[Federal Register: December 21, 2006 (Volume 71, Number 245)]
[Proposed Rules]
[Page 76729-76793]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21de06-16]
[[Page 76729]]
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Part II
Department of Transportation
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Federal Motor Carrier Safety Administration
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49 CFR Parts 365, 385, 387, and 390
New Entrant Safety Assurance Process; Proposed Rule
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DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety Administration
49 CFR Parts 365, 385, 387, and 390
[Docket No. FMCSA-2001-11061]
RIN 2126-AA59
New Entrant Safety Assurance Process
AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.
ACTION: Notice of Proposed Rulemaking (NPRM); request for comments.
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SUMMARY: FMCSA proposes changes to the New Entrant Safety Assurance
Process that would raise the standard of compliance for passing the new
entrant safety audit. The agency has identified 11 regulations that it
believes are essential elements of basic safety management controls
necessary to operate in interstate commerce and proposes that failure
to comply with any one of the 11 regulations would result in automatic
failure of the audit. Under this proposal, carriers would also be
subject to the current safety audit evaluation criteria in Appendix A
of part 385. Additionally, if a roadside inspection discloses certain
violations, the new entrant would be subject to expedited actions to
correct these deficiencies. The agency proposes to eliminate Form MCS-
150A--Safety Certification for Application for USDOT Number. The agency
also intends to check compliance with the Americans with Disabilities
Act and certain household goods-related requirements in the new entrant
safety audit, if they apply to the new entrant's operation. However,
failure to comply with these requirements would not impact the outcome
of the safety audit. These changes would not impose additional
operational requirements on any new entrant carrier. All new entrants
would continue to receive educational information on how to comply with
the safety regulations and be given an opportunity to correct any
deficiencies found. FMCSA recognizes many new entrants are small
businesses that are unaware of these requirements and continue to need
the agency's assistance. Finally, FMCSA would make clarifying changes
to some of the existing new entrant regulations and establish a
separate new entrant application procedure and safety oversight program
for non-North America-domiciled motor carriers. FMCSA believes this
proposal would improve its ability to identify at-risk new entrant
carriers and ensure deficiencies in basic safety management controls
are corrected before the new entrant is granted permanent registration.
DATES: We must receive your comments by February 20, 2007.
ADDRESSES: You may submit comments, identified by DOT DMS Docket Number
FMCSA-2001-11061, by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Agency Web site: http://dms.dot.gov. Follow the
instructions for submitting comments on the DOT electronic docket site.
Fax: 1-202-493-2251.
Mail: Docket Management Facility; U.S. Department of
Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401,
Washington, DC 20590-0001.
Hand Delivery: Room PL-401 on the plaza level of the
Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9
a.m. and 5 p.m., Monday through Friday, except Federal Holidays.
Instructions: All submissions received must include the agency name
and docket number or Regulatory Identification Number (RIN) for this
rule. All comments received will be posted without change to http://dms.dot.gov
, including any personal information provided. For detailed
instructions on submitting comments and additional information on the
rulemaking process, see the ``Public Participation'' heading of the
SUPPLEMENTARY INFORMATION section of this document. For a summary of
DOT's Privacy Act Statement or information on how to obtain a complete
copy of DOT's Privacy Act Statement please see the ``Privacy Act''
heading under Rulemaking Analyses and Notices.
Docket: For access to the docket to read background documents or
comments received, go to http://dms.dot.gov at any time or to Room PL-
401 on the plaza level of the Nassif Building, 400 Seventh Street, SW.,
Washington, DC, between 9 am and 5 pm, Monday through Friday, except
Federal Holidays.
FOR FURTHER INFORMATION CONTACT: Mr. Arturo H. Ramirez, (202) 366-8088,
Chief, Enforcement and Compliance Division, Federal Motor Carrier
Safety Administration (MC-ECE), 400 Seventh Street, SW., Washington, DC
20590-0001. Office hours are from 7:45 a.m. to 4:15 p.m., ET, Monday
through Friday, except Federal holidays.
SUPPLEMENTARY INFORMATION:
Public Participation: The DMS is available 24 hours each day, 365
days each year. You can get electronic submission and retrieval help
and guidelines under the ``help'' section of the DMS web site. If you
want us to notify you of receiving your comments, please include a
self-addressed, stamped envelope or postcard or print the
acknowledgement page that appears after submitting comments on-line.
Comments received after the comment closing date will be included
in the docket, and we will consider late comments to the extent
practicable. FMCSA may, however, issue a final rule at any time after
the close of the comment period.
Legal Basis for the Rule
Title 49 U.S.C. 31144 requires the Secretary of Transportation
(Secretary) to determine whether an owner or operator is fit to operate
safely. Section 210 of the Motor Carrier Safety Improvement Act of 1999
[Public Law 106-159, 113 Stat. 1764, December 9, 1999] (MCSIA) added
Sec. 31144(g) \1\ directing the Secretary to establish regulations to
require each owner and operator granted new operating authority to
undergo a safety review within 18 months of starting operations. In
issuing these regulations, the Secretary was required to: (1) Establish
the elements of the safety review, including basic safety management
controls; (2) consider their effects on small businesses; and (3)
consider establishing alternate locations where such reviews may be
conducted for the convenience of small businesses. The Secretary was
also required to phase in the new entrant safety review requirements in
a manner that takes into account the availability of certified motor
carrier safety auditors. Congress mandated increased oversight of new
entrants because studies indicated these operators had a much higher
rate of non-compliance with basic safety management requirements and
were subject to less oversight than established operators.
