrows many terms from the USMCA, 

including the definitions for ‘‘net cost’’ 

and ‘‘substantially transformed,’’ two 

key terms that help set parameters for 

the limitations built into the Act and 

help instruct manufacturers how to 

comply with it.23 These similarities 

have helped inform FRA’s 

understanding of the requirements of 

the Act. The similarities also help 

eliminate certain potential burdens 


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85564 Federal Register / Vol. 88, No. 235 / Friday, December 8, 2023 / Proposed Rules 

24 Id. at (a)(7) and (6). 

25This term refers to the manufacturing process 

and is generally used to help determine the country 

of origin for a product in international trade. 

Generally, substantial transformation means that 

the good underwent a fundamental change 

(normally as a result of processing or manufacturing 

in the country claiming origin) in form, appearance, 

nature, or character, which adds to its value an 

amount or percentage that is significant in 

comparison to the value which the good (or its 

components or materials) had when exported from 

the country in which it was first made or grown. 

Usually a new article of commerce—normally one 

with a different name—is found to result from any 

process that Customs decides has brought about a 

‘‘substantial transformation’’ in the pre-existing 

components. Thus, leading to a change in the tariff 

classification of the substantially transformed item. 

See https://www.trade.gov/rules-origin-substantialtransformation. 

26 49 U.S.C. 20171(c)(2). 

27 Id. at (c)(3). 

28 Id. at (b)(2). 

29 Id. at (b)(1)(A). 

30Whitman v. American Trucking Ass’n, 531 U.S. 

457, 468 (2001) (‘‘Congress, we have held, does not 

alter the fundamental details of a regulatory scheme 

in vague terms or ancillary provisions—it does not, 

one might say, hide elephants in mouseholes.’’). 

31 49 U.S.C. 20171(c)(1). 

arising from this proposed rulemaking. 

As such, FRA expects that the steps 

involved certifying compliance under 

the USMCA will be substantially the 

same as those needed to certify 

compliance with the Act. FRA 

welcomes comments to this NPRM to 

help further develop its understanding 

of the issues. 

III. Application of the Infrastructure 

Investment and Jobs Act to Railroad 

Freight Car Manufacturers Including 

Discussions With RSA 

To understand how railroad industry 

manufacturers were complying with 

other Congressional requirements 

concerning equipment and components 

manufactured by or sourced from COCs 

or SOEs and the certification 

requirements of the USMCA, FRA 

conducted a series of listening sessions 

with RSA, including two in person 

meetings on September 26, 2022, and 

March 3, 2023. While the proposals in 

this NPRM are FRA’s alone, based on its 

independent assessments of the issues, 

the meetings with RSA helped FRA 

analyze the requirements of the Act. A 

summary of the meetings is in the 

public docket for this rulemaking 

(Docket Number FRA–2023–21). 

A. The Infrastructure Investment and 

Jobs Act Content Limitations Apply 

Only at the Time of Manufacture 

Section 20171(b)(2) of the Act sets 

forth certain content limitations that 

must be met for ‘‘railroad freight cars’’ 

(as defined in the statute) ‘‘wholly’’ 

manufactured after a certain date to 

operate on the U.S. general railroad 

system of transportation. Understanding 

this subsection within the context of the 

Act as a whole (49 U.S.C. 20171), FRA 

concluded that the Act regulates 

railroad freight cars by imposing such 

requirements at the time of initial 

manufacture but does not require FRA 

to ensure that the content limitations set 

forth in section 20171(b)(2) are met 

throughout the useful life of the 

equipment or at each re-entry into 

service following any changes to the 

railroad freight car including, repair, 

alteration, modification, rebuild, 

refurbishment, restoration, or 

reconstruction. 

First, in the Act’s definitions, 

Congress explicitly defined who would 

be qualified to manufacture railroad 

freight cars eligible to operate on the 

general railroad system of transportation 

by limiting the manufacturing process to 

‘‘qualified manufacturers’’ in ‘‘qualified 

facilities.’’ 24 The statute does not define 

those who would be qualified to 

perform repairs or maintenance or 

otherwise address such ‘‘aftermarket’’ 

activities. References to the 

manufacturing process are also found in 

the definition of ‘‘substantially 

transformed,’’ which is a trade term of 

art used to describe a ‘‘change in tariff 

classification as a result of the 

manufacturing process.’’ 25

Second, the Act requires 

manufacturers to provide an annual 

certification that any railroad freight 

cars they provide for operation on the 

U.S. general railroad system of 

transportation meet the Act’s 

requirements.26 Manufacturers are 

capable of making such a certification, 

particularly with respect to the content 

limitations, only in connection with the 

initial manufacturing process. 

Third, the Act requires manufacturers 

to have a valid certification at the time 

a railroad freight car begins operation.27

Given the emphasis on manufacturers 

and the manufacturing process, it is 

reasonable to interpret this phrase to 

mean at the time a railroad freight car 

first begins operation, but not every time 

the car is returned to service. 

Accordingly, reading the Act as a 

whole, content limitations imposed by 

Congress apply to only newlymanufactured railroad freight cars at the 

point when cars first enter the U.S. 

general railroad system of 

transportation.28 The Act does not 

impose a continuing obligation on the 

manufacturer to certify to the content 

limitations throughout the useful life of 

the assets and does not require FRA to 

enforce section 20171(b)(2)’s content 

limitations at all times a railcar is in 

service. 

B. After-Manufacture Changes to a 

Railroad Freight Car Are Not Covered by 

the Infrastructure Investment and Jobs 

Act 

Because the Act regulates railroad 

freight cars at the time a railcar first 

begins operation, the content limitations 

set forth in section 20171(b)(2) do not 

apply at the time of repair. As a result, 

the statute does not contemplate FRA 

enforcing the content limitations at the 

time of repair. 

The Act limits by whom and where a 

railroad freight car is ‘‘manufactured, 

assembled, or substantially 

transformed.’’ 29 As noted above, 

Congress focused on who may perform 

the manufacturing or assembly of a 

railroad freight car and sought to ensure 

such activity was not carried out in a 

facility that is owned or controlled by a 

state-owned enterprise. Congress also 

sought to regulate who may 

‘‘substantially transform’’ a component 

of a railroad freight car during the 

manufacturing process. ‘‘Substantially 

transformed’’ is a defined term of art, 

borrowed from trade law, that relates to 

tariff classification as a result of the 

manufacturing process. 

Requiring enforcement of the content 

limitations for the railroad freight car’s 

entire useful life—including repairs— 

would be a departure from the 

compliance scheme dictated by the 

statute, which is tied to manufacturer 

certifications. If Congress intended FRA 

to enforce content limitations in section 

20171(b)(2) throughout the life of the 

railcar, including upon repair, it would 

have explicitly said so.30 Moreover, 

Congress does not define or reference 

any type of repair or aftermarket 

component replacement within the 

scope of the Act at any place. Because 

terms like ‘‘for the life of the asset,’’ ‘‘at 

all times,’’ or ‘‘at the time of repair’’ are 

absent from the text of the Act, FRA has 

concluded that its enforcement 

obligation does not extend beyond the 

time of manufacture for the content 

limitations in section 20171(b)(2). 

C. Railroad Freight Cars Already Placed 

in Service in the U.S. Are Not Subject 

to the Infrastructure Investment and 

Jobs Act 

The Act requires FRA to issue 

regulations to implement the 

requirements set forth in the Act.31 For 

purposes of this analysis, FRA has 


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Federal Register / Vol. 88, No. 235 / Friday, December 8, 2023 / Proposed Rules 85565 

32 Id. at (b)(1) and (2). 

33Railinc Corp.’s Umler system is an electronic 

resource that contains critical data for the North 

American rail fleet, such as internal and external 

dimensions, cubic or gallon capacity, and weight 

information for each unit. See Association of 

American Railroads Rule 93 and UMLER Data 

Specification Manual; see also The Umler® System 

at https://public.railinc.com/products-services/ 

umler-system#:∼:text=

Umler%C2%AE%20is%20the%20

source,to%20logistics%20partners%20

and%20customers. 

34 49 U.S.C. 20171(c)(2) and 20171(c)(3). 

35 Id. at (c)(4). 

36 Id. at (c)(3). 

37 49 CFR part 215. 

38FRA performs sample car inspections as a 

courtesy to the manufacturers, to better ensure 

equipment is built in accordance with all applicable 

Federal railroad safety laws. Generally, 

manufacturers that desire to have FRA review their 

equipment for compliance with safety appliance 

standards are to submit their safety appliance 

arrangement drawings, prints, etc., to FRA’s Office 

of Railroad Safety, Office of Railroad Infrastructure 

and Mechanical Equipment for review, at least 60 

days prior to construction. FRA reviews the 

documents submitted and advises the manufacturer 

if any specifications laid out in the drawings do not 

conform with the applicable regulation(s). The 

sample base car inspection generally provides the 

manufacturer an opportunity to make any necessary 

changes in the design or manufacturing process to 

meet compliance before building the remaining cars 

of that order. See https://railroads.dot.gov/sites/ 

fra.dot.gov/files/2020-05/MPECompliance

Manual2013.pdf. 

39The percentage breakdown for evaluating 

content is the net cost of materials (excluding the 

cost of sensitive technology) compared to total cost 

of the freight car. 

40 5 U.S.C. 552(b)(4). 

41 49 U.S.C. 20171(a)(1). 

proposed to define the date on which 

FRA promulgates regulations as the 

‘‘Issuance Date.’’ With respect to 

applicability, the plain language of 

section 20171 states that only railroad 

freight cars that are wholly 

manufactured on or after a date that is 

one year after the Issuance Date are 

subject to Act’s requirements.32 Thus, if 

FRA promulgates regulations on June 1, 

2023, the only railroad freight cars that 

are wholly manufactured on or after 

June 1, 2024, are subject to the Act’s 

requirements. Using this hypothetical 

issuance date of June 1, 2023, as an 

example, existing railroad freight cars 

manufactured prior to June 1, 2024, and 

new railroad freight cars that were 

partially manufactured prior to June 1, 

2024, are not subject to the Act. Thus, 

railroad freight cars that are currently 

in-use are not subject to the Act, 

including when parts are replaced 

during maintenance or repair; because 

the Act only imposes forward-looking 

requirements. 

D. The Act’s Requirements Apply Only 

to Manufacturers, Not Railroads 

The Act imposes certification and 

compliance obligations on 

manufacturers, not railroads. 

Specifically, the certification 

requirement set forth in section 

20171(c)(2) and the prohibition on false 

registration in Umler 33 both attach to a 

railroad freight car manufacturer.34

Further, FRA is permitted to prohibit a 

railroad freight car manufacturer from 

providing additional railroad freight 

cars for operation in the U.S. if the 

manufacturer is a repeat violator of 

section 20171.35 The statute does not 

impose obligations on a railroad to 

ensure the railroad freight cars meet 

content limitations nor does the statute 

require FRA to hold railroads 

accountable for compliance with the 

Act. FRA requests comments on 

whether a railroad should be 

responsible for the operation of freight 

cars known to be in noncompliance 

with the Act. 

