[Federal Register Volume 87, Number 139 (Thursday, July 21, 2022)]
[Proposed Rules]
[Pages 43467-43489]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-15192]


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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

49 CFR Part 224

[Docket No. FRA-2021-0080, Notice No. 1]
RIN 2130-AC77


Reflectorization of Rail Freight Rolling Stock; Codifying 
Existing Waivers

AGENCY: Federal Railroad Administration (FRA), Department of 
Transportation (DOT).

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: FRA proposes to amend its standards for Reflectorization of 
Rail Freight Rolling Stock (Reflectorization Standards) to codify 
waivers and remove the outdated implementation schedule. The proposed 
changes are expected to enhance safety, promote innovation, clarify 
existing requirements, and reduce unnecessary paperwork burdens. The 
proposed amendments are consistent with the mandate of the 
Infrastructure Investment and Jobs Act (IIJA), which requires FRA to 
review and analyze certain longstanding waivers to determine whether 
incorporating the

[[Page 43468]]

waivers into FRA's regulations is justified.

DATES: Comments on the proposed rule must be received by September 19, 
2022. Comments received after that date will be considered to the 
extent practicable.

ADDRESSES: 
    Comments: Comments related to Docket No. FRA-2021-0080 may be 
submitted by going to https://www.regulations.gov and following the 
online instructions for submitting comments.
    Instructions: All submissions must include the agency name and 
docket number or Regulatory Identification Number (RIN) for this 
rulemaking. Note that all comments received will be posted without 
change to https://www.regulation.gov; this includes any personal 
information. Please see the Privacy Act heading in the SUPPLEMENTARY 
INFORMATION section of this document for Privacy Act information 
related to any submitted comments or materials.
    Docket: For access to the docket to read background documents or 
comments received, go to https://www.regulations.gov and follow the 
online instructions for accessing the docket.

FOR FURTHER INFORMATION CONTACT: Check Kam, Mechanical Engineer, Office 
of Railroad Safety, at telephone: (202) 366-2139 or email: 
[email protected]; or Michael Masci, Senior Attorney, Office of the 
Chief Counsel, at telephone: (202) 493-6037 or email: 
[email protected].

SUPPLEMENTARY INFORMATION:

Abbreviations and Terms Used in This Document

AAR--Association of American Railroads
ASLRRA--American Short Line and Regional Railroad Association
ASTM--ASTM International (formerly known as American Society for 
Testing and Materials)
CE--Categorical Exclusion
CFR--Code of Federal Regulations
DOT--Department of Transportation
EA--Environmental Assessment
EIS--Environmental Impact Statement
FHWA--Federal Highway Administration
FR--Federal Register
FRA--Federal Railroad Administration
GS--General Schedule
IIJA--Infrastructure Investment and Jobs Act (Pub. L. 117-58)
IRFA--Initial Regulatory Flexibility Analysis
LED--Light-Emitting Diode
MOW--Maintenance of Way
NEPA--National Environmental Policy Act
NPRM--Notice of Proposed Rulemaking
OMB--Office of Management and Budget
PRA--The Paperwork Reduction Act
RIT--Run-Into-Train
RRA--Running Repair Agent
S-916--AAR's Standard S-916; Retroreflective Comparator Panel 
Requirements
SCABT--Single Car Air Brake Test
SIA--Specific Intensity per unit Area
STB--Surface Transportation Board
THEERP--Tourist, Historic, Excursion, Educational, Recreational, or 
Private
TTI--Texas A&M Transportation Institute
UMLER--Universal Machine Language Equipment Register
U.S.C.--United States Code
Volpe--Volpe National Transportation Systems Center

Table of Contents for Supplementary Information

I. Executive Summary
II. Statutory and Regulatory Background
    A. Existing Reflectorization Requirements
    B. Waivers Excluding From Part 224 Rail Freight Rolling Stock 
Used Only for Tourist, Historic, Excursion, Educational, 
Recreational, or Private (THEERP) Purposes, Except for Incidental 
Freight Service
    C. Waivers Allowing Development and Testing of Alternative 
Methods To Determine When To Replace Retroreflective Sheeting
III. Overview and Technical Discussion of Proposed Requirements
    A. Proposal To Exclude From Part 224 Rail Freight Rolling Stock 
Used Only for THEERP Purposes, Except for Incidental Freight Service
    B. Proposal To Allow Alternative Methods To Determine When To 
Replace Retroreflective Sheeting
    1. The Existing 10-Year Replacement Cycle Ensures Effective 
Retroreflective Sheeting, but May Require Replacement Sooner Than 
Necessary
    2. FRA Worked Closely With The Association of American Railroads 
(AAR) and Texas A&M Transportation Institute (TTI) To Develop a 
Comparator Panel That Could Be Used With the Reflectorization 
Standards
    3. FRA Approved a Pilot Program To Test AAR's Standard S-916; 
Retroreflective Comparator Panel Requirements (S-916) in Service
IV. Section-by-Section Analysis
V. Regulatory Impact and Notices
    A. Executive Order 12866
    B. Regulatory Flexibility Act and Executive Order 13272
    C. Paperwork Reduction Act
    D. Federalism Implications
    E. International Trade Impact Assessment
    F. Environmental Impact
    G. Executive Order 12898 (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 periodically reviews, and proposes amendments to, its 
regulations to identify ways to enhance safety, and update regulatory 
requirements. This proposed rule is expected to enhance safety, promote 
innovation, reduce unnecessary costs, and clarify existing 
requirements. Moreover, FRA expects reduced environmental waste 
resulting from not needlessly replacing retroreflective sheeting prior 
to the end of its useful life.
    This proposed rule would respond to the mandate of section 22411 of 
the IIJA (Pub. L. 117-58) which requires the Secretary to review and 
analyze existing waivers issued under 49 U.S.C. 20103 that have been in 
continuous effect for a 6-year period to determine whether issuing a 
rule consistent with the waiver is in the public interest and 
consistent with railroad safety. After conducting the appropriate 
analysis, if the Secretary concludes that it would be in the public 
interest and consistent with railroad safety to initiate a rulemaking 
to incorporate into the regulations the relevant aspects of the waivers 
analyzed, section 22411 specifically authorizes the Secretary to 
initiate such a rulemaking.

Summary of the Regulatory Action

    The Reflectorization of Rail Freight Rolling Stock 
(Reflectorization Standards or Part 224) contain minimum safety 
requirements to help motor vehicle operators contain minimum safety 
requirements to help motor vehicle operators see rail freight rolling 
stock at night and under conditions of poor visibility. Part 224 was 
designed to reduce the number and severity of highway-rail grade 
crossing accidents and deaths, injuries, and property damage resulting 
from those accidents. Generally, FRA has provided two types of relief 
from part 224's requirements: (1) relief to THEERP operations, because 
they do not typically travel over low visibility highway-rail grade 
crossings at nighttime; and (2) relief to allow the use of a 
performance-based method (comparator panels) to determine when to 
replace reflectorization sheeting. FRA proposes to codify these waivers 
for two reasons: (1) freight rolling stock used exclusively for THEERP 
purposes do not typically travel over low visibility highway-rail grade 
crossings at nighttime; and (2) to allow the replacement of 
retroreflective sheeting to be based on alternative methods of 
evaluating its effectiveness. Allowing for performance-based methods of 
reflectorization evaluation and replacement is a more reliable and 
accurate way to evaluate the effectiveness of the retroreflectivity of 
the required sheeting than part 224's current 10-year default 
replacement cycle. Codifying these waivers is

[[Page 43469]]

expected to enhance safety (i.e., by ensuring retroreflective sheeting 
is replaced when it is no longer effective), promote innovation, and 
reduce unnecessary paperwork burdens for both industry and FRA by 
eliminating the need to continue to use the waiver process for relief. 
Codifying these waivers would also provide the railroad industry with 
regulatory certainty as to the applicability of part 224 to equipment 
used for THEERP purposes, while enhancing safety.
    Finally, FRA proposes to remove Sec.  224.107, which has become 
outdated. Section 224.107 requires the locomotive fleet population to 
be fully equipped with part 224 compliant retroreflective sheeting by 
November 28, 2010, and the freight car fleet to be compliant by 
November 28, 2015. FRA is proposing to remove this section, because the 
implementation dates have passed and are no longer necessary to have in 
the regulation.

Costs and Benefits of the Proposed Regulatory Action

    The proposed rule would eliminate the need for railroads to submit 
waiver petitions (and repeated extensions of those waivers every 5 
years) from part 224 for certain older railroad equipment used in 
THEERP operations, and eliminate the Federal Government's need to 
review and approve the waiver petitions and extension requests. In 
addition, the proposed rule would allow railroads and private car 
owners to replace retroreflective sheeting based on performance, 
instead of time, thus increasing efficient use of resources and 
reducing environmental waste from discarding retroreflective sheeting 
prior to the end of its useful life. FRA estimates there will be minor 
costs for purchasing and recalibration of the comparator panels used to 
evaluate retroreflective sheeting, and training employees in their use 
(about 0.2% of total NPRM costs).
    FRA expects the proposed rule to enhance safety, promote 
innovation, clarify existing requirements, and reduce unnecessary 
burdens. Entities that have been operating under the THEERP waivers and 
performance-based waivers using a comparator panel to evaluate 
retroreflective sheeting have not shown an increase in accidents/
incidents. Also, retroreflective sheeting that is performing poorly 
would likely be replaced sooner under the NPRM than under the existing 
10-year replacement cycle, better ensuring continued effectiveness of 
the sheeting. Overall FRA estimates the proposed rule will result in 
net benefits in terms of businesses benefits. FRA's estimates of 
benefits for the NPRM are shown in the table below.

                          Table ES-1--Summary of Total Benefits Over the 20-Year Period
                                                 [2020 Dollars]
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                                                   Present value   Present value
             Impact                Undiscounted         7%              3%         Annualized 7%   Annualized 3%
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Baseline Cost...................    $540,747,953    $286,435,001    $402,248,463     $27,037,438     $27,037,415
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Baseline Costs consist of Visual Inspection & Replacement, 10-Year Renewal, Transportation of Cars Typically not
 Interchanged, and Waivers.
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NPRM Cost.......................    $436,091,940    $231,038,590    $324,420,840     $21,808,408     $21,806,176
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NPRM Costs for Visual Inspection & Replacement; Periodic Evaluation & Retroreflective Sheeting Replacement
 (Performance-Based); Transportation of Cars Typically not Interchanged; 10-Year Renewal (@15% of Cars, Provides
 Flexibility for Small Entities); and Comparator Panel Purchase, Recalibration, and Employee Training.
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Net Benefits....................    $104,656,013     $55,396,411     $77,827,623      $5,229,029      $5,231,239
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Government Costs for Waivers            $167,171         $89,183        $124,739          $8,418          $8,384
 (Baseline).....................
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Qualitative Benefit: Reduced environmental waste from not replacing effective reflective sheeting prematurely.

II. Statutory and Regulatory Background

A. Existing Reflectorization Requirements

    The Reflectorization Standards require retroreflective sheeting on 
the sides of rail freight rolling stock to enhance the visibility of 
trains. The final rule establishing the Reflectorization Standards in 
2005 did not discuss how it would apply to equipment used for THEERP 
purposes.\1\ By default, THEERP operations were required to comply with 
the Reflectorization Standards in the same manner as conventional 
railroads. THEERP operations did not comment during the rulemaking 
proceeding and FRA did not anticipate the challenges THEERP operations 
would encounter when attempting to bring their equipment into 
compliance with the Reflectorization Standards. THEERP operations began 
requesting relief through FRA's waiver process shortly after FRA 
published the Reflectorization Standards.\2\ Their petitions for waiver 
explained the operational differences between THEERP entities and 
conventional railroads and the relative corresponding disutility of 
reflectorization during such operations. After more fully considering 
these differences, FRA granted a series of waivers excluding equipment 
used for THEERP purposes from the Reflectorization Standards.\3\
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    \1\ 70 FR 144, January 3, 2005.
    \2\ See e.g., Docket Numbers FRA-2005-2308 (Strasburg Railroad 
Company) and FRA-2008-0021 (Lavacot Locomotive Works).
    \3\ A list of active waivers FRA has issued to THEERP operations 
is available in the docket.
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    Currently, reflectorization is required to be replaced after no 
more than 10 years of service, regardless of its condition at the time 
of replacement (49 CFR 224.111). FRA's research when developing the 
Reflectorization Standards concluded that the durability and adhesive 
properties of the microprismatic retroreflective material could provide 
adequate luminance intensity levels and be sustained for up to 10 years 
with minimum maintenance.\4\ At the time, it was not clear how the 
sheeting would withstand real-world railroad operating conditions or 
whether it could be effective for longer than 10 years. In 2015, after 
using the sheeting for close to 10 years, it became evident, that under 
certain circumstances, it could continue to perform as required beyond 
10 years. To

[[Page 43470]]

better tailor the reflectorization requirements to the actual condition 
of the sheeting, the railroad industry began developing an alternate 
method to evaluate the effectiveness of the sheeting. After successful 
initial results, AAR, on behalf of its member railroads, petitioned FRA 
for relief from the Reflectorization Standards to use an alternate 
method to determine when to replace the retroreflective sheeting.\5\ 
FRA granted a waiver to AAR to develop alternate methods of evaluating 
the effectiveness of the sheeting and to implement a pilot program for 
in-service testing.\6\
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    \4\ 70 FR 145, January 3, 2005.
    \5\ Docket Number FRA-2015-0105, Document No. 1 (available at 
https://www.regulations.gov/document/FRA-2015-0105-0001).
    \6\ Docket Number FRA-2015-0105, Document No. 22 (available at 
https://www.regulations.gov/document/FRA-2015-0105-0022).
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B. Waivers Excluding From Part 224 Rail Freight Rolling Stock Used Only 
for THEERP Purposes, Except for Incidental Freight Service

    As of 2022, the Safety Board has granted relief from part 224 in 
response to 14 waiver petitions from 12 different railroads that 
operate rail freight rolling stock used exclusively for THEERP 
purposes. In some rare instances, the subject equipment is also used 
for incidental freight services when no other equipment is available. 
Railroads petitioned for relief, because adding retroreflective 
sheeting to their equipment would detract from its aesthetic or 
historical nature. Such equipment is typically not interchangeable, 
generally does not travel in the dark, and operates at low speeds and 
on rail lines not connected to the general railroad system. In 
addition, such equipment often travels over crossings protected by 
automatic warning gates and flashing lights, or the equipment travels 
over crossings at a much lower frequency than freight equipment. These 
operating conditions significantly reduce the benefit of 
retroreflective sheeting, which increases visibility of trains 
primarily during nighttime conditions and at passive grade crossings. 
When deciding these waivers, the Safety Board reviewed available 
records and found that the specific railroad operations and operating 
environments demonstrated no history of accidents at grade crossings 
resulting from low visibility.
    While monitoring implementation of these waivers, FRA reviewed all 
accident and incident reports from railroads operating under the 
waivers, and identified no injuries or deaths that were attributable to 
the lack of part 224 reflectorization. Given the railroad industry's 
long-term success in safely operating under these waivers, FRA is 
proposing to codify them in part 224. This change would eliminate the 
need for further waivers and the associated employee hours spent on 
their documentation and renewal every five years.