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\1\ MCSIA originally codified section 31144(g) as Sec. 31144(c)
and directed that it be added at the end of 49 U.S.C. 31144
following preexisting subsections (c), (d), and (e). Section
4114(c)(1) of the Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users (Public Law 109-59,
119 Stat. 1144, August 10, 2005) (SAFETEA-LU) recodified this
provision as Sec. 31144(g).
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In addition to expanding the Secretary's authority under Sec.
31144, Section 210 of MCSIA was a specific statutory directive
consistent with the more general pre-existing legal authority provided
by the Motor Carrier Safety
[[Page 76731]]
Act of 1984 (the 1984 Act) [49 U.S.C. App. 2505 (1988)], which requires
the Secretary to prescribe regulations on commercial motor vehicle
safety. The regulations required by the 1984 Act must prescribe minimum
safety standards for commercial motor vehicles (CMVs). At a minimum,
the regulations shall ensure: (1) CMVs are maintained, equipped,
loaded, and operated safely; (2) the responsibilities imposed on
operators of CMVs do not impair their ability to operate the vehicles
safely; (3) the physical condition of operators of CMVs is adequate to
enable them to operate the vehicles safely; and (4) the operation of
CMVs does not have a deleterious effect on the physical condition of
the operators (49 U.S.C. 31136(a)).
This NPRM proposes changes to the New Entrant Safety Assurance
Process to improve the agency's ability to identify at-risk new entrant
motor carriers through screening and ensure deficiencies are corrected
before granting them permanent registration. As such, it implements the
Sec. 31136(a)(1) mandate that FMCSA regulations ensure CMVs are
maintained and operated safely. It does not propose any new operational
responsibilities on drivers pursuant to Sec. Sec. 31136(a)(2)-(4).
Regulatory History
In response to the MCSIA statutory mandate, on May 13, 2002, FMCSA
published an interim final rule (IFR) titled New Entrant Safety
Assurance Process (67 FR 31978), which became effective January 1,
2003. Although operating authority has generally been construed in the
past to mean registration of for-hire carriers subject to the
jurisdiction transferred from the former Interstate Commerce Commission
following enactment of the ICC Termination Act of 1995 [Public Law 104-
88, 109 Stat. 888, December 29, 1995] (ICCTA), FMCSA interpreted
Section 210 of MCSIA as extending this concept to all carriers subject
to Federal safety jurisdiction (see 67 FR 31979, May 13, 2002). For
this reason, FMCSA applied the New Entrant Safety Assurance Process to
all domestic and Canada-domiciled new entrants, regardless of whether
they needed to register with FMCSA under 49 U.S.C. 13901. Mexico-
domiciled new entrants are covered under a separate application process
and safety monitoring system (see 67 FR 12652, 67 FR 12701, and 67 FR
12757 published March 19, 2002).
Under the current New Entrant Safety Assurance Process, FMCSA
provides applicants with an application package including, upon
request, educational and technical assistance materials. The applicant
must complete the application, including Form MCS-150A--Safety
Certification for Application for USDOT Number, which requires the
carrier to certify procedures are in place for basic safety management
controls. Following completion of the application forms, FMCSA
registers the new entrant and assigns a United States Department of
Transportation (USDOT) Number. For-hire motor carriers, unless
providing transportation exempt from ICCTA registration requirements,
also are required to obtain FMCSA operating authority under 49 U.S.C.
13902, prior to commencing operations. The new entrant safety
monitoring period begins when FMCSA issues the new entrant provisional
registration via a USDOT Number and continues for 18 months. To
maintain its provisional registration, a new entrant must comply with
all FMCSA regulations and applicable hazardous materials regulations.
Within the first 18 months of a new entrant's operation, FMCSA will
conduct a safety audit (SA) of the carrier's operations to educate the
carrier on compliance with the Federal Motor Carrier Safety Regulations
(FMCSRs) and Hazardous Materials Regulations (HMRs) and to determine if
the carrier is exercising basic safety management controls as defined
in 49 CFR 385.3. An SA is not a compliance review. It does not result
in a safety rating. These terms are defined in Sec. 385.3.
During the SA, FMCSA gathers information by reviewing the carrier's
compliance with ``acute'' and ``critical'' provisions of the FMCSRs and
applicable HMRs. Acute regulations are those where the consequences of
non-compliance are so severe as to require immediate corrective actions
by a motor carrier, regardless of the overall basic safety management
controls of the motor carrier (e.g., allowing a driver with a suspended
license to operate a vehicle). Critical regulations are defined as
those where noncompliance relates to management or operational controls
and are indicative of breakdowns in a carrier's management controls
(e.g., allowing a driver to operate a vehicle before his/her medical
exam). Parts of the FMCSRs and HMRs having similar characteristics are
combined together into six regulatory areas called ``factors.'' The SA
scoring evaluates each of the following factors and determines the
adequacy of the carrier's safety management controls based on this
evaluation. The six factors are:
Factor 1--General: Parts 387 and 390.
Factor 2--Driver: Parts 382, 383, and 391.
Factor 3--Operational: Parts 392 and 395.
Factor 4--Vehicle: Parts 393 and 396 and inspection data for the last
12 months.
Factor 5--Hazardous Materials: Parts 171, 177, 180 and 397.
