Freight Cars Final Rule

Federal Register / Vol. 89, No. 244 / Thursday, December 19, 2024 / Rules and Regulations
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
Federal Railroad
Administration (FRA), Department of
Transportation (DOT).
ACTION: Final rule.
lotter on DSK11XQN23PROD with RULES1

AGENCY:

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.)

SUMMARY:

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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.
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.
DATES:

FOR FURTHER INFORMATION CONTACT:

Check Kam, Mechanical Engineer,
Office of Railroad Safety at (202) 366–
2139, email: [email protected]; or
Michael Masci, Senior Attorney
Adviser, Office of the Chief Counsel,
telephone: (202) 302–7117, email:
[email protected].
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

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103677

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
1 The 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).

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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)
Cost

Annualized

Entity
Undiscounted

PV 3%

PV 2%

PV 3%

Industry ................................................................................
FRA ......................................................................................

40,100
103,500

35,900
94,900

34,000
90,100

4,000
10,500

4,000
10,600

Total cost ......................................................................

143,600

130,300

124,100

14,500

14,600

II. Discussion of Comments on the
NPRM
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PV 2%

FRA reviewed all fifteen comments
received in response to the NPRM.
Comments generally raised issues
related to the proposed: (1) application
2 49

U.S.C. 20171(b)(1).
at (b)(2).
4 88 FR 85561 (Dec. 8, 2023).

5 The Act requires certification to the ‘‘Secretary
of Transportation.’’ Pursuant to 49 CFR 1.89(a), the
Secretary has delegated that authority to FRA.

3 Id.

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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

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enforcing the Act’s requirements and
penalties. In response to the comments,
this final rule incorporates portions of
FRA’s existing enforcement process into

6 88

FR 85561.
No. FRA–2023–0021.
8 All cost estimates are in 2022 dollars.
7 Docket

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

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9 Adding

§§ 215.409 through 215.421 to the rule
text in this final rule.
10 Alliance for American Manufacturing’s
comment and letter from U.S. Senators Tammy
Baldwin, John Cornyn, and Paul Casey Jr.
11 FRA–2023–0021–0002.
12 Docket No. FRA–2023–0021, Notice No. 1.
13 88 FR at 85568.
14 Id.

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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
15 Alliance 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.
17 FRA–2023–0021–002.
18 88 FR at 85565.

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103679

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
19 49

U.S.C. 20171(b)(1).
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.
21 The prohibition in 49 CFR 215.405(a)(2) would
apply.
20 Canadian

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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

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22 88

FR at 85562, 85567, and 85575.
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).
23 Canadian

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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
27 Docket

number FRA–2023–0021–0003.
CFR 215.401(a).
29 See In the matter of Certain Cast Steel Railway
Wheels, et al. USITC Inv. No. 337–TA–655 (U.S.
Intern. Trade Com’n), 2009 WL 10693128.
28 49

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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
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.
31 Tianrui Group Co. Ltd. v. Intl. Trade Comm’n,
661 F.3d 1322 (Fed. Cir. 2011).
32 Codified by this final rule at 49 CFR
215.401(a)(3).
33 88 FR at 85567.
34 49 U.S.C. 20171(b)(1).

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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.

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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
35 Id.

at (c)(3).
CFR part 215.
37 88 FR at 85577.
38 Trinity Industries and Wabtec Corporation.
36 49

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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
39 Trinity

Industries and Wabtec Corporation.
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.
41 Trinity Industries, Greenbrier Companies, and
Wabtec Corporation.
42 49 CFR 215.407.
40 Most

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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
43 88

FR at 85568.
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).
44 This

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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
45 49 CFR 209.409, 209.335(a); see also part 209,
appendix A.
46 Part 209, appendix A (citing RSIA, Pub. L. 100–
342, enacted June 22, 1988).

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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.
47 Id.
48 Section

3(a) of the RSIA, Public Law 100–342.
D of 49 CFR part 209, implementing
the suspension and disqualification provisions of
RSIA.
50 49 CFR 209.131.
51 SAFETEA–LU, Public Law 109–59, 119 Stat.
1144 (as amended) (enacted as 49 U.S.C. 5124(a)).
52 See 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].’’
49 Subpart

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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
53 Greenbrier Companies, Trinity Industries, and
Wabtec Corporation.
54 Appendix A to part 209.
55 Id.
56 Appendix 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.
58 Section 20171(c) incorporated by this final rule
into the regulation at 49 CFR 215.407(b).