C. Waivers Allowing Development and Testing of Alternative Methods 
(Comparator Panel Evaluation) To Determine When To Replace 
Retroreflective Sheeting

    On September 22, 2015, AAR petitioned FRA \7\ for a waiver from 
compliance with 49 CFR 224.111. That section requires retroreflective 
sheeting to be replaced with new sheeting no later than 10 years after 
the date of initial installation, regardless of the sheeting's 
condition at the time of replacement. In support of the petition, AAR 
contracted with TTI to test and evaluate retroreflective sheeting on 
approximately 900 freight cars and approximately 100 locomotives in 
service. That testing found that generally sheeting that had been 
applied to rail cars more than nine years before met or exceeded the 
Reflectorization Standards. This data, collected in 2012 and in 2014 
using a RoadVista 922 retroreflectometer,\8\ showed the performance of 
the retroreflective sheeting on both rail cars and locomotives is more 
a function of material condition and cleanliness than it is of the 
amount of time passed since the application date. In particular, the 
sheeting demonstrated that, after more than nine years in service, it 
performed effectively (above the minimum thresholds outlined in Table 1 
to subpart B of part 224) and should be allowed to remain in service if 
properly maintained. The field data collected by AAR supported using an 
alternative method in lieu of the 10-year replacement cycle for 
retroreflective sheeting on rail freight rolling stock, provided that 
the sheeting is undamaged and maintained in a relatively clean 
condition. Thus, AAR sought a waiver to extend the replacement 
requirement for at least three years to develop an alternate evaluation 
method. On November 25, 2015, the Safety Board granted AAR relief from 
the 10-year replacement cycle for three years.\9\
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    \7\ Docket Number FRA-2015-0105, Document No. 1 (available at 
https://www.regulations.gov/document/FRA-2015-0105-0001).
    \8\ A retroreflectometer is an instrument (typically handheld) 
capable of accurately and reliably measuring the retroreflective 
properties of retroreflective sheeting materials.
    \9\ https://www.regulations.gov/document/FRA-2015-0105-0009.
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    A retroreflectometer, like the hand-held RoadVista 922 that AAR and 
TTI used to gather data in support of their waiver petition, is the 
most direct form of measuring sheeting's retroreflective value. 
Retroreflectometers are costly (approximately $10,000 or more per unit) 
and are cumbersome to use, and therefore are not currently practical 
for regular use in a railroad shop or field environment. For a more 
practical option, the AAR Equipment Engineering Committee looked to the 
Federal Highway Administration (FHWA) Comparison Panel Method. FHWA 
indicates that the comparison panels are fabricated to have 
retroreflectivity values at or above the minimum required levels and 
are used to assess highway signs that have marginal 
retroreflectivity.\10\ AAR proposed to develop a standard comparator 
panel that could be used to assess rail freight rolling stock 
retroreflective sheeting to the minimally required photometric 
performance requirements of part 224. This standard comparator panel 
would be fabricated to have retroreflectivity values at or above the 
minimum photometric values outlined in Sec.  224.103.
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    \10\ https://safety.fhwa.dot.gov/roadway_dept/night_visib/sign_retro_4page.pdf.
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    After approximately three years of development, AAR finalized the 
design, specifications, and procedures for a standard comparator panel 
for evaluating the effectiveness of retroreflective sheeting on rail 
freight rolling stock, and on July 27, 2018, AAR petitioned FRA for 
final approval to use its comparator panel process in lieu of the 10-
year replacement cycle.\11\ On October 10, 2018, the Safety Board 
granted the petition finding that the comparator panel could be used to 
reliably evaluate the effectiveness of the installed retroreflective 
sheeting and that the design and specifications of AAR's proposed 
comparator panel met the minimum photometric performance requirements 
in Sec.  224.103.\12\
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    \11\ https://www.regulations.gov/document/FRA-2015-0105-0021.
    \12\ Docket Number FRA-2015-0105, Document No. 22 (available at 
https://www.regulations.gov/document/FRA-2015-0105-0022).

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[[Page 43471]]

III. Overview and Technical Discussion of Proposed Requirements

A. Proposal To Exclude From Part 224 Rail Freight Rolling Stock Used 
Only for THEERP Purposes, Except for Incidental Freight Service

    The Reflectorization Standards require retroreflective sheeting on 
the sides of rail freight rolling stock to enhance the visibility of 
trains. These standards were developed, generally, because low 
visibility, particularly at highway-rail grade crossings, can 
contribute to motorists colliding with rail equipment. According to 
data from 1992 through 2001, gathered from the FRA Office of Safety 
Analysis' crossing accident database, the number of accidents involving 
motor vehicles running into trains occupying grade crossings accidents 
(RIT accidents) was roughly 23% of all highway-rail grade crossing 
accidents. Almost 80% of these RIT accidents occurred during nighttime 
conditions (dusk, dawn, or darkness) and involved the highway vehicle 
striking the train after the first two units of the consist. Adding 
reflectorization to rail equipment reduces the likelihood of RIT 
accidents. When developing the Reflectorization Standards, FRA relied 
on a report from the John A. Volpe National Transportation Systems 
Center (Volpe Center Report) \13\ to develop specific retroreflectivity 
requirements based on minimum threshold detectability levels by 
motorists. The Volpe Center Report defined Category 1 RIT accidents as 
accidents or collisions involving a highway vehicle striking the train 
after the lead unit and reported roughly 70% of the Category 1 RIT 
accidents (from 1975 to 1996) occurred during nighttime conditions. 
Category 1 RIT accidents during nighttime conditions at crossings with 
passive warning devices accounted for 3.0% of the total accidents 
during this 22-year period. This became the intended target population 
for the Reflectorization Standards.
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    \13\ Carroll, A.A., Multer, J., Williams, D., & Yaffee, M.A. 
Safety of Highway-Railroad Grade Crossings: Freight Car 
Reflectorization. DOT/FRA/ORD-98/11, John A. Volpe National 
Transportation Systems Center, January 1999.
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    The Reflectorization Standards exclude locomotives and passenger 
cars used exclusively in passenger service,\14\ because generally, the 
conspicuity of equipment used in conventional passenger service is 
significantly better than the conspicuity of equipment used in freight 
service.\15\ For example, highway-rail grade crossings along passenger 
routes are typically better protected than crossings used exclusively 
in freight service. Also, many passenger cars have bright exteriors or 
are painted in contrasting colors and are maintained in a much cleaner 
condition than freight cars. In addition, passenger cars typically have 
inside lights which are visible through the side windows that run the 
entire length of the car. Due to enhanced conspicuity and better 
protected crossings, reflectorization is not necessary for locomotives 
and passenger cars used exclusively for passenger service. Such 
equipment is currently operating without retroreflective sheeting and 
FRA is unaware of any accidents or incidents involving this equipment 
that would have been mitigated by the presence of reflectorization.
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    \14\ 49 CFR 224.3(c).
    \15\ 70 FR 149.
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    Similarly, retroreflective sheeting provides no clear safety 
benefit for equipment used exclusively for THEERP purposes because like 
other passenger equipment, equipment used exclusively for THEERP 
purposes is more highly visible than conventional railroad equipment 
and, as discussed above, is used in a more protected operating 
environment. For these reasons, FRA proposes to exclude equipment used 
for THEERP purposes from the Reflectorization Standards.

B. Proposal To Allow Alternative Methods (Comparator Panel Evaluation 
or Retroreflectometer Measurement) To Determine When To Replace 
Retroreflective Sheeting

    As noted above, in 2015, FRA granted AAR's waiver petition 
providing relief from the replacement requirement in Sec.  224.111 for 
three years, allowing time for AAR to develop an alternate method for 
evaluating the effectiveness of retroreflective sheeting more than 10 
years old.\16\ AAR initially proposed to adopt a minimum performance 
level of 45 candela per foot-candle per square foot (cd/fc/ft\2\) \17\ 
for a yellow comparator panel, which AAR stated was consistent with the 
recommendation provided by the Volpe Center Report, but did not mirror 
the complete specifications in Sec.  224.103. After FRA expressed 
concerns about the proposed specifications, AAR agreed to develop 
standard comparator panels that would meet the complete minimum 
photometric performance requirements in Sec.  224.103 (i.e., 45 cd/fc/
ft\2\ for yellow or fluorescent yellow sheeting and 75 cd/fc/ft\2\ for 
white sheeting with a specific condition of a 30[deg] entrance angle 
and a 0.5[deg] observation angle).\18\ Following development, FRA 
agreed to allow a pilot program for AAR to test the comparator panel 
method in service.\19\ A trained railroad inspector would place a 
comparator panel immediately adjacent to, or overlapping, 
retroreflective sheeting installed on rail freight rolling stock, and 
determine its relative brightness. When the comparator panel was equal 
to, or brighter than, the installed sheeting, it was replaced. Testing 
showed the comparator panel is an accurate and easy way to determine 
when retroreflective sheeting needs to be replaced in compliance with 
the Reflectorization Standards. Similarly, a retroreflectometer device 
can be used to take direct measurements of the sheeting and be an 
effective performance-based method for evaluating retroreflectivity. As 
such, FRA proposes to add comparator panel evaluation and direct 
measurements with a retroreflectometer, as alternative options to 
determine compliance with the Reflectorization Standards. These methods 
would provide flexibility for the rail industry while, in most 
instances, enhancing safety because allowing for alternative methods of 
reflectorization evaluation and replacement is a more reliable and 
accurate way to evaluate the effectiveness of the retroreflective 
sheeting than part 224's current 10-year default replacement cycle.
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    \16\ Docket Number FRA-2015-0105, Document No. 9 (available at 
https://www.regulations.gov/document/FRA-2015-0105-0009).
    \17\ The units of cd/fc/ft 2 are equivalent to the units of cd/
lux/m 2 (candela per lux per square meter) and are often used 
interchangeably, and the Specific Intensity per unit Area (SIA) is 
another notation for referencing retroreflection values, which is 
expressed in the units above.
    \18\ Docket Number FRA-2015-0105, Document No. 10 (available at 
https://www.regulations.gov/document/FRA-2015-0105-0010).
    \19\ Docket Number FRA-2015-0105, Document No. 22 (available at 
https://www.regulations.gov/document/FRA-2015-0105-0022).
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1. The Existing 10-Year Replacement Cycle Ensures Effective 
Retroreflective Sheeting, but Often Requires Replacement Sooner Than 
Necessary
    Currently, all retroreflective sheeting, required by part 224, must 
be replaced with new sheeting after 10 years of service, regardless of 
its condition at the time of replacement. FRA established the 10-year 
replacement cycle based on the 10-year useful life of the sheeting 
according to most manufacturers.\20\ This means the retroreflective 
sheeting is expected to maintain its performance for no less than 10 
years. As such, sheeting that complies with the Reflectorization 
Standards, when installed, is expected to continue to comply throughout 
the

[[Page 43472]]

10-year cycle despite inevitable accumulations of dirt and 
environmental aging. This regulatory approach helps ensure rail freight 
rolling stock is equipped with effective retroreflective sheeting, but 
it may also result in railroads unnecessarily replacing sheeting that 
continues to be effective beyond 10 years of service.
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    \20\ 70 FR 157.
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    When the initial 10-year replacement deadline approached, and in 
support of AAR's petition to the FRA, AAR conducted testing on 
retroreflective sheeting of approximately 900 railcars and 
approximately 100 locomotives using a RoadVista 922 
retroreflectometer.\21\ The installation dates for retroreflective 
sheeting in the sampling were from 2005 to 2014. Based on the 
performance measurements, AAR believed the sheeting could continue to 
comply with the Reflectorization Standards for a significant amount of 
time beyond 10 years of service.
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    \21\ Docket FRA-2015-0105, Document No. 1 (available at https://www.regulations.gov/document/FRA-2015-0105-0001) Appendix B: 
Supporting Documentation from AAR Equipment Engineering Committee.
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    On January 27, 2017, AAR submitted a status report to FRA on its 
reflectorization waiver,\22\ providing field measurement data for 
retroreflective sheeting evaluated ``as is'' and ``after cleaning'' for 
service ages ranging from 1 to nearly 10 years of age. Prior to AAR's 
field measurements, FRA did not have any data showing the performance 
of retroreflective sheeting in the field, but expected it would perform 
at or above the minimum detectable threshold levels required by the 
Reflectorization Standards throughout its useful life. The data 
confirmed that retroreflective sheeting can perform well up to, and 
perhaps beyond, 10 years, especially when periodically cleaned. The 
data also showed that not all initially applied compliant material 
performs equally well throughout its anticipated useful life and can be 
affected by the type of service or commodity (salt, coal, chemicals, 
etc.) and environmental conditions (multiple freeze-thaw cycles, 
extreme cold or heat, high humidity, etc.) that the equipment endures. 
Under the more extreme of these circumstances, samples yielded 
measurements, after being cleaned, that were below the minimum proposed 
comparator panel values just 1 to 2 years after application. One cause 
for the poor performing samples was found to be internal degradation of 
the sheeting due to damage or delamination, which can lead to mold or 
mildew growth over the microprismatic layer. Such poor performing or 
internally degraded material, could be identified early on through use 
of the proposed comparator panel or direct measurements with a 
retroreflectometer, allowing for earlier replacement. Overall, this 
would lead to better performing sheeting in service, resulting in an 
increase in safety compared to a blanket application of a 10-year 
replacement cycle.
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    \22\ Docket FRA-2015-0105, Document No. 23.
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    AAR estimates the number of freight cars (not including 
locomotives) that would need full replacement of retroreflective 
sheeting based on the 10-year age limit was 283,500 freight cars in 
2016, 152,000 freight cars in 2017, 149,000 freight cars in 2018, 
96,500 freight cars in 2019, and 93,000 freight cars in 2020.\23\ These 
figures are for freight cars only and do not include locomotives. In 
2020, AAR estimated the average cost of one retroreflective sheet (4 
inches by 18 inches) at $1.31 and the average labor rate to be 
approximately $141.38 per hour ($2.36 per minute). AAR also estimated 
that the length of time allotted for the application of the first sheet 
per side of a car is 9.2642 minutes and 2.6197 minutes for each 
additional sheet. Assuming each freight car is equipped with a minimum 
3.5 square feet of retroreflective material, this equates to a minimum 
of 25 minutes per side for each car. Thus, by 2020 it would have cost 
an estimated $105 million or more for full replacement of 
retroreflective sheeting based on the 10-year age limit during that 5-
year period.\24\ The cost estimate for 2019 and 2020, alone, was 
approximately $26 million. However, between the 4th quarter of 2018 
through 3rd quarter of 2020 when AAR was implementing the comparator 
panel process, AAR estimated that 1,143,500 cars were evaluated with 
the comparator panel during a single-car airbrake test (SCABT) and that 
an average of 0.71 sheets per car was replaced for all cars under this 
procedure. AAR indicated that, with the comparator panel evaluation, it 
takes about 3.2743 minutes to clean and 2.7574 minutes to inspect 
retroreflective material per car (6 minutes total). Thus, the cost 
estimate between the 4th quarter of 2018 through 3rd quarter of 2020 
for using the comparator panel during SCABT was approximately $42 
million.\25\ This estimate may include sheeting that was replaced as a 
result of being damaged, missing, or obscured during the SCABT, as 
required under Sec.  224.109, and therefore does not entirely reflect 
the sole cost of sheeting that was replaced as a result of failing the 
comparator panel, and does not include the cost of the comparator 
panels themselves. To better understand the efficacy of the comparator 
panels, FRA seeks comment from the industry regarding the proportion of 
sheets that were replaced as a direct result of not meeting the 
performance criteria versus sheets that were replaced under Sec.  
224.109. When FRA granted AAR relief from the Reflectorization 
Standards to develop and test the comparator panel method, AAR avoided 
unnecessarily replacing 584,500 pieces of effective retroreflective 
sheeting that would have cost approximately $79 million during those 
first three years. Codifying the performance-based method will avoid 
requiring railroads to unnecessarily replace the sheeting on 
approximately 1.5 million freight cars over the next 10 years.
---------------------------------------------------------------------------

    \23\ Docket FRA-2015-0105, Document No. 24.
    \24\ (774,000 freight cars) x [(14 sheets) x ($1.31 per sheet) + 
(50 minutes) x ($2.36 per minute)] = $105,527,000.
    \25\ (1,143,500 freight cars) x [(0.71 sheets) x ($1.31 per 
sheet) + (6 minutes + 9.2642 minutes) x ($2.36 per minute)] = 
$42,323,000.
---------------------------------------------------------------------------

    In addition, FRA believes railroads may be unnecessarily replacing 
compliant retroreflective sheeting because the inspection and 
replacement process can be cumbersome, and detailed tracking is not 
required. Section 224.109 requires retroreflective sheeting to be 
visually inspected for presence and condition at the time of SCABT \26\ 
or annual locomotive inspection and replaced at that time, if more than 
20% of the required area is missing, damaged, or obscured. It is 
unclear to FRA, if, or how, railroads update Universal Machine Language 
Equipment Register (UMLER) or other records to show the date that 
retroreflective sheeting is replaced based on inspection results. On 
October 1, 2020, FRA sent an inquiry to AAR with questions regarding 
the reflectorization replacement process before and after the waiver 
was granted.\27\ FRA asked how the UMLER system is updated with the 
date of installation or replacement if only a portion of 
retroreflective sheeting is replaced during the SCABT or annual 
locomotive inspection. AAR responded that updates have been 
inconsistent because the industry no longer relies on the information 
provided by the UMLER fields (because relief from the 10-year 
replacement cycle was in place). Thus, it is FRA's understanding that 
the date of installation is not updated when only a portion of the 
minimum required

[[Page 43473]]

sheeting area is replaced under Sec.  224.109. Accordingly, when the 
10-year replacement becomes due on the remaining retroreflective 
sheeting that was initially installed on a piece of rail freight 
rolling stock, without knowing a portion of the sheeting was recently 
replaced, railroads may replace the almost new retroreflective sheeting 
along with the retroreflective sheeting due for the 10-year 
replacement. In this scenario, replacing the almost new retroreflective 
sheeting may be premature and unnecessary per the regulation and likely 
without any safety benefit.
---------------------------------------------------------------------------

    \26\ AAR estimates the industry median time in 2020 between 
SCABT is approximately 25.6 months.
    \27\ Docket FRA-2015-0105, Document No. 24.
---------------------------------------------------------------------------