Factor 6--Accident: Recordable Accident Rate per Million Miles.
For each instance of noncompliance with an acute regulation, 1.5
points are assessed against the carrier. For each instance of
noncompliance with a critical regulation, 1 point is assessed. For
factors 1-5, if the combined violations of acute and critical
regulations for each factor are equal to three or more points, the
carrier is determined not to have basic safety management controls for
that individual factor. If the recordable accident rate (factor 6) is
greater than 1.7 recordable accidents per million miles for an urban
carrier (1.5 for all other carriers), the carrier is determined to have
inadequate basic safety management controls (i.e., the carrier fails
the factor). If the carrier's accident rate is anywhere between zero
and 1.5 (1.7 for urban carriers), the carrier is considered to have
adequate safety management controls in factor 6. A new entrant fails
the SA if it fails three or more separate factors. Currently, FMCSA is
studying a new approach to assessing the severity of violations as part
of its announced CSA 2010 initiative (69 FR 51748). This initiative may
ultimately replace the ``acute and critical'' methodology described
here.
If the SA discloses the new entrant's basic safety management
controls are adequate, the carrier retains the new entrant registration
and continues to be monitored until the end of the 18-month period.
FMCSA will grant permanent registration only if the new entrant
successfully completes the monitoring period. If the basic safety
management controls are inadequate, the new entrant is given an
opportunity to correct the deficiencies. To provide that opportunity,
FMCSA notifies the new entrant that unless the deficiencies are
remedied, the registration will be revoked in 45 days (for carriers
using passenger vehicles with a capacity to transport 16 or more
passengers or vehicles transporting hazardous materials as defined
under 49 CFR Sec. 383.5) or 60 days (for all other new entrants).
FMCSA may extend the compliance period if it determines the new entrant
is making a good faith effort to remedy the problems. If, within the 45
or 60 days, the new entrant fails to respond to the notice or fails to
correct the deficiencies, FMCSA issues an out-
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of-service order prohibiting further operations in interstate commerce
and revokes the new entrant registration.
Discussion of the Proposed Rule
FMCSA decided to publish an NPRM rather than a final rule because
today's action proposes substantive changes to the May 13, 2002 IFR.
These proposals would benefit from further notice and comment before
promulgation as a final rule. Following is a discussion of these
proposed changes.
Strengthening the Safety Audit
In FY 2000, FMCSA published a report titled ``Analysis of New
Entrant Motor Carrier Safety Performance and Compliance Using
SafeStat,'' which compared the safety performance of new entrant
carriers to that of experienced carriers. A copy of the report is in
the docket for this rule. The report indicated new entrant carriers had
significantly higher crash involvement than experienced carriers. New
entrant carriers had significantly worse driver safety compliance and
performance compared to experienced carriers. To a lesser degree, new
entrant carrier vehicle safety compliance and performance were also
worse than for experienced carriers. For these reasons, FMCSA intends
to ensure all new entrant carriers have basic safety programs and
controls in place before granting permanent registration.
In response to comments to the 2002 IFR (see the section below
titled ``Discussion of Comments''), as well as feedback from FMCSA
field staff and State partners administering the New Entrant Safety
Assurance Process, the Administrator convened an internal working group
in the summer of 2003 to review and improve the process. The working
group identified 11 regulatory violations which reflect a clear lack of
basic safety management controls yet are not properly weighted by the
existing SA. Under the current system, a new entrant could commit one
of these 11 violations and still pass the SA. The group recommended
that FMCSA strengthen the SA pass/fail criteria to give more
appropriate weight to these 11 basic safety management requirements and
clarify several vague regulatory requirements.
Based on this recommendation, FMCSA proposes that committing any
one of the following 11 regulatory violations would result in an
automatic failure of the SA:
1. Sec. 382.115(a)/Sec. 382.115(b)--Failing to implement an
alcohol and/or controlled substances testing program (domestic and
foreign motor carriers, respectively).
2. Sec. 382.211--Using a driver who has refused to submit to an
alcohol or controlled substances test required under part 382.
3. Sec. 382.215--Using a driver known to have tested positive for
a controlled substance.
4. Sec. 383.37(a)--Knowingly allowing, requiring, permitting, or
authorizing an employee with a commercial driver's license which is
suspended, revoked, or canceled by a State or who is disqualified to
operate a commercial motor vehicle.
5. Sec. 383.51(a)--Knowingly allowing, requiring, permitting, or
authorizing a driver to drive who is disqualified to drive a commercial
motor vehicle.
6. Sec. 387.7(a)--Operating a motor vehicle without having in
effect the required minimum levels of financial responsibility
coverage.
7. Sec. 391.15(a)--Using a disqualified driver.
8. Sec. 391.11(b)(4)--Using a physically unqualified driver.
9. Sec. 395.8(a)--Failing to require a driver to make a record of
duty status.
10. Sec. 396.9(c)(2)--Requiring or permitting the operation of a
commercial motor vehicle declared ``out-of-service'' before repairs are
made.
11. Sec. 396.17(a)--Using a commercial motor vehicle not
periodically inspected.
