Federal Register / Vol. 89, No. 244 / Thursday, December 19, 2024 / Rules and Regulations 103677 

1The Infrastructure Investment and Jobs Act 

(IIJA), Sec. 22425, Pub. L. 117–58, 135 Stat. 752 

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

generally referred to in this rule as the Act, or 

section 20171). 

Management Area from December 1 

through April 30 each year for the 

protection of critical winter wildlife 

habitat. This closure may be opened 

April 15 if conditions and wildlife 

needs warrant. 

33. You must not enter identified 

closure areas in the Perins Peak Wildlife 

Management Area from March 15 

through July 31 each year for the 

protection of critical raptor habitat. 

Exemptions 

The following persons are exempt 

from this supplementary rule: any 

Federal, State, or local officers or 

employees acting within the scope of 

their official duties; members of any 

organized law enforcement, military, 

rescue, or fire-fighting force performing 

an official duty; and any persons who 

are expressly authorized or approved by 

the BLM Authorized Officer. 

Enforcement 

Any person who violates any part of 

this supplementary rule may be tried 

before a United States Magistrate and 

fined in accordance with 18 U.S.C. 

3571, imprisoned no more than 12 

months under 43 U.S.C. 1733(a) and 43 

CFR 8360.0–7, or both. In accordance 

with 43 CFR 8365.1–7, State or local 

officials may also impose penalties for 

violations of Colorado or local law. 

(Authority: 43 U.S.C. 1733, 43 U.S.C. 1740; 

43 CFR 8365.1–6) 

Douglas J. Vilsack, 

BLM Colorado State Director. 

[FR Doc. 2024–30059 Filed 12–18–24; 8:45 am] 

BILLING CODE 4331–16–P 

DEPARTMENT OF TRANSPORTATION 

Federal Railroad Administration 

49 CFR Part 215 

[Docket No. FRA–2023–0021, Notice No. 2] 

RIN 2130–AC94 

Freight Car Safety Standards 

Implementing the Infrastructure 

Investment and Jobs Act 

AGENCY: Federal Railroad 

Administration (FRA), Department of 

Transportation (DOT). 

ACTION: Final rule. 

SUMMARY: FRA is amending 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 

sensitive technology that originates from 

a COC or is sourced from a SOE. The 

Act mandates that FRA issue a 

regulation to monitor and enforce 

industry’s compliance with the Act’s 

standards. 

DATES: The Final Rule is effective 

January 21, 2025. 

ADDRESSES: 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 

Adviser, 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 

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 

RSEP—Railroad Safety Enforcement 

Procedures 

RSIA—Rail Safety Improvement Act of 1988 

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. Discussion of Comments to the NPRM 

A. Comments About FRA’s Proposed 

Application of the Act’s Content 

Limitation and Sensitive Technology 

Requirements to Railroad Freight Car 

Manufacturers 

1. The Act Does Not Regulate AfterManufacture Changes to Railroad Freight 

Cars, Including Content Limitations and 

Sensitive Technology 

2. Railroad Freight Cars Already Placed in 

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

Act 

3. Definitions Provided by the Act for the 

Terms Sensitive Technology, 

Component, Country of Concern, and 

State-Owned Enterprise Are Suitable for 

Implementing the Act 

4. The Scope of the IP Violation or 

Infringement Prohibition Being 

Incorporated Into the Freight Car Safety 

Standards Is Intended To Be the Same as 

the Act 

B. Comments About FRA’s Proposal 

Implementing the Act’s Freight Car 

Compliance Certification 

1. The Act Requires Certain Information To 

Be Included in the Certification 

2. The Act Requires Certification To Be 

Submitted Prior to Placing Freight Cars 

Into Service on the U.S. General Rail 

System 

C. Comments About FRA’s Process for 

Enforcing the Act’s Requirements and 

Penalties 

1. The Act Does Not Require a Finding of 

Willfulness To Establish a Violation 

2. Process for Manufacturers To Defend 

Against and Appeal Findings of 

Noncompliance With the Act 

3. Process for Railroad Freight Car 

Manufacturer To Be Reinstated After 

Being Prohibited Under the Act 

4. Five-Year Statute of Limitations Applies 

to the Act 

III. Section-by-Section Analysis 

IV. 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, as codified at 49 

U.S.C. 20171.1 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 


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

3 Id. at (b)(2). 

4 88 FR 85561 (Dec. 8, 2023). 

5The Act requires certification to the ‘‘Secretary 

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

Secretary has delegated that authority to FRA. 

6 88 FR 85561. 

7 Docket No. FRA–2023–0021. 

8All cost estimates are in 2022 dollars. 

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 country of 

concern (COC) or is sourced from a 

state-owned enterprise (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 

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 newly 

manufactured 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 See the notice of proposed 

rulemaking 4 (NPRM) for detailed 

discussion on the background of the Act 

and other relevant laws. 

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.5 FRA issued an NPRM on 

December 8, 2023,6 proposing to codify 

a process for FRA to monitor and 

enforce compliance with the Act. This 

final rule adopts that proposal with 

minor clarifications. To carry out the 

Act’s certification requirement, this rule 

requires railroad freight car 

manufacturers to electronically certify 

to FRA that each freight car complies 

with the Act before that car is operated 

on the U.S. general railroad system of 

transportation. The certification is 

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, 

this final rule requires manufacturers 

offering freight cars for service in the 

U.S. to maintain all records showing 

information to support certification, 

including content calculations, and 

such records are required to be made 

available to FRA upon request. 

Fifteen comments to the NPRM were 

submitted to the docket for this 

rulemaking proceeding.7 FRA reviewed 

all the comments, and in response, has 

incorporated portions of FRA’s existing 

enforcement process into this final rule 

to clarify the process FRA will use to 

enforce the civil penalty fines provided 

in the Act. No other changes to the 

proposed rule text are provided in this 

final rule, but discussions are provided 

to help clarify: (1) the application of the 

Act’s content limitation and sensitive 

technology prohibition requirements to 

freight car manufacturers; and (2) the 

implementation and enforcement of the 

Act’s freight car compliance 

certification requirement and penalties. 

Costs and Benefits of the Regulatory 

Action 

This rule fulfills FRA’s obligation to 

issue a rulemaking that implements the 

Act. In section ‘‘V. A. Executive Order 

12866 as Amended by Executive Order 

14094’’ of this rule, FRA describes the 

benefits and costs that are expected to 

come from issuing this regulation. 

In the economic analysis section, FRA 

qualitatively explains the benefits 

expected to result from implementing 

the rule. Issuing the rule will 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 rule mitigates 

potential issues related to compromised 

national security and corporate 

espionage. Issuing the rule also fulfills 

FRA’s duties required by the Act. 

Over a 10-year period of analysis, 

FRA quantifies the following costs to 

the freight car manufacturing industry 

and FRA that come from issuing this 

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 rule 

is approximately $143,600 

(undiscounted), $130,300 (PV, 2%), 

$124,100 (PV, 3%), and $102,800 (PV, 

7%). The annualized net costs are 

approximately $14,500 (PV, 2%) and 

$14,600 (PV, 3%).8

TABLE 1—INDUSTRY AND FRA BURDEN FROM ISSUING THE RULE, TOTAL COST, 2022 DOLLARS, ROUNDED ($100) 

Entity 

Cost Annualized 

Undiscounted PV 2% PV 3% PV 2% PV 3% 

Industry ................................................................................ 40,100 35,900 34,000 4,000 4,000 

FRA ...................................................................................... 103,500 94,900 90,100 10,500 10,600 

Total cost ...................................................................... 143,600 130,300 124,100 14,500 14,600 

II. Discussion of Comments on the 

NPRM 

FRA reviewed all fifteen comments 

received in response to the NPRM. 

Comments generally raised issues 

related to the proposed: (1) application 

of the Act’s content limitation and 

sensitive technology prohibition 

requirements to freight car 

manufacturers; (2) implementation of 

the Act’s freight car compliance 

certification; and (3) process for 

enforcing the Act’s requirements and 

penalties. In response to the comments, 

this final rule incorporates portions of 

FRA’s existing enforcement process into 


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9Adding §§ 215.409 through 215.421 to the rule 

text in this final rule. 

10Alliance for American Manufacturing’s 

comment and letter from U.S. Senators Tammy 

Baldwin, John Cornyn, and Paul Casey Jr. 

11FRA–2023–0021–0002. 

12 Docket No. FRA–2023–0021, Notice No. 1. 

13 88 FR at 85568. 

14 Id. 

15Alliance for American Manufacturing; 

American Foundry Society, American Iron and 

Steel Institute, and Steel Manufacturers 

Association; Amsted Railway Company; BLET; 

Canadian Association of Railway Suppliers; FRA– 

2023–0021–0002; RSA; United Steelworkers; and 

Wabtec Corporation. 

16 88 FR at 85564. 

17FRA–2023–0021–002. 

18 88 FR at 85565. 

19 49 U.S.C. 20171(b)(1). 

20Canadian Association of Railway Suppliers, 

American Foundry Society, American Iron and 

Steel Institute, and Steel Manufacturers 

Association, Trinity Industries, RSA, Greenbrier 

Companies, BLET, Railway Supply Institute (RSI), 

and Wabtec Corporation. 

21The prohibition in 49 CFR 215.405(a)(2) would 

apply. 

the FCSS 9 to help clarify the process 

FRA will use to enforce the civil 

penalties provided in the Act. 

Discussions are also provided in this 

section of this rulemaking to help clarify 

the other issues raised in the comments. 

In addition, other comments broadly 

expressed support 10 for the proposal or 

concern 11 about railroad safety, and 

although FRA considered these 

comments, FRA is not discussing those 

comments in this final rule because 

generally, they do not provide a basis 

for FRA to respond or are outside the 

scope of this rulemaking. Notably, FRA 

did not receive any comments in 

opposition to the proposals in the 

NPRM. For a complete list of comments 

please see the docket for this 

rulemaking.12

A. Comments About FRA’s Proposed 

Application of the Act’s Content 

Limitation and Sensitive Technology 

Requirements to Railroad Freight Car 

Manufacturers 

The preamble to the NPRM provides 

FRA’s understanding of how the Act 

applies to railroad freight car 

manufacturers.13 It generally explains 

that the Act: (1) applies to 

manufacturers and not railroads and 

does not cover after-manufacture 

changes to railroad freight cars, 

including sensitive technology; (2) does 

not apply to railroad freight cars already 

placed in service in the U.S.; and (3) 

provides definitions for the terms 

’’sensitive technology’’, COCs, and SOEs 

that are suitable for implementation of 

the Act. 

