We used to have S12's and a few SW900's stationed where I lived in NW IA before the takeover by the Soo. The SW's had dual S-shaped horizontal mufflers and were numbered in the 900-range IIRC. Later on there were some GP & SD 9's there also in addition to the little switchers. We're talking late 60's/early 70's time frame.
Supposedly, from my recent understanding, any school bus or trucks, carrying any hazardous commodity, commonly required by law to STOP at all railroad grade crossings, look both ways before proceeding across the tracks, do not necessarily have to STOP, LOOK, and LISTEN at any grade crossing marked as "EXEMPT," the trains crossing there are typically infrequent, or they travel at very slow speeds, or even instances where the grade crossing is manually flagged by a train crew member. (BTW, I did see the "EXEMPT" signs in question, those mounted below the flasher lights on the crossing signals, around the 5:15 mark. I saw two instances hereafter whereby the crossing was flagged by a train crew member before the train proceeded across the road.)