    During the approximately 3-year period of relief from the 10-year 
replacement requirement from 2015 to 2018, and prior to AAR 
implementing the pilot program to test its performance-based method, 
the majority of retroreflective sheeting in service on AAR-member 
railroads was installed in 2005 and continued in service beyond 10 
years. After reviewing pertinent records, FRA is unaware of any 
reportable RIT accidents attributable to under-performing 
retroreflective sheeting. Once the pilot program was approved to test 
the comparator panel method on in-service equipment, all sheeting on 
equipment within AAR interchange was evaluated using the comparator 
panels whenever the equipment underwent the SCABT or annual locomotive 
inspection, and replaced as necessary when sheeting failed the 
comparator evaluation. By gradually replacing retroreflective sheeting 
as needed, a significant amount performed effectively beyond 10 years 
and was allowed to continue in service beyond 10 years. These findings 
help confirm AAR's conclusion that retroreflective sheeting can perform 
effectively beyond 10 years of service.
    Thus far, only AAR-member railroads have participated in the pilot 
program to test the comparator panel method, but FRA anticipates 
additional railroads would choose to use it, if codified. In response 
to the public notice FRA published related to AAR's waiver petition, 
three commenters expressed concurrence with the proposal of an 
alternative method in lieu of the 10-year replacement cycle and 
suggested relief should be applied to all railroads.\28\ However, FRA 
could not apply the relief to all railroads at that time, because not 
all railroads were party to the waiver petition. Thus, short line 
railroads, private car owners, and other entities not affiliated with 
AAR are still subject to the 10-year replacement cycle.
---------------------------------------------------------------------------

    \28\ Docket Number FRA-2015-0105; comments from Railroad Supply 
Institute, Colorado Springs Utilities, and North America Freight Car 
Association.
---------------------------------------------------------------------------

    FRA believes allowing an alternative evaluation of installed 
retroreflective sheeting would better tailor the replacement 
requirements to the condition of the sheeting. The retroreflective 
sheeting has a finite service life and performance-based methods of 
evaluation will help ensure: (1) sheeting that continues to perform 
well after the 10 years of service can remain in service; and (2) 
sheeting that underperforms before the 10 years of service can be 
identified and replaced on a more frequent, as needed basis. FRA 
understands that not all railroads may benefit from the use of 
alternative methods because of the financial burden of procuring a 
comparator panel or retroreflectometer device and related training for 
employees, particularly for some small railroads with limited 
equipment. Such railroads may prefer to continue to utilize the 10-year 
replacement cycle. Therefore, FRA proposes to retain the 10-year 
replacement cycle as an option.
2. FRA Worked Closely With AAR and TTI To Develop a Comparator Panel 
That Could Be Used With the Reflectorization Standards
    Over approximately three years, FRA worked closely with AAR and TTI 
to develop a comparator panel that could evaluate retroreflective 
sheeting and determine whether it complies with existing photometric 
performance requirements outlined in Sec.  224.103. The 
Reflectorization Standards (Table 1 to subpart B of part 224) included 
minimum photometric performance requirements (i.e., minimum SIA) for 
both yellow and white retroreflective material at observation angles of 
0.2[deg] and 0.5[deg] and light entrance angles of -4[deg] and 30[deg] 
based on typical grade crossing configurations and the standards in 
ASTM D 4956-01a.\29\ The Volpe Center Report established that the 
minimum threshold SIA of 45 cd/fc/ft\2\ is sufficient for detectability 
and recognition of a crossing train by an approaching motorist. This 
value was derived from the example of a vehicle traveling 50 mph on wet 
level pavement, a 2.5 second driver reaction time, and a necessary 
stopping distance of 500 feet to bring the vehicle to a safe stop 
without hitting the crossing train. In many cases, the reflected light 
received by the observer is reduced by three factors: the incidence (or 
entrance angle), the divergence (or observation) angle, and the 
properties of the retroreflecting material.
---------------------------------------------------------------------------

    \29\ ASTM D 4956-01a: Standard Specification for Retroreflective 
Sheeting on Traffic Control.
---------------------------------------------------------------------------

    Appendix H of the Volpe Center Report further showed the 
observation angle on a level road at a detection distance of 500 feet 
ranges from 0.15[deg] for small passenger cars to 0.55[deg] for cab-
over-engine trucks, as the elevation from the driver to the headlight 
increases. The observation angle has a greater effect on reflectivity 
than does the entrance angle. The entrance angle is also a function of 
the approach of the vehicle with respect to the crossing. Appendix H 
also indicated that FRA's Grade Crossing Inventory identified 
approximately 80% of all crossings having a crossing angle between 
60[deg] and 90[deg], 16% between 30[deg] and 59[deg], and only 4% are 
between 0[deg] and 29[deg]. In essence, 80% of all crossings will have 
a vehicle (light) entrance angle of between 0[deg] and 30[deg] (with 
0[deg] being the head-on approach). Thus, the real-world scenarios 
outlined in the Volpe Center Report support the typical entrance and 
observation angles outlined in ASTM D 4956-01a for retroreflective 
material.
    Additionally, in determining these minimum photometric performance 
requirements for the Reflectorization Standards, FRA extrapolated test 
data detailed in the Volpe Center Report out by 10 years, which is the 
manufacturer's stated useful life of the material. This extrapolation 
demonstrated that the forecasted SIA levels remained well above the 
minimum detection level established in the Volpe Center Report (45 cd/
fc/ft\2\). Furthermore, Table 1 to subpart B of part 224 specifies only 
the minimum values, as initially applied, for the retroreflectivity 
values for the given combinations of entrance (-4[deg] and 30[deg]) and 
observation angles (0.2[deg] and 0.5[deg]). The rule does not require 
that these initial values be retained for any particular length of 
time, e.g., 5 or 10 years. However, it is reasonable to expect the 
material to perform well up to the manufacturer's stated useful life 
(i.e., 10 years).
    AAR began the development process by applying methodology similar 
to FHWA's comparison panels used for evaluating retroreflective 
materials (discussed in section II D above). The comparator panel was 
constructed by adding a set of fine dot matrix markings such that the 
target reflectivity was achieved at the desired boundary conditions. 
AAR planned an evaluation process that would allow a field inspector to 
view the comparator panel next to, or on top of, existing sheeting from 
a prescribed distance away with a light source perpendicular to the 
plane of the sheets. AAR believed this would most likely resemble the -
4[deg] entrance

[[Page 43474]]

angle and 0.2[deg] observation angle configuration. Therefore, 
developing a comparator panel with sufficient retroreflectivity at this 
configuration would also inherently contain the minimum detection level 
(45 cd/fc/ft\2\) at the more oblique angles (30[deg] entrance angle and 
0.5[deg] observation angle configuration) and would eliminate the need 
for a field inspector to evaluate sheeting at various angles and off 
center from the installed sheeting.
    To find an appropriate target retroreflectivity for the comparator 
panel, AAR and TTI sampled part 224 compliant sheeting from various 
manufacturers and gathered the retroreflectivity measurements (with the 
922 RoadVista) at each entrance and observation angle configuration. 
Correlation ratios were obtained between the two entrance angles (-
4[deg] and 30[deg]) for each corresponding observation angle (0.2[deg] 
and 0.5[deg]) for all the samples. The lowest correlation ratio between 
all samples of 0.50 was then applied to the minimum threshold 
retroreflectivity of 45 cd/fc/ft\2\, which relates to the 30[deg] 
entrance angle, to obtain a corresponding retroreflectivity value at 
the -4[deg] entrance angle. Because the apparent surface area of 
sheeting reduces as the angle at which it is viewed increases, a cosine 
correction factor was applied to compensate for the reduction of 
apparent size at the 30[deg] entrance angle compared to -4[deg] 
entrance angle. A standard sheet of reflectorization is typically 4-
inches by 18-inches and has a total surface area of 72 square inches, 
but when viewed from 30 degrees off normal the apparent surface area is 
reduced to approximately 85% of the true total surface area, or 62 
square inches. Taking the correlation ratio and cosine correction into 
consideration and applying it to the minimum threshold 
retroreflectivity of 45 cd/fc/ft\2\, a minimum retroreflectivity value 
is obtained at for the -4[deg] entrance angle and 0.2[deg] observation 
angle configuration for a yellow comparator panel. To provide some 
assurance that the applied sheeting being evaluated remains suitable 
for a period after the SCABT or locomotive annual inspection is 
performed, AAR and FRA agree upon a minimum threshold value of 150 cd/
fc/ft\2\ (or cd/lux/m\2\). Also, to make manufacturing the comparator 
panel more feasible, a range was provided which set a maximum at 170 
cd/fc/ft\2\. The same methodology was applied to obtain the minimum 
retroreflectivity values for a white comparator panel which 
corresponded to minimum retroreflectivity value of 250 cd/fc/ft\2\ and 
a maximum of 285 cd/fc/ft\2\ for the -4[deg] entrance angle and 
0.2[deg] observation angle configuration.
    Both AAR and FRA felt it was necessary to define what the minimum 
retroreflectivity value is for the 30[deg] entrance angle and 0.5[deg] 
observation angle configuration because the comparator panels are 
typically manufactured by adding fine dot matrix layers to part 224 
compliant reflectorization to reduce the overall retroreflectivity and 
achieve the desired level of retroreflectivity. This ensured that while 
the overall retroreflectivity was being reduced at the -4[deg] entrance 
angle and 0.2[deg] observation angle configuration to a target 
retroreflectivity value of 150 cd/fc/ft\2\, it did not inadvertently 
drop below 45 cd/fc/ft\2\ for the 30[deg] entrance angle and 0.5[deg] 
observation angle configuration. As previously mentioned, the existing 
Reflectorization Standards do not require that all initial 
retroreflectivity values be retained for a set period; however, it is 
reasonable to expect the sheeting to perform as intended for its useful 
life. Industry practice requires that the sheeting retain at least 80% 
of its initial values when subjected to 36 months of accelerated 
weathering.\30\ Therefore, both AAR and FRA felt it was reasonable to 
require the comparator panels to have 80% of the minimum 
retroreflectivity value at the 30[deg] entrance angle and 0.5[deg] 
observation angle configuration, or 35 cd/fc/ft\2\ for yellow panels 
and 60 cd/fc/ft\2\ for white panels.
---------------------------------------------------------------------------

    \30\ ASTM D 4956-01a: Standard Specification for Retroreflective 
Sheeting on Traffic Control.
---------------------------------------------------------------------------

    With the specifications for the retroreflective comparator panels 
established, AAR solicited samples from various retroreflective 
sheeting manufacturers made to the comparator panel specifications. AAR 
procured six sample comparator panels from one manufacture for 
evaluation and took measurements of the retroreflectivity with the 922 
RoadVista. The results show that the six samples of comparator panels 
average an SIA value of about 160 cd/fc/ft\2\ at the -4[deg]/0.2[deg] 
configuration and about 55 cd/fc/ft\2\ at the 30[deg]/0.5[deg] 
configuration. While these values were from one single manufacturer, 
both AAR and FRA were confident that the specifications outlined for 
the comparator panel could be achieved from other manufacturers as 
well.
3. FRA Approved a Pilot Program To Test AAR's Standard S-916; 
Retroreflective Comparator Panel Requirements (S-916) in Service
    On July 27, 2018, AAR petitioned FRA for approval of a pilot 
program to test its newly developed standard comparator panel and 
process for using it to evaluate retroreflective sheeting for 
compliance with the Reflectorization Standards instead of the 10-year 
replacement cycle required by Sec.  224.111.\31\ The Safety Board found 
the design and specifications of AAR's proposed comparator panel were 
acceptable and noted that when viewed at -4[deg] entrance angle and 
0.2[deg] observation angle (-4[deg]/0.2[deg]), the comparative panel 
achieved the equivalent minimum detectable SIA, as referenced in the 
Volpe Center Report (45 cd/fc/ft\2\ for yellow material or 75 cd/fc/
ft\2\ for white material), at an entrance angle of 30[deg] and 
observation angle of 0.5[deg] (30[deg]/0.5[deg]), or reasonably at a 
service worn estimate of 80 percent of these values. On October 10, 
2018, the Safety Board approved of AAR's proposed pilot program.\32\ To 
facilitate the pilot program, AAR finalized and adopted AAR Standard S-
916, Retroreflective Comparator Panel Requirements, prescribing the 
requirements for comparator panels to be used in the performance 
evaluation of retroreflective sheeting on freight cars and locomotives. 
The pilot program is currently ongoing. Throughout the pilot program, 
within AAR interchange, comparator panel evaluations have been, and 
will continue to be, required for all retroreflective sheeting on 
freights cars during each SCABT and on locomotives during each annual 
inspection.
---------------------------------------------------------------------------

    \31\ Docket FRA-2015-0105, Document No. 21.
    \32\ Docket FRA-2015-0105, Document No. 22.
---------------------------------------------------------------------------

    Currently, Table 3.1 of S-916 provides the following specifications 
for a comparator panel:

[[Page 43475]]

[GRAPHIC] [TIFF OMITTED] TP21JY22.033

    In addition to the retroreflectivity specifications, S-916 also 
provided a comprehensive list of other aspects of the comparator panel. 
To maintain sufficient surface area for retroreflectivity, and for ease 
of use and versatile placement of the comparator panel on various parts 
of rail freight rolling stock, S-916 specifies that the retroreflective 
surface of the panels shall measure 4 inches by 4 inches and be 
equipped with a magnetic backing. Unlike the miscroprismatic 
retroreflective material required for rail freight rolling stock, the 
comparator panels shall be constructed of glass-beaded material or 
other material that displays uniform appearance when rotated and viewed 
with a light source. Because part 224 allows for horizontal and 
vertical placement of retroreflective sheeting, this helps eliminate 
the slight directional dependency of the panel that would otherwise be 
exhibited in prismatic material; however, this does not diminish the 
amount of retroreflectivity for the same given value.
    AAR and FRA agreed that the comparator panels would need to contain 
pertinent information about the panel so that individuals using the 
panel could easily verify it was valid, i.e., calibrated and/or 
certified. Thus, as a condition of FRA's approval of the comparator 
panels, FRA required the panels to have a waterproof and dust-proof 
label on the back side that contained the phrase ``Retroreflective 
Comparator Panel--Yellow'' or ``Retroreflective Comparator Panel--
White;'' and the name of the manufacturer, the part, model, or serial 
number, the date the panel was manufactured, the target 
retroreflectivity level to which the panel was manufactured (measured 
in cd/lx/m\2\), and a space provided for future recalibration date 
sticker(s). FRA and AAR concluded that a recalibration sticker would 
help ensure the panels stay within the specified retroreflectivity 
levels. Initially, an expiration date was considered, however, setting 
an expiration on a comparator panel that may continue to function as 
intended is contrary to the purpose for developing comparator panels to 
evaluate the sheeting. Thus, AAR built a recalibration requirement into 
S-916, to ensure that comparator panels are checked or recalibrated 
periodically to confirm they remain within the manufactured 
specifications for continued use. Specifically, S-916 requires the use 
of a sticker attached to the back of each comparator panel with a 
recalibration date specified.
    To help implement its comparator panel standard, AAR published 
Specification M-944, Retroreflective Sheeting Inspection Procedure (M-
944). M-944 provides the process for conducting a performance 
evaluation of retroreflective sheeting on railroad freight cars and 
locomotives using a comparator panel or electronic handheld 
retroreflectometer. An initial inspection of the car or locomotive 
includes cleaning and examination of sheeting with a light source 
approximately 15 feet away as a preliminary screening to determine if 
further inspection is necessary. If the perceived reflected light 
intensity of the entire installed sheeting appears brighter than that 
of the comparator panel, it does not need to be further evaluated with 
the comparator panel. Sheeting that has signs of condemnable 
degradation (i.e., internal mold or mildew growth) also do not need to 
be further evaluated with the comparator panel, as they are simply 
replaced. If the perceived reflected light intensity of the entire 
installed sheeting does not appear brighter than that of the comparator 
panel and does not have signs of condemnable degradation (typically 
exhibiting dull or otherwise questionable retroreflectivity) it is 
evaluated by a comparator panel for evaluation (or a handheld 
retroreflectometer). The comparator panel is placed adjacent to or 
overlapping the target sheeting, and both are evaluated with a light 
source adjacent to the inspector's eye and from approximately 15 feet 
away. Sheeting that appears brighter than the comparator panel does not 
need to be further evaluated and does not need to be replaced. If the 
comparator panel appears brighter than the sheeting, or if the 
inspector cannot distinguish one as being brighter than the other, the 
sheeting shall be replaced. A handheld annular retroreflectometer can 
also be used to directly evaluate sheeting. The minimum retroreflective 
value to continue in service is 150 cd/lux/m\2\ for yellow sheeting and 
250 cd/lux/m\2\ for white sheeting, when measured at -4[deg] entrance 
angle and 0.2[deg] observation angle. Sheeting that yields 
retroreflective values below these minimums shall be replaced.
    AAR incorporated the specifications of the comparator card and 
inspection procedures into AAR Interchange Rule 66, Reflective 
Sheeting. Rule 66 also established a new billing repair ``Why Made 
Code: 1F'' related to use of the comparator panel and replacing 
reflective sheeting for not meeting the minimum reflectivity levels per 
Rule 66. The existing ``Why Made Code: 49'' is still valid for 
reflective sheeting lacking FRA-224 stamp, damaged, obscured, or 
missing, for use with Job Codes 5500 and 5502. FRA seeks comment from 
AAR regarding the proportion of ``Why Made Code: 1F'' to ``Why Made 
Code: 49'' that was billed during freight car SCABT or locomotive 
annual inspection.
    Since late 2018, AAR's alternate method has been widely used by 
industry (specifically within interchange among AAR member railroads). 
FRA understands the standard has been successful and has no record of 
accidents, incidents, or violations related using the standard. FRA is 
proposing to codify the current elements of the standard in this 
rulemaking proceeding and requests comments on whether the elements of 
the standard should be codified to continue use of the standard for 
complying with part 224 and make it an option for the entire railroad 
industry.