1. The Act Does Not Regulate AfterManufacture Changes to Railroad 

Freight Cars, Including Content 

Limitations and Sensitive Technology 

As discussed in the NPRM, FRA 

concluded that the Act regulates 

railroad freight cars by imposing 

requirements at the time of initial 

manufacture but does not require FRA 

to ensure that the requirements 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.14 Several manufacturers, 

trade associations, Brotherhood of 

Locomotive Engineers and Trainmen 

(BLET), and Rail Security Alliance 

(RSA) 15 commented that the Act’s 

sensitive technology prohibition should 

be extended beyond the time of initial 

manufacture to further protect against 

the potential influence from COCs and 

SOEs. The commenters agree with 

FRA’s conclusion that the Act imposes 

requirements only at a car’s time of 

initial manufacture, but they contend 

that extending the prohibition would be 

within the spirit of the Act. These 

comments generally expressed concern 

that aftermarket parts containing 

sensitive technology originating from 

SOEs and COCs could be controlled 

remotely and could be used to disrupt 

railroad operation. Trinity Industries 

and the Association of American 

Railroads commented agreeing with the 

proposed rule’s conclusion that the 

Act’s sensitive technology prohibition 

applies only at the time of initial 

manufacture and do not request any 

extension to aftermarket parts. As 

discussed in the NPRM, the Act 

expressly places requirements on the 

sensitive technologies installed on 

railroad freight car manufacturers at the 

time of the cars’ initial manufacture and 

does not place on-going restrictions on 

the use of such technology (e.g., 

aftermarket parts) on freight cars.16

Without express Congressional intent to 

impose such ongoing restrictions, FRA 

is not extending the sensitive 

technology prohibitions to apply to 

freight cars after their time of initial 

manufacture. 

2. The Act Does Not Apply to Railroad 

Freight Cars Already Placed in Service 

in the U.S. 

One member of the public 17

commented that the Act’s requirements 

should not apply to existing freight cars. 

As discussed in the NPRM, 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 

requirements on newly-manufactured 

freight cars.18 With respect to 

applicability, the plain language 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.19 The 

Act requires FRA to issue regulations to 

implement the requirements set forth in 

the Act. For purpose of this analysis, 

FRA proposed to define the date on 

which FRA promulgates regulations as 

the ‘‘issuance date.’’ Thus, if FRA 

promulgates regulations on June 1, 

2025, only railroad freight cars that are 

wholly manufactured on or after June 1, 

2026, are subject to the Act’s 

requirements. Using this hypothetical 

issuance date of June 1, 2025, as an 

example, railroad freight cars 

manufactured prior to June 1, 2026, and 

new railroad freight cars that were 

partially manufactured prior to June 1, 

2026, are not subject to the Act. 

3. Definitions Provided by the Act for 

the Terms ‘‘Sensitive Technology’’, 

‘‘Component’’, ‘‘Country of Concern’’, 

and ‘‘State-Owned Enterprise’’ Are 

Suitable for Implementing the Act 

Several manufacturers, trade 

associations, BLET, and RSA 20

commented that FRA should revise the 

proposed definition for ‘‘sensitive 

technology’’ to expressly include only 

devices and components that are 

physically located on the freight car. As 

such, devices in such locations would 

be prohibited, if originating from a COC 

or sourced from a SOE.21 FRA disagrees 

that the revision is needed and in this 

final rule adopts the proposed rule’s 

definition, incorporating the Act’s 

definition for the term ‘‘sensitive 

technology.’’ The NPRM adopted the 

definition of the term ‘‘sensitive 

technology’’ directly from the Act. The 

Act defines sensitive technology as ‘‘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.’’ FRA finds this 

definition suitable for implementing the 

Act’s requirement. When read alone, 

FRA agrees with the commenters that 

the definition does not clearly restrict 

sensitive technology to devices located 

on freight cars. However, the Act’s 

prohibition of certain sensitive 

technology expressly identifies 

‘‘sensitive technology located on the 

railroad freight car’’ and proposed 

§ 215.401(a)(2), adopted in this final 

rule, makes clear that the prohibition 

applies to sensitive technology ‘‘on the 


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22 88 FR at 85562, 85567, and 85575. 

23Canadian Association of Railway Suppliers, 

American Foundry Society, American Iron and 

Steel Institute, and Steel Manufacturers 

Association, RSA, BLET, RSI, and Wabtec 

Corporation. 

24 88 FR at 85567. 

25 Id. 

26 49 U.S.C. 20171(a). 

27 Docket number FRA–2023–0021–0003. 

28 49 CFR 215.401(a). 

29See 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. 

30 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. 

31Tianrui Group Co. Ltd. v. Intl. Trade Comm’n, 

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

32Codified by this final rule at 49 CFR 

215.401(a)(3). 

33 88 FR at 85567. 

34 49 U.S.C. 20171(b)(1). 

railroad freight car.’’ As such, FRA finds 

that its conclusion (discussed in the 

NPRM 22) that the Act’s definition of 

‘‘sensitive technology’’ is limited to 

devices located on freight cars is correct 

and as such, FRA does not find it 

necessary to revise the definition of 

‘‘sensitive technology.’’ 

Several manufacturers, trade 

associations, BLET, and RSA 23

commented that FRA should revise the 

final rule to further clarify the term 

‘‘sensitive technology’’ by expressly 

including microprocessors, short range 

wireless processors, and long-range 

wireless processors to ensure these 

devices (or components) would be 

prohibited, if originating from a COC or 

sourced from a SOE. The NPRM 

adopted the definition of the term 

‘‘sensitive technology’’ directly from the 

Act and, in the preamble to the NPRM, 

FRA explained that as proposed, the 

sensitive technology prohibition would 

also apply to the components necessary 

to the functionality of the sensitive 

technology (i.e., the active components 

that work with the sensitive 

technology).24 Further, in the NPRM, 

FRA specifically listed ‘‘any type of 

processor, transmitter, receiver, or data 

storage device’’ as active components of 

sensitive technology.25 As such, FRA 

finds that it is clear that various 

processors identified by the commenters 

are covered by the prohibition as 

proposed. The comments did not 

explain why such processors would not 

be covered by the proposed definition. 

Thus, FRA concludes it is not necessary 

to explicitly call out these types of 

active components in the definition of 

the term ‘‘sensitive technology,’’ and 

adopts the proposed definition. 

Amsted Rail’s comment suggests that 

FRA ‘‘adopt a de minimis limitation of 

3%–5% of total material cost only on 

the finished railcar as a clear definition 

of small parts’’ to interpret the term 

‘‘component,’’ as used in the Act. FRA 

declines to adopt a de minimis 

limitation, as it could be inconsistent 

with the definition provided by the Act. 

According to the Act, the term 

‘‘component’’ means a part or 

subassembly of a railroad freight car.26

The de minimis limitation suggested by 

Amsted Rail does not exclude parts or 

subassemblies from being included in 

the calculation. As such, part or 

subassembly of a finished car could be 

calculated in the 3%–5% of total 

material cost. In such a scenario, 

excluding the part or subassembly from 

the definition of ‘‘component’’ would be 

inconsistent with the express definition 

provided by the Act. Amsted Rail’s 

comment did not address whether it 

would be possible to avoid any such 

inconsistencies. 

A member of the public 27 commented 

that FRA should consult and coordinate 

with other relevant agencies and 

stakeholders to better refine and 

harmonize the proposed definitions for 

COC and SOE. The comment, however, 

does not express any concern with the 

proposed definitions, which are 

incorporated from the Act. FRA finds 

that the definitions are suitable for 

implementing the Act, and in this final 

rule, FRA adopts the definitions as 

proposed. 

4. The Scope of the IP Violation or 

Infringement Prohibition Being 

Incorporated Into the Freight Car Safety 

Standards Is Intended To Be the Same 

as That Delineated in the Act 

Wabtec Corporation and RSA 

commented on FRA’s proposal for 

enforcing the Act’s prohibition against 

railroad freight cars operating on the 

U.S. general railroad system of 

transportation if equipped with content 

originating from a COC or sourced from 

an SOE that has violated or infringed 

U.S. intellectual property (IP) rights.28

The commenters: (1) request that this 

final rule clarify that any railroad freight 

cars equipped with IP subject to a 

violation or infringement that is not 

from a COC or SOE do not trigger the 

Act’s IP violation or infringement 

prohibition; and (2) disagree with FRA’s 

proposal that the duration of the IP 

violation or infringement prohibition is 

always permanent. 

FRA agrees with the commenters that 

the IP violation or infringement 

prohibition applies only when the IP 

subject to the violation or infringement 

comes from a COC or SOE. The 

following example, provided in the 

NPRM, helps clarify this point. In 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).29 The ITC 

determined that the 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.30 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.31 FRA understands that 

section 20171(b)(1)(C) 32 would prohibit 

a railroad freight car from operating on 

the U.S. general railroad system of 

transportation if equipped with the steel 

wheels that were the subject of this case, 

only if they are from a COC or SOE. 

Therefore, a railroad freight car 

equipped with the steel wheels sourced 

from the either of the two U.S. 

companies (not SOEs) in this example, 

are not covered by the Act’s IP violation 

or infringement prohibition. 

As discussed in the NPRM, FRA 

understands the plain language of the 

Act to permit permanent prohibition, 

because it does not expressly limit the 

duration of the IP violation or 

infringement prohibition or connect it to 

any penalty provided in a determination 

by the ITC, or other court or agency of 

competent jurisdiction and legal 

authority.33 The commenters disagree, 

asserting that ‘‘to the extent that the IP 

rights that were the subject of the 

violation have since lost their protected 

status other than through violation of 

law (e.g., where such IP was protected 

by a patent that has expired or where a 

trade secret is no longer protected as 

such for example due to intentional 

disclosure), . . . the prohibition would 

no longer apply.’’ However, the scope of 

the application of the Act’s IP violation 

or infringement prohibition is not 

limited to a particular owner, operator, 

or IP (likely a component on the railroad 

freight car), it is tied to the railroad 

freight car. The Act provides that the 

entire railroad freight car ‘‘may only 

operate on the United States general 

railroad system of transportation if . . . 

none of the content of the railroad 

freight car . . .’’ satisfies the 

prohibition.34 When the prohibition is 


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35 Id. at (c)(3). 