The agency believes carriers committing these violations do not
have the basic safety management controls in place to safely operate in
interstate commerce. The working group identified, and FMCSA accepted,
these 11 infractions because they are so basic to ensuring safety that
no carrier should be allowed to operate if any of these violations are
found and not corrected. For example, implementation of an alcohol and
controlled substances testing program is a fundamental requirement for
any interstate carrier. A carrier that has implemented a program to
ensure its drivers do not operate after testing positive for drugs or
alcohol will reduce the risk of that carrier/driver being involved in a
fatal accident. Allowing drivers who refuse to submit to drug or
alcohol testing to drive indicates the carrier does not have an
effective drug and alcohol testing program. Similarly, only qualified
drivers should be permitted to drive. A carrier does not exercise
sufficient safety management controls if it uses drivers who are
disqualified from operating a CMV, physically unqualified, or who have
had their commercial driver's license suspended, revoked, or canceled.
Additionally, the primary mission of the agency is to reduce
crashes, injuries and fatalities involving large trucks and buses. For
this mission to succeed, carriers must operate safe vehicles. To
accomplish this, vehicles must be periodically inspected and kept in
safe operating condition. Therefore, a new entrant would fail the
safety audit if it does not inspect its vehicles periodically or
operates any vehicle declared out-of-service before making the required
repairs.
Further, driver fatigue has been identified as a contributing
factor in many CMV crashes. To achieve the highest level of safety,
carriers must have a system to safeguard the public against fatigued
drivers by ensuring their drivers adhere to the agency's hours-of-
service limitations. Hours-of-service violations comprise the largest
percentage of driver out-of-service violations at the roadside. One
effective safety management control for preventing fatigued drivers
from operating a CMV is to have in place a system requiring drivers to
submit records of duty status or other records, as appropriate. This
recordkeeping requirement is fundamental to an effective driver
monitoring system.
Finally, the agency believes it is essential for the traveling
public to receive adequate compensation for personal injuries or
property damage caused by CMVs operating on the highways. Therefore,
carriers lacking required minimum financial responsibility would not be
permitted to operate.
FMCSA emphasizes that the purpose of the proposed revision is to
improve the safety management of new entrants, not to remove them from
operations. The agency believes the regulations identified above are
evidence of whether a new entrant has a systemic program to ensure it
has the basic safety management controls to operate in interstate
commerce.
As discussed above, when a new entrant fails an audit, even for one
of the automatic failures described above, it will be afforded due
process and given time to correct its failures and improve its safety
management controls. This proposal emphasizes FMCSA's commitment to
highway safety and would allow the agency to ensure new entrants are
not permitted to operate without first correcting serious deficiencies
in a timely manner.
FMCSA believes it is incumbent upon all new entrant carriers to be
informed about, and familiar with, the FMCSRs prior to receiving a
safety audit. To this end, FMCSA provides outreach and educational
materials to carriers to help them prepare for the audit. Carriers
discovered to have committed one of the
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11 violations identified above, after having been informed of the need
to comply prior to receiving permanent registration, and found to have
not corrected the deficiency, will not be permitted to continue to
operate. Establishing these 11 violations as grounds for failing the
safety audit would promote public safety by encouraging new entrants to
correct serious deficiencies in their safety management controls and
reducing the number of potentially unsafe carriers operating on the
nation's highways.
It should be noted that most of these 11 regulations correspond to
requirements necessary for Mexico-domiciled long-haul carriers to
obtain authority to operate in the United States, as established by
Congress under Section 350(a)(1)(B) of the Fiscal Year 2002 DOT
Appropriations Act [Public Law 107-87, Title III, sec. 350, 115 Stat.
864, Dec. 18, 2001]. The requirements applicable to Mexico-domiciled
long-haul carriers are:
Verification of a controlled substances and alcohol
testing program consistent with 49 CFR part 40;
Verification of a carrier's system of compliance with
hours-of-service rules, including hours-of-service records;
Verification of proof of financial responsibility;
An evaluation of that motor carrier's safety inspection,
maintenance, and repair facilities or management systems, including
verification of records of periodic vehicle inspections; and
Verification of drivers' qualifications, including a
required commercial driver's license.
Expedited Action
Under existing Sec. 385.307(a), having ``an accident rate or
driver or vehicle violation rate that is higher than the industry
average for similar motor carrier operations' triggers an expedited SA
or compliance review of the new entrant. (The reference to a ``driver
or vehicle violation rate'' is an error and should read ``driver or
vehicle out-of-service rate.'') The agency proposes to replace the
abbreviated expedited action provisions under Sec. 385.307(a) with the
same ``Expedited Action'' provisions applicable to Mexico-domiciled
carriers under Sec. 385.105. As the agency stated in proposing the
expedited action provisions for Mexico-domiciled carriers, we believe
these violations pose the greatest threat to public safety and raise
serious questions about a carrier's willingness and ability to conduct
safe operations. See 66 FR 22416 (May 3, 2001). In addition to
identifying potentially unsafe new entrant carriers, expanding the
expedited action provisions would also make the treatment of Mexico-
domiciled new entrants and all other new entrants more uniform.
This change would improve the New Entrant Safety Assurance Process
by tightening scrutiny of new entrants before and after the safety
audit. New entrants discovered with these violations could be
identified during a roadside inspection or by any other means even if
the agency had not yet conducted a safety audit.
Discovery of certain violations during a roadside inspection or by
any other means would subject the new entrant to expedited action. If
the carrier had not already submitted to an audit, the carrier would be
flagged for review as soon as practicable. If the carrier already had
submitted to an audit before discovery of an ``expedited action
violation,'' FMCSA would send the carrier a letter requesting evidence
of corrective action within 30 days of the notice or the carrier's
registration would be revoked. Additionally, if FMCSA determined the
violation warranted a more thorough review of the carrier's operation,
the agency would schedule a compliance review. The following actions
would trigger expedited action against the motor carrier:
Using a driver who does not have a valid commercial
driver's license.