IV. Overview of the Proposal To 

Implement the Infrastructure 

Investment and Jobs Act Requirement 

for Freight Car Compliance 

Certification 

The Act requires manufacturers to 

annually certify to FRA, as delegated by 

the Secretary, that any railroad freight 

cars it offers for operation on the U.S. 

general railroad system of transportation 

meet the requirements of the Act.36 This 

rulemaking proposes to incorporate the 

certification requirement into the 

FCSS 37 and establish a process for FRA 

to access necessary information to 

determine compliance with the Act. 

FRA proposes to require 

manufacturers’ certifications to be 

submitted electronically to FRA’s Office 

of Railroad Safety. The certifications 

would include the manufacturer’s name 

and address, the name, signature and 

contact information for the person 

responsible for certifying compliance, 

and a car identification number for each 

car being certified. Manufacturers 

would be required to maintain records 

to support their compliance and FRA 

would be able to access those records 

upon request. FRA expects freight car 

manufacturers to certify groups of cars 

together coinciding with bulk orders for 

equipment. For convenience, 

manufacturers may submit the 

certification to FRA at the same time as 

they request a safety appliance drawing 

review and/or courtesy sample base car 

inspection for the same build order.38 At 

its discretion, FRA may request the 

percentage break down on the content 

for a specific car, as needed, to 

determine compliance for that car.39

FRA is also proposing that 

manufacturers maintain records 

showing the calculations made to 

support certification under this section 

and such records shall be made 

available to FRA upon request. This 

would provide FRA access to the 

information necessary to determine the 

percentage of components originating 

form COCs and SOE for each freight car. 

FRA understands that manufacturers 

currently generate such a break down 

for their cars to comply with the 

USMCA and does not anticipate that 

assembling the information will result 

in an additional burden to the industry. 

FRA anticipates that certain 

documents submitted by manufacturers 

pursuant to 49 U.S.C. 20171(c)(3) may 

contain proprietary or other confidential 

business information. Manufacturers 

should follow the procedures in 49 CFR 

209.11 to ensure proper handling of 

such information, and manufacturers 

may redact portions of submitted 

information so long as FRA is able to 

accurately ascertain the manufacturer’s 

compliance with the Act. However, FRA 

retains the right to make its own 

determinations regarding disclosure of 

submitted information. In making these 

determinations, FRA will consider all 

exemptions to Freedom of Information 

Act disclosure, including the exemption 

on disclosure of commercial or financial 

information and privileged or 

confidential information.40

V. Section-by-Section Analysis 

This section-by-section analysis is 

intended to explain the rationale for 

each revised or new provision FRA is 

proposing to incorporate into the FCSS. 

The proposed regulatory changes are 

organized by section number. FRA seeks 

comments on all proposals in this 

NPRM. 

Section 215.5 Definitions 

FRA proposes to incorporate several 

new, defined terms into the FCSS, most 

pulled directly from the Act and some 

proposed as necessary to effectively 

implement the Act. FRA also proposes 

to organize the existing FCSS 

definitions along with the newly 

proposed definitions in alphabetical 

order to conform with FRA’s other 

regulations. The Act’s definition for the 

term ‘‘railroad freight car’’ mirrors the 

definition for the same term in the 

current FCSS. Accordingly, this 

rulemaking would keep the definition in 

the FCSS unchanged. The new 

definitions FRA proposes to add are 

discussed below: 

Component is defined by the Act,41

and FRA is proposing to adopt it in the 


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42 Id. at (a)(2). 

43 Id. at (a)(3). 

44 Id. at (a)(4). 

45These same criteria are used to define ‘‘country 

of concern’’ in 49 U.S.C. 5323(u) (placing 

limitations on certain rolling stock procurements 

for public transportation that qualify for financial 

assistance), and the FTA has published Frequently 

Asked Questions Regarding Section 7613 of the 

National Defense Authorization Act for Fiscal Year 

2020 that discusses the criteria and the definition 

of ‘‘country of concern.’’ https://

www.transit.dot.gov/funding/procurement/ 

frequently-asked-questions-regarding-section-7613- 

national-defense. 

46 49 U.S.C. 20171(a)(4)(A). 

47 Int’l Trade Admin, Countries Currently 

Designated by Commerce as Non-Market Economy 

Countries, https://www.trade.gov/nme-countries-list 

(identifying the Federal Register notices wherein a 

country was designated as a non-market economy 

country). 

48 49 U.S.C. 20171(a)(4)(B). 

49Office of the U.S. Trade Rep., 2022 Special 301 

Report, 5 (2022), (2022 Special 301 Report.pdf 

(ustr.gov)). 

50 49 U.S.C. 20171(a)(4)(C). See Office of the U.S. 

Trade Rep., 2022 Special 301 Report, 44 (2022), 

https://ustr.gov/issue-areas/intellectual-property/ 

special-301/2022-special-301-review, (listing 

countries included on the priority watch list and 

whether such countries are subject to monitoring 

under section 306 of the Trade Act of 1974). 

51USMCA chapter 4, July 1, 2020, https://

ustr.gov/trade-agreements/free-trade-agreements/ 

united-states-mexico-canada-agreement. 

52 49 U.S.C. 20171(a)(5). 

53Uniform Regulations Regarding the 

Interpretation, Application, and Administration of 

Chapter 4 (Rules or Origin) and Related Provisions 

in Chapter 6 (Textile and Apparel Goods) of the 

Agreement Between the United States of America, 

The United Mexican States, and Canada. https://

ustr.gov/sites/default/files/files/agreements/usmca/ 

UniformROO.pdf. 

54 49 U.S.C. 20171(a)(6). 

55 Id. at (a)(7). 

56 Id. at (a)(9). 

57 Id. at (a)(10). 

58 Id. at (a)(11). 

59https://www.trade.gov/rules-origin-substantialtransformation. 

FCSS. Although the proposed definition 

does not identify specific parts and 

subassemblies of freight cars as 

‘‘components,’’ FRA believes Congress 

intends this definition to include the 

major components of freight cars (e.g., 

trucks, wheel sets, center sills, draft 

gears, couplers, walkways, running 

boards) when calculating content 

limitations under proposed section 49 

CFR 215.401(b)(1). FRA does not intend 

the definition of ‘‘component’’ to 

include smaller parts that do not 

significantly impact manufacturing 

costs (e.g., wear plates, roof liners, or 

small pieces of hardware such as 

screws). FRA welcomes comment on 

how freight car items fit into this 

definition. 

Control is defined by the Act,42 and 

FRA is proposing to adopt it in the 

FCSS. This definition relates to the 

definitions of ‘‘qualified facility’’ and 

‘‘qualified manufacturer’’ discussed 

below. 

Cost of sensitive technology is defined 

by the Act,43 and FRA is proposing to 

adopt it in the FCSS. 

Country of concern is defined by the 

Act 44 and FRA is proposing to adopt it 

in the FCSS.45 As noted in the 

Infrastructure Investment and Jobs Act 

Background section above a country 

must meet all three criteria to qualify as 

a ‘‘country of concern.’’ Each of the 

criteria within the definition of 

‘‘country of concern’’ are separated by 

‘‘and’’ instead of ‘‘or,’’ meaning a 

country must meet all three criteria to 

meet the definition. 

First, to qualify as a ‘‘country of 

concern’’ under section 20171, the U.S. 

DOC must have identified that country 

as a nonmarket economy country 

pursuant to the Tariff Act of 1930 at the 

date of enactment (i.e., as of Nov. 15, 

2021).46 In 2021, when the Act became 

law, the U.S. DOC had named eleven 

countries as nonmarket economy 

countries: Armenia, Azerbaijan, Belarus, 

China, Georgia, Kyrgyzstan, Moldova, 

Tajikistan, Turkmenistan, Uzbekistan, 

and Vietnam.47 FRA notes that this 

criterion is tied to the Passenger Rail 

Expansion and Rail Safety Act of 2021 

enactment date and accordingly, the 

countries that meet this first prong of 

the definition will not change. 

Second, to constitute a ‘‘country of 

concern,’’ the USTR must also name 

that country on the priority watch list in 

the most recent report required by the 

Trade Act of 1974.48 In the most 

recently required report, the USTR 

identified seven countries on the 

priority watch list: Argentina, Chile, 

China, India, Indonesia, Russia, and 

Venezuela.49

Third, a country is deemed a ‘‘country 

of concern’’ only if it is subject to 

monitoring by the USTR under section 

306 of the Trade Act of 1974.50 In the 

2022 Special 301 Report, the USTR 

identifies seven countries that are on the 

priority watch list: Argentina, Chile, 

China, India, Indonesia, Russia, and 

Venezuela. Of these seven, only China 

is monitored pursuant to section 306. 

Accordingly, China is currently the 

only country that meets all three criteria 

and therefore is the only ‘‘country of 

concern’’ as defined in the Act. 

Net cost is defined by the Act,51 52 and 

FRA is proposing to adopt it in the 

FCSS. Currently, chapter 4 of the 

USMCA defines net cost.53

Qualified facility is defined by the 

Act,54 and FRA is proposing to adopt it 

in the FCSS. When read in combination 

with the definition of the term control 

the Act provides, FRA finds that the Act 

intends for general corporate law 

principles to apply to determine 

whether a particular railroad freight car 

or component manufacturer is ‘‘owned 

or controlled by, is a subsidiary of, or 

is otherwise related legally or 

financially to a corporation based in’’ a 

country that meets the statutory criteria. 

Qualified manufacturer is defined by 

the Act,55 and FRA is proposing to 

adopt it in the FCSS. For the purpose of 

this definition, a supplier, component 

and repair part manufacturer, or other 

entity may be a railroad freight car 

manufacturer, if it manufactures, 

assembles, of substantially transforms a 

freight car, as described in proposed 49 

CFR 215.401(a)(1). Like the definition of 

qualified facility, when read in 

combination with the Act’s definition of 

the term control, FRA again finds that 

the Act intends for general corporate 

law principles to apply to determine 

whether a particular railroad freight car 

or component manufacturer is ‘‘owned 

or controlled by, is a subsidiary of, or 

is otherwise related legally or 

financially to a corporation based in’’ a 

country that meets the statutory criteria. 

Sensitive technology is defined by the 

Act,56 and FRA is proposing to adopt it 

in the FCSS. While FRA understands 

the list of devices included in this 

definition to be examples that can be 

considered sensitive technology, FRA is 

not currently aware of any additional 

devices that should be included in the 

list. 

State-owned enterprise is defined by 

the Act,57 and FRA is proposing to 

adopt it in the FCSS. 

Substantially transformed is defined 

by the Act,58 and FRA is proposing to 

adopt it in the FCSS. FRA understands 

that a manufacturing process which 

changes an article’s name, character, or 

use will often result in a change in the 

article’s tariff classification. 