36 49 CFR part 215. 

37 88 FR at 85577. 

38Trinity Industries and Wabtec Corporation. 

39Trinity Industries and Wabtec Corporation. 40Most newly built freight cars are considered 

cars of special construction under the freight car 

safety standards and manufacturers request FRA to 

inspect the cars prior to entering service. According 

to 49 CFR 231.118, cars of construction not covered 

by the 18 types of cars identified in the regulation, 

relative to handholds, sill steps, ladders, hand 

brakes and running boards may be considered as of 

special construction, but shall have, as nearly as 

possible, the same complement of handholds, sill 

steps, ladders, hand brakes, and running boards as 

are required for cars of the nearest approximate 

type. To help ensure the complement of safety 

appliances satisfy the requirements for the nearest 

approximate type, manufacturers request that FRA 

perform a sample car inspection after the cars are 

built, before they enter service. This seems to be a 

convenient time to certify that the cars comply with 

the Act. Manufactures commented that this would 

not be a convenient time to certify the cars are 

compliant but did not provide a clear explanation. 

41Trinity Industries, Greenbrier Companies, and 

Wabtec Corporation. 

42 49 CFR 215.407. 

43 88 FR at 85568. 

44This final rule adds §§ 215.409 through 215.421 

to incorporate the relevant provisions from 

appendix A and subpart B (hazmat) to 49 CFR part 

209 to expressly provide procedures to implement 

§ 215.407(a). Other portions of the RSEP are 

discussed in this section and will be used by FRA 

to determine when to initiate an enforcement action 

for a finding of noncompliance with the Act. 

Notably, any prohibition under § 215.407(b) 

requires assessment of three penalties under 

§ 215.407(a), and will therefore, benefit from the 

process provided for § 215.407(a). 

triggered, it applies to the entire railroad 

freight car that is so equipped, until it 

is brought into compliance (e.g. 

removing the component that is subject 

to an IP violation or infringement). As 

such, the IP violation or infringement 

prohibition would be permanent, if the 

railroad freight car is not brought into 

compliance. 

B. Comments About FRA’s Proposal 

Implementing the Infrastructure 

Investment and Jobs Act’s 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.35 This 

rulemaking incorporates the 

certification requirement into the 

FCSS 36 and establishes a process for 

FRA to access necessary information to 

determine compliance with the Act. 

1. The Act Requires Certain Information 

To Be Included in the Certification 

As proposed in the NPRM, this final 

rule requires manufacturers’ 

certifications to be submitted 

electronically to FRA’s Office of 

Railroad Safety.37 The certifications 

must 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 will 

be required to maintain records to 

support their compliance, and FRA 

must be able to access those records 

upon request. 

Two manufacturers,38 RSA, and RSI 

commented that FRA should impose a 

five-year limit to the recordkeeping 

requirement. FRA disagrees, because 

records may be needed to enforce the 

Act beyond a five-year period. The 

statute of limitations is five years for 

noncompliance with the Act, but as 

explained in section III. C. 4. ‘‘Five-Year 

Statute of Limitations Applies to the 

Act’’ below, the prohibition penalty may 

be initiated after more than three 

monetary penalty assessments under the 

Act. Each of the three penalties could 

take multiple years using the process 

provided in §§ 215.409 through 215.421, 

and the penalty assessments may occur 

years apart. As such, the enforcement 

process would likely extend well 

beyond five years, and FRA may need 

access to records beyond a five-year 

period to enforce the regulation. 

Wabtec Corporation, RSA, and RSI 

commented that FRA should provide a 

standard certification form for 

manufacturers to certify compliance. 

FRA disagrees and adopts the 

certification requirements as proposed 

in the NPRM. These requirements 

provide FRA the information needed to 

implement the certification 

requirements and allow manufacturers 

flexibility to determine how best to 

comply. The information required in 

§ 215.403 can be conveniently and 

adequately provided in different 

formats. If desired, the industry may 

expand upon the minimum certification 

requirements and create an industrywide certification form. 

2. The Act Requires Certification To Be 

Submitted Prior to Placing Freight Cars 

Into Service on the U.S. General Rail 

System 

Two manufacturers,39 RSA, and RSI 

informed FRA in their comments that it 

may not be convenient to certify 

compliance with the Act when they 

request FRA perform a sample car 

inspection. FRA understands that a 

sample car inspection is conducted 

when the sample railcar is fully built for 

inspection.40 As such, it should be a 

convenient time to certify compliance. 

However, FRA expects manufacturers 

will develop their own process to 

ensure they comply with the 

certification requirements, including 

timely submissions to FRA. 

C. Comments About FRA’s Process for 

Enforcing the Act’s Requirements and 

Penalties 

Some manufacturers,41 RSA, and RSI 

commented that FRA should revise the 

proposed rule 42 to clarify or add the 

following: (1) willful noncompliance 

should be required to establish a 

violation of the Act’s requirements; (2) 

FRA’s Chief Counsel should provide 

written notice of a probable violation, 

and an express process should be 

established for manufacturers facing 

prohibition through which 

manufacturers can defend their position 

and appeal a finding of noncompliance; 

(3) a process by which manufacturers 

can be reinstated after the prohibition is 

triggered; and (4) clarification of the 

five-year statute of limitations for 

enforcing identified violations. 

Generally, FRA expects violations of the 

Act to be rare; thus, FRA expects to 

address individual violations on a caseby-case basis. FRA agrees with the 

comments that an express process is 

warranted due to the severity of the 

potential penalties (the prohibition 

against offering cars for service in the 

U.S.) imposed by the Act. As discussed 

in the NPRM, FRA will use its Railroad 

Safety Enforcement Procedures (RSEP) 

(49 CFR part 209) to enforce the Act.43

This final rule incorporates the RSEP 

into the FCSS to clarify how the RSEP 

will apply.44

In addition, Association of American 

Railroads (AAR) expressed its 

understanding that FRA’s proposal to 

request documentation to determine 

whether a freight car is registered with 

the Umler system would be limited to 

information relevant to determining 

such registration. As discussed in the 

NPRM, FRA plans to request 

information to enforce the requirements 

of the Act. In doing so, FRA intends to 

request information relevant to 

determine compliance with the Act and 

treat any protected or sensitive 

information appropriately. 

1. The Act Does Not Require a Finding 

of Willfulness To Establish a Violation 

Wabtec Corporation and RSA 

commented that FRA should assess the 

Act’s prohibition penalty against freight 

car manufacturers only when there is 

willful noncompliance with the Act’s 

requirements. The commenters assert 

that the Act’s language, ‘‘[t]he Secretary 

of Transportation may [emphasis added] 

prohibit a railroad freight car 

manufacturer with respect to which the 


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45 49 CFR 209.409, 209.335(a); see also part 209, 

appendix A. 

46Part 209, appendix A (citing RSIA, Pub. L. 100– 

342, enacted June 22, 1988). 

47 Id. 

48Section 3(a) of the RSIA, Public Law 100–342. 

49Subpart D of 49 CFR part 209, implementing 

the suspension and disqualification provisions of 

RSIA. 

50 49 CFR 209.131. 

51SAFETEA–LU, Public Law 109–59, 119 Stat. 

1144 (as amended) (enacted as 49 U.S.C. 5124(a)). 

52See part 209, appendix A: ‘‘Although railroads 

are strictly liable for violations of the railroad safety 

laws and deemed to have knowledge of those laws, 

FRA’s penalty schedules contain, for each 

regulation, a separate amount earmarked as the 

initial assessment for willful violations. Where FRA 

seeks such an extraordinary penalty from a railroad, 

it will apply the definition of ‘willful’ set forth [in 

appendix A to part 209].’’ 

53 Greenbrier Companies, Trinity Industries, and 

Wabtec Corporation. 

54Appendix A to part 209. 

55 Id. 

56Appendix A refers to this step in the process 

as an ‘‘informal conference.’’ The stated purpose is 

for the respondent to state their case. 

57 Greenbrier Companies and Wabtec 

Corporation. 

58Section 20171(c) incorporated by this final rule 

into the regulation at 49 CFR 215.407(b). 

Secretary has assessed more than 3 

violations under subparagraph (A) from 

providing additional railroad freight 

cars for operation on the United States 

general railroad system of transportation 

. . . ,’’ gives FRA some discretion to 

determine when to impose penalties. 

While FRA agrees the statutory language 

provides FRA discretion, FRA’s RSEP 

provides the following criteria for FRA 

to use to determine which instances of 

noncompliance merit penalties: (1) the 

inherent seriousness of the condition or 

action; (2) the kind and degree of 

potential safety hazard the condition or 

action poses in light of the immediate 

factual situation; (3) any actual harm to 

persons or property already caused by 

the condition or action; (4) the offending 

person’s (i.e., railroad’s or individual’s) 

general level of current compliance as 

revealed by the inspection as a whole; 

(5) the person’s recent history of 

compliance with the relevant set of 

regulations, especially at the specific 

location or division of the railroad 

involved; (6) whether a remedy other 

than a civil penalty (ranging from a 

warning on up to an emergency order) 

is more appropriate under all of the 

facts; and (7) such other factors as the 

immediate circumstances make 

relevant. The criteria provided by the 

RSEP are appropriate for FRA to enforce 

the Act’s penalties tailored to the freight 

car manufacturer’s relevant compliance 

record and the facts surrounding its 

noncompliance and promote rail safety. 

The commenters do not specifically 

address the RSEP criteria, but generally 

seem concerned with the severity of the 

penalties and seem to recommend a 

willfulness standard to safeguard 

against any potential shortcomings. FRA 

agrees with commenters that the Act’s 

civil monetary penalties, potentially 

culminating in a prohibition on 

manufacturers from offering cars for 

service, are more severe than the typical 

civil penalties FRA assesses for 

violations of other Federal rail safety 

laws. 