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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).

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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
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

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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.,
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).

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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
64 Id.

at (a)(2).
at (a)(3).
66 Id. at (a)(4).
67 These same criteria are used to define ‘‘country
of concern’’ in 49 U.S.C. 5323(u) (placing
limitations on certain rolling stock procurements
for public transportation that qualify for financial
assistance), and the FTA has published Frequently
Asked Questions Regarding Section 7613 of the
National Defense Authorization Act for Fiscal Year
2020 that discusses the criteria and the definition
of ‘‘country of concern.’’ https://
www.transit.dot.gov/funding/procurement/
frequently-asked-questions-regarding-section-7613national-defense.
68 These criteria are discussed in section
20171(a)(4)(A)–(C).
69 Pub. 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).
65 Id.

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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
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.
75 Office 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-301review (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).
78 Uniform Regulations Regarding the
Interpretation, Application, and Administration of
Chapter 4 (Rules or Origin) and Related Provisions
in Chapter 6 (Textile and Apparel Goods) of the
Agreement Between the United States of America,
The United Mexican States, and Canada. https://
ustr.gov/sites/default/files/files/agreements/usmca/
UniformROO.pdf.

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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
79 49

U.S.C. 20171(a)(6).
31 CFR 800.208 for examples of control.
81 Id. at (a)(7).
82 See 31 CFR 800.208 for examples of control.
83 Id. at (a)(9).
84 Id. at (a)(10).
85 Id. at (a)(11).
80 See

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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.
86 https://www.trade.gov/rules-origin-substantialtransformation.
87 49 U.S.C. 20171(a)(12).
88 88 FR at 85565.

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

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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
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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
89 19

CFR 210.42(a)(1)(i).
at (h)(2).
91 https://usitc.gov/intellectual_property/337_
determinations.htm.
92 The 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.
90 Id.

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103685

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,
93 88
94 88

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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

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.

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Section 215.413
Compromise

Payment of Penalty;

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.
95 49

CFR part 209.
subpart B and appendix A to 49 CFR part

96 See

209.

material issues of fact, law, and
discretion.

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.

IV. Regulatory Impact and Notices

Section 215.417

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
Decision

Presiding Officer’s

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
100 Id.
101 Id.

98 Id.

102 Id.

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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.
103 88 FR 21879 (April 6, 2023) located at https://
www.federalregister.gov/documents/2023/04/11/
2023-07760/modernizing-regulatory-review.
104 All costs are expressed in 2022 base year
dollars.

99 Id.

97 Id.

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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

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

Section 215.415 Informal Response
and Assessment

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

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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

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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

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103687

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
105 Most 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

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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)
Cost

Annualized

Type of cost

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Undiscounted

PV 2%

PV 3%

PV 2%

PV 3%

Compliance certification .......................................................
Periodic audit .......................................................................

34,400
5,700

30,800
5,100

29,200
4,800

3,400
600

3,400
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

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.
106 A 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.
107 U.S. Bureau of Labor Statistics, Occupational
Employment and Wage Statistics, National
Industry-Specific Occupational Employment and
Wage Statistics, May 2023 NAICS 336500 Railroad
Rolling Stock Manufacturing ‘‘Sales and Related
Occupations’’ $40.45 (mean wage), ‘‘Top
Executives’’ ($62.74) [May 2023] 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.

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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.

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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
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.
109 Freight car manufacturers, participating in an
audit, annual = Number of annual audits (2) * hours
to prepare and participate in an audit (4 hours) *
freight car administrative employee compensation
rate ($70.78) = $566.

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Federal Register / Vol. 89, No. 244 / Thursday, December 19, 2024 / Rules and Regulations
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 10year 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

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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)
Cost

Annualized

Type of cost
Undiscounted

PV 3%

PV 2%

PV 3%

Review affirmations ..............................................................
Periodic audit .......................................................................
Annual report to Congress ...................................................

22,000
51,300
30,200

19,700
47,600
27,100

18,700
45,800
25,600

2,200
5,300
3,000

2,200
5,400
3,000

Total cost ......................................................................

103,500

94,400

90,100

10,500

10,600

(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.