Accordingly, FRA understands the Act’s 

definition of substantially transformed 

to mean a manufacturing process that 

changes an article’s name, character, or 

use. FRA notes that the U.S. Customs 

and Border Protection (CBP) is an 

implementing agency for USMCA and 

although CBP uses a slightly different 

definition of substantially transformed 

than that provided in the Act, CBP 

explains that substantial transformation 

‘‘occurs when, as a result of 

manufacturing processes, a new and 

different article emerges, having a 

distinctive name, character, or use, 

which is different from that originally 

possessed by the article or material 

before being subject to the 

manufacturing process.’’ 59 FRA finds 

that the definition of substantially 


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60 49 U.S.C. 20171(a)(12). 

61 19 CFR 210.42(a)(1)(i). 

62 Id. at (h)(2). 

63https://usitc.gov/intellectual_property/337_

determinations.htm. 

64See In the matter of Certain Cast Steel Railway 

Wheels, et al. USITC Inv. No. 337–TA–655 (U.S. 

Intern. Trade Com’n), 2009 WL 10693128. 

65Tianrui Group Co. Ltd. v. Intl. Trade Comm’n, 

661 F.3d 1322 (Fed. Cir. 2011). 

66 In the matter of Certain Cast Steel Railway 

Wheels, et al. USITC Inv. No. 337–TA–655 (U.S. 

Intern. Trade Com’n), 2009 WL 4261206. 

67Tianrui Group Co. Ltd. v. Intl. Trade Comm’n, 

661 F.3d 1322 (Fed. Cir. 2011). 

transformed provided in the Act and 

CBP’s definition of the same term are 

compatible in that a manufacturing 

process which changes an article’s 

name, character, or use will often also 

result in a change in the article’s tariff 

classification. 

USMCA is defined by the Act,60 and 

FRA is proposing to adopt it in the 

FCSS. 

Section 215.401 Requirements for 

Railroad Freight Cars Placed Into 

Service in the United States 

This section proposes to incorporate 

the requirements of paragraph (b)(1) of 

the Act into the FCSS. Paragraph (b)(1) 

of the Act provides that for a railroad 

freight car to operate on the U.S. general 

railroad system of transportation: (1) 

any car wholly manufactured after a 

certain date must be manufactured, 

assembled, and substantially 

transformed by a qualified manufacturer 

in a qualified facility; (2) none of the 

sensitive technology located on the car 

may originate from a COC or be sourced 

from a SOE; and (3) none of the content 

of the car (except sensitive technology) 

may originate from a COC or be sourced 

from a SOE with a history of 

problematic trade practices or respect 

for IP rights. 

Proposed paragraph (a)(1) mirrors 

paragraph (b)(1)(A) of the Act and 

mandates that any railroad freight car to 

be operated on the U.S. general railroad 

system of transportation and wholly 

constructed one year from a final rule in 

this proceeding, must be manufactured, 

assembled, and substantially 

transformed by a qualified manufacturer 

or a qualified facility. 

Sensitive Technology Prohibition 

Proposed paragraph (a)(2) mirrors 

paragraph (b)(1)(B) of the Act and 

addresses sensitive technology. This 

paragraph proposes to incorporate the 

Act’s general prohibition on operating a 

freight car on the U.S. general railroad 

system of transportation, if any of its 

‘‘sensitive technology’’ or ‘‘components 

necessary to the functionality of the 

sensitive technology’’ originates from a 

COC or is sourced from a SOE. 

As noted above, the Act defines 

‘‘sensitive technology,’’ but does not 

define or provide any guidance on what 

constitutes ‘‘components necessary to 

the functionality of the sensitive 

technology.’’ FRA understands this 

phrase to generally include the active 

components that work with the 

sensitive technology, because they may 

also be able to collect and transmit data. 

Passive components are excluded from 

this phrase because they cannot collect 

or transmit data. Examples of active 

components include, but are not limited 

to, any type of processor, transmitter, 

receiver, or data storage device. While 

the passive components are still 

necessary for the device to function as 

a whole, these components do not play 

a vital role in the storage, collection, 

exchange, transmittal, or manipulation 

of any data. Examples of passive 

components include, but are not limited 

to, printed circuit boards, power 

supplies, temperature sensors, pressure 

gauges, resistors, capacitors, etc. FRA 

welcomes comments to this NPRM 

about what constitutes ‘‘components 

necessary to the functionality of the 

sensitive technology’’ under the Act. 

Intellectual Property Infringement 

Prohibition 

Proposed paragraph (a)(3) mirrors 

paragraph (b)(1)(C) of the Act and 

addresses IP infringement. This 

language forbids the inclusion in any 

railroad freight car of any content from 

a COC or SOE ‘‘that has been 

determined by a recognized court or 

administrative agency of competent 

jurisdiction and legal authority to have 

violated or infringed valid U.S. 

intellectual property rights of another.’’ 

The Act includes both ‘‘a finding by a 

Federal district court under title 35’’ 

and a finding by the U.S. International 

Trade Commission (ITC) under section 

337 of the Tariff Act of 1930 (19 U.S.C. 

1337) as determinations sufficient to 

trigger the prohibition. 

For the purposes of this requirement, 

the ITC makes a finding that an entity 

has violated or infringed valid U.S. IP 

rights when the ITC issues a final 

determination under section 337. Under 

ITC procedure, an administrative law 

judge, who concludes that an entity 

violated section 337 of the Tariff Act, 

first files an initial determination.61

This initial determination becomes a 

final determination of the ITC 60 days 

after it is filed, unless the ITC orders 

review of the initial determination, in 

which case the ITC’s ultimate finding 

would be the final determination.62

These determinations are available on 

the ITC’s website.63 FRA does not 

anticipate tracking determinations on an 

ongoing basis; manufacturers seeking 

certification are responsible for 

researching determinations against their 

own suppliers. 

As an example, in October 2009, the 

ITC issued a 10-year Limited Exclusion 

Order against two Chinese companies 

(Tianrui Group Company Limited and 

Tianrui Group Foundry Company 

Limited) and two U.S. companies 

(Standard Car Truck Company, Inc. and 

Barber Tianrui Railway Supply, LLC) 

that an administrative law judge 

determined had violated section 337.64

The U.S. Court of Appeals for the 

Federal Circuit upheld the ITC’s 

decision on October 11, 2021.65

Furthermore, FRA finds that section 

20171(b)(1)(C)’s prohibition applies not 

only to the entity determined to be the 

IP infringer, but to the content of that 

infringement as well. For example, in 

2009, the ITC determined that four 

respondents violated section 337 of the 

Tariff Act by misappropriating 

numerous Amsted trade secrets relating 

to the manufacture of cast steel railway 

wheels, importing into the U.S. cast 

steel railway wheels and substantially 

injuring, and threatening substantial 

injury to, Amsted’s domestic cast steel 

railway wheel operations, which 

manufacture Amsted’s Griffin®

wheels.66 The ITC determination 

excluded any such steel railway wheels 

from entering into the U.S. for ten years. 

On appeal, the Federal Circuit upheld 

the ITC’s decision.67 FRA understands 

that section 20171(b)(1)(C) would 

prohibit a railroad freight car to be 

equipped with steel wheels that were 

manufactured using the stolen IP that 

was the subject of this case. The Act 

does not expressly provide a timeframe 

for the prohibitions under this section 

or connect it to the length of the ITC 

exclusion or any other time limitations. 

As such, FRA understands the 

prohibition to be permanent. 

Content Limitations 

Proposed paragraph (b) mirrors 

section 20171(b)(2) of the Act and 

addresses content limitations from 

COCs and SOEs generally. Consistent 

with the Act, beginning 1 year after this 

regulation is issued, proposed paragraph 

(b)(1)(i) would initially prohibit newly 

manufactured freight cars from 

operating on the U.S. general railroad 

system of transportation if more than 20 

percent of the car’s content originates 

from a COC or is sourced from a SOE. 

After 3 years, proposed paragraph 

(b)(1)(ii) would reduce that threshold to 


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68The proposed definition of ‘‘net cost’’ is 

provided in section 215.5 of this proposed rule. For 

a discussion of ‘‘net cost,’’ see the section-bysection analysis above. 

69 49 CFR part 209. 

70 88 FR 21879 (April 6, 2023) located at https:// 

www.federalregister.gov/documents/2023/04/11/ 

2023-07760/modernizing-regulatory-review. 

71All costs are expressed in 2022 base year 

dollars. 

no more than 15 percent. Cars not 

meeting these thresholds would be 

noncompliant and the manufacturer 

would be subject to civil penalties 

under proposed § 215.407. Consistent 

with the Act, as proposed, the percent 

of content is measured by the net cost 

of materials (excluding the cost of 

sensitive technology).68 Proposed 

paragraph (b)(2) mirrors paragraph 

(b)(2)(B) of the Act and explains that the 

content limitations provided in the Act 

shall apply notwithstanding any 

apparent conflict with provisions of 

chapter 4 of the USMCA. Chapter 4 of 

the USMCA and the Act both establish 

rules for the country of origin for a 

product in international trade. This 

paragraph clarifies that compliance with 

chapter 4 of the USMCA does not 

constitute, or in any way affect, the 

content limitations in the Act, which 

apply independently. 

Section 215.403 Certification of 

Compliance 

This proposed section incorporates 

the requirements of paragraph (c) of the 

Act and includes requirements designed 

to help FRA monitor and enforce the 

Act’s standards. 

Consistent with paragraph (c)(2) of 

section 20171, proposed paragraph (a) 

requires railroad freight car 

manufacturers to annually certify to 

FRA, as delegated by the Secretary of 

Transportation, that any railroad freight 

car it provides for operation in the 

United States, meets the requirements of 

section 20171. 

Proposed paragraph (a)(1) would 

require railroad freight car 

manufacturers to submit a certification 

report to FRA, identifying and certifying 

compliance for, each freight car before 

it can operate on the U.S. general 

railroad system of transportation. Each 

certification report submitted to FRA 

may identify a single freight car or 

multiple freight cars based on the 

manufacturer’s preference. For 

convenience, a manufacturer may 

submit its certification report directly to 

the Office of Railroad Safety along with 

any customary request to FRA for a 

sample base car inspection or safety 

appliance arrangement drawing review. 

Paragraph (a)(1)(i) would require the 

report to include a statement certifying 

compliance, the manufacturer’s name, 

the individual responsible for certifying 

compliance with the Act and this rule, 

and the car identification number for 

each car being certified. Paragraph 

(a)(1)(ii) would require the freight car 

manufacturer to maintain all records 

showing the information, including 

calculations, made to support 

certification under this section and such 

records shall be made available to FRA 

upon request. 

Section 215.405 Prohibition on 

Registering Noncompliant Railroad 

Freight Cars 

This section proposes to incorporate 

the requirements in 49 U.S.C. 

20171(c)(3)(B) into the FCSS. FRA will 

review registration records when there 

is evidence of noncompliance with the 

Act. For example, when FRA 

determines a railroad freight car 

manufacturer is not in compliance with 

the Act’s substantive requirements (e.g., 

it is equipped with sensitive technology, 

or 20 percent or 15% of its components, 

sourced from an SOE and operating on 

the U.S. general railroad system of 

transportation), FRA would request 

documentation to determine whether 

the freight car was registered with the 

Umler system. If the freight car was so 

registered, the freight car would also be 

in noncompliance with this section. 