The RSEP explains FRA applies a 

willfulness standard for penalty 

assessments only when it is statutorily 

mandated. For example, FRA applies a 

willfulness standard for civil penalties 

assessed against individuals,45 but does 

not require willfulness for suspensions 

or disqualifications of individuals. The 

willfulness standard for individual civil 

penalties described in the RSEP was 

statutorily mandated and created in 

response to an FRA proposal.46 FRA 

proposed the willful act requirement for 

individuals because it ‘‘believed then 

that it would be too harsh a system to 

collect fines from individuals on a strict 

liability basis, as the safety statutes 

permit FRA to do with respect to 

railroads.’’ 47

In contrast to the individual civil 

penalty provisions, the provisions in the 

Rail Safety Improvement Act of 1988 

(RSIA) authorizing suspension or 

disqualification of an individual whose 

violation of Federal rail safety laws has 

shown that individual to be unfit for 

safety-sensitive service, do not require a 

showing of willfulness.48 In the absence 

of a statutory requirement, FRA’s 

implementing regulations for 

disqualification actions did not require 

a violation to be willful.49

Criminal penalties are the only 

provisions identified by the RSEP, other 

than individual civil monetary 

penalties, that require willfulness for 

assessment.50 This willfulness 

requirement also arose under statute.51

Accordingly, it is not established FRA 

practice to interpret a willfulness 

requirement where the statute does not 

expressly require one. FRA has, 

however, broadly incorporated 

willfulness as a factor for determining 

the penalty amount when not statutorily 

required. FRA’s civil penalty schedules 

for regulated entities generally provide 

higher penalties for willful violations 

than non-willful violations. In other 

words, FRA uses willfulness to assess a 

higher monetary penalty rather than as 

a threshold requirement for a finding of 

a violation.52

For the forgoing reasons, FRA has 

found that willfulness is not required to 

support a violation of the Act’s 

requirements. Without any evidence 

that Congress intended to apply a 

willfulness standard for the Act’s 

requirements, per the RSEP, FRA will 

enforce the penalties using the same 

criteria as other civil monetary penalties 

assessed in FRA’s safety program. 

2. Process for Manufacturers To Defend 

Against and Appeal Findings of 

Noncompliance With the Act 

Three manufacturers,53 RSA, and RSI 

commented that FRA should revise the 

proposed rule to add a specific process 

for manufacturers to defend against and 

appeal FRA’s findings of 

noncompliance with the Act and a 

requirement for FRA’s Chief Counsel to 

provide written notice of a probable 

violation of the Act. The RSEP 54

explains that when a violation is 

committed, ‘‘penalties are assessed by 

issuance of a penalty demand letter that 

summarizes the claims, encloses the 

violation report with a copy of all 

evidence on which FRA is relying in 

making its initial charge, and explains 

that the railroad may pay in full or 

submit, orally or in writing, information 

concerning any defenses or mitigating 

factors.’’ Consistent with the RSEP, FRA 

expects to issue a penalty demand letter, 

as described in the RSEP, for any 

violation of the Act prior to assessing 

any civil penalties. 

The RSEP also provides a process for 

respondents to defend against a finding 

of noncompliance with the Act when 

FRA indicates its intent to enforce a 

civil penalty. Specifically, ‘‘[t]he 

railroad safety statutes, in conjunction 

with the Federal Claims Collection Act, 

authorize FRA to adjust or compromise 

the initial penalty claims based on a 

wide variety of mitigating factors.’’ 55

Once penalties have been proposed, the 

respondent is given a reasonable 

amount of time to investigate the 

charges and then make its case before 

FRA in an informal conference.56

3. Process for Railroad Freight Car 

Manufacturer To Be Reinstated After 

Being Prohibited Under the Act 

Two manufacturers and RSA 

commented that FRA should clarify the 

process for freight car manufacturers to 

provide cars for operation on the U.S. 

rail system after being prohibited from 

doing so due to noncompliance with the 

Act.57 According to the Act,58 the 

prohibition continues until FRA 

determines: (1) such manufacturer is in 

compliance with the Act; and (2) all 

civil penalties assessed to such 

manufacturer pursuant to this section 


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59 28 U.S.C. 2462 (‘‘Except as otherwise provided 

by Act of Congress, an action, suit or proceeding for 

the enforcement of any civil fine, penalty, or 

forfeiture, pecuniary or otherwise, shall not be 

entertained unless commenced within five years 

from the date when the claim first accrued if, 

within the same period, the offender or the property 

is found within the United States in order that 

proper service may be made thereon.’’). 

60 49 CFR 215.407(a). 

61 Id. 

62 88 FR at 85565. 

63 49 U.S.C. 20171(a)(1). 

64 Id. at (a)(2). 

65 Id. at (a)(3). 

66 Id. at (a)(4). 

67These 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. 

68These criteria are discussed in section 

20171(a)(4)(A)–(C). 

69Pub. L. 117–167, 136 Stat 1380, 15 CFR 

231.102. 

70 International Religious Freedom Act of 1998 

(H.R. 2431) and its amendment of 1999 (Public Law 

106–55) codified at 22 U.S.C. 73. 

71 49 U.S.C. 20171(a)(4)(A). 

have been paid in full. Remedial action 

may be considered mitigation during the 

civil penalty process, and evidence of 

completed remedial actions may help 

FRA determine compliance with the 

Act. FRA expects that during the course 

of any enforcement process, a 

manufacturer will submit evidence of 

appropriate corrective actions 

demonstrating that it has corrected the 

identified noncompliance and that it 

has come into full compliance with the 

Act and this regulation. Once FRA 

determines that a manufacturer has 

come into compliance and paid all 

relevant civil penalties, FRA will 

document that determination in writing. 

To help further clarify the 

reinstatement process, this final rule is 

updating the term ‘‘section’’ in section 

215.407(b)(1) to ‘‘subpart.’’ Section 

20171(c)(4) states that a freight car 

manufacturer can resume providing cars 

for operation on the U.S. freight railroad 

interchange system when ‘‘[s]uch 

manufacturer is in compliance with this 

section.’’ The phrase, ‘‘this section,’’ 

refers to 49 U.S.C. 20171, which 

contains the Act’s substantive 

requirements, including content 

limitations and certification. FRA’s 

proposal, as indicated throughout the 

NPRM, intended to incorporate the 

statutory requirements into the 

regulation for the convenience of the 

regulated community without changing 

the substance. The proposed rule text 

incorporated the phrase, ‘‘this section,’’ 

from the Act into section 215.407(b)(1) 

without updating the reference to match 

the existing regulatory formatting and 

language. Within the existing regulatory 

formatting, the proper reference is to the 

‘‘subpart,’’ referring to Subpart E— 

Manufacturing, which contains the 

same substantive requirements 

contained in 49 U.S.C. 20171. As such, 

FRA is changing the phrase ‘‘this 

section’’ to ‘‘this subpart’’ in the final 

rule’s section 215.407(b)(1). 

4. Five-Year Statute of Limitations 

Applies to the Act 

RSA and Wabtec Corporation 

commented that FRA should clarify 

how the statute of limitations will apply 

to findings of noncompliance with the 

Act. The statute of limitations is 

generally five years for penalties 

enforced by FRA, including civil 

monetary penalties and prohibitions 

(such as forfeiture of the right to provide 

freight cars for operation on the U.S. rail 

system).59 As such, enforcement must 

commence within five years from the 

date when the claim first accrued. When 

FRA enforces civil monetary penalties 

for noncompliance with the Act,60 the 

date the claim first accrues is the date 

that the noncompliance occurred. When 

FRA enforces prohibitions for 

noncompliance with the Act,61 the date 

the claim first accrues is the date that 

more than three civil monetary penalties 

are assessed. 

III. Section-by-Section Analysis 

This section-by-section analysis is 

intended to explain the rationale for 

each revised or new provision FRA is 

incorporating into the FCSS. The 

regulatory changes are organized by 

section number. 

Section 215.5 Definitions 

As proposed in the NPRM, FRA is 

incorporating several new defined terms 

into the FCSS, most pulled directly from 

the Act and some added, as necessary, 

to effectively implement the Act. FRA is 

also organizing the existing FCSS 

definitions along with the new 

definitions in alphabetical order to 

conform with FRA’s other regulations. 

No changes are being made to the 

existing FCSS definitions. As also 

explained in the NPRM, the Act’s 

definition for the term ‘‘railroad freight 

car’’ mirrors the definition for the same 

term in the current FCSS and 

accordingly, in this final rule, FRA is 

adopting that definition as proposed. 

The rule text for this section is 

unchanged from the NPRM. See the 

NPRM for more detailed section-bysection analysis.62 For discussion of 

comments received about the definition 

for the terms ‘‘country of concern,’’ 

‘‘sensitive technology,’’ and ‘‘stateowned enterprise’’ in this section, see 

section II. A. 3. of this final rule. 

Although FRA is adopting each 

definition as proposed in the NPRM, 

FRA is reiterating the discussion of each 

definition below for the convenience of 

the reader. 

Component is defined by the Act,63

and FRA is adopting it in the FCSS. 

Although the 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 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). 

Control is defined by the Act,64 and 

FRA is adopting 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,65 and FRA is adopting it in 

the FCSS. 

Country of concern is defined by the 

Act 66 and FRA is adopting it in the 

FCSS.67 As noted in the Infrastructure 

Investment and Jobs Act Background 

section in the NPRM, 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.68 This term is 

separate and distinct from the terms 

‘‘foreign country of concern’’ used in the 

CHIPS Act and implementing 

regulations to identify a country that is 

‘‘detrimental to the national security or 

foreign policy of the United States’’ 69 or 

‘‘country of particular concern’’ used in 

religious freedom designations made by 

the U.S. Department of State.70

First, to qualify as a ‘‘country of 

concern’’ under section 20171, the 

United States Department of Commerce 

(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).71 In 2021, when the Act 

became law, the U.S. DOC had named 


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72 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). 

73 19 U.S.C. 2242(g)(3). 

74 49 U.S.C. 20171(a)(4)(B), 19 U.S.C. 2242. 

75Office of the U.S. Trade Rep., 2024 Special 301 

Report, 5 (2024), (2024 Special 301 Report.pdf 

(ustr.gov)). 