IV. Section-by-Section Analysis

Section 224.3 Applicability

    Section 224.3 sets forth the scope and application of part 224. 
Part 224 generally applies to all railroad freight

[[Page 43476]]

cars and locomotives that operate over a public or private highway-rail 
grade crossing and are used for revenue or work train service. Existing 
paragraphs (a) through (d) of Sec.  224.3 exclude from part 224's 
applicability, certain types of equipment and operations because they 
present a low risk of RIT collisions. FRA proposes to add paragraph (e) 
to exclude rail freight rolling stock used solely for THEERP purposes, 
except for incidental freight service. FRA is proposing to exclude 
equipment used only for THEERP purposes because (as discussed further 
in Section II C. and III A. of the supplementary materials above) those 
operations present a low risk of RIT collisions. Incidental freight 
service would include when a railroad uses rail freight rolling stock 
for other than THEERP purposes only on rare occasions as necessary to 
facilitate some of their operations. For example, California State 
Railroad Museum requested relief from part 224 for two locomotives used 
primarily for yard switching, freight service, and rarely in passenger 
(excursion) train service, but only when its steam locomotives 
fail.\33\ In another instance, The Everett Railroad Company stated that 
its caboose car is retained primarily for use on excursion trains, 
historical and public relation events, along with possible, but very 
infrequent, use as a crew caboose or shoving platform.\34\ For these 
particular instances, the freight train consist, as well as the 
railroad trackage, are short, and the trains operate at much lower 
speeds than typical freight service.
---------------------------------------------------------------------------

    \33\ Docket FRA-2010-0171, Document No. 9.
    \34\ Docket FRA-2012-0024, Document No. 4.
---------------------------------------------------------------------------

Section 224.107 Implementation Schedule

    FRA proposes to remove this section. On November 28, 2005, when the 
Reflectorization Standards took effect, railroads operating rail 
freight rolling stock subject to this part, were required to commit to 
an implementation schedule for equipping their fleet with 
reflectorization. This section required such railroads to submit an 
implementation schedule to FRA for approval, or adopt FRA's proposed 
implementation schedule, equipping 10% of total freight fleet per year 
for 10 years, and 20% of total locomotive fleet per year for 5 years. 
This meant that by November 28, 2015, 100% of the freight fleet 
population would be fully equipped with part 224 compliant 
retroreflective sheeting. Similarly, by November 28, 2010, 100% of the 
locomotive fleet population would be fully equipped with part 224 
compliant retroreflective sheeting. With the passage of time, railroads 
are no longer required to submit an implementation schedule or adopt 
FRA's proposed implementation schedule. Therefore, this section is 
outdated and FRA is proposing to remove the language to shorten and 
simplify part 224.

Section 224.109 Inspection, Repair, and Replacement

    FRA proposes to revise paragraphs (a) and (b) to remove any 
references to Sec.  224.107, because that section's requirements are 
outdated, and in this rulemaking proceeding FRA is proposing to remove 
it. Specifically, FRA proposes to remove the following language 
``(Sec.  224.107 in the case of freight cars subject to Sec.  
224.107(a)(3))'' from paragraph (a), and the following language 
``(Sec.  224.107 in the case of locomotives subject to Sec.  
224.107(b)(3))'' from paragraph (b).

Section 224.111 Renewal

    FRA proposes to retitle this section from ``Renewal'' to 
``Evaluation, and replacement of 10-year old or underperforming 
retroreflective sheeting.'' The existing title, ``Renewal,'' reflects 
the only current replacement option, which is to renew the 
retroreflective sheeting after 10 years, regardless its condition. The 
proposed title would indicate two options for replacing the 
retroreflective sheeting: the same 10-year replacement cycle; or using 
a performance-based method to determine when replacement is required.
    In paragraph (a), FRA proposes to identify two options for 
replacing retroreflective sheeting: a 10-year replacement cycle; and an 
alternative method to determine when replacement is required. FRA 
proposes to include the existing 10-year replacement option in 
paragraph (b) and the alternative option in paragraph (c).
    FRA proposes to retain the 10-year replacement option in paragraph 
(b), because some short line railroads or individual car owners may not 
want to invest in the equipment and training needed to switch to an 
alternative method. As discussed above, it is not clear if, or how, 
railroads are able to distinguish between replacement sheeting and 
previously installed sheeting on the same piece of equipment. According 
to AAR, UMLER system updates have been inconsistent, because the 
railroad industry no longer relies on the information provided by the 
UMLER fields. FRA requests comment from the railroad industry on how 
records are created and maintained to track the installation date of 
sheeting when only a portion of the required sheeting is replaced prior 
to 10-years from the date of original installation.
    Proposed paragraph (c) would require railroads to evaluate 
retroreflective sheeting during the SCABT and annual locomotive 
inspection. Proposed paragraph (c)(1) provides the specifications for 
an acceptable comparator panel to carry out the evaluation. Proposed 
paragraph (c)(2) sets forth the process and criteria for evaluating the 
existing sheeting using a comparator panel under paragraph (c)(1). 
Proposed paragraph (c)(3) permits the use of a handheld 
retroreflectometer to perform the required evaluation. As part of FRA's 
routine compliance oversight, the agency expects to review railroads' 
inspection records to verify an alternative evaluation was conducted.
    As proposed, the retroreflectivity, color, and construction 
requirements in paragraph (c)(1)(i) through (iii) are the same as the 
current S-916. The proposed labeling requirement in subparagraph 
(c)(1)(iv) is also the same as the current S-916, with the additional 
requirement that a panel's label include information on the calibration 
status of the panel. Since AAR indicated that the median time between 
SCABT is 25.6 months, FRA proposes to have the comparator panels 
recalibrated at least every two years (i.e., no more than two years 
from its manufactured date or previous recalibration date, whichever is 
most recent). FRA seeks comment on this proposed timeframe and how much 
downtime is expected while a panel is out for recalibration.
    Proposed paragraph (c)(2) would establish the same comparator panel 
evaluation process and criteria as the current M-944. M-944 recommends 
evaluating installed sheeting with a comparator panel from 15 feet. FRA 
understands that 15 feet provides an appropriate amount of space to 
perform the evaluation, but also understands that during a SCABT or 
locomotive annual inspection it may not be practicable for an inspector 
to stand 15 feet from the equipment. To provide some flexibility, 
proposed paragraph (c)(2)(iv) would require sheeting to be evaluated 
from a distance of between 10 and 20 feet, with a 15-foot distance 
being preferable. FRA seeks comments on whether a range of 10 to 20 
feet is sufficient to properly evaluate retroreflective sheeting and 
whether the proposed range provides sufficient flexibility.
    Consistent with M-944, proposed paragraph (c)(2)(v) sets forth the 
process for conducting the evaluation (e.g., with light source 
positioned adjacent to the

[[Page 43477]]

inspector's eye and directed at the sheeting and comparator panel, the 
inspector compares the reflected light intensity of the entire 
installed sheeting to that of the comparator panel). Proposed paragraph 
(c)(2)(v)(A) provides that if the perceived reflected light intensity 
of the entire installed sheeting appears brighter than that of the 
comparator panel, the installed sheeting passes the evaluation. 
Proposed paragraph (c)(2)(v)(B) provides that if the perceived 
reflected light intensity of the entire installed sheeting does not 
appear brighter than the comparator panel or if the two are 
indistinguishable, the installed sheeting, does not pass the 
evaluation. If the two are indistinguishable, the installed sheeting is 
already at or near the minimum threshold to comply with this section 
and would only continue to degrade below the threshold if allowed to 
continue in service until the next evaluation required by this section. 
Therefore, as proposed, FRA would require such sheeting to be replaced.
    In paragraph (c)(3), FRA proposes to allow the use of handheld 
reflectometers to evaluate retroreflective sheeting and determine when 
it is required to be replaced under this part. FRA understands that 
reflectometers can be used to evaluate retroreflective sheeting easily, 
reliably, and accurately. Proposed paragraph (c)(3) would require use 
of an annular reflectometer, placed directly against the 
retroreflective sheeting. FRA is requiring an annular device, if a 
reflectometer is used, because it is easier to ensure an accurate 
evaluation compared to other types of devices that require multiple 
measurements from different angles to properly evaluate the sheeting. 
Proposed paragraph (c)(3)(iii) sets forth the minimum allowable 
retroreflective values and necessary measurement angles if a 
reflectometer is used. Due to the current high cost of a handheld 
reflectometer, FRA does not anticipate widespread use of reflectometers 
initially. However, if the cost diminishes overtime, railroads may 
prefer it.

V. Regulatory Impact and Notices

A. Executive Order 12866

    The proposed rule is a nonsignificant regulatory action under 
Executive Order 12866, ``Regulatory Planning and Review.'' FRA made 
this determination as the economic effects of the proposed rulemaking 
would not exceed the $100 million annual threshold defined by Executive 
Order 12866. FRA estimates this proposed rule would result in benefits 
over a 20-year period from not replacing retroreflective sheeting prior 
to the end of its useful life, while potentially improving safety by 
replacing in less than 10 years sheeting that has already reached the 
end of its useful life.
1. Need for Regulatory Action
    The Reflectorization Standards were promulgated in 2005; in the 
over-15 years since their publication, FRA has learned that the 
reflective sheeting applied to rail freight rolling stock can remain 
effective beyond the 10 years initially thought at the time the 
Reflectorization Standards were developed. This rulemaking updates the 
Reflectorization Standards in light of this new information by allowing 
the use of an alternative method to evaluate retroreflective sheeting. 
The alternative method, currently implemented by using a comparator 
panel (under waiver), allows railroads and private car owners to 
replace retroreflective sheeting as needed, based on performance, 
instead of a mandatory replacement based on length of time. The 
proposed rule also recognizes a segment of the regulated entities that 
operate THEERP freight rolling stock and extends the exclusion from the 
Reflectorization Standards to THEERP operations, as they pose a low 
risk of highway-rail grade crossing incidents. For both stakeholders 
that choose to use the comparator panel, and those that operate THEERP 
freight rolling stock, the proposed rule promotes regulatory certainty 
and efficiency. Unnecessary paperwork burdens would also be reduced by 
no longer needing to periodically file waivers with FRA for relief from 
their respective sections of part 224.
    The proposed rulemaking amends part 224 in two substantive ways. 
First, the proposed rule codifies waivers excepting THEERP operations 
from reflectivity standards in Sec.  224.3. Second, the proposed rule 
codifies the AAR waiver allowing railroads to use an alternative method 
(i.e., the comparator panel) for determining when retroreflective 
sheeting needs replacement. The comparator panel would be added as an 
option to the existing 10-year replacement cycle under Sec.  224.111.
2. Baseline
    The typical baseline scenario from which benefits and costs of the 
regulation are measured is the no-action baseline, which is an 
assessment of the railroad world without the proposed rule.\35\ Without 
the NPRM, it is likely that the railroads will continue to file waivers 
and waiver renewals for using the alternative method and exclusion of 
THEERP freight rolling stock from the Reflectorization Standards. One 
possible baseline would assume FRA approves most of these waivers with 
conditions, as it has in the past. In comparing this baseline to the 
NPRM, the benefit from the NPRM would be the removal of unnecessary 
paperwork burdens of having to file future waivers and renewals with 
FRA.
---------------------------------------------------------------------------

    \35\ Office of Management and Budget (OMB), Circular A-4: 
Regulatory Analysis (Sept. 17, 2003). Available: https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf.
---------------------------------------------------------------------------

    However, another baseline might offer more information about the 
impacts of the proposed rule. The waiver to use the comparator panel is 
relatively recent (2018), and many of the THEERP waivers are also less 
than 10 years old. The comparator-panel waiver covers almost all the 
rail freight rolling stock. Another baseline would describe a scenario 
absent the comparator-panel waiver, that is, in which approval of the 
waiver is uncertain and reflective sheeting is replaced per the 10-year 
renewal cycle in existing Sec.  224.111. FRA proposes to use this 
baseline to better estimate the substantive impacts of the NPRM. The 
baseline is accounted for as a separate alternative under the Costs 
section below. FRA invites comment on the appropriate baseline to use 
for the regulatory analysis.
3. Costs
a. Methodology
    Since the retroreflective sheeting is applied per rail car, this 
analysis used the per-car cost as the basis to estimate much of the 
costs related to retroreflective sheeting. The costs for preparing 
waiver petitions were estimated based on the labor costs of those 
employees preparing the waivers.
    FRA requested data from AAR about the railroads' experiences under 
the approved waiver using the comparator panel. FRA reviewed the data 
supplied by AAR and incorporated it into the cost estimates below. AAR 
provided data for before and after the comparator panel waiver.\36\
---------------------------------------------------------------------------

    \36\ Association of American Railroads (AAR), FRA Data Request 
for Docket FRA-2015-0105 (Nov. 3, 2020).
---------------------------------------------------------------------------

    In its estimates, AAR used an average labor rate of $140.38 per 
hour or $2.34 per minute, in 2020 dollars, which may be based on 
interchange billing rates. For its regulatory analyses, however, FRA 
uses standardized labor rates which the Class I railroads report to the 
Surface Transportation Board (STB).

[[Page 43478]]

These rates are burdened by 75 percent for any fringe benefits. (The 
Class I railroads report service hours and compensation to STB under 49 
CFR 1245.2.) For this analysis FRA used the STB wage rates for the 
relevant employee groups. These are STB Group 200 employees consisting 
of Executives, Officials, & Staff Assistants who likely complete waiver 
petitions for the railroads, and Group 400 Maintenance of Equipment & 
Stores employees who inspect and apply the reflective sheeting. The 
Executives, Officials, & Staff Assistants burdened rate is $77.44 per 
hour or $1.29 per minute, and the Maintenance of Equipment & Stores 
employees burdened rate is $59.89 per hour or $1.00 per minute (in 2020 
dollars).\37\
---------------------------------------------------------------------------

    \37\ Surface Transportation Board (STB), Quarterly Wage A&B Data 
(2020). Annual composite for All Railroads. Available: https://www.stb.gov/reports-data/economic-data/quarterly-wage-ab-data/. 
Calculations: For Group 200 employees, $44.25 per hour STB average 
straight time rate x 1.75 fringe benefit multiplier = $77.44 per 
hour burdened wage rate. Similarly, for Group 400 employees, $34.22 
x 1.75 = $59.89 per hour burdened wage rate.
---------------------------------------------------------------------------

    To estimate Government costs and benefits resulting from reviewing 
and approving waivers, FRA used the General Schedule (GS) pay rates for 
grade GS-14 step 5 employees in the Washington, DC area. The Federal 
pay rate was also burdened by 75 percent yielding a Federal pay rate of 
$115.29 per hour.\38\
---------------------------------------------------------------------------

    \38\ Office of Personnel Management (OPM), Salary Table 2020-DCB 
(Jan. 2020). Available: https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2020/DCB_h.pdf. 
Calculation: $65.88 per hour GS-14 Step 5 rate x 1.75 fringe benefit 
multiplier = $115.29 per hour burdened rate.
---------------------------------------------------------------------------

    AAR provided counts of the maintenance of way (MOW) cars and 
locomotives that would be covered under part 224; however, FRA focused 
on freight rail cars to simplify the analysis. Given that MOW cars and 
locomotives represent a small portion of all freight rail cars (about 
2.5 percent and 1.6 percent respectively), including them in the 
analysis would not significantly affect the results.
    FRA used a 20-year period of analysis for this rulemaking because 
retroreflective sheeting appears to have an effective service life 
beyond 10 years (based on data from the AAR comparator panel waiver). 
FRA also identified one study that estimated prismatic sheeting used on 
traffic signs may last 15 to 30 years, which may be a reasonable proxy 
for similar sheeting used on rail cars.\39\ However, for the rail 
freight rolling stock used in THEERP operations, a 10-year period of 
analysis may be a better ``fit'' because overage equipment may only be 
actively used for an additional 5 to 10 years. Since the provision 
permitting use of the comparator panel covers most of the rail car 
fleet, FRA chose to use a 20-year period of analysis.
---------------------------------------------------------------------------

    \39\ Preston, Howard, Traffic Sign Life Expectancy (St. Paul, 
MN: 2014). Report No. MN/RC 2014-20. Minnesota Dept. of 
Transportation. Available: https://www.lrrb.org/pdf/201420.pdf.
---------------------------------------------------------------------------

    First, the baseline scenario costs were determined, followed by the 
NPRM costs. The difference between the two costs represents the 
estimated net benefits (or costs) of the NPRM: Baseline costs-NPRM 
costs = Net benefits (or costs).
    The costs and benefits associated with the NPRM are summarized in 
Table V-1 below.