Section 215.407 Civil Penalties 

This section proposes to incorporate 

the requirements in 49 U.S.C. 

20171(c)(4) into the FCSS. The Act 

specifies penalty amounts for violations 

of its substantive requirements and 

specifies that the unit of violation is the 

freight car. FRA anticipates utilizing the 

Railroad Safety Enforcement Procedures 

to enforce these penalties in the same 

manner as other civil penalties enforced 

by FRA.69

VI. Regulatory Impact and Notices 

A. Executive Orders 12866 as Amended 

by Executive Order 14094 

This proposed rule is not a significant 

regulatory action within the meaning of 

Executive Order (E.O.) 12866 

(‘‘Regulatory Planning and Review’’), as 

amended by Executive Order 14094, 

Modernizing Regulatory Review,70 and 

DOT Order 2100.6A (‘‘Rulemaking and 

Guidance Procedures’’). This proposed 

rule aims to enforce the Act’s 

restrictions on content and technology 

originating from COCs and SOEs in 

newly built freight cars entering service 

on the U.S. general railroad system of 

transportation. Issuing this proposed 

rulemaking would authorize FRA to 

monitor and enforce industry 

compliance with the Act. This section 

qualitatively explains benefits and 

quantitatively explains costs for the 

freight car industry and FRA associated 

with implementing this proposed rule 

over a 10-year period, considering 

discount rates of 7 percent and 3 

percent.71

FRA has concluded that the Act does 

not impose a continuing obligation on 

manufacturers or railcar owners related 

to certifying content and technology 

limitations throughout the useful life of 

each freight car. As such, the proposed 

rule would not require FRA to enforce 

the requirements set forth in the Act at 

all times a freight railcar is in service on 

the U.S. general railroad system of 

transportation. Therefore, this proposed 

rule would only impact original freight 

car manufacturers related to the initial 

entry of freight cars into service in the 

U.S. general railroad system of 

transportation. 

Based on discussions with FRA 

subject matter experts in the Office of 

Motive Power and Equipment, this 

analysis estimates that the proposed 

rule would impact six freight car 

manufacturers that have manufacturing 

facilities within North America. This 

proposed rule would not significantly 

impact any other entity. Over a 10-year 

period, this analysis estimates the 

impact of issuing this proposed rule on 

freight car manufacturing industry and 

FRA related to: (1) limiting content 

sourced from COCs or SOEs; (2) 

prohibiting the use of sensitive 

technology and components necessary 

to the functionality of the sensitive 

technology from a COC or SOE; (3) 

compliance costs; and (4) government 

administrative costs associated with 

enforcing this proposed rule. 

Additionally, this analysis provides a 

summary of the regulatory impact and 

describes some alternative regulatory 

options that FRA considered. 

(1) Limit Content Sourced From COCs 

or SOEs 

Based on conversations with RSA and 

FRA subject matter experts, all six 

freight car manufacturers currently 

comply with the 15 percent content 

limitation, which would be required 

three years after this proposed rule’s 

implementation date. Also, absent FRA 

issuing this proposed rule, over the next 

10 years, this analysis forecasts that no 

freight car manufacturer plans to change 

its materials sourcing whereby a freight 

car manufacturer would not be in 

compliance with the content limitation 

set forth in this proposed rule. Lastly, 

this analysis does not anticipate any 


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72A freight car manufacture may also certify 

compliance with Act by submitting an independent 

document to FRA for any build order (e.g., for 

subsequent orders of the same car builds utilizing 

the same safety appliance arrangement that have 

already been reviewed and/or inspected by FRA). 

This analysis concluded that the cost to submit an 

independent document to affirm compliance with 

the Act follows similarly to including such 

affirmation along with safety appliance review and/ 

or sample car inspection request package. 

73U.S. Bureau of Labor Statistics, Occupational 

Employment and Wage Statistics, National 

Industry-Specific Occupational Employment and 

Wage Statistics, May 2023 NAICS 336500 Railroad 

Rolling Stock Manufacturing ‘‘Sales and Related 

Occupations’’ $40.45 (mean wage), ‘‘Top 

Executives’’ ($62.74) [May 2023] https://

www.bls.gov/oes/current/naics4_336500.htm. When 

estimating labor burden, this analysis added a 

compensation factor of 1.75, so the administrative 

employee’s hourly burden rate is $70.79 and the VP 

of engineering’s hourly burden rate is $109.80. 

74 Industry burden for affirming compliance, 

annual = Number of freight cars introduced (35) * 

[time to write the document affirming compliance 

with the Act (1 hour) * administrative 

professional’s hour compensation rate ($70.79) + 

time to review and sign the document (15 minutes) 

* VP of engineering compensation rate ($109.80)] = 

$3,438. 

new freight car manufacturers entering 

the North American freight car industry 

over the next 10 years (during the 

period of analysis). Therefore, related to 

complying with content limitation, 

issuing this proposed rule would not 

result in any costs or benefits. FRA 

welcomes public comment related to 

this conclusion. 

(2) Prohibit the Use of Sensitive 

Technology From COCs or SOEs 

As explained earlier in this NPRM, 

FRA understands the prohibition on the 

use of sensitive technology that 

originates from a COC or SOE to also 

include any active technological 

components necessary to the 

functionality of the sensitive technology 

(excluding passive technological 

components) that originates from a COC 

or SOE. Based on this understanding 

and input from the RSA and FRA 

subject matter experts, all six freight car 

manufacturers currently comply with 

the limitations on use of sensitive 

technological components as set forth in 

this proposed rule. Also, absent FRA 

issuing this proposed rule, over the next 

10 years, this analysis forecasts that no 

freight car manufacturer plans to change 

its materials sourcing whereby a freight 

car manufacturer would not comply 

with the sensitive technology limitation 

set forth in this proposed rule. Further, 

over the next 10 years (during the 

period of analysis), this analysis does 

not anticipate any new freight car 

manufacturer entering the North 

American freight car industry. 

Therefore, the provision that would 

prohibit the use of sensitive technology, 

or active technological components 

necessary to the functionality of the 

sensitive technology that originates from 

a COC or SOE for freight cars entering 

service in the U.S. general railroad 

system of transportation would not 

result in any costs. FRA welcomes 

public comment related to this 

conclusion. 

However, issuing this provision 

(prohibiting the use of sensitive 

technology from COCs or SOEs) may 

provide benefit. That is, issuing this 

proposed rule would mitigate concerns 

related to compromised national 

security and potential corporate 

espionage that exists if newly built 

freight cars with sensitive technology 

and active technological components 

necessary to the functionality of the 

sensitive technology from COC or SOE 

enter service into the U.S. general 

railroad system of transportation. FRA 

welcomes public comment related to 

these conclusions. 

(3) Compliance Costs 

Issuing the proposed rule would 

create a few compliance burdens for 

freight car manufacturers including 

affirming compliance with this 

proposed rule, submitting an annual 

certification, and participating in 

periodic audits. 

Manufacturers Affirm Compliance Prior 

to a Freight Car Entering Service 

Prior to a manufacturer providing a 

freight car for operation on the U.S. 

general railroad system of 

transportation, a manufacturer would 

affirm that the freight car is compliant 

with this regulation. Currently, FRA 

provides a courtesy safety appliance 

drawing review and/or sample car 

inspection to freight car manufacturers 

that request it for all freight cars that 

they intend to manufacture for 

operation on the U.S. general system. 

FRA anticipates that manufacturers 

would affirm compliance with the Act 

by certifying at the time of their safety 

appliance drawing review and/or 

sample car inspection.72

Based on input from FRA subject 

matter experts, this analysis estimates 

that each year manufacturers introduce 

approximately 35 freight car orders. 

Based on FRA subject matter expert 

input, this analysis assumes that an 

administrative professional in the 

freight car’s contract office would draft 

the document affirming compliance 

with the Act (1 hour) and a vicepresident of engineering would review 

and sign the letter (15 minutes).73 Each 

year, the burden on manufacturers to 

affirm compliance with the Act for all 

newly built freight cars intended for 

operation on the U.S. general railroad 

system of transportation is $3,438.74

Over the 10-year period of analysis, the 

industry burden is approximately, 

$34,400 (undiscounted), $29,200 

(present value (PV), 3%), and $20,400 

(PV, 7%). 

Periodic Audit of Freight Car 

Manufacturers 

As part of FRA’s enforcement of the 

proposed rule, FRA expects to randomly 

audit freight car manufacturers to 

ensure compliance with the Act. Based 

on input from FRA subject matter 

experts, FRA would likely randomly 

audit one-third of the freight car 

manufacturers each year (approximately 

two freight car manufacturers each 

year). Based on FRA subject matter 

expert input, the likely audit process 

would compromise of FRA selecting one 

freight car order from the 

manufacturer’s product line and have 

the freight car manufacturer provide 

evidence of compliance. FRA would 

audit the bill of materials to determine 

if the manufacturer complied with this 

regulation. If the freight car 

manufacturer provides sufficient 

evidence to show its freight car is 

complaint with the rule, FRA would 

take no further action. Based on FRA 

subject matter expert input, FRA 

anticipates that the results of FRA’s 

random audit is that FRA will find all 

freight car manufacturers compliant 

with the proposed rule. 

Based on input from FRA subject 

matter experts, this analysis estimates 

that it would take four hours for a 

freight car manufacturer to retrieve 

existing information that shows 

compliance with this proposed rule and 

provide it to an FRA inspector. This 

analysis placed a relatively low hourly 

burden for the periodic audit because 

this proposed rule requires freight 

railroads to maintain records that show 

compliance. Thus, other than retrieving 

records that should already exist, freight 

car manufacturers would have no 

additional burden. With an estimated 

two audits per year, the audit burden for 

all freight car manufacturers is 8 hours 


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75Freight car manufacturers, participating in an 

audit, annual = Number of annual audits (2) * hours 

to prepare and participate in an audit (4 hours) * 

freight car administrative employee compensation 

rate ($70.78) = $566. 

76FRA headquarters staff salary estimated at the 

GS–14 step 5 rate Washington, DC) of $71.88 with 

a burden rate of 1.75 for an hourly burden rate of 

$125.79. See https://www.opm.gov/policy-dataoversight/pay-leave/salaries-wages/2023/generalschedule/. 

77FRA burden for affirming compliance, annual 

= Number of freight cars introduced (35) * [time to 

review affirmation (0.5 hour) * FRA headquarters 

employee compensation rate ($125.79) = $2,201. 

78FRA headquarters staff salary estimated at the 

GS–14 step 5 rate Washington DC) of $71.88 with 

a burden rate of 1.75 for an hourly burden rate of 

$125.79. FRA field staff salary estimated at the GS– 

12 step 5 rate (Rest of United States) of $44.98 with 

a burden rate of 1.75 for an hourly burden rate of 

$78.72. See https://www.opm.gov/policy-dataoversight/pay-leave/salaries-wages/2023/generalschedule/. 

79FRA audit burden, annual = number of audits 

per year (2 audits) * [FRA headquarters staff time 

per audit (20 hours) * FRA headquarters staff 

compensation rate ($125.79) + FRA headquarters 

staff travel expense ($500) + FRA field staff time per 

audit (12 hours) * FRA field staff compensation rate 

($78.72) + FRA field staff travel expense ($100)] = 

2 * $4,060 = $8,121. 