Operating vehicles that have been placed out-of-service
for violations of the Federal Motor Carrier Safety Regulations or
compatible State laws and regulations without taking necessary
corrective action.
Being involved in, through action or omission, a hazardous
materials incident involving--
A highway route controlled quantity of certain radioactive
materials (Class 7).
Any quantity of certain explosives (Class 1, Division 1.1,
1.2, or 1.3).
Any quantity of certain poison inhalation hazard materials
(Zone A or B).
Being involved in, through action or omission, two or more
hazardous materials incidents involving hazardous materials other than
those listed above.
Using a driver who tests positive for controlled
substances or alcohol or who refuses to submit to required drug or
alcohol tests.
Operating a motor vehicle that is not insured as required.
Having a driver or vehicle out-of-service rate of 50
percent or more based on at least three inspections within a
consecutive 90-day period.
The last item above would replace the ``vehicle or driver violation
rate that is higher than the industry average for similar motor carrier
operations'' requirement under Sec. 385.307. From an operational
standpoint, the ``50 percent or more threshold'' would provide for more
effective and efficient monitoring of new entrant performance because
it is a non-subjective and easily measured rate.
Applicability of Proposed Requirements to Current New Entrants
The changes in today's notice of proposed rulemaking, if
promulgated as a final rule, would apply to motor carriers still
subject to the current new entrant safety monitoring process on the
final rule's effective date. Assuming all changes are adopted, these
new entrants would be subject to expedited enforcement action for
committing any of the seven violations or actions identified under the
section ``Expedited Action.'' If a current new entrant has not had a
safety audit prior to the final rule effective date, it would be
audited in accordance with the safety audit procedures adopted in the
final rule, including the applicable 11 automatic failure factors
identified under the section ``Strengthening the Safety Audit.''
However, the automatic failure factors would not be retroactively
applied to safety audits completed prior to the final rule's effective
date. The safety audit outcomes determined prior to the final rule's
effective date would remain unchanged by the final rule.
Form MCS-150A--Safety Certification for Application for USDOT Number
The purpose of the MCS-150A is for a new entrant to certify it has
a system in place to ensure compliance with the FMCSRs and applicable
HMRs. However, based on the SAs conducted to date, FMCSA has found many
new entrants certified on the MCS-150A they are knowledgeable about the
FMCSRs and applicable HMRs and have in place the safety management
controls necessary to conduct interstate operations, but are not, in
fact, in compliance with the FMCSRs and applicable HMRs. Therefore,
while the intent of the MCS-150A is valid, in practice it fails.
Consequently, FMCSA is proposing to eliminate the form. Conforming
amendments are proposed to eliminate mention of the MCS-150A throughout
the regulations.
Timing of Administrative Reviews
The administrative review provisions in current Sec. 385.327 are
ambiguous with respect to the time during which a carrier is allowed to
file a request for administrative review and when it must file a
request for administrative review,
[[Page 76734]]
if it wants the review to be completed before its registration is
revoked. FMCSA is proposing to revise the section to clarify that, if a
new entrant disagrees with the findings of an SA, the new entrant must
file a request for an administrative review within 90 days of the date
of the notice of audit failure or within 90 days of the notice of its
corrective action being insufficient. However, if a new entrant wants a
decision before the revocation takes effect, the new entrant must file
a request for review within 15 days of the date of the notice of audit
failure. Requests filed after 15 days will be considered, but it is
possible the revocation would take effect before the administrative
review process is completed, even if the new entrant eventually
prevails and its registration is restored.
``Chameleon'' Carriers
The agency is concerned about carriers attempting to evade
enforcement actions and/or out-of-service orders issued against them by
re-registering as new entrants and operating as different entities
under new USDOT Numbers. We call these entities ``chameleon'' carriers.
Such a carrier might attempt to conceal its former identity by
leaving blank the response to items 16 and 17 on the ``Motor Carrier
Identification Number--Application for USDOT Number'' (Form MCS-150).
Items 16 and 17 of the MCS-150 request the carrier's USDOT Number or MC
or MX Number. In other cases, the carrier may attempt to hide the fact
that its USDOT Number is revoked by falsifying the response to item 28
on the MCS-150, which asks whether the carrier's USDOT Number
registration is currently revoked by FMCSA, and if so, requires the
carrier to list this number. Item 30 on the MCS-150 requires the
carrier to certify the information provided on the MCS-150 is true,
correct and complete. Unfortunately, some carriers deliberately fail to
disclose information regarding their history in order to evade civil
penalties assessed against the company or to circumvent out-of-service
orders and other operational restrictions by obtaining new USDOT
Numbers. Often these chameleon carriers go undetected until the agency
conducts an SA or compliance review.
The agency is committed to ensuring only safe carriers are
permitted to continue operating on our nation's highway. FMCSA has the
authority to correct, modify, or revoke new entrant registration issued
inadvertently, or obtained by fraud, misrepresentation or other
wrongful means. Proposed Sec. 385.306 clarifies what action may be
taken against any carrier not providing truthful and complete
information on its MCS-150.