                          Table V-1--Summary of Total Benefits Over the 20-Year Period
                                                 [2020 Dollars]
----------------------------------------------------------------------------------------------------------------
                                                   Present value   Present value
             Impact                Undiscounted         7%              3%        Annualized  7%  Annualized  3%
----------------------------------------------------------------------------------------------------------------
Baseline Cost...................    $540,747,953    $286,435,001    $402,248,463     $27,037,438     $27,037,415
NPRM Cost.......................     436,091,940     231,038,590     324,420,840      21,808,408      21,806,176
Net Benefits....................     104,656,013      55,396,411      77,827,623       5,229,029       5,231,239
Government Costs for Waivers             167,171          89,183         124,739           8,418           8,384
 (Baseline).....................
----------------------------------------------------------------------------------------------------------------
Qualitative Benefit: Reduced environmental waste from not replacing effective reflective sheeting prematurely.

    The impacts are described in detail below.
b. Baseline Costs
    Absent this NPRM, both THEERP operations and other railroads to 
which the Reflectorization Standards apply will incur costs for the 
following requirements:
     Cost for inspection and replacement of missing, damaged, 
or obscured retroreflective sheeting (``sheeting'') under Sec.  
224.109.
     Cost to renew, i.e., replace sheeting no later than 10 
years after installation under Sec.  224.111. The baseline assumes 
sheeting will be replaced periodically every 10 years.
     Incidental cost for transporting rail cars that would not 
typically appear on a repair track or shop for a SCABT to renew 
sheeting under Sec.  224.111.
     Cost of petitioning FRA for waivers from the 
Reflectorization Standards.
    These cost elements may be represented by the equation: Baseline 
cost = Visual inspection & sheeting replacement + 10-year renewal + 
Transport + Waiver.
    The cost for inspection and replacement of missing, damaged, or 
obscured sheeting was determined by the cost of a visual inspection and 
sheeting replacement multiplied by the number of cars undergoing a 
SCABT. The SCABT serves as the triggering event for the inspection and 
replacement of sheeting under Sec.  224.109. To determine the number of 
cars undergoing a SCABT per month, FRA used the median time between 
SCABTs of 25.6 months, and the average annual number of freight cars of 
1,658,334 (an average over the recent period 2016-2020). The cars per 
month were multiplied by 12 months to yield an estimated 765,385 cars 
per year undergoing a SCABT.\40\
---------------------------------------------------------------------------

    \40\ Calculation: 1,658,334 fleet size/26 months = 63,782 SCABT 
cars per month. Then 63,782 cars per month x 12 months = 765,385 
cars per year that undergo a SCABT, or about 46% of the fleet. 
Source: FRA Data Request, 2020.
---------------------------------------------------------------------------

    Further, the cost of the visual inspection and sheeting replacement 
was determined by the sum of the cost of the visual inspection and cost 
to replace missing, damaged, or obscured sheeting. AAR indicated the 
time for a visual inspection was 0.83 minutes, the time to replace the 
first sheet per side was 9.3 minutes, the average number of sheets 
replaced during SCABTs was 0.71 sheets, and the cost per sheet was 
$1.31. Accounting for the labor time using the STB Maintenance of 
Equipment & Stores wage rate of $1.00 per minute results in a per-car 
cost of $11.00. Then the cost under Sec.  224.109 was calculated by 
multiplying the estimated cars undergoing a SCABT by

[[Page 43479]]

the cost per car, resulting in a cost of $8,423,025 per year.\41\
---------------------------------------------------------------------------

    \41\ Calculations: Per-car cost for visual inspection and sheet 
replacement = 0.83 min. x $1 per min. visual inspection + 9.3 min. x 
$1 per min. sheeting replacement + 0.71 sheets x $1.31 per sheet = 
$11.00. Total cost for visual inspection and sheeting replacement = 
765,385 cars x $11 per car = $8,423,025 per year.
---------------------------------------------------------------------------

    Similarly, the cost to renew the sheeting after 10 years was 
determined by the number of cars affected multiplied by the cost of 
renewal. The average number of cars that would need full renewal was 
154,800 per year based on the average over the years 2016 to 2020 (FRA 
Data Request, 2020). That represents about 10 percent of the fleet per 
year, which is expected given the 10-year renewal period. The cost for 
sheeting material per car was estimated given 14 sheets (of 0.5 square-
foot each) would be needed for 2 sides of the rail car (less than 50-
foot car, 7 sheets per side), for a cost of $18.34 per car. AAR 
provided that the time to apply the sheeting was 9.3 minutes for the 
first sheet per side, and 2.6 minutes for each additional sheet, 
totaling almost 50 minutes for both sides of a rail car and $50 in 
labor costs (using the STB Maintenance of Equipment & Stores wage rate 
of $1.00 per minute). The cost per car for sheeting renewal is the sum 
of the material cost and labor application costs ($18.34 + $49.87 = 
$68.21 per car). Then the renewal cost for all affected cars is 
$10,558,758 annually.\42\
---------------------------------------------------------------------------

    \42\ Calculation: Cost to renew sheeting after 10 years = 
154,800 cars x $68.21 per car = $10,558,758 per year on average.
---------------------------------------------------------------------------

    In order to model the impacts more accurately under the baseline, 
FRA estimated the potential costs for transporting rail cars, that in 
their normal operations, would not appear on a repair track or shop 
(for a SCABT). These cars may be owned by private car owners that do 
not own repair shops, MOW cars that are not regularly interchanged, 
older cars that are not regularly interchanged, stored cars, and 
seasonally used cars. These cars may incur additional expense for 
transportation to a repair shop when their sheeting needs renewal after 
10 years. However, this situation is mitigated by mobile repair units 
or a railroad's Running Repair Agent (RRA) that can perform SCABTs and 
replace sheeting.\43\ Nevertheless, FRA accounted for the 
transportation costs for some cars that may need to be moved for 
sheeting replacement because of scheduling issues with mobile repair 
agents or operational issues. As a proxy estimate for the number of 
cars requiring transport, FRA used the 23,000 freight cars that have 
interchange restrictions as reported by AAR; these cars are usually 
older cars.\44\ Another way to estimate the number of affected cars is 
to consider the conditional probability of not undergoing a SCABT on a 
repair track or shop and cars that would need full sheeting renewal. 
The probability of not undergoing a SCABT was found by dividing the 
number of cars undergoing a SCABT by the average fleet size, then 
subtracting from 1, for a result of 0.54 or about 50 percent.\45\ From 
the discussion above, the probability of renewal for a car is about 10 
percent or 0.1. The conditional probability is the product of the two 
probabilities, equaling about 0.05 or 5 percent of the fleet, and 
representing 89,295 rail cars. Qualitatively, the majority of these 
cars can be serviced by mobile repair agents and RRAs, and FRA used 
23,000 cars as a reasonable estimate.
---------------------------------------------------------------------------

    \43\ Railinc, Running Repair Agents--Active. Available: https://findusrail.railinc.com/#/home.
    \44\ AAR, Railroad Facts: 2020 Edition (Washington: 2020) 53.
    \45\ Calculation: 1-765,385 SCABT cars/1,658,334 average fleet 
size = 1-0.46 = 0.54, or about 50 percent of cars not likely to 
appear on a repair track or shop for a SCABT.
---------------------------------------------------------------------------

    For the transportation cost per car, FRA estimated the expected 
transportation cost as the probability that a car would need 
transportation for sheeting renewal multiplied by its transportation 
cost. FRA estimated a range of $3,000 for $4,000 to transport an empty 
car, or an average cost of $3,500 per car; the expected cost in any one 
year is $350.\46\ Then, the transportation cost for the rail car fleet 
is the estimated 23,000 affected cars multiplied by the expected 
transportation cost of $350, for an overall transportation cost of 
$8,050,000 annually. Given the uncertainty about the number of cars 
affected, there is a higher degree of uncertainty about this cost 
estimate and FRA invites comment on the inputs used.
---------------------------------------------------------------------------

    \46\ Calculation: Expected (transportation cost per car) = 
probability (car would need 10-year sheeting renewal) x 
transportation cost = 0.1 x $3,500 = $350.)
---------------------------------------------------------------------------

    The last cost element in the baseline scenario is the cost of 
petitioning FRA for waivers from the Reflectorization Standards. When 
approved, waivers generally provide regulatory relief for five years. 
For this analysis, FRA distinguished between waiver extensions and 
waiver renewals. Waivers extensions permit the railroad or individual 
car owners to continue to operate under the original waiver for another 
five years, and do not require preparation of a Federal Register 
notice. After 10 years, the railroad or individual car owner can no 
longer apply for an extension, but must instead request a renewal of 
the waiver. The renewal requires more administrative tasks including a 
Federal Register notice. The baseline waiver cost is the estimated 
number of new waivers plus waiver extensions and renewals, multiplied 
by the cost of filing waivers. This analysis estimated the waiver costs 
for both THEERP operations and the performance-based (i.e., comparator-
panel) waiver.
    In the case of waivers for THEERP operations, FRA has received and 
reviewed 22 waivers over 16 years, for a rate of 1.375 new waivers per 
year, which is rounded to 1.5 waivers for analysis. Therefore, over the 
20-year period of analysis (years 2022 to 2041), FRA expects 30 new 
waiver petitions. Based on historical experience and FRA subject matter 
expert estimates, FRA has found that waiver extensions and renewals are 
subject to the following three conditions:
     Railroads or individual car owners will likely not operate 
overage equipment beyond 10 years.
     Railroads or individual car owners have not asked for 
renewals of waivers beyond 10 years.
     FRA has approved 14 out of 22 waivers for an approval rate 
of 64 percent (i.e., 64 percent of 1.5 new waivers is about 1 new 
waiver per year). Moreover, there were 7 dismissed or denied waivers, 
and 1 double-counted waiver to complete the set of 22 THEERP waivers).
    Applying these conditions to the number of new waivers, FRA 
estimated 15 waiver extensions over the period of analysis. As 
explanation, new waivers approved during years 1 through 5 of the 
period of analysis (from calendar years 2022 through 2026) will likely 
receive extensions during years 6 through 10 of the period of analysis 
(from calendar years 2027 through 2031) respectively, resulting in 5 
extensions. (After 10 years, requests for waivers renewals are not 
likely under the first two conditions above.) Similarly, new waivers 
approved during years 6 through 10 of the analysis will likely receive 
extensions during years 11 through 15 of the analysis (from 2032 
through 2036) respectively, resulting in an additional 5 extensions. 
Finally, new waivers approved during years 11 through 15 of the 
analysis will likely receive extensions during years 16 through 20 of 
the analysis (from 2037 through 2041) respectively, resulting in 5 more 
extensions. In total, FRA expects 15 waiver extensions.
    Also, THEERP operations that currently have waivers may request

[[Page 43480]]

extensions resulting in an additional 6 waiver extensions. Of the 14 
approved THEERP waivers, 4 did not request a waiver renewal and expired 
before year 2022 (waivers FRA-2010-0148, 2010-0156, 2008-0021, and 
2014-0082). Of the remaining 10 approved THEERP waivers, 1 is due for 
an extension in year 1 of the analysis, i.e., calendar year 2022 
(waiver FRA-2016-0110--approved in 2017). Four approved waivers are due 
for extensions in year 3 of the analysis, i.e., year 2024 (waivers FRA-
2018-0026, 2018-0086, 2019-0008, 2019-0047--all approved in 2019). 
Finally, 1 approved waiver is due for an extension in year 4 of the 
analysis, i.e., year 2025 (waiver FRA-2020-0046--approved in 2020). In 
sum, FRA expects 6 waiver extensions. Four of the 10 approved waivers 
may request waiver renewals during the period of analysis but are 
unlikely to do so based on the above conditions.
    Thus, FRA expects THEERP operations to file 30 new waivers, 15 
extensions of these new waivers, and 6 extensions of existing waivers. 
FRA estimated each new THEERP waiver petition requires 40 hours of 
labor, and each extension requires 8 hours of labor. Accounting for 
these labor hours at the STB Executives, Officials, & Staff Assistants 
burdened wage rate yields a new waiver cost of $3,097.50 per waiver, 
and a corresponding cost of $4,646 for 1.5 new waivers per year.\47\ 
The cost for a waiver extension is $619.50 per extension. The costs are 
scheduled according to the frequency of occurrence of new THEERP 
waivers (1.5 per year), new THEERP waiver extensions (1 per year 
starting in year 6 of the analysis), and currently-approved THEERP 
waiver extensions (1 in year 1 of the analysis, 4 in year 4, and 1 in 
year 5). The cost schedule also accounts for extensions and renewals of 
the performance-based waiver at $1,587 per extension or renewal (see 
below, 1 extension expected in year 2 of the analysis, and thereafter 1 
renewal per each year in years 7, 12, and 17). As an example, in year 2 
of the analysis, FRA expects 1.5 new THEERP waivers ($4,646), and 1 
alternative waiver extension ($1,587), for a total estimated cost of 
$6,234.
---------------------------------------------------------------------------

    \47\ Calculation: Cost for 1 waiver = 40 hrs. x $77.44 = 
$3,097.50. Then 1.5 new waivers x $3,097.50 per waiver = $4,646.
---------------------------------------------------------------------------

    For regulated entities petitioning to use alternative methods to 
evaluate sheeting, FRA is not aware of any new methods in development 
and expects no new waiver filings. If a new performance-based waiver 
was filed, the cost to file such a waiver would be qualitatively high 
because it would likely involve extensive development and in-service 
testing like the comparator panel. Given the research to develop the 
comparator panel, FRA expects AAR will continue to file for extensions 
and renewals to extend the waiver's relief. Over the period of 
analysis, FRA estimated 4 extensions and renewals, requiring 20.5 hours 
each at the same Executives, Officials, & Staff Assistants wage rate 
for a per-waiver cost of $1,587.47. FRA estimated the performance-based 
waiver extension requires more labor time than the THEERP-operations 
waiver extension because Class I railroads' operations are more 
complex. (A THEERP-operations waiver renewal, however, may involve 
detailed descriptions of the subject equipment that may add to the time 
to file a potential renewal.)
    Furthermore, the Federal Government expends resources to review 
these waiver petitions. Depending on the waiver, FRA's review will 
involve legal personnel, subject matter experts, administrative 
personnel, and railroad inspectors. FRA estimated these costs using the 
same respective labor hours as for THEERP-operations waivers and 
performance-based waivers above. For the wage rate, instead of using an 
average wage rate for the variety of personnel involved, FRA used a 
representative wage rate for GS-14 step 5 employees of $115.29 per 
hour. The resulting FRA costs are $4,611.60 for a new THEERP-operations 
waiver, $922.32 for a THEERP-operations waiver extension, and $2,363.45 
for the comparator-panel wavier extension and renewal.
    The following table presents the estimated baseline scenario cost 
elements. The Government costs are not included in the total baseline 
cost.