80Prepare and submit annual report to Congress, 

annual = FRA staff hourly labor burden rate 

($125.79) * hours to complete and submit report (24 

hours) = $3,019. 

or $566.75 Over the 10-year period of 

analysis, the burden periodic audits of 

freight car manufacturers is 

approximately $5,700 (undiscounted), 

$4,800 (PV, 3%), and $3,400 (PV, 7%). 

Total Cost and Benefit for Industry 

As shown, in table 2, over the 10-year 

period of analysis, the industry burden 

is approximately $44,800 

(undiscounted), $38,200 (PV, 3%), and 

$30,900 (PV, 7%). 

TABLE 2—FREIGHT CAR INDUSTRY, TOTAL COST, ROUND ($100) 

Type of cost 

Total cost ($) Annualized ($) 

Undiscounted PV 3% PV 7% PV 3% PV 7% 

Compliance certification ....................................................... 34,400 29,200 20,400 3,400 2,900 

Periodic audit ....................................................................... 5,700 4,800 3,400 600 500 

Total .............................................................................. 40,100 34,000 23,800 4,000 3,400 

FRA is issuing this regulation as 

required by the Act. In this economic 

analysis, FRA qualitatively explains the 

potential benefits that may result from 

implementing the proposed rule. FRA 

requests public comment regarding 

these cost estimates and the benefit that 

would come from issuing the proposed 

rule. 

(4) Governmental Administrative Costs 

Issuing the proposed rule would 

create enforcement costs for FRA, 

including the review of freight car 

manufacturers certifying compliance, 

periodic audits of freight car 

manufacturers, and creating an annual 

report to Congress. 

Review of Certification of Compliance 

Reports 

Based on input from FRA subject 

matter experts, this analysis estimates 

that each year manufacturers introduce 

approximately 35 freight car orders and 

certify to FRA that their freight cars 

comply with this Act. FRA staff would 

spend approximately 30 minutes to 

review each of the 35 submissions. 

Therefore, FRA’s annual burden related 

to reviewing the manufacturer’s is 

$2,201.76 77 Over the 10-year period of 

analysis, the total burden is 

approximately $22,00 (undiscounted), 

$18,700 (present value (PV), 3%), and 

$13,000 (PV, 7%). 

FRA Periodic Audit of Freight Car 

Manufacturers 

As explained in the above section that 

describes industry burden, each year 

FRA expects to audit approximately two 

freight car manufacturers as part of 

FRA’s enforcement efforts. To minimize 

compliance costs, FRA would use FRA 

field staff who have duty stations in 

close proximity to the freight car 

manufacturing facility. However, based 

on subject matter expert input, in the 

first five years of implementation of the 

proposed rule, FRA expects that it 

would send both an FRA field inspector 

and FRA headquarters employee to 

conduct the audit. Beginning with the 

sixth year, FRA expects that only FRA 

field inspectors would conduct audits. 

Based on FRA subject matter expert 

input, FRA’s burden related to periodic 

audits of freight car manufacturers is 20 

hours for FRA headquarters staff (4 

hours to prepare for audit, 4 hours to 

conduct audit, and 12 hours of travel 

time) and 12 hours for FRA field staff (4 

hours to prepare for audit, 4 hours to 

conduct audit, and 4 hours travel time). 

In addition, FRA will incur travel 

expenses of $500 for FRA headquarters 

staff and $100 for FRA field staff per 

audit. In the first year of analysis, the 

cost related to conducting two audit is 

$8,121.78 79 Over the 10-year period of 

analysis, FRA’s burden for conducting 

periodic audits is $51,000 

(undiscounted), $45,300 (PV, 3%), and 

$34,800 (PV, 7%). 

Preparing an Annual Report to Congress 

After the final rule becomes effective, 

FRA expects that it will prepare and 

submit an annual report to Congress that 

would summarize all certification 

submissions that FRA received from all 

the manufacturers during the calendar 

year. FRA anticipates that it may 

include this report within its existing 

Fiscal Year Enforcement Report to 

Congress. Based on input from subject 

matter experts, it would take FRA staff 

approximately 24 hours to prepare and 

submit an annual report with an 

associated cost of $3,019.80 Over the 10- 

year period of analysis, the costs of 

preparing and submitting annual reports 

to Congress is $30,200 (undiscounted), 

$25,600 (present value (PV), 3%), and 

$17,900 (PV, 7%). 

Total FRA Burden 

As shown, in table 3, over the 10-year 

period of analysis, FRA’s enforcement 

burden is approximately $103,200 

(undiscounted), $89,600 (PV, 3%), and 

$65,700 (PV, 7%). 


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TABLE 3—FRA ENFORCEMENT BURDEN FROM ISSUING THE PROPOSED RULE, TOTAL COST, ROUND ($100) 

Type of cost 

Total cost ($) Annualized ($) 

Undiscounted PV 3% PV 7% PV 3% PV 7% 

Review affirmations .............................................................. 22,000 18,700 13,000 2,200 1,900 

Periodic audit ....................................................................... 51,000 45,300 34,800 5,300 5,000 

Annual report to Congress ................................................... 30,200 25,600 17,900 3,000 2,500 

Total cost ...................................................................... 103,200 89,600 65,700 10,500 9,400 

(5) Summary of Regulatory Impact 

As shown below in table 4, the total 

impact that would come from issuing 

the proposed rule including the impact 

on industry and FRA is approximately 

$143,300 (undiscounted), $123,600 (PV, 

3%), and $89,500 (PV, 7%). In this 

economic analysis, FRA qualitatively 

explains the potential benefits that may 

result from implementing the proposed 

rule, including addressing concerns 

related to compromised national 

security and potential corporate 

espionage if newly built freight cars 

with sensitive technology and active 

technological components necessary to 

the functionality of the sensitive 

technology from COC or SOE enter 

service into the U.S. general railroad 

system of transportation. FRA welcomes 

public comment related to the potential 

costs and benefits associated with 

implementing this proposed rule. 

TABLE 4—INDUSTRY COMPLIANCE BURDEN AND FRA’S ENFORCEMENT BURDEN, TOTAL COST, ROUND ($100) 

Entity 

Total cost ($) Annualized ($) 

Undiscounted PV 3% PV 7% PV 3% PV 7% 

Industry costs ....................................................................... 40,100 34,000 23,800 4,000 3,400 

FRA costs ............................................................................ 103,200 89,600 65,700 10,500 9,400 

Total cost ...................................................................... 143,300 123,600 89,500 14,500 12,800 

(6) Alternatives Considered 

FRA considered different ways to 

interpret the Act related to satisfying its 

duties of issuing a rule. The following 

alternatives, the baseline alternative and 

reoccurring annual certification 

alternatives, provide insight into FRA’s 

decision-making process related to 

issuing this proposed rule pursuant to 

implementing the Act. 

Baseline Alternative 

The core of a regulatory impact 

analysis is an assessment of the benefits 

and costs of regulation in comparison to 

a ‘‘without regulation’’ (or ‘‘no action’’) 

baseline. If FRA did not issue this 

proposed rule, FRA would not 

implement the Act and would not 

codify a process for FRA to monitor and 

enforce industry compliance with the 

Act. 

If FRA failed to follow the statutory 

requirement of the Act, the Act may not 

be binding and FRA would not meet its 

statutory obligations. 

Reoccurring Annual Certification 

Alternative 

FRA considered alternative 

interpretations of the statutory 

requirement in the Act, with the aim of 

ensuring that freight cars on the U.S. 

general railroad system of transportation 

comply with the Act. The first 

interpretation would require that freight 

car owners submit annual certifications 

for each of the approximately 1.6 

million freight cars in service on the 

U.S. general railroad system of 

transportation. The second 

interpretation would grandfather in 

existing freight cars and only require 

owners of freight cars built after the 

rule’s implementation date to submit 

annual certifications. The third 

interpretation would grandfather in 

existing freight cars but require any 

freight car owner that adds or replaces 

sensitive technology (including the 

active components within) on a freight 

car to submit an annual certification 

that the sensitive technology in each 

augmented freight car complies with the 

sensitive technology provision of the 

proposed rule. 

Under the first interpretation, each 

year freight car owners would need to 

ensure that all their freight cars comply 

with the Act. Not only would this 

interpretation not comport with FRA’s 

understanding that the Act applies to 

freight car manufacturers and not freight 

car owners, but it would also be 

problematic because existing freight car 

owners are unlikely to know the 

percentage of content of each freight car 

that comes from COCs or SOEs and 

whether the existing sensitive 

technology in each freight car was 

sourced from a COC or SOE. FRA 

determined that car owners lacked 

sufficient information to comply with 

this alternative. 

Under the second interpretation, 

owners of freight cars entering service 

after the implementation date would 

need to ensure that all aftermarket 

reconfigurations and repairs comply 

with the Act (both the content limitation 

and the sensitive technology sourcing 

provisions). Owners of freight cars 

would need to maintain records of the 

source origin for all parts in each 

augmented freight car. This alternative 

might help ensure that aftermarket 

reconfigurations of freight cars entering 

service after the implementation date 

would not use sensitive technology 

(including the active technological 

components within) that originate from 

a COC or SOE, this alternative would 

impose a significantly greater burden on 

both the industry (railroads and private 

car owners) and FRA as compared to the 

proposed rule. FRA is also concerned 

about how such an interpretation would 

impact Class III railroads and small 

private car owners. FRA welcomes 

public comment on this alternative. 

Under a third alternative, FRA would 

require that any freight car owner that 

adds or replaces sensitive technology 

(including the active technological 

components within) on a freight car 

submit an annual certification to affirm 

that the freight car maintained 

compliance with the sensitive 


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81 5 U.S.C. 601 et seq. 

82 67 FR 53461 (Aug. 16, 2002). 

83 49 U.S.C. 20171. See https://

www.whitehouse.gov/briefing-room/presidentialactions/2021/11/15/executive-order-onimplementation-of-the-infrastructure-investmentand-jobs-act/. 

84 Id. at (c)(1). 

85 Id. at (c)(2). 

86This NAICS classification compromises 

establishments primarily engaged in one or more of 

the following: (1) manufacturing and/or rebuilding 

locomotives, locomotive frames, and parts; (2) 

manufacturing railroad, street, and rapid transit cars 

and car equipment for operation on rails for freight 

and passenger service; and (3) manufacturing rail 

layers, ballast distributors, rail tamping equipment, 

and other railway track maintenance equipment. 

https://www.census.gov/naics/ 

?input=336510&year=2022&details=336510. 

87 ‘‘Table of Small Business Size Standard’’, U.S. 

Small Business Administration, Size Standards 

effective as of March 17, 2023, p. 16 of 41 https:// 

www.sba.gov/document/support-table-sizestandards. 

88An establishment is a fixed physical location or 

permanent structure where some form of business 

activity is conducted. 

89These compliance cost estimates follow from 

the estimates in ‘‘VI. A. Executive Orders 12866.’’ 