110 FRA headquarters staff salary estimated at the
GS–14, step 5, rate, Washington, DC) of $71.88 with
a burden rate of 1.75 for an hourly burden rate of
$125.79. See https://www.opm.gov/policy-dataoversight/pay-leave/salaries-wages/2023/generalschedule/.
111 FRA 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.

112 FRA headquarters staff salary estimated at the
GS–14, step 5, rate, Washington, DC) of $71.88 with
a burden rate of 1.75 for an hourly burden rate of
$125.79. FRA field staff salary estimated at the GS–
12, step 5, rate (Rest of United States) of $44.98
with a burden rate of 1.75 for an hourly burden rate
of $78.72. See https://www.opm.gov/policy-dataoversight/pay-leave/salaries-wages/2023/generalschedule/.
113 FRA audit burden, annual = number of audits
per year (2 audits) * [FRA headquarters staff time

per audit (20 hours) * FRA headquarters staff
compensation rate ($125.79) + FRA headquarters
staff travel expense ($500) + FRA field staff time per
audit (12 hours) * FRA field staff compensation rate
($78.72) + FRA field staff travel expense ($100)] =
$8,651.
114 Prepare and submit annual report to Congress,
annual = FRA staff hourly labor burden rate
($125.79) * hours to complete and submit report (24
hours) = $3,019.

(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.

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(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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$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)
Cost

Annualized

Entity
Undiscounted

PV 3%

PV 2%

PV 3%

Industry ................................................................................
FRA ......................................................................................

40,100
103,500

35,900
94,900

34,000
90,100

4,000
10,500

4,000
10,600

Total cost ......................................................................

143,600

130,300

124,100

14,500

14,600

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.

Total 118 ........................

FRA hereby certifies that this final
rule will not have a significant
economic impact on a substantial
number of small entities.

C. Paperwork Reduction Act

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

The information collection
requirements in this rule are being
submitted for approval to OMB 115
under the Paperwork Reduction Act of
1995.116 The information collection
requirements and the estimated time to
fulfill each requirement are as follows:

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

784 railroads .......

4 notifications ......

1 hour ..................

4.00 hours ...........

$311.64

6 manufacturers ..

35 affirmations ....

1.25 hours ...........

43.75 ...................

2,786.00

6 manufacturers ..

0.33 report ...........

6 hours ................

1.98 hours ...........

126.09

784 railroads + 6
manufacturers.

39.33 notifications

N/A ......................

49.73 hours .........

3,223.73

Respondent
universe

CFR Section

215.5(d)(6)—Dedicated
Service—Notification to
FRA.
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).
—(a)(1)(ii) Records and
such records shall be
made available to FRA
upon request (New requirement).

Advocacy did not submit any
comments. Therefore, FRA is not
required to prepare a final regulatory
flexibility analysis.

Certification

B. Regulatory Flexibility Act and
Executive Order 13272

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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:
[email protected] or
telephone: (571) 609–1285 or Ms.

115 FRA 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.

117 The dollar equivalent cost is derived from U.S.
Bureau of Labor Statistics, 2021 NAICS 336500—
Railroad Rolling Stock Manufacturing; 13–1000
Business Operations Specialist median wage $63.68
($36.39 + 1.75 overhead costs. The one exception

is § 215.5(d)(6), which is derived from the Surface
Transportation Board’s Full Year Wage 2021, group
200 Professional and Administrative.
118 Totals may not add due to rounding.

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Joanne Swafford, Information Collection
Clearance Officer, at email:
[email protected] 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.

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

D. Federalism Implications

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federalism summary impact statement
for the rule is not required.

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

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
120 40

119 64

FR 43255 (Aug. 10, 1999).

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121 23

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CFR 771.116(b).

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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,
122 See

16 U.S.C. 470.
Department of Transportation Act of 1966,
as amended (Pub. L. 89–670, 80 Stat. 931); 49 U.S.C.
303.
124 E.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.
125 Public Law 104–4, 2 U.S.C. 1531.
123 See

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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

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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:

■

126 66

FR 28355 (May 22, 2001).

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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

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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.

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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

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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.

§ 215.401 Requirements for railroad freight
cars placed into service in the United
States.

§ 215.403

(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

(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
[email protected]. 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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Certification of compliance.

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(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.

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§ 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,

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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.

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§ 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
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.

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§ 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

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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
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Interim final rule.
AGENCY:

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
SUMMARY:

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(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

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