If a carrier obtains a new USDOT Number after being ordered to
cease operations based on a failed safety audit, prior Unsatisfactory
rating, failure to pay a civil penalty or any other reason, and the
information is discovered after the carrier received another USDOT
Number, the agency will revoke the carrier's new registration and may
also take additional enforcement action against the carrier. If a
carrier obtains a new USDOT Number, but was not subject to an
outstanding order to cease operations under a previous number, the
agency may determine the new USDOT Number should not be revoked and,
instead, link the history of the two companies by identifying in our
database the new USDOT Number as the primary active number. The old
USDOT Number would be listed in the database as one under which the
carrier has also done business, and its safety history, including
enforcement actions against the carrier, would be imputed to the new
entity.
A carrier that ceased interstate operations and wishes to reapply
should submit an updated MCS-150 and list its old USDOT Number when
applying. The agency would reactivate the USDOT Number upon approval of
the application.
Reapplication Process
Current Sec. 385.329(a) states a new entrant whose new entrant
registration has been revoked and whose operations have been placed
out-of-service must wait 30 days after the revocation date to reapply.
Current Sec. 385.329(b) states the motor carrier will be required to
initiate the application process ``from the beginning,'' demonstrate it
has corrected the deficiencies resulting in revocation, and otherwise
ensure it has adequate basic safety management controls. Some have
interpreted ``from the beginning'' to mean the carrier must resubmit
all documents submitted when the new entrant initially applied for new
entrant registration and, if the application is accepted, undergo
another SA and receive a new USDOT Number. The agency proposes to
address the reapplication issue by establishing two separate procedures
based upon what caused the revocation.
Under proposed Sec. 385.329(b), a new entrant whose registration
is revoked for failing the safety audit would reapply by submitting an
updated Form MCS-150 and providing evidence of corrective action (which
FMCSA would review for adequacy). If FMCSA concludes the re-applicant
has taken adequate corrective action, it would grant the application
and the re-applicant would not be subject to a second SA. The carrier
would remain a new entrant, retain the same USDOT Number and continue
to be monitored for 18 months from the date the new application is
approved. For-hire motor carriers must also reapply for operating
authority under 49 U.S.C. Sec. 13902, if their operating authority was
revoked.
If FMCSA revokes a new entrant's registration because it refused to
submit to an audit, the new entrant would be required to submit an
updated MCS-150, retain the same USDOT Number, and submit to an SA as
soon as practicable once the new application is approved. FMCSA intends
to flag these carriers so they will receive an SA as soon as
practicable once they reenter the program. In all instances, a carrier
reapplying for new entrant authority would be prohibited from operating
in interstate commerce until its new application is approved. As in the
case above, a new 18-month monitoring period would start upon approval
of the new application.
To retain historical information on a revoked new entrant's past
performance, FMCSA would require the new entrant to retain the same
USDOT Number when reapplying for registration. This is consistent with
what FMCSA has done in the past and is currently doing whenever a
carrier is placed out-of-service and subsequently remedies whatever
deficiencies resulted in the out-of-service order.
Household Goods
Currently, the SA does not evaluate compliance with FMCSA's
household goods (HHG) regulations (49 CFR part 375). In order to
strengthen its oversight of the HHG industry, FMCSA is proposing to
include questions regarding HHG requirements in the audit. Because the
HHG requirements are not safety related, however, FMCSA would not count
the answers toward the pass/fail determination. Instead, any violations
found would be enforced through other means (e.g., a compliance
review).
Americans With Disabilities Act
The SA also does not evaluate compliance by passenger carriers with
the Americans with Disabilities Act of 1990 [Public Law 101-336, 104
Stat. 327, July 26, 1990] (ADA). DOT regulations at 49 CFR part 37
prohibit discrimination against individuals with disabilities in the
provision of transportation services, and require
[[Page 76735]]
certain vehicles to be readily accessible to and usable by such
individuals. In order to strengthen its oversight over ADA issues,
FMCSA is proposing to include questions regarding ADA compliance in
audits of new entrant passenger carriers. As with violations of the HHG
requirements, FMCSA would not count the answers toward the pass/fail
determination. Instead, any violations found would be enforced by
forwarding apparent violations to the U.S. Department of Justice or, if
the carrier is a recipient of DOT financial assistance, through DOT
administrative enforcement action.
Other Changes
Today's proposal would amend Sec. 385.319, which concerns the new
entrant's responsibilities for remedying deficient safety management
practices discovered during the safety audit. It adds an additional
category of passenger carriers to the description of which carriers
must remedy deficiencies within 45 days of notification by FMCSA--new
entrants that haul passengers in a vehicle used or designed to
transport between 9 and 15 passengers for compensation.\2\ The
corrective action periods in Sec. 385.319(c) were modeled after the
45- and 60-day effective dates of Unsatisfactory safety ratings in 49
CFR 385.11. Section 385.11 subjects all motor carriers transporting
passengers by CMV to the 45-day requirement, including CMVs designed to
transport between 9 and 15 passengers for compensation. The May 2002
IFR inadvertently failed to apply the 45-day requirement to small
vehicle passenger carriers, subjecting them instead to the 60-day
period applicable to property carriers not hauling hazardous materials
requiring placarding. We propose to amend Sec. 385.319(c), as well as
Sec. Sec. 385.323, 385.325, and 385.327 to make them consistent with
Sec. 385.11. Section 385.319 has also been rewritten to cross
reference the definition of CMVs relating to hazardous materials
carriers in 49 CFR 390.5 for purposes of consistency.