90U.S. Bureau of Labor Statistics, Occupational 

Employment and Wage Statistics, National 

Industry-Specific Occupational Employment and 

Wage Statistics, May 2023 NAICS 336500 Railroad 

Rolling Stock Manufacturing ‘‘Sales and Related 

Occupations’’ $40.45 (mean wage), ‘‘Top 

Executives’’ ($62.74) [May 2023] https://

www.bls.gov/oes/current/naics4_336500.htm. When 

estimating labor burden, this analysis added a 

compensation factor of 1.75, so the administrative 

employee’s hourly burden rate is $70.79 and the VP 

of engineering’s hourly burden rate is $109.80. 

91 Industry burden for affirming compliance, 

annual = Number of freight car designs introduced 

(6) * [time to write the document affirming 

compliance with the Act (1 hour) * administrative 

professional’s hour compensation rate ($70.79) + 

time to review and sign the document (15 minutes) 

* VP of engineering compensation rate ($109.80)] = 

$589. 

92Freight car manufacturers, participating in an 

audit, annual (undiscounted) = Number of annual 

audits (1) * hours to prepare and participate in an 

audit (4 hours) * freight car employee compensation 

rate ($70.79) = $283. 

technology limitations of the proposed 

rule. While this alternative may help 

protect the U.S. general railroad system 

of transportation from safety risks and 

data breaches, this alternative would 

impose a significantly greater burden on 

both the industry (railroads and private 

car owners) and FRA as compared to the 

proposed rule. Moreover, this 

alternative would not comport with 

FRA’s understanding that the Act 

applies to freight car manufacturers and 

not freight car owners. FRA welcomes 

public comment on this alternative. 

FRA concluded that the proposed rule 

strikes an appropriate balance between 

enhancing the safety and security of the 

U.S. general railroad system of 

transportation while minimizing the 

burden. 

B. Regulatory Flexibility Act and 

Executive Order 13272 

The Regulatory Flexibility Act of 

1980 81 and E.O. 13272 82 require agency 

review of proposed and final rules to 

assess their impacts on small entities. 

An agency must prepare an Initial 

Regulatory Flexibility Analysis (IRFA) 

unless it determines and certifies that a 

rule, if promulgated, would not have a 

significant economic impact on a 

substantial number of small entities. 

FRA has not determined whether this 

proposed rule would have a significant 

economic impact on a substantial 

number of small entities and provides 

the following IRFA. 

1. Reasons for Considering Agency 

Action 

The Act mandates that FRA issue a 

regulation to monitor and enforce 

freight car manufacturers’’ compliance 

with the standards of the Act. FRA’s 

implementation of this regulation would 

carry out the Act’s mandate. 

2. A Succinct Statement of the 

Objectives of, and the Legal Basis for, 

the Proposed Rule 

On November 15, 2021, President 

Biden signed the Act,83 which includes 

a mandate that FRA issue regulations to 

implement the statute.84 The Act 

provides that freight cars wholly 

manufactured after a certain date may 

only operate on the U.S. general railroad 

system of transportation if the cars are 

manufactured by a ‘‘qualified 

manufacturer’’ in a ‘‘qualified facility.’’ 

Further the Act prohibits newly built 

freight cars from being operated on the 

U.S. general railroad system of 

transportation, if they are manufactured: 

(1) with sensitive technology originating 

from a COC or sourced from a SOE; (2) 

with any components originating from a 

COC or sourced from a SOE with a 

history of problematic trade practices or 

respect for IP rights; or, (3) with 

components originating from a COC or 

sourced from a SOE exceeding 20 

percent of the freight car after 1 year 

from the date of issuance of regulations 

or 15 percent of the freight car after 3 

years from the date of issuance of 

regulations. The Act requires 

manufacturers to annually certify that 

they meet the requirements of the Act.85

3. A Description of, and Where Feasible, 

an Estimate of the Number of Small 

Entities to Which the Proposed Rule 

Would Apply 

Freight car manufacturers are 

classified within NAICS 336510 

Railroad rolling stock manufacturing.86

The SBA size standard for NAICS 

336510 is 1,500 employees.87 Based on 

FRA subject matter expert input, three 

of the six freight car manufacturers are 

considered small entities. 

Census data shows that there are 153 

establishments 88 classified within 

NAICS 336510. Therefore, because 

freight car manufacturers that produce 

newly built freight railcars compromise 

of about four percent (6 of 153 

establishments) of establishments 

classified within NAICS 336510, a 

breakdown of small entities using 

Census data for NAICS 336510 would 

not yield a reliable distribution of small 

firms by firm size (number of 

employees). 

Based on input from FRA subject 

matter experts, this analysis concludes 

that the three small freight car 

manufacturers currently comply with 

the proposed requirements in this rule 

related to content and sensitive 

technology limitations. Therefore, this 

analysis concludes that the provisions 

related to content and sensitive 

technology limitations would not create 

a cost or benefit that would be borne by 

the three small freight car 

manufacturers. 

With respect to the three small freight 

car manufacturers, the proposed rule 

would create compliance costs 89 related 

to: (1) affirming newly designed freight 

cars comply with the Act; (2) annual 

certification of compliance letter; and 

(3) participation in a periodic audit of 

freight car manufacturers. 

Based on input from FRA subject 

matter experts, this analysis estimates 

that each year small manufacturers 

introduce approximately six unique 

freight car design builds. For each of 

these introductions, the small 

manufacturer would need to inform 

FRA that the new designs are compliant 

with the Act. Based on FRA subject 

matter expert input, this analysis 

assumes that an administrative 

professional in the freight car’s contract 

office would draft a document certifying 

compliance with the Act (1 hour) and a 

vice-president of engineering would 

review and sign the letter (15 

minutes).90 Each year, the industry 

burden for small entities is $589,91 or 

approximately $200 per small 

manufacturer. Over the 10-year period 

of analysis, the industry burden is 

approximately $5,900 (undiscounted), 

$5,000 (present value (PV), 3%), and 

$4,000 (PV, 7%). 

Based on input from FRA subject 

matter experts, FRA expects to audit 

approximately one small freight car 

manufacturer each year, which would 

result in an annual burden on small 

manufacturers of 4 hours or $283,92 or 

approximately $90 per small freight car 


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93Total cost, small manufacturers (undiscounted) 

= affirming newly built cars comply with Act 

($5,900) + participation in periodic audit ($2,800) 

= $8,700. 

94FRA will be using the OMB control number 

(OMB No. 2130–0502) that was issued with when 

the previous NPRM was issued in 1979 for this 

information collection. 

95 44 U.S.C. 3501 et seq. 

96The dollar equivalent cost is derived from U.S. 

Bureau of Labor Statistics, 2021 NAICS 336500— 

Railroad Rolling Stock Manufacturing; 13–1000 

Business Operations Specialist median wage $63.68 

($36.39 + 1.75 overhead costs. The one exception 

is section 215.5(d)(6), which is derived from the 

Surface Transportation Board’s Full Year Wage 

2021, group 200 Professional and Administrative. 

97Totals may not add due to rounding. 

manufacturer. Over the 10-year period 

of analysis, the burden of periodic 

audits on small manufacturers is $2,800 

(undiscounted), $2,400 (PV, 3%), and 

$1,900 (PV, 7%). 

The total cost for small freight car 

manufacturers is approximately $8,700 

(undiscounted),93 $7,400 (PV, 3%), and 

$5,200 (PV, 7%). The annualized 

burden for small freight cars related to 

participating in an FRA audit is 

approximately $900 (PV, 3%), or 

approximately $300 per small freight car 

manufacturer. Based on subject matter 

expert input, each of the three small 

freight car manufacturers have annual 

revenue exceeding $1 million. 

Therefore, issuing the proposed rule 

would result in an annual burden for 

each of the small freight car 

manufacturers of less than one-tenth of 

one-percent of its annual revenue. FRA 

has not determined whether this 

proposed rule would have a significant 

economic impact on a substantial 

number of small entities. FRA welcomes 

public comment on these findings and 

conclusion. 

4. A Description of the Projected 

Reporting, Recordkeeping, and Other 

Compliance Requirements of the Rule, 

Including an Estimate of the Class of 

Small Entities That Would Be Subject to 

the Requirements and the Type of 

Professional Skill Necessary for 

Preparation of the Report or Record 

The proposed rule would create three 

reporting, recordkeeping, and other 

compliance requirements. The three 

affected freight car manufacturers would 

need to make a dedicated service 

notification to FRA, submit an annual 

certification of compliance to FRA, and 

maintain and make available to FRA 

records that affirm compliance with the 

Act. The types of professional skills 

necessary for preparing and maintaining 

these reports include administrative 

professional skills (basic accounting, 

writing, organizing) and clerical skills. 

5. Identification, to the Extent 

Practicable, of All Relevant Federal 

Rules That May Duplicate, Overlap, or 

Conflict With the Proposed Rule 

For a list of all Federal rules that may 

duplicate, overlap, or conflict with this 

proposed rule, please see the rules 

described in section II. above. 

6. A Description of Significant 

Alternatives to the Rule 

FRA considered three significant 

alternative interpretations to the 

proposed rule with the aim of ensuring 

that freight cars on the U.S. general 

railroad system of transportation 

comply with the Act. The first 

interpretation would require that all 

freight car owners submit annual 

certifications for each of the 

approximately 1.6 million freight cars in 

service on U.S. general railroad system 

of transportation. The second 

interpretation would grandfather in 

existing freight cars and only require 

owners of freight cars built after the 

rule’s implementation date to submit 

annual certifications with the Act. The 

third interpretation would grandfather 

in existing freight cars, but require any 

freight car owner that adds or replaces 

sensitive technology (including the 

active components within) on a freight 

car to submit an annual certification 

with the Act; specifying that the 

sensitive technology in each augmented 

freight car complies with the sensitive 

technology provision of the proposed 

rule. As explained in section VI. 

Regulatory Impact and Notices A. 

Executive Order 12866, FRA concluded 

that the primary alternative is preferred 

to each of these significant alternatives. 

C. Paperwork Reduction Act 

The information collection 

requirements in this proposed rule are 

being submitted for approval to OMB94

under the Paperwork Reduction Act of 

1995.95 The information collection 

requirements and the estimated time to 

fulfill each requirement are as follows: 

CFR section Respondent universe Total annual 

responses 

Average time 

per response 

(hours) 

Total annual 

burden hours 

Total cost 

equivalent in 

U.S. dollars 

(A) (B) (C) = (A * B) (D) = (C * 

wage rates) 96

215.5(d)(6)—Dedicated Service—Notification to FRA.784 railroads ............. 4 notifications ............ 1 4.00 $311.64 

215.403(a)(1)—Certification of Compliance—Manufacturers to electronically certify to FRA that the cars comply with the 

requirements of this subpart (New requirement).

6 manufacturers ........ 35 Affirmations .......... 1.25 43.75 2,786.00 

—(a)(1)(ii) Records and such records shall 

be made available to FRA upon request 

(New requirement).

6 manufacturers ........ 0.33 report ................ 6 1.98 126.09 

Total 97 ................................................... 784 railroads + 6 

manufacturers.

