(a) Limitation on railroad freight cars. A railroad freight car wholly manufactured on or after December 19, 2025 may only operate on the United States general railroad system of transportation if:

(1) The railroad freight car is manufactured, assembled, and substantially transformed, as applicable, by a qualified manufacturer in a qualified facility;

(2) None of the sensitive technology located on the railroad freight car, including components necessary to the functionality of the sensitive technology, originates from a country of concern or is sourced from a state-owned enterprise; and

(3) None of the content of the railroad freight car, excluding sensitive technology, originates from a country of concern or is sourced from a state-owned enterprise that has been determined by a recognized court or administrative agency of competent jurisdiction and legal authority to have violated or infringed valid United States intellectual property rights of another including such a finding by a Federal district court under title 35 or the U.S. International Trade Commission under section 337 of the Tariff Act of 1930 (19 U.S.C. 1337).

(b) Limitation on railroad freight car content—(1) Percentage limitation—(i) Initial limitation. Not later than December 19, 2025, a railroad freight car described in paragraph (a) of this section may operate on the United States general railroad system of transportation only if not more than 20 percent of the content of the railroad freight car, calculated by the net cost of all components of the car and excluding the cost of sensitive technology, originates from a country of concern or is sourced from a state-owned enterprise.

(ii) Subsequent limitation. Effective beginning on December 19, 2028, a railroad freight car described in paragraph (a) of this section may operate on the United States general railroad system of transportation only if not more than 15 percent of the content of the railroad freight car, calculated by the net cost of all components of the car and excluding the cost of sensitive technology, originates from a country of concern or is sourced from a state-owned enterprise.

(2) Conflict. The percentages specified in the clauses in paragraphs (b)(1)(i) and (ii) of this section, as applicable, shall apply notwithstanding any apparent conflict with provisions of chapter 4 of the USMCA.

(a) Certification required. To be eligible to provide a railroad freight car for operation on the United States general railroad system of transportation, the manufacturer of such car shall certify, at least annually, to the Federal Railroad Administrator that any railroad freight cars to be so provided comply with 49 U.S.C. 20171.

(1) Certification procedure. Prior to providing any cars for operation on the United States general railroad system of transportation, each freight car manufacturer shall certify to FRA that the cars comply with 49 U.S.C. 20171. Such certification shall be submitted via electronic mail by an authorized representative of the manufacturer to [email protected]. A manufacturer may submit this certification to FRA annually provided it covers all cars to be provided in the relevant year, or a manufacturer may submit separate certifications throughout the year.

(i) The certification shall include the statement “I certify that all freight cars that will be provided for operation on the United States general railroad system of transportation will comply with 49 U.S.C. 20171,and;

(B) The name, signature, and contact information for the person designated to certify compliance with this subpart; and

(C) A car identification number for each car being certified.

(ii) Manufacturers shall maintain records showing the information, including the calculations, made to support certification under this section and such records shall be made available to FRA upon request.

(2) Valid certification required. At the time a railroad freight car begins operation on the United States general railroad system of transportation, the manufacturer of such railroad freight car shall have valid certification described in paragraph (a) of this section for the year in which such car begins operation.

(b) [Reserved]

(a) Cars prohibited. A railroad freight car manufacturer may not register, or cause to be registered, a railroad freight car that does not comply with the requirements under this subpart in the Umler system.

(b) [Reserved]

(a) In general. A railroad freight car manufacturer that has manufactured a railroad freight car for operation on the United States freight railroad interchange system that the Secretary of Transportation determines, after written notice and an opportunity for a hearing, has violated this subpart is liable to the United States Government for a civil penalty of at least $100,000, but not more than $250,000, for each such violation for each railroad freight car.

(b) Prohibition for violations. The Secretary of Transportation may prohibit a railroad freight car manufacturer with respect to which the Secretary has assessed more than three violations under this section from providing additional railroad freight cars for operation on the United States freight railroad interchange system until the Secretary determines:

(1) Such manufacturer is in compliance with this subpart; and

(2) All civil penalties assessed to such manufacturer pursuant to this section have been paid in full.

(a) FRA, through the Office of the Chief Counsel, begins a civil penalty proceeding under § 215.407(a) by serving a demand letter on a railroad freight car manufacturer, charging the railroad freight car manufacturer with having violated one or more provisions of this subpart.

(b) A demand letter issued under this section includes:

(1) A statement of the provision(s) which the respondent is believed to have violated;

(2) A statement of the factual allegations upon which the proposed civil monetary penalty is being sought;

(3) Notice of the maximum amount of civil monetary penalty for which the respondent may be liable;

(4) Notice of the amount of the civil monetary penalty proposed;

(5) A description of the manner in which the respondent should make payment of any money to the United States;

(6) A statement of the respondent's right to present written explanations, information, or any materials in answer to the charges or in mitigation of the penalty; and

(7) A statement of the respondent's right to request a hearing and the procedures for requesting a hearing.

(c) FRA may amend the demand letter at any time prior to completion of a fully executed settlement agreement or the entry of an order to pay a civil monetary penalty. If the amendment contains any new material allegation of fact, the respondent is given an opportunity to respond. In an amended demand letter, FRA may change the civil monetary penalty amount initially proposed, up to the maximum penalty amount for each violation.