76 49 U.S.C. 20171(a)(4)(C), 19 U.S.C. 2416. See 

Office of the U.S. Trade Rep., 2024 Special 301 

Report, 44 (2024), https://ustr.gov/issue-areas/ 

intellectual-property/special-301/2023-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). 

77 49 U.S.C. 20171(a)(5). 

78Uniform 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. 

79 49 U.S.C. 20171(a)(6). 

80See 31 CFR 800.208 for examples of control. 

81 Id. at (a)(7). 

82See 31 CFR 800.208 for examples of control. 

83 Id. at (a)(9). 

84 Id. at (a)(10). 

85 Id. at (a)(11). 

86https://www.trade.gov/rules-origin-substantialtransformation. 

87 49 U.S.C. 20171(a)(12). 

88 88 FR at 85565. 

eleven countries as nonmarket economy 

countries: Republic of Armenia, 

Republic of Azerbaijan, Republic of 

Belarus, People’s Republic of China, 

Georgia, Kyrgyz Republic, Republic of 

Moldova, Republic of Tajikistan, 

Turkmenistan, Republic of Uzbekistan, 

and Socialist Republic of Vietnam 72

Accordingly, the countries that meet 

this first prong of the definition will not 

change. 

Second, to constitute a ‘‘country of 

concern,’’ the U.S. Trade Representative 

(USTR) must also name that country on 

the priority watch list 73 in the most 

recent report required by the Trade Act 

of 1974.74 In the most recently required 

report, the USTR identified seven 

countries on the priority watch list: 

Argentine Republic, Republic of Chile, 

People’s Republic of China, Republic of 

India, Republic of Indonesia, Russian 

Federation, and Bolivarian Republic of 

Venezuela.75

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 1974.76

Currently, the People’s Republic of 

China is the only country subject to 

monitoring pursuant to section 306. 

Accordingly, the People’s Republic of 

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 based 

on its definition in the USMCA or any 

subsequent free trade agreement 

between the United States, Mexico, and 

Canada,77 and FRA is adopting that 

definition in the FCSS. Currently, 

chapter 4 of the USMCA defines net 

cost.78

Qualified facility is defined by the 

Act,79 and FRA is adopting 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 an 

SOE.80

Qualified manufacturer is defined by 

the Act,81 and FRA is adopting 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 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 

an SOE.82

Sensitive technology is defined by the 

Act,83 and FRA is adopting 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 means— 

(a) 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 

(b) an individual acting under the 

direction or influence of a government 

or agency described in paragraph (a) of 

this definition.84

This definition is provided by the Act 

and FRA is adopting it in the FCSS. 

Substantially transformed is defined 

by the Act,85 and FRA is adopting 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.’’ 86 FRA 

finds that the definition of substantially 

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,87 and 

FRA is adopting it in the FCSS. 

Section 215.401 Requirements for 

Railroad Freight Cars Placed Into 

Service in the United States 

This section incorporates the 

requirements of 49 U.S.C. 20171(b)(1) 

into the FCSS. Section 20171(b)(1) 

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. These concepts are 

discussed further below. 

Paragraph (a)(1) of 49 CFR 215.401 

mirrors paragraph (b)(1)(A) of section 

20171 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. The 

rule text for this section is unchanged 

from the NPRM. See the NPRM for more 

detailed section-by-section analysis.88

For discussion of comments received 

about this section, see section II. A. of 

this final rule. 


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89 19 CFR 210.42(a)(1)(i). 

90 Id. at (h)(2). 

91https://usitc.gov/intellectual_property/337_

determinations.htm. 

92The definition of ‘‘net cost’’ is provided in 

section 215.5 of this rule. For a discussion of ‘‘net 

cost,’’ see the section-by-section analysis above. 

93 88 FR at 85565. 

94 88 FR at 85565. 

Sensitive Technology Prohibition 

As proposed in the NPRM and 

adopted in this final rule, paragraph 

(a)(2) of 49 CFR 215.401 mirrors 

paragraph (b)(1)(B) of section 20171 and 

addresses sensitive technology. This 

paragraph incorporates 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 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. 

Intellectual Property Infringement 

Prohibition 

As proposed in the NPRM and 

adopted in this final rule, paragraph 

(a)(3) of 49 CFR 215.401 mirrors 

paragraph (b)(1)(C) of section 20171 and 

addresses IP violation and infringement. 

This language forbids the inclusion in 

any railroad freight car of any content 

from a COC or 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 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.89

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.90

These determinations are available on 

the ITC’s website.91 FRA does not 

anticipate tracking determinations on an 

ongoing basis; manufacturers seeking 

certification are responsible for 

researching determinations against their 

own suppliers. 

Content Limitations 

As proposed in the NPRM and 

adopted in this final rule, 49 CFR 

215.401(b) mirrors section 20171(b)(2) 

and addresses content limitations from 

COCs and SOEs generally. Consistent 

with the Act, beginning 1 year after this 

regulation is issued, § 215.401(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, paragraph (b)(1)(ii) 

reduces that threshold to no more than 

15 percent. Cars not meeting these 

thresholds are noncompliant, and the 

manufacturer is subject to civil 

monetary penalties under § 215.407. 

Consistent with the Act, the percent of 

content is measured by the net cost of 

materials (excluding the cost of 

sensitive technology).92 Paragraph (b)(2) 

of § 215.401 mirrors paragraph (b)(2)(B) 

of section 20171 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 section incorporates the 

requirements of paragraph (c) of section 

20171 and includes requirements 

designed to help FRA monitor and 

enforce the Act’s standards. The rule 

text for this section is unchanged from 

the NPRM. See the NPRM for more 

detailed section-by-section analysis.93

For discussion of comments received 

about this section, see section II. B. of 

this final rule. 

Consistent with paragraph (c)(2) of 

section 20171, § 215.403(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. 

As proposed in the NPRM and 

adopted in this final rule, 

§ 215.403(a)(1) requires 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) requires the report to 

include a statement certifying 

compliance, the manufacturer’s name 

and address, 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) requires 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 incorporates the 

requirements in 49 U.S.C. 20171(c)(3)(B) 

into the FCSS. No substantive 

comments were received about this 

section, and the rule text for this section 

is unchanged from the NPRM. See the 

NPRM for more detailed section-bysection analysis.94 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, 


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95 49 CFR part 209. 

96See subpart B and appendix A to 49 CFR part 

209. 

97 Id. 

98 Id. 

99 Id. 

100 Id. 

101 Id. 

102 Id. 

103 88 FR 21879 (April 6, 2023) located at https:// 

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

2023-07760/modernizing-regulatory-review. 

104All costs are expressed in 2022 base year 

dollars. 

or 20 percent or 15 percent of its 

components, sourced from an SOE and 

operating on the U.S. general railroad 

system of transportation), FRA may 

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 

§ 215.405. 

Section 215.407 Civil Penalties 

This section incorporates the 

requirements of 49 U.S.C. 20171(c)(4) 

into the FCSS. The Act specifies civil 

monetary penalty amounts for violations 

of its substantive requirements and 

specifies that the unit of violation is the 

freight car. As discussed in the NPRM, 

FRA anticipates utilizing the RSEP to 

enforce civil monetary penalties for 

noncompliance with the Act in a 

manner consistent with other civil 

monetary penalties enforced by FRA.95

To help clarify the process, this final 

rule provides specific procedures in 

§§ 215.409 through 215.421 to enforce 

these civil monetary penalties. For 

discussion of comments received about 

this section, see section II. B. of this 

final rule. 

Section 215.409 Demand Letter 

Like the demand letter used in FRA’s 

RSEP, § 215.409 establishes the demand 

letter requirements for the FCSS.96 The 

demand letter serves to initiate the 

enforcement process by providing 

certain essential information to the 

manufacturer subject to the enforcement 

action. 

Section 215.411 Reply 

This section incorporates the Reply 

step from FRA’s RSEP into the FCSS.97

The reply provides the respondent with 

an opportunity to respond to the 

information provided in the demand 

letter described in § 215.409. 

Section 215.413 Payment of Penalty; 

Compromise 

This section incorporates payment 

and compromise procedures from FRA’s 

RSEP into the FCSS.98 This section 

provides the respondent with an 

opportunity to pay or negotiate 

penalties per § 215.407. 

Section 215.415 Informal Response 

and Assessment 

This section incorporates the informal 

response process from FRA’s RSEP into 

the FCSS.99 This section identifies the 

information needed for the respondent 

to informally reply to FRA’s 

enforcement action. After consideration 

of an informal response, including any 

relevant information presented at a 

conference, FRA’s Office of the Chief 

Counsel may dismiss the enforcement 

action in whole or in part. If the Office 

of the Chief Counsel does not dismiss 

the action in whole, the Office of the 

Chief Counsel may enter into a 

settlement agreement with the 

respondent or enter an order assessing 

a civil monetary penalty. 

Section 215.417 Request for Hearing 

This section incorporates the process 

to request a hearing from FRA’s RSEP 

into the FCSS.100 Specifically, this 

section provides the respondent an 

opportunity for a hearing. To use this 

option, the respondent must submit a 

written request to FRA’s Office of the 

Chief Counsel and include the pertinent 

information identified in this section to 

allow the case to be assigned to the 

presiding officer. 

Section 215.419 Hearing 

This section incorporates the hearing 

process from FRA’s RSEP into the 

FCSS.101 This section generally 

describes how a hearing requested 

under § 215.417 will be conducted, and 

the roles of the presiding officer, FRA’s 

Office of the Chief Counsel, and the 

respondent during the hearing. 

Section 215.421 Presiding Officer’s 

Decision 

This section incorporates the language 

regarding the presiding officer’s 

decision from FRA’s RSEP into the 

FCSS.102 Specifically, this section 

provides the decision options for the 

presiding officer. After consideration of 

the evidence of record, the presiding 

officer may dismiss the enforcement 

action in whole or in part. If the 

presiding officer does not dismiss the 

enforcement action in whole, the 

presiding officer will issue, and serve on 

the respondent, an order assessing a 

civil monetary penalty. The presiding 

officer’s decision will include a 

statement of findings and conclusions, 

as well as the reasons therefor, on all 

material issues of fact, law, and 

discretion. 