39.33 notifications ..... N/A 49.73 3,223.73 

All estimates include the time for 

reviewing instructions; searching 

existing data sources; gathering or 

maintaining the needed data; and 

reviewing the information. Pursuant to 

44 U.S.C. 3506(c)(2)(B), FRA solicits 

comments concerning: whether these 

information collection requirements are 

necessary for the proper performance of 


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98 64 FR 43255 (Aug. 10, 1999). 99 40 CFR 1508.4. 

100 23 CFR 771.116(b). 

101See 16 U.S.C. 470. 

102See Department of Transportation Act of 1966, 

as amended (Pub. L. 89–670, 80 Stat. 931); 49 U.S.C. 

303. 

the functions of FRA, including whether 

the information has practical utility; the 

accuracy of FRA’s estimates of the 

burden of the information collection 

requirements; the quality, utility, and 

clarity of the information to be 

collected; and whether the burden of 

collection of information on those who 

are to respond, including through the 

use of automated collection techniques 

or other forms of information 

technology, may be minimized. 

Organizations and individuals desiring 

to submit comments on the collection of 

information requirements or to request a 

copy of the paperwork package 

submitted to OMB should contact Ms. 

Arlette Mussington, Information 

Collection Clearance Officer, at email: 

arlette.mussington@dot.gov or 

telephone: (571) 609–1285 or Ms. 

Joanne Swafford, Information Collection 

Clearance Officer, at email: 

joanne.swafford@dot.gov or telephone: 

(757) 897–9908. 

OMB is required to make a decision 

concerning the collection of information 

requirements contained in this proposed 

rule between 30 and 60 days after 

publication of this document in the 

Federal Register. Therefore, a comment 

to OMB is best assured of having its full 

effect if OMB receives it within 30 days 

of publication. The final rule will 

respond to any OMB or public 

comments on the information collection 

requirements contained in this proposal. 

FRA is not authorized to impose a 

penalty on persons for violating 

information collection requirements that 

do not display a current OMB control 

number, if required. 

D. Federalism Implications 

Executive Order 13132, Federalism,98

requires FRA to develop an accountable 

process to ensure ‘‘meaningful and 

timely input by State and local officials 

in the development of regulatory 

policies that have federalism 

implications.’’ ‘‘Policies that have 

federalism implications’’ are defined in 

the Executive order to include 

regulations that have ‘‘substantial direct 

effects on the States, on the relationship 

between the national government and 

the States, or on the distribution of 

power and responsibilities among the 

various levels of government.’’ Under 

Executive Order 13132, the agency may 

not issue a regulation with federalism 

implications that imposes substantial 

direct compliance costs and that is not 

required by statute, unless the Federal 

Government provides the funds 

necessary to pay the direct compliance 

costs incurred by State and local 

governments or the agency consults 

with State and local government 

officials early in the process of 

developing the regulation. Where a 

regulation has federalism implications 

and preempts State law, the agency 

seeks to consult with State and local 

officials in the process of developing the 

regulation. 

FRA has analyzed this proposed rule 

in accordance with the principles and 

criteria contained in Executive Order 

13132. FRA has determined that this 

proposed rule has no federalism 

implications, other than the possible 

preemption of State laws under 49 

U.S.C. 20106. Therefore, the 

consultation and funding requirements 

of Executive Order 13132 do not apply, 

and preparation of a federalism 

summary impact statement for the 

proposed rule is not required. 

E. International Trade Impact 

Assessment 

The Trade Agreements Act of 1979 

prohibits Federal agencies from 

engaging in any standards or related 

activities that create unnecessary 

obstacles to the foreign commerce of the 

United States. Legitimate domestic 

objectives, such as safety, are not 

considered unnecessary obstacles. The 

statute also requires consideration of 

international standards and, where 

appropriate, that they be the basis for 

U.S. standards. This proposed rule is 

not expected to affect trade 

opportunities for U.S. firms doing 

business overseas or for foreign firms 

doing business in the United States. 

F. Environmental Impact 

FRA has evaluated this proposed rule 

consistent with the National 

Environmental Policy Act (NEPA; 42 

U.S.C. 4321 et seq.), the Council of 

Environmental Quality’s NEPA 

implementing regulations at 40 CFR 

parts 1500 through 1508, and FRA’s 

NEPA implementing regulations at 23 

CFR part 771 and determined that it is 

categorically excluded from 

environmental review and therefore 

does not require the preparation of an 

environmental assessment (EA) or 

environmental impact statement (EIS). 

Categorical exclusions (CEs) are actions 

identified in an agency’s NEPA 

implementing regulations that do not 

normally have a significant impact on 

the environment and therefore do not 

require either an EA or EIS.99

Specifically, FRA has determined that 

this proposed rule is categorically 

excluded from detailed environmental 

review pursuant to 23 CFR 

771.116(c)(15), ‘‘[p]romulgation of rules, 

the issuance of policy statements, the 

waiver or modification of existing 

regulatory requirements, or 

discretionary approvals that do not 

result in significantly increased 

emissions of air or water pollutants or 

noise.’’ 

The main purpose of this rulemaking 

is to revise FRA’s FCSS to reduce 

unnecessary costs and provide 

regulatory flexibility while maintaining 

safety. This rulemaking would not 

directly or indirectly impact any 

environmental resources and would not 

result in significantly increased 

emissions of air or water pollutants or 

noise. In analyzing the applicability of 

a CE, FRA must also consider whether 

unusual circumstances are present that 

would warrant a more detailed 

environmental review.100 FRA has 

concluded that no such unusual 

circumstances exist with respect to this 

proposed rule and it meets the 

requirements for categorical exclusion 

under 23 CFR 771.116(c)(15). 

Pursuant to section 106 of the 

National Historic Preservation Act and 

its implementing regulations, FRA has 

determined this undertaking has no 

potential to affect historic properties.101

FRA has also determined that this 

rulemaking does not approve a project 

resulting in a use of a resource protected 

by section 4(f).102

G. Environmental Justice 

Executive Order 12898, ‘‘Federal 

Actions to Address Environmental 

Justice in Minority Populations and 

Low-Income Populations’’ require DOT 

agencies to achieve environmental 

justice as part of their mission by 

identifying and addressing, as 

appropriate, disproportionately high 

and adverse human health or 

environmental effects, including 

interrelated social and economic effects, 

of their programs, policies, and 

activities on minority populations and 

low-income populations. DOT Order 

5610.2C (‘‘U.S. Department of 

Transportation Actions to Address 

Environmental Justice in Minority 

Populations and Low-Income 

Populations’’) instructs DOT agencies to 

address compliance with Executive 

Order 12898 and requirements within 

DOT Order 5610.2C in rulemaking 

activities, as appropriate, and also 

requires consideration of the benefits of 

transportation programs, policies, and 


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103Executive Order 14096 ‘‘Revitalizing Our 

Nation’s Commitment to Environmental Justice,’’ 

issued on April 26, 2023, supplements Executive 

Order 12898, but is not currently referenced in DOT 

Order 5610.2C. 

104Public Law 104–4, 2 U.S.C. 1531. 

105 66 FR 28355 (May 22, 2001). 

other activities where minority 

populations and low-income 

populations benefit, at a minimum, to 

the same level as the general population 

as a whole when determining impacts 

on minority and low-income 

populations.103 FRA has evaluated this 

proposed rule under Executive Orders 

12898, 14096 and DOT Order 5610.2C 

and has determined it would not cause 

disproportionate and adverse human 

health and environmental effects on 

communities with environmental justice 

concerns. 

H. Unfunded Mandates Reform Act of 

1995 

Under section 201 of the Unfunded 

Mandates Reform Act of 1995,104 each 

Federal agency ‘‘shall, unless otherwise 

prohibited by law, assess the effects of 

Federal regulatory actions on State, 

local, and tribal governments, and the 

private sector (other than to the extent 

that such regulations incorporate 

requirements specifically set forth in 

law).’’ Section 202 of the Act (2 U.S.C. 

1532) further requires that ‘‘before 

promulgating any general notice of 

proposed rulemaking that is likely to 

result in promulgation of any rule that 

includes any Federal mandate that may 

result in the expenditure by State, local, 

and tribal governments, in the aggregate, 

or by the private sector, of $100,000,000 

or more (adjusted annually for inflation) 

in any 1 year, and before promulgating 

any final rule for which a general notice 

of proposed rulemaking was published, 

the agency shall prepare a written 

statement’’ detailing the effect on State, 

local, and tribal governments and the 

private sector. This proposed rule 

would not result in the expenditure, in 

the aggregate, of $100,000,000 or more 

(as adjusted annually for inflation) in 

any one year, and thus preparation of 

such a statement is not required. 

I. Energy Impact 

Executive Order 13211, ‘‘Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use,’’ requires Federal 

agencies to prepare a Statement of 

Energy Effects for any ‘‘significant 

energy action.’’ 105 FRA evaluated this 

proposed rule under Executive Order 

13211 and determined that this 

regulatory action is not a ‘‘significant 

energy action’’ within the meaning of 

Executive Order 13211. 

J. Privacy Act Statement 

In accordance with 5 U.S.C. 553(c), 

DOT solicits comments from the public 

to better inform its rulemaking process. 

DOT posts these comments, without 

edit, to www.regulations.gov, as 

described in the system of records 

notice, DOT/ALL–14 FDMS, accessible 

through www.dot.gov/privacy. To 

facilitate comment tracking and 

response, we encourage commenters to 

provide their name, or the name of their 

organization; however, submission of 

names is completely optional. Whether 

or not commenters identify themselves, 

all timely comments will be fully 

considered. If you wish to provide 

comments containing proprietary or 

confidential information, please contact 

the agency for alternate submission 

instructions. 

List of Subjects in 49 CFR Part 215 

Freight cars, Infrastructure Investment 

and Jobs Act. 

The Proposed Rule 

For the reasons discussed in the 

preamble, FRA proposes to amend part 

215 of chapter II, subtitle B of title 49, 

Code of Federal Regulations, as follows: 

PART 215—RAILROAD FREIGHT CAR 

SAFETY STANDARDS 

■ 1. The authority citation for part 215 

is revised to read as follows: 

Authority: 49 U.S.C. 20171(c)(1), 49 U.S.C. 

20102–03, 20107, 20133, 20137–38, 20143, 

20701–03, 21301–02, 21304; 28 U.S.C. 2401, 

note; and 49 CFR 1.49. 

■ 2. Revise § 215.5 to read as follows: 

§ 215.5 Definitions. 

As used in this part: 

Break means a fracture resulting in 

complete separation into parts; 

Component means a part or 

subassembly of a railroad freight car; 

Control means the power, whether 

direct or indirect and whether or not 

exercised, through the ownership of a 

majority or a dominant minority of the 

total outstanding voting interest in an 

entity; representation on the board of 

directors of an entity; proxy voting on 

the board of directors of an entity; a 

special share in the entity; a contractual 

arrangement with the entity; a formal or 

informal arrangement to act in concert 

with an entity; or any other means, to 

determine, direct, make decisions, or 

cause decisions to be made for the 

entity; 

Cost of sensitive technology means the 

aggregate cost of the sensitive 

technology located on a railroad freight 

car. 