(a) Within sixty (60) days of the service of a demand letter issued under § 215.409, the respondent may—

(1) Pay as provided in § 209.413(a) and thereby close the case;

(2) Make an informal response as provided in § 215.415; or

(3) Request a hearing as provided in § 215.417.

(b) The Office of the Chief Counsel may extend the sixty (60) day period for good cause shown.

(c) Failure of the respondent to reply by taking one of the three actions described in paragraph (a) of this section, within the period provided, constitutes a waiver of the right to appear and contest the allegations, and authorizes the Office of the Chief Counsel, without further notice to the respondent, to find the facts to be as alleged in the demand letter and to assess an appropriate civil penalty.

(a) Payment of a civil monetary penalty may be made by credit card, certified check, money order, or wire transfer. Payment by credit card must be made via the internet at https://www.pay.gov/paygov/. Instructions for online payment are found on the website. Payments made by certified check or money order should be made payable to the Federal Railroad Administration and sent to DOT/FRA, M.M.A.C., AMK-324, HQ-RM 181, P.O. Box 25082, Oklahoma City, OK 73125. Overnight express payments may be sent to DOT/FRA, M.M.A.C., AMK-324, HQ-RM 181, 6500 South MacArthur Blvd., Oklahoma City, OK 73169.

(b) At any time before an order requiring payment of a civil monetary penalty is referred to the Attorney General for collection, the respondent may offer to compromise for a specific amount by contacting the Office of the Chief Counsel.

(a) If a respondent elects to make an informal response to a demand letter, respondent must submit to the Office of the Chief Counsel such written explanations, information, or other materials as respondent may desire in answer to the charges or in mitigation of the proposed penalty.

(b) The respondent may include in the informal written response a request for a conference. Upon receipt of such a request, the Office of the Chief Counsel arranges for a conference as soon as practicable.

(c) Written explanations, information, or materials submitted by the respondent, and relevant information presented during any conference held under this section, are considered by the Office of the Chief Counsel in reviewing the demand letter and determining the fact(s) of the violation and the amount of any civil penalty to be paid.

(d) After consideration of an informal response, including any relevant information presented at a conference, the Office of the Chief Counsel may dismiss the demand letter in whole or in part. If the Office of the Chief Counsel does not dismiss the action in whole, the Office of the Chief Counsel may enter into a settlement agreement or enter an order assessing a civil monetary penalty.

(a) If a respondent elects to request a hearing, the respondent must submit a written request to the Office of the Chief Counsel referring to the case number which appeared on the demand letter. The request must—

(1) State the name and email address of the respondent and of the person signing the request, if different from the respondent;

(2) State with respect to each allegation whether it is admitted or denied; and

(3) State with particularity the issues to be raised by the respondent at the hearing.

(b) After a request for hearing that complies with the requirements of paragraph (a) of this section, the Office of the Chief Counsel schedules a hearing for the earliest practicable date.

(c) The Office of the Chief Counsel, or the hearing officer designated under § 215.419, may grant extensions of the time of the commencement of the hearing for good cause shown.

(a) When a hearing is requested and scheduled under § 215.417, a presiding officer designated by the Office of the Chief Counsel convenes and presides over the hearing. If requested by the respondent, and if practicable, the hearing is held in the general vicinity of the place where the alleged violation occurred, at a place convenient to the respondent, or virtually. Testimony by witnesses shall be given under oath and the hearing shall be recorded verbatim.

(b) The presiding official may:

(1) Administer oaths and affirmations;

(2) Issue subpoenas as provided by § 209.7;

(3) Adopt procedures for the submission of evidence in written form;

(4) Take or cause depositions to be taken;

(5) Rule on offers of proof and receive relevant evidence;

(6) Examine witnesses at the hearing;

(7) Convene, recess, reconvene, and adjourn and otherwise regulate the course of the hearing;

(8) Hold conferences for settlement, simplification of the issues or any other proper purpose; and

(9) Take any other action authorized by, or consistent with, the provisions of this subpart pertaining to civil monetary penalties and permitted by law that may expedite the hearing or aid in the disposition of an issue raised, therein.

(c) The Office of the Chief Counsel has the burden of providing the facts alleged in the demand letter and may offer such relevant information as may be necessary fully to inform the presiding officer as to the matter concerned.

(d) The respondent may appear and be heard on the respondent's own behalf or through counsel of the respondent's choice. The respondent or respondent's counsel may offer relevant information, including testimony, which they believe should be considered in defense of the allegations, or that may bear on the proposed civil monetary penalty, and conduct such cross-examination as may be required for a full disclosure of the material facts.

(e) At the conclusion of the hearing, or as soon thereafter as the hearing officer shall provide, the parties may file proposed findings and conclusions, together with supporting reasons.

(a) After consideration of the evidence of record, the presiding officer may dismiss the demand letter in whole or in part. If the presiding officer does not dismiss the civil penalty enforcement action in whole, the presiding officer will issue and serve on the respondent an order assessing a civil penalty. The presiding officer's decision will include a statement of findings and conclusions as well as the reasons therefor on all material issues of fact, law, and discretion.

(b) If, within twenty (20) days after service of an order assessing a civil penalty fine issued by the presiding officer under paragraph (a) of this section, the respondent does not pay the civil penalty fine, the case may be referred to the Attorney General with a request that an action to collect the penalty be brought in the appropriate United States District Court. In the civil action, the amount and appropriateness of the civil penalty shall not be subject to review.