                                       Table V-2--Baseline Scenario Costs
                                                 [2020 Dollars]
----------------------------------------------------------------------------------------------------------------
                                                   Present value   Present value
      Baseline cost impact         Undiscounted         7%              3%        Annualized  7%  Annualized  3%
----------------------------------------------------------------------------------------------------------------
Visual Inspection & Replacement     $168,460,499     $89,233,646    $125,313,342      $8,423,025      $8,423,025
 (Sec.   224.109)...............
10-Year Renewal (Sec.   224.111)     211,175,170     111,859,638     157,087,664      10,558,758      10,558,758
Transportation for Non-SCABT         161,000,000      85,281,815     119,763,673       8,050,000       8,050,000
 Cars...........................
Waivers.........................         112,284          59,902          83,784           5,654           5,632
                                 -------------------------------------------------------------------------------
    Total Baseline..............     540,747,953     286,435,001     402,248,463      27,037,438      27,037,415
Government Costs for Waivers....         167,171          89,183         124,739           8,418           8,418
----------------------------------------------------------------------------------------------------------------

c. NPRM Costs
    The first substantive change under the NPRM would add freight 
rolling stock used for THEERP operations to the list of excepted 
equipment under Sec.  224.3. These operations would no longer need to 
file waivers and waiver extensions with FRA and thus save the 
associated paperwork costs. The benefits would equal the baseline costs 
for waivers (when taken together with the similar type of benefits from 
codifying the comparator panel waiver).
    The largest change under the NPRM would be evaluating rail cars 
with a comparator panel instead of replacing sheeting under the 10-year 
renewal cycle. THEERP operations and other railroads to which the 
Reflectorization Standards apply will incur costs for the following 
requirements:
     Cost for inspection and replacement of missing, damaged, 
or obscured retroreflective sheeting under Sec.  224.109. This 
requirement is unchanged from the baseline except for removing old 
implementation dates.
     Cost to evaluate and replace sheeting under Sec.  224.111. 
The NPRM retains the option to use the 10-year replacement cycle.
     Incidental cost for transporting rail cars that would not 
typically appear on a repair track or shop for a SCABT to renew 
sheeting under Sec.  224.111. This

[[Page 43481]]

cost occurs under the baseline too but is adjusted for relief from the 
10-year replacement cycle, and longer expected sheeting life.
     Small entities that may use the 10-year replacement cycle 
option under Sec.  224.111 (estimated at 15 percent of small entities).
     Cost of the comparator panel.
     Cost to recalibrate the comparator panel under Sec.  
224.111.
     Employee training to use the comparator panel as described 
in AAR Field Manual Rule 66. (The comparator panel inspection of 
reflective sheeting will become part of the SCABT and annual locomotive 
inspection.)
    These cost elements may be represented by the equation: NPRM Cost = 
Visual inspection & sheeting replacement + Periodic evaluation & 
sheeting replacement + Transport + 10-year renewal option estimated for 
small entities + Comparator panel + Comparator panel recalibration + 
Employee training.
    The cost for visual inspection and replacement of missing, damaged, 
or obscured sheeting remained the same as under the baseline scenario 
because FRA is only removing the references to the outdated 
implementation schedule. The substantive requirements remain the same.
    The primary change under the NPRM would be evaluating the sheeting 
on rail cars with a comparator panel. The cost of using the comparator 
panels is determined by the number of cars undergoing a SCABT and 
evaluated with the comparator panel multiplied by the material and 
labor costs per car. Based on data supplied by AAR, FRA estimated 
571,750 cars will evaluated, a preliminary inspection will require 2.8 
minutes, cleaning will take 3.3 minutes, and the time to apply 1 sheet 
will require 9.3 minutes. AAR also found an average of 0.72 sheets 
renewed during their waiver at a cost of $1.31 per sheet. FRA applied 
the STB Group 400 Maintenance of Equipment and Stores employee wage 
rate to estimate a cost per car of $16.21, and $9,270,752 per year for 
the affected cars. (In contrast, the estimated cost per car for 
sheeting renewal under the baseline scenario was $68.21 per car.) \48\
---------------------------------------------------------------------------

    \48\ Calculation: Material cost per car = 0.72 sheets x $1.31 
per sheet = $0.95. Labor cost per car = (2.8 min. inspection + 3.3 
min. cleaning + 9.3 min. first sheet application) x $1 per min. = 
$15.27. Material and labor costs per car = $0.95 + $15.27 = $16.21. 
Cost for evaluated cars = 571,750 cars x $16.21 per car = 
$9,270,750.
---------------------------------------------------------------------------

    The NPRM also allows use of a handheld retroreflectometer to 
directly evaluate the performance of sheeting. The retroreflectometer 
may be easier to use than the comparator panel, but given its current 
high cost ($10,000), its use will likely be minimal at this time.
    As in the baseline scenario, some rail cars may incur a 
transportation cost to renew sheeting because they may not periodically 
undergo a SCABT at a repair shop or track, or receive service from a 
mobile service agent. However, given the experience under the AAR 
comparator panel waiver showing reflective sheeting can likely remain 
effective beyond 10 years, these cars would need to be transported less 
frequently. These cars would no longer be subject to the 10-year 
renewal cycle. FRA used the estimates from Preston (2014) of an average 
reflector service life of about 20 years to calculate the reduced 
impact of cars needing transport for reflective sheeting replacement 
under the NPRM. Using a 20-year service life reduced the probability 
that cars would need transport by half to 5 percent, and the resulting 
expected cost per car from $350 to $175. Given the same number of cars 
needing transport as under the baseline scenario (23,000 cars), yielded 
a transportation cost of $4,025,000 per year.
    The NPRM contains an option for railroad car owners to continue 
using a 10-year replacement cycle for sheeting. FRA assumes that a 
portion of small entities will be most likely to choose this option to 
reduce their investment in the comparator panel and associated costs to 
implement it (such as training employees). Based on feedback from the 
American Short Line and Regional Railroad Association (ASLRRA), FRA 
understands most short line railroads are in fact using the comparator 
panel. However, for operations that find using the comparator panel 
costly, FRA estimated 15 percent of small entities will use the 10-year 
replacement option. To count the number of rail cars owned by small 
entities, FRA subtracted Class I railroad owned cars in North America, 
Class II railroad owned cars, and privately-owned cars from all freight 
cars--to estimate Class III railroads own 54,766 rail cars on average 
(over the years 2016 to 2020). Thus, 15 percent of these Class III 
railroad cars is 8,215 cars. FRA used AAR Railroad Facts books and 
Progressive Railroading magazine ``Fleet Stats'' for various years to 
determine car ownership.\49\ Using the same percent of cars that would 
need full renewal under the baseline scenario of 10 percent means about 
821 cars per year would need sheeting renewal. FRA applied the same 
cost per car for 10-year sheeting replacement as under the baseline 
scenario ($68.21 per car) and estimated a cost of $56,033 per year 
under the NPRM.
---------------------------------------------------------------------------

    \49\ AAR, Railroad Facts (Washington: multiple editions 2017-
2020) 65-80. Foran, Pat, & Stagl, Jeff, eds., ``Fleet Stats,'' 
Progressive Railroading (multiple editions 2016-2019, and 2021). 
Year 2020 not available, 2019 Railroad Car Owners data carried over 
to 2020. Available: https://www.progressiverailroading.com/keywords/keywords.aspx?id=0&keywords=Fleet+Stats&year=2017. (May require log-
in for some years.)
---------------------------------------------------------------------------

    To estimate the number of comparator panels that may be purchased, 
FRA used the difference between the average number of shops and 
locations qualified to perform a SCABT and evaluate sheeting using a 
comparator panel, before and after the comparator panel waiver. AAR 
estimated an average of 1,570 shops and locations qualified for SCABTs 
before the waiver, and 1,063 shops and locations equipped with a 
comparator panel after the waiver; the difference of about 500 shops 
and locations represents the shops and locations that may purchase a 
comparator panel. AAR notes its estimates include shops and locations 
that performed five or more SCABT tests, so the actual counts may be 
higher. In addition, FRA internally estimated 300 shops and locations 
may need to purchase a comparator panel. FRA used an average of the two 
estimates for analysis, or 400 shops and locations. FRA assumed 1 
comparator panel purchased per shop or location, and applied the $190 
cost per panel to estimate a marginal cost of $76,000 for acquiring 
comparator panels. Furthermore, AAR offers these comparator panels may 
need replacement every 4 years (years 1, 5, 9, 13, and 17 of the 20-
year period of analysis).
    These comparator panels are also required to be periodically 
recalibrated (not later than 2 years) so that an accurate number of 
retroreflective sheets are replaced on rail cars. Given the 4-year 
average life of a comparator panel, a comparator panel will be 
typically recalibrated 1 time during its useful life. For example, if a 
comparator panel is purchased in year 1 of the period of analysis, it 
would be recalibrated in year 3, and a new comparator panel purchased 
in year 5. Over the period of analysis, recalibration would occur in in 
years 3, 7, 11, 15, and 19. Additionally, AAR estimated a recalibration 
cost of $80 per panel with a discount if multiple panels are 
recalibrated per shop. As FRA does not know how many shops own multiple 
comparator panels, the cost of recalibrating one panel was used to 
estimate a cost of $32,000 for recalibrating 400 comparator panels.

[[Page 43482]]

    Employees inspecting and replacing reflective material likely would 
need training and instruction in these procedures. Rule 66, Reflective 
Sheeting, of the AAR Field Manual contains instructions for inspecting 
sheeting using the comparator panels. A manufacturer of comparator 
panels also provides step-by-step instructions on its website.\50\ FRA 
assumed these comparator panel instructions will be combined with 
existing training sessions on performing SCABTs and locomotive 
inspections. FRA estimated a marginal training cost using the same 
amount of time estimated to inspect reflective sheeting using a 
comparator panel of 2.8 minutes, applied to 20,253 STB Group 400 
Maintenance of Equipment and Stores employees at their wage rate, to 
calculate a training cost of $55,739. Only the first year of training 
is considered because the cost of subsequent training is covered under 
the training rule, 49 CFR part 243.\51\
---------------------------------------------------------------------------

    \50\ Avery Dennison, available: RR-Comparison-Panel-
Kit_Overview.pdf (averydennison.com).
    \51\ Calculation: 2.8 min. marginal training time x $1 per min. 
x 20,253 employees = $55,739.
---------------------------------------------------------------------------

    The following table presents the estimated NPRM cost elements.

                                              Table V-3--NPRM Costs
                                                 [2020 Dollars]
----------------------------------------------------------------------------------------------------------------
                                                   Present value   Present Value
        NPRM cost impact           Undiscounted         7%              3%        Annualized  7%  Annualized  3%
----------------------------------------------------------------------------------------------------------------
Visual Inspection & Replacement     $168,460,499     $89,233,646    $125,313,342      $8,423,025      $8,423,025
 (Sec.   224.109)...............
Periodic Evaluation & Sheeting       185,415,041      98,214,480     137,925,381       9,270,752       9,270,752
 Replacement (Sec.   224.111)...
Transportation for Non-SCABT          80,500,000      42,640,907      59,881,836       4,025,000       4,025,000
 Cars...........................
10-Year Renewal Option est. for        1,120,661         593,615         833,630          56,033          56,033
 Small Entities.................
Comparator Panel................         380,000         221,151         295,326          20,969          19,851
Comparator Panel Recalibration..         160,000          81,699         117,210           7,712           7,878
Employee Training...............          55,739          52,092          54,115           4,917           3,637
                                 -------------------------------------------------------------------------------
    Total NPRM..................     436,091,940     231,038,590     324,420,840      21,808,408      21,806,176
----------------------------------------------------------------------------------------------------------------

4. Alternatives
    FRA considered a few regulatory alternatives before deciding to 
offer stakeholders the option of using either the 10-year replacement 
cycle or the alternative method (comparator panels) as proposed. As a 
presumably lower-cost alternative, FRA considered eliminating the 10-
year replacement cycle completely given that most of the industry is 
using the comparator panel waiver. However, FRA assessed that some 
entities might incur higher costs for evaluating sheeting on MOW cars 
and other privately-owned cars using the comparator panel because these 
cars may not appear at a repair shop or on a repair track regularly for 
a SCABT. Some smaller entities with fewer cars may also find it easier 
to replace the retroreflective sheeting on their cars every 10 years. A 
pre-determined schedule for replacing sheeting provides regulatory 
simplicity for these entities and may be easier to implement than a 
comparator panel-based standard. Overall, including both alternatives 
as proposed increases regulatory flexibility for railroads and car 
owners.
    FRA also considered stricter alternatives that would help FRA 
enforce the Reflectorization Standards. For example, FRA could mandate 
railroads and private-car owners record and report when retroreflective 
sheeting is changed. FRA could also require the industry to report 
which standard for evaluation and replacement they are following (i.e., 
either the alternative replacement or the 10-year replacement cycle). 
As noted in the Overview section above, under the approved waiver for 
using the comparator panel, the industry has not been consistently 
recording in UMLER when and why sheeting is replaced. That makes it 
difficult to determine how much of the sheeting was replaced because of 
damage, and how much because of the passage of time. Given the size of 
the fleet and frequency of SCABTs, the record-keeping and reporting 
costs could be somewhat significant. Railroads would need to record and 
report information that is not currently required, including when the 
sheeting is replaced, why it is replaced (obscured, damaged, or 
missing), and how much of the rail car sheeting was replaced. FRA 
estimates this would cost at least $167,000 annually.\52\ In return, 
better records could facilitate FRA enforcement, for example, to check 
if the overall rate of sheeting replacement under the NPRM is in-line 
with expectations for the service life of sheeting in various 
operations and environments. As proposed, enforcement will generally 
rely on FRA inspectors visually inspecting sheeting and SCABT data, 
which, given the low accident risk under the waivers historically, 
would provide a less costly alternative to requiring more record-
keeping and reporting. For example, if an inspector observes sheeting 
to be in poor condition, and requests records from the railroad that 
list a recent SCABT, it would provide an indication the sheeting may 
not have been replaced when required.
---------------------------------------------------------------------------

    \52\ The Paperwork Reduction Act (PRA) analysis for this 
proposal estimates a cost of $167,000 for recording and reporting 
obscured, damaged, or missing sheeting under Sec.  224.109. This 
analysis assumes the stricter alternative would require railroads to 
record and report additional data. As an approximation, the 
additional burden is another 5 minutes, or $167,000 annually. Also, 
Railinc would incur a cost for programming changes to the UMLER 
database to accommodate the new data fields. FRA inspectors would 
also spend more time reviewing these more detailed records.
---------------------------------------------------------------------------

5. Sensitivity Analysis
    The cost and benefit estimates could change if the analysis's 
underlying assumptions or inputs were to change. The largest categories 
of costs presented in Table V-3 are the pre-existing requirement to 
visually inspect and replace sheeting (Sec.  224.109), periodically 
evaluate and replace sheeting (Sec.  224.111), and transport cars that 
would not typically appear on a repair track or shop for a SCABT. The 
costs to visually inspect and replace sheeting, and to periodically 
evaluate and replace sheeting, depend primarily on the number of cars. 
The number of cars is about 750,000 and 500,000 respectively for these 
cost estimates. If the number of cars used in calculating these 
estimates were to increase, then the estimated net business benefits 
would increase too. The number of active freight cars may increase if 
economic growth continues in the short run, likely increasing the 
demand for freight transportation. FRA used an

[[Page 43483]]

average of recent freight cars counts (2016-2020) as a reasonable 
estimate in its cost estimates.
    Furthermore, for the cost to periodically evaluate and replace 
sheeting, if the cost for purchasing a retroreflectometer decreases 
over time, or a cheaper substitute method of directly measuring the 
reflectivity becomes available, the labor time to evaluate the sheeting 
on a car will decrease. The benefits from using an alternative method 
will then increase as well.
    For the transportation cost, the cost per car is a significant 
factor. FRA applied the probability of sheeting renewal to estimate 
this cost. As the actual service life of sheeting in different railroad 
operations and environments becomes better known, the need to transport 
cars to replace sheeting may further decrease, reducing this cost. 
Additionally, as mentioned, FRA used a proxy to estimate the number of 
cars that may need transportation, which is a source of uncertainty in 
the estimate, but conceptually represents the type of cars that may 
need transportation.
    FRA also used STB wage rates in its estimates, based on the Class I 
railroads' reports to the STB. Using AAR wage rates will affect the 
scale of costs, but not the resources used in terms of capital (i.e., 
the number of cars and comparator panels), and labor time used to 
comply with the regulation.
6. Conclusion
    As shown in Table V-1 above, FRA estimates the NPRM results in net 
benefits with a present value of $55 million using a 7 percent discount 
rate and $78 million using a 3 percent discount rate (over a 20-year 
period of analysis in 2020 dollars). In annualized terms, the net 
benefits are $5 million per year using a 7 percent discount rate, and a 
similar $5 million using a 3 percent discount rate. In addition, the 
Federal Government would save the cost of reviewing and analyzing 
waivers of about $89,183 (present value, 7 percent discount rate); 
$124,739 (present value, 3 percent discount rate), or $8,418 
(annualized, both 7 and 3 percent discount rates).
    FRA also estimates there may be ancillary benefits of the NPRM in 
terms of reduced environmental impact from disposing of reflective 
sheeting prematurely. Given reflective sheeting can remain effective 
more than 10 years, there would be less reflective sheeting replaced 
under the NPRM during the period of analysis. Based on the Preston 
(2014) study, if reflective sheeting lasts 15 to 20 years, then there 
would be 50 percent to 100 percent less reflective sheeting replaced 
and disposed of in comparison to the mandatory 10-year replacement. The 
benefit would be less environmental waste. Although FRA has not 
quantified this benefit, it could be important given the large number 
of rail cars affected. As in the regulation before this NPRM, 
reflective sheeting would still need replacement earlier than 10 years 
if damaged or obscured. Also, in the long run, the reflective sheeting 
applied on all cars would need replacement and disposal eventually. FRA 
invites comment on these environmental benefits.