Country of concern means a country 

that— 

(1) Was identified by the Department 

of Commerce as a nonmarket economy 

country (as defined in section 771(18) of 

the Tariff Act of 1930 (19 U.S.C. 

1677(18))) as of November 15, 2021; 

(2) Was identified by the United 

States Trade Representative in the most 

recent report required by section 182 of 

the Trade Act of 1974 (19 U.S.C. 2242) 

as a foreign country included on the 

priority watch list (as defined in 

subsection (g)(3) of such section); and 

(3) Is subject to monitoring by the 

Trade Representative under section 306 

of the Trade Act of 1974 (19 U.S.C. 

2416). 

Dedicated service means the exclusive 

assignment of cars to the transportation 

of freight between specified points 

under the following conditions: 

(1) The cars are operated— 

(i) Primarily on track that is inside an 

industrial or other non-railroad 

installation; and 

(ii) Only occasionally over track of a 

railroad; 

(2) The cars are not operated— 

(i) At speeds of more than 15 miles 

per hour; and 

(ii) Over track of a railroad— 

(A) For more than 30 miles in one 

direction; or 

(B) On a round trip of more than 60 

miles; 

(3) The cars are not freely 

interchanged among railroads; 

(4) The words ‘‘Dedicated Service’’ 

are stenciled, or otherwise displayed, in 

clearly legible letters on each side of the 

car body; 

(5) The cars have been examined and 

found safe to operate in dedicated 

service; and 

(6) The railroad must— 

(i) Notify FRA in writing that the cars 

are to be operated in dedicated service; 

(ii) Identify in that notice— 

(A) The railroads affected; 

(B) The number and type of cars 

involved; 

(C) The commodities being carried; 

and 

(D) The territorial and speed limits 

within which the cars will be operated; 

and 

(iii) File the notice required by this 

paragraph (6)(iii) of the definition not 

less than 30 days before the cars operate 

in dedicated service; 

In service when used in connection 

with a railroad freight car, means each 

railroad freight car subject to this part 

unless the car: 

(1) Has a ‘‘bad order’’ or ‘‘home shop 

for repairs’’ tag or card containing the 


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prescribed information attached to each 

side of the car and is being handled in 

accordance with § 215.9; 

(2) Is in a repair shop or on a repair 

track; 

(3) Is on a storage track and is empty; 

or 

(4) Has been delivered in interchange 

but has not been accepted by the 

receiving carrier. 

Net cost has the meaning given such 

term in chapter 4 of the USMCA or any 

subsequent free trade agreement 

between the United States, Mexico, and 

Canada. 

Qualified facility means a facility that 

is not owned or under the control of a 

state-owned enterprise. 

Qualified manufacturer means a 

railroad freight car manufacturer that is 

not owned or under the control of a 

state-owned enterprise. 

Railroad means all forms of nonhighway ground transportation that run 

on rails or electromagnetic guideways, 

including: 

(1) Commuter or other short-haul rail 

passenger service in a metropolitan or 

suburban area, and 

(2) High speed ground transportation 

systems that connect metropolitan areas, 

without regard to whether they use new 

technologies not associated with 

traditional railroads. Such term does not 

include rapid transit operations within 

an urban area that are not connected to 

the general railroad system of 

transportation. 

Railroad freight car means a car 

designed to carry freight or railroad 

personnel by rail, including— 

(1) A box car; 

(2) A refrigerator car; 

(3) A ventilator car; 

(4) An intermodal well car; 

(5) A gondola car; 

(6) A hopper car; 

(7) An auto rack car; 

(8) A flat car; 

(9) A special car; 

(10) A caboose car; 

(11) A tank car; and 

(12) A yard car. 

Sensitive technology means any 

device embedded with electronics, 

software, sensors, or other connectivity, 

that enables the device to connect to, 

collect data from, or exchange data with 

another device, including— 

(1) Onboard telematics; 

(2) Remote monitoring software; 

(3) Firmware; 

(4) Analytics; 

(5) Global positioning system satellite 

and cellular location tracking systems; 

(6) Event status sensors; 

(7) Predictive component condition 

and performance monitoring sensors; 

and 

(8) Similar sensitive technologies 

embedded into freight railcar 

components and sub-assemblies. 

State inspector means an inspector 

who is participating in investigative and 

surveillance activities under section 206 

of the Federal Railroad Safety Act of 

1970 (45 U.S.C. 435). 

State-owned enterprise means— 

(1) An entity that is owned by, or 

under the control of, a national, 

provincial, or local government of a 

country of concern, or an agency of such 

government; or 

(2) An individual acting under the 

direction or influence of a government 

or agency described in paragraph (1) of 

this definition. 

Substantially transformed means a 

component of a railroad freight car that 

undergoes an applicable change in tariff 

classification as a result of the 

manufacturing process, as described in 

chapter 4 and related annexes of the 

USMCA or any subsequent free trade 

agreement between the United States, 

Mexico, and Canada. 

USMCA. The acronym ‘USMCA’ has 

the meaning given the term in section 3 

of the United States-Mexico-Canada 

Agreement Implementation Act (19 

U.S.C. 4502). 

■ 3. Add subpart E to part 215 to read 

as follows: 

Subpart E—Manufacturing 

Sec. 

215.401 Requirements for railroad freight 

cars placed into service in the United 

States. 

215.403 Certification of compliance. 

215.405 Prohibition on registering 

noncompliant railroad freight cars. 

215.407 Civil penalties. 

Subpart E—Manufacturing 

§ 215.401 Requirements for railroad freight 

cars placed into service in the United 

States. 

(a) Limitation on railroad freight cars. 

A railroad freight car wholly 

manufactured on or after [DATE 365 

DAYS AFTER DATE OF PUBLICATION 

OF THE FINAL RULE IN THE 

FEDERAL REGISTER] may only 

operate on the United States general 

railroad system of transportation if: 

(1) The railroad freight car is 

manufactured, assembled, and 

substantially transformed, as applicable, 

by a qualified manufacturer in a 

qualified facility; 

(2) None of the sensitive technology 

located on the railroad freight car, 

including components necessary to the 

functionality of the sensitive 

technology, originates from a country of 

concern or is sourced from a stateowned enterprise; and 

(3) None of the content of the railroad 

freight car, excluding sensitive 

technology, originates from a country of 

concern or is sourced from a stateowned enterprise that has been 

determined by a recognized court or 

administrative agency of competent 

jurisdiction and legal authority to have 

violated or infringed valid United States 

intellectual property rights of another 

including such a finding by a Federal 

district court under title 35 or the U.S. 

International Trade Commission under 

section 337 of the Tariff Act of 1930 (19 

U.S.C. 1337). 

(b) Limitation on railroad freight car 

content. (1) Percentage limitation— 

(i) Initial limitation. Not later than 

[DATE 365 DAYS AFTER DATE THE 

FINAL RULE IS ISSUED], a railroad 

freight car described in paragraph (a) of 

this section may operate on the United 

States general railroad system of 

transportation only if not more than 20 

percent of the content of the railroad 

freight car, calculated by the net cost of 

all components of the car and excluding 

the cost of sensitive technology, 

originates from a country of concern or 

is sourced from a state-owned 

enterprise. 

(ii) Subsequent limitation. Effective 

beginning on [DATE 1461 DAYS AFTER 

DATE OF PUBLICATION IN THE 

FEDERAL REGISTER], a railroad 

freight car described in paragraph (a) of 

this section may operate on the United 

States general railroad system of 

transportation only if not more than 15 

percent of the content of the railroad 

freight car, calculated by the net cost of 

all components of the car and excluding 

the cost of sensitive technology, 

originates from a country of concern or 

is sourced from a state-owned 

enterprise. 

(2) Conflict. The percentages specified 

in the clauses in paragraphs (b)(1)(i) and 

(ii) of this section, as applicable, shall 

apply notwithstanding any apparent 

conflict with provisions of chapter 4 of 

the USMCA. 

§ 215.403 Certification of compliance. 

(a) Certification required. To be 

eligible to provide a railroad freight car 

for operation on the United States 

general railroad system of 

transportation, the manufacturer of such 

car shall certify, at least annually, to the 

Railroad Administrator that any railroad 

freight cars to be so provided comply 

with the 49 U.S.C. 20171. 

(1) Certification procedure. Prior to 

providing any cars for operation on the 

United States general railroad system of 

transportation, each freight car 

manufacturer shall certify to FRA that 

the cars comply with the 49 U.S.C. 


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20171. Such certification shall be 

submitted via electronic mail by an 

authorized representative of the 

manufacturer to FRAMP&E@dot.gov. A 

manufacturer may submit this 

certification to FRA annually provided 

it covers all cars to be provided in the 

relevant year, or a manufacturer may 

submit separate certifications 

throughout the year. 

(i) The certification shall include the 

statement ‘‘I certify that all freight cars 

that will be provided for operation on 

the United States general railroad 

system of transportation will comply 

with the 49 U.S.C. 20171, and the 

implementing regulations at 49 CFR part 

215’’ and contain: 

(A) The manufacturer’s name and 

address; 

(B) The name, signature, and contact 

information for the person designated to 

certify compliance with this subpart; 

and 

(C) A car identification number for 

each car being certified. 

(ii) Manufacturers shall maintain 

records showing the information, 

including the calculations, made to 

support certification under this section 

and such records shall be made 

available to FRA upon request. 

(2) Valid certification required. At the 

time a railroad freight car begins 

operation on the United States general 

railroad system of transportation, the 

manufacturer of such railroad freight car 

shall have valid certification described 

in paragraph (a) of this section for the 

year in which such car begins operation. 

(b) [Reserved] 

§ 215.405 Prohibition on registering 

noncompliant railroad freight cars. 

(a) Cars prohibited. A railroad freight 

car manufacturer may not register, or 

cause to be registered, a railroad freight 

car that does not comply with the 

requirements under this subpart in the 

Umler system. 

(b) [Reserved] 

§ 215.407 Civil penalties. 

(a) In general. A railroad freight car 

manufacturer that has manufactured a 

railroad freight car for operation on the 

United States freight railroad 

interchange system that the Secretary of 

Transportation determines, after written 

notice and an opportunity for a hearing, 

has violated this subpart is liable to the 

United States Government for a civil 

penalty of at least $100,000, but not 

more than $250,000, for each such 

violation for each railroad freight car. 

(b) Prohibition for violations. The 

Secretary of Transportation may 

prohibit a railroad freight car 

manufacturer with respect to which the 

Secretary has assessed more than 3 

violations under this section from 

providing additional railroad freight 

cars for operation on the United States 

freight railroad interchange system until 

the Secretary determines: 

(1) Such manufacturer is in 

compliance with this section; and 

(2) All civil penalties assessed to such 

manufacturer pursuant to this section 

have been paid in full. 

Issued in Washington, DC. 

Amitabha Bose, 

Administrator. 

[FR Doc. 2023–26133 Filed 12–7–23; 8:45 am] 

BILLING CODE 4910–06–P 


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