IV. Regulatory Impact and Notices 

A. Executive Order 12866 as Amended 

by Executive Order 14094 

This rule is a non-significant 

regulatory action within the meaning of 

Executive Order (E.O.) 12866 

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

amended by E.O. 14094, Modernizing 

Regulatory Review,103 and DOT Order 

2100.6A (‘‘Rulemaking and Guidance 

Procedures’’). This 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 

regulation authorizes 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 rule over a 10-year 

period, considering discount rates of 2 

percent, 3 percent, and 7 percent.104

Summary of Public Comments Related 

to the Economic Analysis Presented in 

the NPRM 

FRA received public comments 

related to the following points regarding 

the economic analysis presented in the 

NPRM. 

(1) General Support for Economic and 

Security Impacts 

A commenter commented on the 

rule’s broader benefits, emphasizing its 

importance for national security, 

economic interests, and the reliability of 

the freight car industry, though without 

specific economic analysis points. 

(2) Cost Benefit Agreement and Industry 

Implications 

Trinity Industries, RSA, The 

Greenbrier Companies, and RSI 

supported the economic analysis, 

agreeing that the anticipated industry 

costs are modest. They highlighted that 

compliance obligations are an 

incremental addition, primarily aligning 

with the USMCA requirements. RSA 

noted this incremental compliance 

approach would have minimal 

additional impact. 


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105Most newly built freight cars are considered 

cars of special construction under the freight car 

safety standards and manufacturers request FRA to 

inspect the cars prior to entering service. According 

to 49 CFR 231.118, cars of construction not covered 

by the 18 types of cars identified in the regulation, 

relative to handholds, sill steps, ladders, hand 

brakes and running boards may be considered as of 

special construction, but shall have, as nearly as 

possible, the same complement of handholds, sill 

steps, ladders, hand brakes, and running boards as 

are required for cars of the nearest approximate 

Continued 

(3) Railroad Burden Concerns 

AAR expressed concerns about the 

burden on railroads, noting that 

railroads lack the means to 

independently verify manufacturer 

certifications through inspection and 

suggesting that the rule should not 

impose additional burdens on railroads. 

AAR also commented agreeing with the 

proposed rule’s conclusion that the 

Act’s sensitive technology prohibition 

applies only at the time of initial 

manufacture and do not extend to 

aftermarket parts. 

Integration of Updated Analytical 

Standards in Final Rule 

In preparing the final economic 

analysis for the rule to be issued prior 

to January 2025, FRA has taken steps to 

align its methodology with the guidance 

provided in the updated Circular A–4, 

issued by the Office of Management and 

Budget (OMB) on November 9, 2023. 

While the new Circular A–4’s 

requirements formally apply to 

proposed rules submitted to OMB’s 

Office of Information and Regulatory 

Affairs after February 29, 2024, and final 

rules submitted after December 31, 

2024, FRA recognizes the value of 

incorporating its principles to enhance 

the quality and transparency of our 

analysis. 

Discount Rates 

Consistent with the new Circular A– 

4 guidance, FRA has used discount rates 

of 2 percent, 3 percent, and 7 percent for 

present value calculations in this 

analysis. These rates were selected to 

ensure our economic evaluation is 

consistent with current best practices 

and standards, improving the 

comparability and reliability of the 

findings. 

In conclusion, while FRA’s proposed 

rule was issued in December 2023 and 

not required to adhere to the new 

Circular A–4 guidelines, FRA has 

integrated its principles into the final 

economic analysis to enhance the 

quality, transparency, and 

comprehensiveness of the assessment. 

This approach not only aligns with 

emerging standards but also ensures a 

robust evaluation of the rule’s impacts. 

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 rule does 

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. This rule only impacts 

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 input from FRA subject 

matter experts in the Office of Motive 

Power and Equipment, this analysis 

estimates that the rule impacts six 

freight car manufacturers with 

manufacturing facilities within North 

America. This rule does not 

significantly impact any other entity. 

Over a 10-year period, this analysis 

estimates the impact of issuing this rule 

on the 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 a SOE; (3) 

compliance costs; and (4) government 

administrative costs associated with 

enforcing this rule. Additionally, this 

analysis provides a summary of the 

regulatory impact. 

(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 will be required three 

years after this rule’s implementation 

date. Also, absent FRA issuing this 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 rule. Lastly, this 

analysis does not anticipate any 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 the content limitation, 

issuing this rule does not result in any 

costs or benefits. 

(2) Prohibit the Use of Sensitive 

Technology From COCs or SOEs 

FRA understands the prohibition on 

the use of sensitive technology that 

originates from a COC or a 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 a 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 rule. Also, absent FRA issuing this 

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 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 a SOE for freight cars entering 

service in the U.S. general railroad 

system of transportation would not 

result in any costs. 

However, issuing this provision 

(prohibiting the use of sensitive 

technology from COCs or SOEs) may 

provide benefits. That is, issuing this 

rule mitigates 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. 

(3) Compliance Costs 

Issuing this rule creates a few 

compliance burdens for freight car 

manufacturers including affirming 

compliance with this 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 must 

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 they 

intend to manufacture for operation on 

the U.S. general railroad system.105 FRA 


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type. To help ensure the complement of safety 

appliances satisfy the requirements for the nearest 

approximate type, manufacturers request that FRA 

perform a sample car inspection after the cars are 

built, before they enter service. 106A freight car manufacturer may also certify 

compliance with the 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. 

107U.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. 

108 Industry burden for affirming compliance, 

annual = Number of freight car orders 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. 

109Freight 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. 

anticipates manufacturers may affirm 

compliance with the Act by certifying at 

the time of their safety appliance 

drawing review and/or sample car 

inspection.106

Based on input from FRA subject 

matter experts and previous 

submissions for safety appliance 

reviews and sample car inspection 

requests, this analysis estimates that 

each year manufacturers introduce 

approximately 35 freight car orders. An 

order can be of any type of car and of 

any quantity (as little as one car or 

thousands of cars on the order) and FRA 

expects one certification for each freight 

car order. FRA expects the number of 

annual freight car orders to remain 

constant over the period of analysis. 

Based on FRA subject matter expert 

input, this analysis assumes that an 

administrative professional in the 

freight car manufacturer’s contract office 

will draft the document affirming 

compliance with the Act (1 hour), and 

a vice-president of engineering would 

review and sign the letter (15 

minutes).107 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 estimated to be $3,438.108 Over the 

10-year period of analysis, the industry 

burden is approximately, $34,400 

(undiscounted), $30,800 (PV, 2%), 

$29,200 (PV, 3%), and $23,600 (PV, 

7%). 

Cost for Railroads 

There is no anticipated burden on 

railroads as a result of this rulemaking. 

Periodic Audit of Freight Car 

Manufacturers 

As part of FRA’s enforcement of this 

rule, FRA expects to randomly audit 

freight car manufacturers to ensure 

compliance with the Act. Based on 

input from FRA subject matter experts, 

FRA will likely randomly audit onethird 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 will consist of FRA 

selecting one freight car order from the 

manufacturer’s product line and have 

the freight car manufacturer provide 

evidence of compliance. FRA will 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 

compliant with the rule, FRA will take 

no further action. Based on FRA subject 

matter expert input, FRA anticipates 

that the results of FRA’s random audits 

will be that all freight car manufacturers 

are compliant with the rule. 

Based on input from FRA subject 

matter experts, this analysis estimates 

that it will take four hours for a freight 

car manufacturer to retrieve existing 

information that shows compliance with 

this rule and provide it to an FRA 

inspector. This analysis placed a 

relatively low hourly burden for the 

periodic audit because this rule requires 

freight railroads to maintain records that 

show compliance. Thus, other than 

retrieving records that should already 

exist, freight car manufacturers will 

have no additional burden. With an 

estimated two audits per year, the audit 

burden for all freight car manufacturers 

is 8 hours or $566.109 Over the 10-year 

period of analysis, the burden of 

periodic audits of freight car 

manufacturers is approximately $5,700 

(undiscounted), $5,100 (PV, 2%), $4,800 

(PV, 3%), and $3,900 (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 $40,100 

(undiscounted), $35,900 (PV, 2%), 

$34,000 (PV, 3%), and $27,500 (PV, 7%) 

with annualized costs of $4,000 (PV, 

2%), $4,000 (PV, 3%), and $4,000 (PV, 

7%). The annualized discount rates are 

the same because the timing of cash 

flows are identical. 

TABLE 2—FREIGHT CAR INDUSTRY, TOTAL COSTS, 2022 DOLLARS, ROUND ($100) 

Type of cost 

Cost Annualized 

Undiscounted PV 2% PV 3% PV 2% PV 3% 

Compliance certification ....................................................... 34,400 30,800 29,200 3,400 3,400 

Periodic audit ....................................................................... 5,700 5,100 4,800 600 600 

Total .............................................................................. 40,100 35,900 34,000 4,000 4,000 

FRA is issuing this regulation as 

required by the Act. In this economic 

analysis, FRA qualitatively explains the 

potential benefits that are expected to 

result from implementing the rule. 

(1) Governmental Administrative Costs 

Issuing this rule creates 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 the total manufacture 

industry will introduce approximately 

35 freight car orders and certify to FRA 


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110FRA 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/. 111FRA burden for affirming compliance, annual 

= Number of freight car orders introduced (35) * 

[time to review affirmation (0.5 hour) * FRA 

headquarters employee compensation rate 

($125.79)] = $2,201. 

112FRA 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/. 

113FRA 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)] = 

$8,651. 

114Prepare 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. 

that its 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 manufacturers is 

$2,201.110 111 Over the 10-year period of 

analysis, the total burden is 

approximately $22,000 (undiscounted), 

$19,700 (PV, 2%), $18,700 (PV), 3%), 

and $15,100 (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 will 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 

rule, FRA expects it would send both an 

FRA field inspector and an FRA 

headquarters employee to conduct an 

audit. Beginning in the sixth year, FRA 

expects that only FRA field inspectors 

will 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 an audit, 4 hours 

to conduct an audit, and 12 hours of 

travel time) and 12 hours for FRA field 

staff (4 hours to prepare for an audit, 4 

hours to conduct an 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 audits is $8,651.112 113 Over the 10- 

year period of analysis, FRA’s burden 

for conducting periodic audits is 

$51,300 (undiscounted), $47,600 (PV, 

2%), $45,800 (PV, 3%), and $39,500 

(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 

summarizes 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, FRA expects that it will 

take staff approximately 24 hours to 

prepare and submit an annual report 

with an associated cost of $3,019.114

Over the 10-year period of analysis, the 

costs of preparing and submitting 

annual reports to Congress is $30,200 

(undiscounted), $27,100 (PV, 2%), 

$25,600 (PV), 3%), and $20,700 (PV, 

7%). 