B. Regulatory Flexibility Act and Executive Order 13272

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) and 
Executive Order 13272, ``Proper Consideration of Small Entities in 
Agency Rulemaking,'' (67 FR 53461 (Aug. 16, 2002)) require agency 
review of proposed and final rules to assess their impacts on small 
entities. An agency must prepare an Initial Regulatory Flexibility 
Analysis (IRFA) unless it certifies that a rule, if promulgated, would 
not have a significant economic impact on a substantial number of small 
entities. FRA has not determined whether this proposed rule would have 
a significant economic impact on a substantial number of small 
entities, and has therefore prepared this IRFA. FRA seeks comment from 
small entities on the economic impacts of this proposed rule.
1. Reasons for Considering Agency Action
    FRA is initiating this rulemaking to codify two types of waivers 
that entities have submitted for relief from the Reflectorization 
Standards (or part 224). First, entities that operate rail freight 
rolling stock in THEERP operations have petitioned for exclusion from 
the Reflectorization Standards. Generally, FRA has found these 
operations do not operate their equipment under low-light conditions 
(i.e., at night) over highway-rail grade crossings. Therefore, these 
operations pose a low safety risk in terms of accidents/incidents 
preventable by retroreflective sheeting. By codifying waivers for 
equipment used in THEERP operations, FRA would provide relief from 
unnecessary paperwork burdens for these entities because they would no 
longer need to file these waivers. Second, the NPRM codifies a waiver 
granted to AAR to use an alternative method, specifically the 
comparator panel, to determine when to replace retroreflective 
sheeting. The existing Reflectorization Standards require replacement 
of retroreflective sheeting after 10 years of service, based on the 
best information available at the time the Reflectorization Standards 
were promulgated. Through its pilot program to test the comparator 
panel method, AAR has demonstrated that retroreflective sheeting can 
often perform effectively beyond 10 years. Using the comparator panel 
method allows retroreflective sheeting to be replaced as needed, 
resulting reduced costs and environmental waste. The comparator panel 
method may also result in replacing degraded or otherwise substandard 
sheeting sooner than it would have been under the 10-year replacement 
cycle, thus potentially increasing overall train visibility for motor 
vehicle drivers--and improving public safety. The proposed rule 
recognizes this more efficient method for evaluating retroreflective 
sheeting and makes it available to all entities operating freight 
rolling stock. In addition, the NPRM retains the option for entities to 
use the 10-year replacement cycle for entities that may find that 
method less burdensome for their particular operation. The proposed 
rule also removes outdated implementation schedules for retroreflective 
sheeting to improve regulatory clarity.
2. A Succinct Statement of the Objectives of, and Legal Basis for, the 
Proposed Rule
    The objective of this proposed rule is to enhance safety, promote 
innovation, and reduce the unnecessary paperwork burdens on the 
railroad industry. The provision to codify waivers for rail freight 
rolling stock used in THEERP operations would reduce paperwork costs 
for these operations. Except for larger railroads that operate older 
equipment as private business cars and for special events, most of the 
entities that operate rail cars used in THEERP operations are small 
entities. These small entities would benefit economically from the 
provision to codify THEERP-related waivers. The second provision to 
codify the alternative method (comparator panel) to determine when to 
replace retroreflective sheeting would reduce compliance costs for most 
of the railroad industry. ASLRRA indicated to FRA that most of the 
small railroads are using the comparator panel method; FRA estimates 85 
percent of small entities are using the comparator panel, and 15 
percent are using the 10-year replacement cycle. FRA has kept the 10-
year replacement cycle as an alternative compliance method for that 
share of small entities that wish to use it. These small entities may 
have operations for

[[Page 43484]]

which using the comparator panel may be burdensome, such as operating 
equipment that may not be regularly interchanged, and incurring the 
costs for purchasing and using the panel. Some small entities may also 
find it less burdensome and prefer the regulatory simplicity of 
following a predetermined replacement schedule for retroreflective 
sheeting. For entities using the 10-year replacement option, the cost 
to comply would remain the same as it is before the proposed rule. For 
the entities using the alternative replacement option, FRA estimates 
the costs to comply would decrease, while enhancing safety.
    The Secretary of Transportation has broad statutory authority to 
``prescribe regulations and issue orders for every area of railroad 
safety'' under 49 U.S.C. 20103, including reflectorization of rail 
freight rolling stock regulated in part 224. FRA's review and 
codification of existing waivers issued under 49 U.S.C. 20103 is also 
responsive to section 22411 of the Infrastructure Investment and Jobs 
Act (Pub. L. 117-58).
3. A Description of and, Where Feasible, an Estimate of the Number of 
Small Entities to Which the Proposed Rule Would Apply
    The Regulatory Flexibility Act of 1980 requires a review of 
proposed and final rules to assess their impact on small entities, 
unless the Secretary certifies that the rule would not have a 
significant economic impact on a substantial number of small entities. 
``Small entity'' is defined in 5 U.S.C. 601 as a small business concern 
that is independently owned and operated and is not dominant in its 
field of operation. The U.S. Small Business Administration (SBA) has 
authority to regulate issues related to small businesses, and 
stipulates in its size standards that a ``small entity'' in the 
railroad industry includes a for-profit ``line-haul railroad'' that has 
fewer than 1,500 employees and a ``short line railroad'' with fewer 
than 500 employees.\53\
---------------------------------------------------------------------------

    \53\ ``Size Eligibility Provisions and Standards,'' 13 CFR part 
121, subpart A.
---------------------------------------------------------------------------

    Federal agencies may adopt their own size standards for small 
entities in consultation with SBA and in conjunction with public 
comment. Under that authority, FRA has published a final statement of 
agency policy that formally establishes ``small entities'' or ``small 
businesses'' as railroads, contractors, and hazardous materials 
shippers that meet the revenue requirements of a Class III railroad as 
set forth in 49 CFR part 1201, General Instruction 1-1, which is $20 
million or less in inflation-adjusted annual revenues; and commuter 
railroads or small governmental jurisdictions that serve populations of 
50,000 or less.\54\ The $20 million limit is based on the Surface 
Transportation Board's revenue threshold for a Class III railroad 
carrier. Railroad revenue is adjusted for inflation by applying a 
revenue deflator formula in accordance with 49 CFR part 1201, General 
Instruction 1-1. The current threshold is $40.4 million.\55\ FRA is 
using this definition for the proposed rule.
---------------------------------------------------------------------------

    \54\ 68 FR 24891 (May 9, 2003) (codified at appendix C to 49 CFR 
part 209).
    \55\ The Class III railroad revenue threshold is $40.4 million 
or less, for 2020. (The Class II railroad threshold is between $40.4 
million and $900 million, and the Class I railroad threshold is $900 
million or more.) See Surface Transportation Board (STB), Data 
Issued in Regulatory Proceedings. Revenue Deflators. Available: 
https://www.stb.gov/reports-data/economic-data/. See also STB 
Decision, Docket No. EP 748, Indexing the Annual Operating Revenues 
of Railroads, Decided June 10, 2020. https://prod.stb.gov/reports-data/economic-data/railroad-revenue-deflator-factors/.
---------------------------------------------------------------------------

    Based on railroads that report to FRA under part 225 (Railroad 
Accidents/Incidents), FRA estimates the universe of small railroads 
consists of 744 Class III railroads. The NPRM's provision codifying 
waivers related to rail cars used in THEERP operations affects 
primarily the tourist railroads. FRA estimates there are 123 tourist 
railroads that are Class III railroads to which the NPRM would apply. 
Although some of these tourist railroads may have been excepted before 
this rulemaking because they are not on the general railroad system of 
transportation, and are excepted under existing Sec.  224.3, it may 
have been unclear to stakeholders which railroads were exempt. For the 
provision codifying the alternative method, FRA estimates 85 percent of 
the Class III universe that chooses to use the comparator panel to 
evaluate sheeting will be affected, or about 632 small railroads.
    In addition, FRA knows of one manufacturer of comparator panels, 
specifically Avery Dennison Corp. Avery Dennison employs more than 750 
persons, the SBA \56\ benchmark for large businesses. There are other 
manufacturers of retroreflective sheeting; FRA is aware of ORAFOL 
Americas, Inc, a subsidiary of the ORAFOL Group, that has purchased 
Reflexite Corp., and the 3M Co. Both manufacturers currently do not 
make comparator panels and are large businesses.
---------------------------------------------------------------------------

    \56\ North American Industry Classification System (NAICS) Code 
326113 signifies the Unlaminated Plastics Film and Sheet (except 
Packaging) Manufacturing firms that would be affected by this 
proposal. Per SBA, any firm under NAICS code 326113 that employs 
more than 750 employees cannot qualify as a small business. U.S. 
Small Business Administration, Table of Small Business Size 
Standards Matched to North American Industry Classification Codes 
(Jan. 2019). Available: https://www.sba.gov/document/support-table-size-standards.
---------------------------------------------------------------------------

4. A Description of the Projected Reporting, Recordkeeping, and Other 
Compliance Requirements of the Rule, Including an Estimate of the Class 
of Small Entities That Will Be Subject to the Requirements and the Type 
of Professional Skill Necessary for Preparation of the Report or Record
    The NPRM would provide relief for the small entities that operate 
rail freight rolling stock used in THEERP operations by excluding these 
rail cars from the Reflectorization Standards in part 224. In the 
absence of the NPRM, the affected railroads would continue to submit 
waivers under part 224. As explained in the regulatory analysis above, 
FRA expects 30 new waiver submittals, 15 extensions of these waivers, 
and 6 extensions of existing THEERP associated waivers over the 20-year 
period of analysis. FRA estimated each new waiver costs $3,097.50, each 
waiver extension costs $619.50, and requires 40 hours of labor and 8 
hours of labor respectively. FRA accounted for the labor time using the 
burdened STB wage rate for Professional and Administrative employees of 
$77.44 per hour. In annualized terms using a 7 percent discount rate, 
the NPRM results in estimated paperwork reduction benefits of $5,654 
per year. When divided by the class of 123 tourist railroads, each 
tourist railroad would save $45.79 per year.\57\
---------------------------------------------------------------------------

    \57\ Under the NPRM, railroads that operate equipment used in 
THEERP operations would save the cost of evaluating and applying 
retroreflective sheeting to their rail cars too, but since FRA has 
historically approved the majority of these waivers, the analysis 
accounts primarily for the savings from not having to file waivers.
---------------------------------------------------------------------------

    For the provision of the NPRM allowing use of an alternative method 
to evaluate and replace retroreflective sheeting, the compliance 
requirements for the small entities are the same as for all entities 
accounted for in the regulatory analysis above. This section generally 
uses annualized costs using a 7 percent discount rate to express the 
compliance costs for small entities. The annualized cost for the 
substantive change in the NPRM of using a comparator panel was 
estimated at $5.59 per car, in comparison to a baseline 10-year 
replacement cost of $6.37 per car, a savings of about $1.00 per 
car.\58\ The other significant cost

[[Page 43485]]

factor of transporting cars that may not be regularly interchanged for 
replacing retroreflective sheeting was estimated at $2.43 per car, or 
one-half the baseline cost. The cost for visual inspection and 
replacement under Sec.  224.109, a requirement that does not change 
under the NPRM and so is ``a wash,'' is $5.08 per car. The costs for 
purchasing and recalibrating the comparator panel are negligible when 
divided by the many cars in the fleet. The cost for the comparator 
panel is also mitigated by its widespread use; FRA estimates 85 percent 
of the small entities are using the comparator panel method. (In 
undiscounted terms, the cost of the comparator panel is $190 per panel 
and $80 for recalibration every 2 years.) For all railroads, training 
employees to use the comparator panel was estimated as a marginal 
addition to the training employees already receive for brake tests and 
locomotive inspections. FRA estimated the training time as the actual 
time to use the comparator panel, an addition of about 3 minutes per 
employee. For small entities, the cost to train employees may be higher 
if they cannot incorporate training to use the comparator panel as part 
of existing training.
---------------------------------------------------------------------------

    \58\ Calculation: NPRM cost = $9,270,752/1,658,334 avg. cars per 
year = $5.59 per car. Baseline cost = $10,558,758/1,658,334 = $6.37. 
Savings = $6.37-$5.59 = $0.78 (annualized, 7%). The annualized costs 
were estimated using an undiscounted NPRM cost of $16.21 per car and 
an undiscounted baseline cost of $68.21 per car, for a difference of 
$50.00 per car.
---------------------------------------------------------------------------

    In annualized terms at 7 percent, the estimated total compliance 
costs under the NPRM are $13.15 per car, compared to baseline costs 
(i.e., without the NPRM) of $16.30 per car, a savings of $3.15 per car. 
FRA estimated Class III railroads own 54,766 cars on average over the 
years 2016 through 2020. Thus, the estimated benefits for the small 
entities is $172,760. When divided by the 632 railroads that would use 
the comparator panel method, each railroad would save $273 per year 
(inclusive of waiver savings). These costs were estimated on a per-car 
basis. The benefits per small entity depends on the number of cars it 
operates.
5. Identification, to the Extent Practicable, of All Relevant Federal 
Rules That May Duplicate, Overlap, or Conflict With the Proposed Rule
    FRA is not aware of any Federal rule that duplicates, overlaps 
with, or conflicts with the proposed rule.
6. A Description of Significant Alternatives to the Rule
    For railroads that find using the comparator panel burdensome for 
their operations and equipment, the NPRM permits the continued use of 
the 10-year replacement cycle. FRA retained the 10-year replacement 
cycle as an alternative compliance method specifically to reduce the 
potential economic impact on small entities (and for other entities 
that may have captive cars, i.e., cars that are not regularly 
interchanged). The estimated 15 percent of small entities that continue 
to use the 10-year replacement cycle will see no change in their 
compliance costs from the regulation existing before the NPRM.

C. Paperwork Reduction Act

    FRA is submitting the information collection requirements in this 
proposed rule to the Office of Management and Budget (OMB) for approval 
under the Paperwork Reduction Act of 1995.\59\ The sections that 
contain the new or revised information collection requirements and the 
estimated time to fulfill each requirement are as follows: 
---------------------------------------------------------------------------

    \59\ 44 U.S.C. 3501 et seq.
    \60\ Throughout the tables in this document, the dollar 
equivalent cost is derived from the 2020 Surface Transportation 
Board's Full Year Wage A&B data series using the appropriate 
employee group hourly wage rate that includes 75-percent overhead 
charges.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Total annual                                    Total annual    Total cost equivalent
            CFR section                Respondent universe          responses         Average time per response  burden (hours)       in U.S. dollar
                                                             (A)...................  (B).......................     (C = A * B)                 (D = C *
                                                                                                                                        wage rates) \60\
--------------------------------------------------------------------------------------------------------------------------------------------------------
224.7--Waivers (Revised requirement  722 railroads and       1 petition............  8 hours...................               8                  $619.52
 due to proposed revision under       freight car owners.
 Sec.   224.3).
--------------------------------------------------------------------------------------------------------------------------------------------------------
224.15(b)--Special approval          2 manufacturers.......  1 petition............  40 hours..................              40                $3,097.60
 procedures--Petitions for special
 approval of alternative standard.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    --(d) Public comment on special  Manufacturers,          3 comments on special   1 hour....................               3                  $232.32
     approval procedures/petitions.   railroads, or general   petition.
                                      public.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    --(d)(3) Hearing on the          FRA does not believe that it will not need any additional information to consider any submitted petitions under the
     petition in accordance with      above requirement. Consequently, there is no burden associated with this provision.
     the procedures provided in
     Sec.   211.25.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    --(e) Disposition of petitions.  Exempted from PRA under 5 CFR 1320.4(2).
--------------------------------------------------------------------------------------------------------------------------------------------------------
224.101--General requirements......  The burden for this requirement is covered under Sec.   224.15.
--------------------------------------------------------------------------------------------------------------------------------------------------------
224.103(d)--Characteristics          There would be no burden involved for new cars. Additionally, the cost for stamping, etching, molding, printing is
 retroreflective sheeting--           included as part of the manufacturing process and consequently there is no burden associated.
 Certification.
--------------------------------------------------------------------------------------------------------------------------------------------------------
224.103(e)--Characteristics          The burden for this requirement is covered under Sec.   224.15.
 retroreflective sheeting--
 Alternative standards.
--------------------------------------------------------------------------------------------------------------------------------------------------------
224.109(a)--Inspection and           AAR/400 car shops.....  33,510.22               5 minutes.................        2,792.52              $167,244.02
 replacement of missing, damaged,                             notifications of
 or obscured retroreflective                                  defect and
 sheeting--Railroad freight cars--                            restriction.
 Railroads notification to person
 responsible for reporting mark
 after visual inspection for
 presence and condition when
 freight car on either side has
 less than 80% reflective sheeting
 of the damaged, obscured, or
 missing sheeting (revised text,
 section heading).
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 43486]]

 
    --(b) Locomotive record of       722 railroads and       2,459.70 records of     5 minutes.................          204.98               $12,276.25
     freight retroreflective          freight car owners.     defect and
     sheeting defects found after                             restriction.
     inspection kept in locomotive
     cab or in railroad accessible
     electronic database that FRA
     can access upon request.
--------------------------------------------------------------------------------------------------------------------------------------------------------
224.111(c)--Evaluation and           The burden for this requirement is covered under 49 CFR 232.305 (2130-0008), or a locomotive receives an annual
 replacement of 10-year-old or        inspection required by 49 CFR 229.27 (OMB Control Number 2130-0004).
 underperforming retroreflective
 sheeting--Performance-based
 replacement.
--------------------------------------------------------------------------------------------------------------------------------------------------------
224.111(c)(1)(iv)--Evaluation and    The cost of labeling is included as part of the manufacturing process and consequently there is no burden
 replacement--Labeling.               associated.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total \61\.....................  722 railroads and 400   35,975 responses......  N/A.......................           3,049                 $183,470
                                      car shops.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    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. For information or a copy of 
the paperwork package submitted to OMB, contact Ms. Hodan Wells, 
Information Collection Clearance Officer, at 202-493-0440. 
Organizations and individuals desiring to submit comments on the 
collection of information requirements should direct them via email to 
Ms. Wells at [email protected].
---------------------------------------------------------------------------

    \61\ Totals may not add due to rounding.
---------------------------------------------------------------------------

    OMB is required to decide concerning the collection of information 
requirements contained in this rulemaking between 30 and 60 days after 
publication of this document in the Federal Register. Therefore, a 
comment to OMB is best assured of having its full effect if OMB 
receives it within 30 days of publication. FRA is not authorized to 
impose a penalty on persons for violating information collection 
requirements that do not display a current OMB control number, if 
required. FRA intends to obtain current OMB control numbers for any new 
information collection requirements resulting from this rulemaking 
action prior to the effective date of the final rule. The OMB control 
number, when assigned, will be announced by separate notice in the 
Federal Register.

