Economic Impacts
As part of the development of this rulemaking, an economic impacts analysis was done. The economic impacts analysis findings show that the costs of the proposed action to State and local agencies would be less than $100 million per year. The economic impact analysis was based on a worst-case scenario (e.g., that no overhead guide or street name signs currently meet the requirements and thus need to be replaced over a seven year implementation period for (regulatory, warning, and post mounted guide signs) and ten years for (overhead guide signs and street name signs)for the rule. It indicated a cost impact of about $51 million per year for all State and local agencies based on the replacement cost of upgrading the sign sheeting from ASTM Type I (Engineering Grade) to ASTM Type III (High Intensity Grade). In the same manner, a second cost estimate was generated reflecting the cost to State and local agencies for upgrading the signs from Type I sheeting material to Type VII (micro-prismatic sheeting) to “more” than just meet the minimum levels. The cost impact of this option was estimated to be about $73 million.
The implementation periods proposed in the rule strive to minimize the impacts on State and local jurisdictions by allowing existing signs to remain in-place for their useful life and to not incur additional labor and logistics costs for sign replacement. Thus, sign facing can be upgraded as part of currently planned maintenance cycles. An implementation period of seven years for regulatory, warning, and guide signs would allow State and local jurisdictions to delay replacement of recently-placed Type I signs until they have reached their commonly-accepted seven year service life. The proposed ten-year compliance period for overhead signs would allow an extended period of time due to the longer service life typically used for those signs.
The FHWA realizes there may be criticism it has “segmented” costs between signing and pavement marking retroreflectivity in order to keep overall impact costs below the $100 million threshold. In fact, the costs reflect the agency's knowledge of retroreflectivity to date and its ability to advance the issue to address Congressional intent.