Total FRA Burden 

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

period of analysis, FRA’s enforcement 

burden is approximately $103,500 

(undiscounted), $94,4000 (PV, 2%), 

$90,100 (PV, 3%), and $75,300 (PV, 

7%). 

TABLE 3—FRA ENFORCEMENT BURDEN FROM ISSUING THE RULE, TOTAL COST, 2022 DOLLARS, ROUND ($100) 

Type of cost 

Cost Annualized 

Undiscounted PV 2% PV 3% PV 2% PV 3% 

Review affirmations .............................................................. 22,000 19,700 18,700 2,200 2,200 

Periodic audit ....................................................................... 51,300 47,600 45,800 5,300 5,400 

Annual report to Congress ................................................... 30,200 27,100 25,600 3,000 3,000 

Total cost ...................................................................... 103,500 94,400 90,100 10,500 10,600 

(2) Summary of Regulatory Impact 

This section provides a summary of 

total costs and total benefits that is 

expected to come from issuing this 

rulemaking. 

(a) Summary of Total Benefits 

FRA expects the benefits that will 

come from implementing this rule 

include addressing concerns related to 

compromised national security and 

potential corporate espionage. 

Based on conversations with RSA and 

FRA subject matter experts, all six 

freight car manufacturers currently 

comply with the 15 percent content 

limitation, which will be required three 

years after this rule’s implementation 

date. Also, absent FRA issuing this 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 rule. Also, this analysis 

does not anticipate any 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 the content limitation, 

issuing this rule does not result in any 

benefits. 

Related to sensitive technology, 

currently no domestic manufacturer 

sources sensitive technology from a 

COC or from a SOE. Moreover, FRA 

estimates that absent this rule no 

domestic manufacturer would have 

plans to source sensitive technology 

from a COC or from a SOE. Therefore, 

the portion of this rule that will prohibit 

sourcing sensitive technology that 

originates from a COC or from a SOE 

does not result in any benefit. 

(b) Summary of Total Costs 

As shown in Table 4, FRA expects 

that the total cost from issuing the rule 

including the impact on industry and 

FRA is approximately $143,600 

(undiscounted), $130,300 (PV, 2%), 


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115FRA will be using the OMB control number 

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

previous NPRM was issued in 1979 for this 

information collection. 

116 44 U.S.C. 3501 et seq. 

117The 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 § 215.5(d)(6), which is derived from the Surface 

Transportation Board’s Full Year Wage 2021, group 

200 Professional and Administrative. 

118Totals may not add due to rounding. 

$124,100 (PV, 3%), and $102,800 (PV, 

7%). 

TABLE 4—INDUSTRY COMPLIANCE BURDEN AND FRA’S ENFORCEMENT BURDEN, TOTAL COST, 2022 DOLLARS, ROUND

($100) 

Entity 

Cost Annualized 

Undiscounted PV 2% PV 3% PV 2% PV 3% 

Industry ................................................................................ 40,100 35,900 34,000 4,000 4,000 

FRA ...................................................................................... 103,500 94,900 90,100 10,500 10,600 

Total cost ...................................................................... 143,600 130,300 124,100 14,500 14,600 

B. Regulatory Flexibility Act and 

Executive Order 13272 

FRA received no comments on the 

Initial Regulatory Flexibility Analysis 

(IRFA) published in the proposed rule, 

and the Small Business 

Administration’s Chief Counsel for 

Advocacy did not submit any 

comments. As a result, FRA’s analysis 

and conclusions regarding the potential 

impact of this rule on small entities, as 

presented in the IRFA, remain 

unchanged. 

Certification 

FRA hereby certifies that this final 

rule will not have a significant 

economic impact on a substantial 

number of small entities. 

Basis for Certification 

The IRFA concluded that the rule 

would not have a significant economic 

impact on a substantial number of small 

entities. No public comments were 

received, and the Small Business 

Administration’s Chief Counsel for 

Advocacy did not submit any 

comments. Therefore, FRA is not 

required to prepare a final regulatory 

flexibility analysis. 

C. Paperwork Reduction Act 

The information collection 

requirements in this rule are being 

submitted for approval to OMB115

under the Paperwork Reduction Act of 

1995.116 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 

Total annual 

burden hours 

Total cost 

equivalent in 

U.S. dollars 

(A) (B) (C) = (A * B) (D) = (C * wage rates) 117

215.5(d)(6)—Dedicated 

Service—Notification to 

FRA.

784 railroads ....... 4 notifications ...... 1 hour .................. 4.00 hours ........... $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 hours ........... 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 hours ................ 1.98 hours ........... 126.09 

Total 118 ........................ 784 railroads + 6 

manufacturers.

39.33 notifications N/A ...................... 49.73 hours ......... 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 

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. 


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119 64 FR 43255 (Aug. 10, 1999). 

120 40 CFR 1508.4. 

121 23 CFR 771.116(b). 

122See 16 U.S.C. 470. 

123See Department of Transportation Act of 1966, 

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

303. 

124E.O. 14096 ‘‘Revitalizing Our Nation’s 

Commitment to Environmental Justice,’’ issued on 

April 26, 2023, supplements E.O. 12898, but is not 

currently referenced in DOT Order 5610.2C. 

125Public Law 104–4, 2 U.S.C. 1531. 

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 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,119 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 E.O. 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 E.O. 

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 rule in 

accordance with the principles and 

criteria contained in E.O. 13132. FRA 

has determined that this rule has no 

federalism implications, other than the 

possible preemption of State laws under 

49 U.S.C. 20106. In addition, this rule 

is required by statute. 49 U.S.C. 

20171(c)(1). Therefore, the consultation 

and funding requirements of E.O. 13132 

do not apply, and preparation of a 

federalism summary impact statement 

for the 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 rule implements a 

statutory mandate to fulfill legitimate 

domestic objectives, as directed by 

Congress. 

F. Environmental Impact 

FRA has evaluated this 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.120

Specifically, FRA has determined that 

this 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.’’ 

This rulemaking will 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.121 FRA has concluded that no 

such unusual circumstances exist with 

respect to this 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.122

FRA has also determined that this 

rulemaking does not approve a project 

resulting in a use of a resource protected 

by section 4(f).123

G. Environmental Justice 

Executive Order 12898, ‘‘Federal 

Actions to Address Environmental 

Justice in Minority Populations and 

Low-Income Populations’’ requires 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 E.O. 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 

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.124 FRA has evaluated this 

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 1995,125 each 

Federal agency ‘‘shall, unless otherwise 

prohibited by law, assess the effects of 

Federal regulatory actions on State, 


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126 66 FR 28355 (May 22, 2001). 

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 Unfunded 

Mandates Reform Act of 1995 (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 final 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.’’ 126 FRA evaluated this 

rule under E.O. 13211 and determined 

that this regulatory action is not a 

‘‘significant energy action’’ within the 

meaning of E.O. 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. 

List of Subjects in 49 CFR Part 215 

Freight cars, Infrastructure Investment 

and Jobs Act, Railroad safety, Reporting 

and recordkeeping requirements. 

The Final Rule 

For the reasons discussed in the 

preamble, FRA amends 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. 20102–03, 20107, 

20171; 28 U.S.C. 2461; and 49 CFR 1.89. 

■ 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 

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 any car 

designed to carry freight or railroad 

personnel by rail, including— 

(1) A box car; 


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(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. 

215.409 Demand letter. 

215.411 Reply. 

215.413 Payment of penalty; compromise. 

215.415 Informal response and assessment. 

215.417 Request for hearing. 

215.419 Hearing. 

215.421 Presiding officer’s decision. 

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 December 19, 

2025 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 

December 19, 2025, 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 December 19, 2028, 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 stateowned 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 

Federal Railroad Administrator that any 

railroad freight cars to be so provided 

comply with 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 49 U.S.C. 20171. 

Such certification shall be submitted via 

electronic mail by an authorized 

representative of the manufacturer to 

FRARRSMPE@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 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. 


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103694 Federal Register / Vol. 89, No. 244 / Thursday, December 19, 2024 / Rules and Regulations 

(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 three 

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 subpart; and 

(2) All civil penalties assessed to such 

manufacturer pursuant to this section 

have been paid in full. 

§ 215.409 Demand letter. 

(a) FRA, through the Office of the 

Chief Counsel, begins a civil penalty 

proceeding under § 215.407(a) by 

serving a demand letter on a railroad 

freight car manufacturer, charging the 

railroad freight car manufacturer with 

having violated one or more provisions 

of this subpart. 

(b) A demand letter issued under this 

section includes: 

(1) A statement of the provision(s) 

which the respondent is believed to 

have violated; 

(2) A statement of the factual 

allegations upon which the proposed 

civil monetary penalty is being sought; 

(3) Notice of the maximum amount of 

civil monetary penalty for which the 

respondent may be liable; 

(4) Notice of the amount of the civil 

monetary penalty proposed; 

(5) A description of the manner in 

which the respondent should make 

payment of any money to the United 

States; 

(6) A statement of the respondent’s 

right to present written explanations, 

information, or any materials in answer 

to the charges or in mitigation of the 

penalty; and 

(7) A statement of the respondent’s 

right to request a hearing and the 

procedures for requesting a hearing. 

(c) FRA may amend the demand letter 

at any time prior to completion of a 

fully executed settlement agreement or 

the entry of an order to pay a civil 

monetary penalty. If the amendment 

contains any new material allegation of 

fact, the respondent is given an 

opportunity to respond. In an amended 

demand letter, FRA may change the 

civil monetary penalty amount initially 

proposed, up to the maximum penalty 

amount for each violation. 

§ 215.411 Reply. 

(a) Within sixty (60) days of the 

service of a demand letter issued under 

§ 215.409, the respondent may— 

(1) Pay as provided in § 209.413(a) 

and thereby close the case; 

(2) Make an informal response as 

provided in § 215.415; or 

(3) Request a hearing as provided in 

§ 215.417. 