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\2\ Under existing FMCSA regulations, most of the FMCSRs do not
apply to the transportation of passengers in such vehicles within a
75 air-mile radius of the driver's work reporting location, or when
the carrier is not directly compensated. See 49 CFR Sec.
390.3(f)(6). However, section 4136 of SAFETEA-LU eliminated the 75
air-mile distance limitation. Therefore, all carriers transporting
passengers in CMVs designed to carry between 9 and 15 passengers
will be subject to the new entrant requirements, provided such
carriers are directly compensated. In a separate rulemaking, Sec.
390.3(f)(6) will be amended to achieve consistency with this
statutory change.
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Current Sec. 385.337(a) states: ``The initial refusal to permit an
SA to be performed may subject the new entrant to the penalty
provisions in 49 U.S.C. Sec. 521(b)(2)(A).'' The term ``initial''
before the word ``refusal'' unnecessarily limits FMCSA's ability to
impose penalties against recalcitrant carriers. Therefore, FMCSA is
proposing to remove the word ``initial'' before the word ``refusal'';
this change would permit FMCSA to consider any refusal as a basis for
imposing penalties.
The New Entrant Safety Assurance Process and Non-North America-
Domiciled Motor Carriers
Congress ratified the Central American Free Trade Agreement in the
summer of 2005. In preparation for implementation of this treaty, FMCSA
examined the agency's programs to ensure that any CMVs entering the
United States from Central American countries were operating safely.
Central American motor carriers, and indeed any motor carrier from a
country other than the United States, Canada, or Mexico (non-North
America-domiciled motor carriers), are not covered by FMCSA's existing
New Entrant oversight programs. There are 64 carriers from Central
American countries that have registered with the agency to operate CMVs
in the United States.
The registered Central American carriers are domiciled in
Guatemala, El Salvador, Belize, Honduras, Panama, and Nicaragua. The
average vehicle fleet size for these carriers is one or two tractor-
trailers. Sixty-three of the 64 carriers classified their operations as
private motor carriers of property. A single carrier listed its
operation type as private motor carrier of passengers (business). Most
of the Central American carriers contracted with the same processing
agent located in Brownsville, Texas, to file the USDOT Number
application with FMCSA. Each of the carriers, including the passenger
carrier, listed general freight or motor vehicles as its cargo type.
FMCSA has considered several options for a safety monitoring
process for non-North America-domiciled motor carriers, including (1)
subjecting them to the safety monitoring process for Mexico-domiciled
carriers; (2) subjecting them to the New Entrant Safety Assurance
Process for U.S. and Canada-domiciled carriers; or (3) developing an
alternate oversight program compatible with existing regulatory
authority.
The safety monitoring system for Mexico-domiciled carriers is based
upon standards set out in the NAFTA Arbitral Panel Report \3\ dated
February 6, 2001, and the provisions of Section 350 of the FY 2002
Department of Transportation Appropriations Act. The NAFTA Arbitral
Panel (the Panel) noted that: (1) The United States is not required to
treat applications from Mexico-domiciled trucking firms in exactly the
same manner as applications from U.S. or Canadian firms, as long as
they are reviewed on a case by case basis; and (2) given the different
enforcement mechanisms in place in the United States and Mexico, it may
be justifiable for the United States to address legitimate safety
concerns through different methods of ensuring compliance with the U.S.
regulatory regime. Similarly, the Panel found it may not be
unreasonable for the United States to implement different procedures
with respect to service providers from another NAFTA country if
necessary to ensure compliance with its own local standards by these
service providers.
---------------------------------------------------------------------------
\3\ In the Matter of Cross-Border Trucking Services, Secretariat
File No. USA-MEX-98-2008-01, Final Panel, (February 6, 2001).
---------------------------------------------------------------------------
Mexico's motor carrier safety regulatory system lacks several of
the components that are central to the U.S. system. As the Panel found,
the U.S. is responsible for the safe operation of motor carriers within
U.S. territory, regardless of the carriers' country of origin, and
FMCSA believes we must ensure each carrier is safe to protect U.S.
highway users. The safety monitoring process for Mexico-domiciled
carriers provides FMCSA with the necessary level of assurance, in a
manner consistent with the Panel's findings, and the relevant
provisions of NAFTA. It ensures that Mexican motor carriers seeking
U.S. operating authority are capable of complying with the U.S. safety
regulatory regime.
The New Entrant Safety Assurance Process for U.S. and Canada-
domiciled carriers is based upon an in-depth understanding of the
safety systems in each country and a long history of cross-border truck
and bus operations. Because FMCSA lacks understanding and experience
with the safety systems of Central American and other non-North
American countries, the agency deems it appropriate to adopt an
alternate method of overseeing the compliance and safety of non-North
America-domiciled-motor carriers. The alternate oversight method for
non-North America-domiciled motor carriers is similar to FMCSA's
oversight program for Mexico-domiciled motor carriers. It also is
consistent with sec. 210(a) of MCSIA because it would require a safety
[[Page 76736]]
review of a new entrant non-North America-domiciled motor carrier
within the first 18 months of operations. FMCSA would implement the
minimum requirements provision of sec. 210(b) for these carriers
through Form OP-1(NNA). Because sec. 210(a) of MCSIA requires the
Secretary to issue regulations mandating safety reviews of all new
entrant carriers, today's action proposes such regulations for non-
North America-domiciled motor carriers. Due to FMCSA's lack of
knowledge regarding the safety regimes of their home countries (as
opposed to Canada and Mexico), FMCSA will use experience gained through
the alternate oversight safety monitoring system to determine whether
further regulatory changes may be appropriate in the future. The agency
requests information on the safety systems of Central American and
other non-North American countries.