D. Federalism Implications

    Executive Order 13132, Federalism,\62\ requires FRA to develop an 
accountable process to ensure ``meaningful and timely input by State 
and local officials in the development of regulatory policies that have 
federalism implications.'' ``Policies that have federalism 
implications'' are defined in the Executive order to include 
regulations that have ``substantial direct effects on the States, on 
the relationship between the national government and the States, or on 
the distribution of power and responsibilities among the various levels 
of government.'' Under Executive Order 13132, the agency may not issue 
a regulation with federalism implications that imposes substantial 
direct compliance costs and that is not required by statute, unless the 
Federal Government provides the funds necessary to pay the direct 
compliance costs incurred by State and local governments or the agency 
consults with State and local government officials early in the process 
of developing the regulation. Where a regulation has federalism 
implications and preempts State law, the agency seeks to consult with 
State and local officials in the process of developing the regulation.
---------------------------------------------------------------------------

    \62\ 64 FR 43255 (Aug. 10, 1999).
---------------------------------------------------------------------------

    FRA has analyzed this proposed rule in accordance with the 
principles and criteria contained in Executive Order 13132. FRA has 
determined that this proposed rule has no federalism implications, 
other than the possible preemption of State laws under 49 U.S.C. 20106. 
Therefore, the consultation and funding requirements of Executive Order 
13132 do not apply, and preparation of a federalism summary impact 
statement for the proposed rule is not required.

E. International Trade Impact Assessment

    The Trade Agreements Act of 1979 prohibits Federal agencies from 
engaging in any standards or related activities that create unnecessary 
obstacles to the foreign commerce of the United States. Legitimate 
domestic objectives, such as safety, are not considered unnecessary 
obstacles. The statute also requires consideration of international 
standards and, where appropriate, that they be the basis for U.S. 
standards. This proposed rule is not expected to affect trade 
opportunities for U.S. firms doing business overseas or for foreign 
firms doing business in the United States.

F. Environmental Impact

    FRA has evaluated this proposed rule consistent with the National 
Environmental Policy Act (NEPA; 42 U.S.C. 4321 et seq.), the Council of 
Environmental Quality's NEPA implementing regulations at 40 CFR parts 
1500-1508, 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

[[Page 43487]]

require either an EA or EIS.\63\ Specifically, FRA has determined that 
this proposed rule is categorically excluded from detailed 
environmental review pursuant to 23 CFR 771.116(c)(15), 
``[p]romulgation of rules, the issuance of policy statements, the 
waiver or modification of existing regulatory requirements, or 
discretionary approvals that do not result in significantly increased 
emissions of air or water pollutants or noise.''
---------------------------------------------------------------------------

    \63\ 40 CFR 1508.4.
---------------------------------------------------------------------------

    The main purpose of this rulemaking is to revise FRA's 
Reflectorization Standards to reduce unnecessary costs and provide 
regulatory flexibility while maintaining safety. This rulemaking would 
not directly or indirectly impact any environmental resources and would 
not result in significantly increased emissions of air or water 
pollutants or noise. In analyzing the applicability of a CE, FRA must 
also consider whether unusual circumstances are present that would 
warrant a more detailed environmental review.\64\ FRA has concluded 
that no such unusual circumstances exist with respect to this proposed 
rule and it meets the requirements for categorical exclusion under 23 
CFR 771.116(c)(15).
---------------------------------------------------------------------------

    \64\ 23 CFR 771.116(b).
---------------------------------------------------------------------------

    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.\65\ FRA has also 
determined that this rulemaking does not approve a project resulting in 
a use of a resource protected by Section 4(f).\66\
---------------------------------------------------------------------------

    \65\ See 16 U.S.C. 470.
    \66\ See Department of Transportation Act of 1966, as amended 
(Pub. L. 89-670, 80 Stat. 931); 49 U.S.C. 303.
---------------------------------------------------------------------------

G. Executive Order 12898 (Environmental Justice)

    Executive Order 12898, ``Federal Actions to Address Environmental 
Justice in Minority Populations and Low-Income Populations'' require 
DOT agencies to achieve environmental justice as part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects, including 
interrelated social and economic effects, of their programs, policies, 
and activities on minority populations and low-income populations. The 
DOT order instructs DOT agencies to address compliance with Executive 
Order 12898 and requirements within the DOT order 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. FRA has 
evaluated this proposed rule under Executive Order 12898 and the DOT 
order and has determined it would not cause disproportionately high and 
adverse human health and environmental effects on minority populations 
or low-income populations.

H. Unfunded Mandates Reform Act of 1995

    Under section 201 of the Unfunded Mandates Reform Act of 1995,\67\ 
each Federal agency ``shall, unless otherwise prohibited by law, assess 
the effects of Federal regulatory actions on State, local, and tribal 
governments, and the private sector (other than to the extent that such 
regulations incorporate requirements specifically set forth in law).'' 
Section 202 of the Act (2 U.S.C. 1532) further requires that ``before 
promulgating any general notice of proposed rulemaking that is likely 
to result in promulgation of any rule that includes any Federal mandate 
that may result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of 
$100,000,000 or more (adjusted annually for inflation) in any 1 year, 
and before promulgating any final rule for which a general notice of 
proposed rulemaking was published, the agency shall prepare a written 
statement'' detailing the effect on State, local, and tribal 
governments and the private sector. This proposed rule would not result 
in the expenditure, in the aggregate, of $100,000,000 or more (as 
adjusted annually for inflation) in any one year, and thus preparation 
of such a statement is not required.
---------------------------------------------------------------------------

    \67\ Public Law 104-4, 2 U.S.C. 1531.
---------------------------------------------------------------------------

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.'' \68\ FRA evaluated this proposed rule 
under Executive Order 13211 and determined that this regulatory action 
is not a ``significant energy action'' within the meaning of Executive 
Order 13211.
---------------------------------------------------------------------------

    \68\ 66 FR 28355 (May 22, 2001).
---------------------------------------------------------------------------

J. Privacy Act Statement

    In accordance with 5 U.S.C. 553(c), DOT solicits comments from the 
public to better inform its rulemaking process. DOT posts these 
comments, without edit, to www.regulations.gov, as described in the 
system of records notice, DOT/ALL-14 FDMS, accessible through 
www.dot.gov/privacy. To facilitate comment tracking and response, we 
encourage commenters to provide their name, or the name of their 
organization; however, submission of names is completely optional. 
Whether or not commenters identify themselves, all timely comments will 
be fully considered. If you wish to provide comments containing 
proprietary or confidential information, please contact the agency for 
alternate submission instructions.

List of Subjects in 49 CFR Part 224

    Penalties, Railroad safety, Reflectorization standards.

The Proposed Rule

    For the reasons stated above, FRA proposes to amend part 224 of 
chapter II, subtitle B of title 49, Code of Federal Regulations, as 
follows:

PART 224--REFLECTORIZATION OF RAIL FREIGHT ROLLING STOCK

0
1. The authority citation for part 224 continues to read as follows:

    Authority: 49 U.S.C. 20103, 20107, 20148 and 21301; 28 U.S.C. 
2461 note; and 49 CFR 1.89.

0
2. Amend Sec.  224.3 by revising paragraphs (c) and (d) and adding 
paragraph (e) to read as follows:


Sec.  224.3  Applicability.

* * * * *
    (c) Locomotives and passenger cars used exclusively in passenger 
service;
    (d) Freight rolling stock that is subject to a reflectorization 
requirement promulgated by another Federal agency; or
    (e) Freight rolling stock used for only for tourist, historic, 
excursion, educational, recreational, or private purposes, except for 
incidental freight service.


Sec.  224.107  [Removed and Reserved]

0
3. Remove and reserve Sec.  224.107.
0
4. Revise Sec.  224.109 to read as follows:


Sec.  224.109  Inspection and replacement of missing, damaged, or 
obscured retroreflective sheeting.

    (a) Railroad freight cars. Retroreflective sheeting on railroad 
freight cars subject to this part must be visually inspected for 
presence and

[[Page 43488]]

condition whenever a car undergoes a single car air brake test required 
under 49 CFR 232.305. If at the time of inspection less than 80 percent 
of the amount of sheeting required under Sec.  224.105 on either side 
of a car is present, not damaged, and not obscured, the inspecting 
railroad or contractor shall promptly notify the person responsible for 
the reporting mark, as indicated in the Universal Machine Language 
Equipment Register, of the damaged, obscured, or missing sheeting 
(unless the inspecting railroad or contractor is the person responsible 
for the reporting mark). The inspecting railroad or contractor shall 
retain a written or electronic copy of each such notification made for 
at least two years from the date of the notice and shall make these 
records available for inspection and copying by the FRA upon request. 
Any person notified of a defect under this section shall have nine 
months (270 calendar days) from the date of notification to repair or 
replace the damaged, obscured, or missing sheeting. Where the 
inspecting railroad or contractor is the person responsible for the 
reporting mark, the person shall have nine months (270 calendar days) 
from the date of the inspection to repair or replace the damaged, 
obscured, or missing sheeting.
    (b) Locomotives. Retroreflective sheeting must be visually 
inspected for presence and condition when the locomotive receives the 
annual inspection required under 49 CFR 229.27. If at the time of 
inspection, less than 80 percent of the amount of sheeting required 
under Sec.  224.105 on either side of a locomotive is present, not 
damaged, and not obscured, the damaged, obscured, or missing sheeting 
must be repaired or replaced within nine months (270 calendar days) 
from the date of inspection, provided a record of the defect is 
maintained in the locomotive cab or in a secure and accessible 
electronic database to which FRA is provided access on request.
0
5. Revise Sec.  224.111 to read as follows:


Sec.  224.111  Evaluation and replacement of 10-year old or 
underperforming retroreflective sheeting.

    (a) Replacement process. Retroreflective sheeting required by this 
part shall comply with the replacement process in either paragraph (b) 
or (c) of this section.
    (b) 10-year replacement cycle. Regardless of condition, 
retroreflective sheeting required by this part shall be replaced with 
new, undegraded, sheeting no later than 10 years after the initial 
installation date. At the time of replacement, it is not necessary to 
remove the previously installed sheeting unless it interferes with the 
placement of the replacement sheeting, as required by Sec.  224.106, 
but the previously installed sheeting shall not be considered in 
calculating the required minimum area of retroreflective material 
required as shown in Table 2 to this subpart.
    (c) Replacement based on retroreflective comparator panel. Except 
as provided in paragraph (c)(3) of this section, retroreflective 
sheeting shall be evaluated using a properly calibrated comparator 
panel, manufactured to the specifications outlined under paragraph 
(c)(1) of this section, whenever a car undergoes a single car air brake 
test required by 49 CFR 232.305, or a locomotive receives an annual 
inspection required by 49 CFR 229.27.
    (1) Retroreflective comparator panel specifications--(i) 
Retroreflectivity. Retroreflective comparator panels shall have the 
minimum (and maximum, if applicable) retroreflectivity values as 
outlined in Table 1 to paragraph (c)(1)(iv) of this section.
    (ii) Color. Retroreflective comparator panels shall be yellow or 
white as outlined in Sec.  224.103(b).
    (iii) Construction. Retroreflective comparator panels shall be 4 
inches wide by 4 inches high, be constructed with glass-beaded material 
or other material that displays uniform appearance when rotated and 
viewed with a light source, and have a magnetic backing so that the 
panel can be attached to rail freight rolling stock.
    (iv) Labeling. Retroreflective comparator panels shall have a 
waterproof and dust-proof label affixed to the backing. The label shall 
contain: the phrase ``Retroreflective Comparator Panel--Yellow'' or 
``Retroreflective Comparator Panel--White;'' and the name of the 
manufacturer, the part, model, or serial number, the date the panel was 
manufactured, the target retroreflectivity level to which the panel was 
manufactured (measured in cd/lx/m\2\), and a space provided for the 
certified recalibration date. Retroreflective comparator panels shall 
be recalibrated at least every two years and the date of a panel's most 
recent recalibration must appear in the space provided on the label.
[GRAPHIC] [TIFF OMITTED] TP21JY22.034

    (2) Retroreflective comparator panel evaluation process and 
criteria. Each retroreflective sheeting on rail freight rolling stock 
shall be evaluated on its performance through use of a properly 
calibrated comparator panel. The evaluation procedure shall consist of 
the following:
    (i) Retroreflective sheeting shall be visually evaluated with the 
use of a light source. The light source must be of sufficient intensity 
to illuminate and overcome ambient lighting conditions. A brighter 
light source (LED) is recommended in daylight conditions.

[[Page 43489]]

    (ii) Retroreflective comparator panels shall conform to the 
requirements outlined in paragraph (c)(1) of this section, and the 
panel's color shall match the color of the installed sheeting being 
evaluated.
    (iii) The comparator panel shall be placed directly adjacent to, or 
overlapping, the retroreflective sheeting being evaluated. The 
retroreflective sheeting shall also be cleaned, as necessary, before 
the evaluation begins.
    (iv) Retroreflective sheeting and the comparator panel shall be 
evaluated from a position perpendicular to the installed sheeting, 
preferably from a distance of 15 feet from the installed sheeting and 
the comparator panel. In the event conducting the evaluation from 15 
feet away is not practicable, the evaluation may be conducted from a 
distance of between 10 and 20 feet.
    (v) The light source shall be positioned adjacent to the 
inspector's eye (left or right) and directed at the sheeting and 
comparator panel, and a comparison of the reflected light intensity of 
the entire installed sheeting to that of the comparator panel shall be 
made. The installed sheeting shall pass or fail based on the following 
criteria:
    (A) If the perceived reflected light intensity of the entire 
installed sheeting appears brighter than that of the comparator panel, 
the installed sheeting passes the evaluation.
    (B) If the perceived reflected light intensity of the entire 
installed sheeting does not appear brighter than that of the comparator 
panel, or if it cannot be discerned if one is brighter than the other, 
the sheeting fails the evaluation and shall be replaced prior to the 
equipment returning to service.
    (C) Installed sheeting that is damaged, obscured, or missing, 
cannot be evaluated with the comparator panel and shall be replaced 
prior to the equipment returning to service.
    (3) Handheld retroreflectometers. A properly calibrated handheld 
retroreflectometer may be used in lieu of a comparator panel, subject 
to the following conditions:
    (i) The handheld retroreflectometer shall be an annular device. A 
single measurement on a strip of sheeting shall suffice with an annular 
device, provided that the sheeting is not damaged, obscured, or 
missing.
    (ii) The handheld device shall be placed directly against the 
reflective sheeting, and the measurement shall be made based on the 
device manufacturer's recommendation.
    (iii) The minimum allowable retroreflective value is 150 cd/lx/m\2\ 
for yellow sheeting and 250 cd/lx/m\2\ for white sheeting, when 
measured at the -4[deg] entrance angle and 0.2[deg] observation angle 
configuration. Sheeting that does not meet these minimum allowable 
retroreflectivity values shall be replaced prior to the equipment 
returning to service.

    Issued in Washington, DC.
Amitabha Bose,
Administrator.
[FR Doc. 2022-15192 Filed 7-20-22; 8:45 am]
BILLING CODE 4910-06-P