(b) The Office of the Chief Counsel 

may extend the sixty (60) day period for 

good cause shown. 

(c) Failure of the respondent to reply 

by taking one of the three actions 

described in paragraph (a) of this 

section, within the period provided, 

constitutes a waiver of the right to 

appear and contest the allegations, and 

authorizes the Office of the Chief 

Counsel, without further notice to the 

respondent, to find the facts to be as 

alleged in the demand letter and to 

assess an appropriate civil penalty. 

§ 215.413 Payment of penalty; 

compromise. 

(a) Payment of a civil monetary 

penalty may be made by credit card, 

certified check, money order, or wire 

transfer. Payment by credit card must be 

made via the internet at https://

www.pay.gov/paygov/. Instructions for 

online payment are found on the 

website. Payments made by certified 

check or money order should be made 

payable to the Federal Railroad 

Administration and sent to DOT/FRA, 

M.M.A.C., AMK–324, HQ–RM 181, P.O. 

Box 25082, Oklahoma City, OK 73125. 

Overnight express payments may be 

sent to DOT/FRA, M.M.A.C., AMK–324, 

HQ–RM 181, 6500 South MacArthur 

Blvd., Oklahoma City, OK 73169. 

(b) At any time before an order 

requiring payment of a civil monetary 

penalty is referred to the Attorney 

General for collection, the respondent 

may offer to compromise for a specific 

amount by contacting the Office of the 

Chief Counsel. 

§ 215.415 Informal response and 

assessment. 

(a) If a respondent elects to make an 

informal response to a demand letter, 

respondent must submit to the Office of 

the Chief Counsel such written 

explanations, information, or other 

materials as respondent may desire in 

answer to the charges or in mitigation of 

the proposed penalty. 

(b) The respondent may include in the 

informal written response a request for 

a conference. Upon receipt of such a 

request, the Office of the Chief Counsel 

arranges for a conference as soon as 

practicable. 

(c) Written explanations, information, 

or materials submitted by the 

respondent, and relevant information 

presented during any conference held 

under this section, are considered by the 

Office of the Chief Counsel in reviewing 

the demand letter and determining the 

fact(s) of the violation and the amount 

of any civil penalty to be paid. 

(d) After consideration of an informal 

response, including any relevant 

information presented at a conference, 

the Office of the Chief Counsel may 

dismiss the demand letter in whole or 

in part. If the Office of the Chief Counsel 

does not dismiss the action in whole, 

the Office of the Chief Counsel may 

enter into a settlement agreement or 

enter an order assessing a civil monetary 

penalty. 

§ 215.417 Request for hearing. 

(a) If a respondent elects to request a 

hearing, the respondent must submit a 

written request to the Office of the Chief 

Counsel referring to the case number 

which appeared on the demand letter. 

The request must— 

(1) State the name and email address 

of the respondent and of the person 

signing the request, if different from the 

respondent; 

(2) State with respect to each 

allegation whether it is admitted or 

denied; and 

(3) State with particularity the issues 

to be raised by the respondent at the 

hearing. 

(b) After a request for hearing that 

complies with the requirements of 

paragraph (a) of this section, the Office 

of the Chief Counsel schedules a hearing 

for the earliest practicable date. 

(c) The Office of the Chief Counsel, or 

the hearing officer designated under 

§ 215.419, may grant extensions of the 

time of the commencement of the 

hearing for good cause shown. 

§ 215.419 Hearing. 

(a) When a hearing is requested and 

scheduled under § 215.417, a presiding 

officer designated by the Office of the 


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Federal Register / Vol. 89, No. 244 / Thursday, December 19, 2024 / Rules and Regulations 103695 

Chief Counsel convenes and presides 

over the hearing. If requested by the 

respondent, and if practicable, the 

hearing is held in the general vicinity of 

the place where the alleged violation 

occurred, at a place convenient to the 

respondent, or virtually. Testimony by 

witnesses shall be given under oath and 

the hearing shall be recorded verbatim. 

(b) The presiding official may: 

(1) Administer oaths and affirmations; 

(2) Issue subpoenas as provided by 

§ 209.7; 

(3) Adopt procedures for the 

submission of evidence in written form; 

(4) Take or cause depositions to be 

taken; 

(5) Rule on offers of proof and receive 

relevant evidence; 

(6) Examine witnesses at the hearing; 

(7) Convene, recess, reconvene, and 

adjourn and otherwise regulate the 

course of the hearing; 

(8) Hold conferences for settlement, 

simplification of the issues or any other 

proper purpose; and 

(9) Take any other action authorized 

by, or consistent with, the provisions of 

this subpart pertaining to civil monetary 

penalties and permitted by law that may 

expedite the hearing or aid in the 

disposition of an issue raised, therein. 

(c) The Office of the Chief Counsel 

has the burden of providing the facts 

alleged in the demand letter and may 

offer such relevant information as may 

be necessary fully to inform the 

presiding officer as to the matter 

concerned. 

(d) The respondent may appear and 

be heard on the respondent’s own behalf 

or through counsel of the respondent’s 

choice. The respondent or respondent’s 

counsel may offer relevant information, 

including testimony, which they believe 

should be considered in defense of the 

allegations, or that may bear on the 

proposed civil monetary penalty, and 

conduct such cross-examination as may 

be required for a full disclosure of the 

material facts. 

(e) At the conclusion of the hearing, 

or as soon thereafter as the hearing 

officer shall provide, the parties may file 

proposed findings and conclusions, 

together with supporting reasons. 

§ 215.421 Presiding officer’s decision. 

(a) After consideration of the evidence 

of record, the presiding officer may 

dismiss the demand letter in whole or 

in part. If the presiding officer does not 

dismiss the civil penalty enforcement 

action in whole, the presiding officer 

will issue and serve on the respondent 

an order assessing a civil penalty. The 

presiding officer’s decision will include 

a statement of findings and conclusions 

as well as the reasons therefor on all 

material issues of fact, law, and 

discretion. 

(b) If, within twenty (20) days after 

service of an order assessing a civil 

penalty fine issued by the presiding 

officer under paragraph (a) of this 

section, the respondent does not pay the 

civil penalty fine, the case may be 

referred to the Attorney General with a 

request that an action to collect the 

penalty be brought in the appropriate 

United States District Court. In the civil 

action, the amount and appropriateness 

of the civil penalty shall not be subject 

to review. 

Issued in Washington, DC. 

Amitabha Bose, 

Administrator. 

[FR Doc. 2024–30030 Filed 12–18–24; 8:45 am] 

BILLING CODE 4910–06–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 648 

[Docket No. 241212–0326] 

RIN 0648–XE368 

Magnuson-Stevens Act Provisions; 

Fisheries of the Northeastern United 

States; Fisheries of the Northeastern 

United States; Atlantic Herring Fishery; 

Adjustment to 2025 Specifications 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Interim final rule. 

SUMMARY: This interim final rule makes 

an in-season adjustment to the 2025 

Atlantic herring specifications and subannual catch limits for the four Atlantic 

herring management areas (including 

Area 1A, 1B, 2, and 3). This action is 

necessary to respond to updated 

scientific information from a 2024 

herring management track stock 

assessment and achieve the goals and 

objectives of the Atlantic Herring 

Fishery Management Plan. This action 

reduces current 2025 catch limits to 

lessen the risk overfishing and help 

rebuild the stock. 

DATES: Effective December 19, 2024, 

through December 31, 2025. 

ADDRESSES: Copies of supporting 

documents, including the 2023–2025 

Atlantic Herring Specifications, are 

available from the Sustainable Fisheries 

Division, Greater Atlantic Regional 

Fisheries Office, 55 Great Republic 

Drive, Gloucester, MA 01930, telephone 

(978) 281–9315, or online at: https://

www.nefmc.org/management-plans/ 

herring and https://www.fisheries.

noaa.gov/species/atlanticherring#management. 

FOR FURTHER INFORMATION CONTACT: 

Carrie Nordeen, Fishery Policy Analyst, 

978–281–9272. 

SUPPLEMENTARY INFORMATION: 

Background 

Regulations implementing the 

Atlantic Herring Fishery Management 

Plan (FMP) appear at 50 CFR part 648, 

subpart K. NMFS implemented the 2025 

specifications in the 2023–2025 

specifications for the Atlantic herring 

fishery (88 FR 17397; March 23, 2023). 

The specifications set an overfishing 

limit (OFL), acceptable biological catch 

(ABC), annual catch limit (ACL), and 

sub-ACLs for 2023–2025 for each of the 

four management areas in the herring 

fishery, subject to future review and any 

necessary adjustments. FMP regulations 

§ 648.200(e) state that NMFS may make 

in-season adjustments to the herring 

specifications and sub-ACLs to achieve 

conservation and management 

objectives, after consulting with the 

New England Fishery Management 

Council, during the fishing year in 

accordance with the Administrative 

Procedure Act and consistent with FMP 

objectives and provisions. 

Amendment 8 to the FMP (86 FR 

1810; January 11, 2021) implemented an 

ABC control rule for the herring fishery. 

The ABC control rule is a formulaic 

approach for setting a harvest limit and 

is designed to balance the goals and 

objectives of the FMP, including 

managing the fishery at long-term 

sustainable levels and accounting for 

herring’s role as forage in the ecosystem. 

The ABC control rule states that when 

biomass is at or above 50 percent of the 

biomass associated with maximum 

sustainable yield (BMSY) or its proxy, 

ABC is the catch associated with a 

maximum fishing mortality (F) of 80 

percent of FMSY or its proxy. When 

biomass falls below 50 percent of BMSY

or its proxy, the allowable F declines 

linearly to zero at 10 percent of BMSY or 

its proxy. 

On October 2, 2020, NMFS 

determined the Atlantic herring stock 

was overfished, but overfishing was not 

occurring. Framework 9 to the FMP (87 

FR 42962; July 19, 2022) established a 

5-year rebuilding plan for herring with 

an F consistent with the ABC control 

rule implemented in Amendment 8. The 

rebuilding plan was expected to rebuild 

the stock by 2026, however, the 

duration of the rebuilding period was 

extended from 5 years (2026) to 7 years 


lotter on DSK11XQN23PROD with RULES1