Monitoring the Safety of Existing Non-North America-Domiciled Motor
Carriers
FMCSA will educate, review and monitor the 64 registered non-North
America-domiciled motor carriers and any additional non-North American
carriers issued a USDOT Number prior to the effective date of any final
rule promulgated for today's notice of proposed rulemaking. Compliance
reviews will be conducted within three months on all existing non-North
America-domiciled motor carriers to assess their compliance with U.S.
regulations. With respect to additional non-North America-domiciled
carriers that register with FMCSA before the effective date of any
final rule promulgated for today's notice of proposed rulemaking, FMCSA
will (1) manually review each application for USDOT Number (Form MCS-
150) filed by non-North America-domiciled motor carriers to ensure they
are complete and accurate; and (2) conduct a compliance review of these
carriers within 6-12 months of issuing a USDOT Number registration and/
or operating authority. FMCSA will monitor all non-North America-
domiciled motor carriers for violations of the 11 regulations that the
agency considers as minimum standards for safe operations (the same
violations proposed as automatic failure factors in this NPRM) and
conduct an expedited compliance review of any non-North America-
domiciled motor carrier when a violation of these regulations is
discovered. While the consequences of undergoing a compliance review
and failing a new entrant safety audit may be somewhat different (civil
penalties, a safety rating, and perhaps an operations out-of-service
order resulting from a compliance review compared to proposed
revocation of new entrant operating authority resulting from a new
entrant safety audit), FMCSA believes conducting a compliance review is
an equivalent level of oversight due to its comprehensive nature, the
resultant safety rating for the carrier, and the possibility of civil
penalties. In addition, non-North America-domiciled motor carriers
would be subject to the same cross-border inspections as Mexico-
domiciled carriers. Vehicles operated by non-North America-domiciled
motor carriers will be subject to the same inspection standards as
other CMVs entering or operating within the United States and will be
inspected at the U.S.-Mexico international border unless displaying a
valid safety decal.
Through the agency's process of gathering information on non-North
America-domiciled motor carriers, another group of carriers from
Central America has been identified. This group of carriers allegedly
drives or flies drivers into interior States to purchase used tractor/
trailers, school buses, farm equipment, and other vehicles. These
vehicles are transported to Central America through the United States
and Mexico without proper registration, insurance or licensing. This
migration of exports from the United States is funneled primarily
through one location--the Los Indios Port of Entry to Mexico.
To address this situation, FMCSA will initially educate southbound
non-North America-domiciled motor carriers by providing warnings and
informing them of the requirements for complying with the Federal Motor
Carrier Safety Regulations. Following the educational period, FMCSA
will perform periodic compliance strike force activities targeting non-
registered southbound traffic at the Los Indios Port of Entry to
Mexico. Non-compliant carriers will receive enforcement action ranging
from roadside inspection citations to placing drivers and vehicles out
of service, if warranted. FMCSA requests comments on this alternate
oversight system for non-North America-domiciled motor carriers.
Proposed Registration and Safety Monitoring Process for Non-North
America-Domiciled Motor Carriers Applying for a USDOT Number
Today's action proposes regulations governing the registration and
safety monitoring of new entrant non-North America-domiciled motor
carriers. The proposals are discussed as follows:
A. Proposed Application Process for Non-North America-Domiciled Motor
Carriers
B. Proposed New Form--OP-1(NNA) for Non-North America-Domiciled Motor
Carriers Requesting New Entrant Registration
C. Proposed Safety Monitoring System for Non-North America-Domiciled
Motor Carriers.
A. Proposed Application Process for Non-North America-Domiciled Motor
Carriers
FMCSA proposes to add a new subpart H to part 385 to address the
specific requirements of the application process for all non-North
America-domiciled motor carriers applying for a USDOT Number. First,
proposed Sec. 385.601 explains that subpart H would apply to any non-
North America-domiciled motor carrier that wants to operate within the
United States to provide transportation of property or passengers in
interstate commerce.
Proposed Sec. 385.603 requires these applicants to file--
Proposed Form OP-1(NNA)--Application for U.S. Department
of Transportation (USDOT) Registration by Non-North America-Domiciled
Motor Carriers,
Form MCS-150--Motor Carrier Identification Report, and
A notification of the means used to designate process
agents.
The application would need to be filled out in English and be
complete to be considered. Information on obtaining applications is
also provided.
Proposed Form OP-1(NNA) would serve the dual purpose as being an
application for new entrant registration (for all non-North America-
domiciled carriers) and operating authority (for for-hire carriers
subject to the requirements of 49 CFR part 365). Together with the MCS-
150, the OP-1(NNA) would provide a more complete picture of the
carrier's operational characteristics as well as its safety compliance
and other key information than could be obtained through either form
alone.
FMCSA would not impose a registration fee for new entrant
registration unless the applicant also requires operating authority
under part 365, for which an application fee is charged. Under FMCSA's
current regulations, a non-North America-domiciled for-hire carrier of
non-exempt commodities must submit Form OP-1 and pay a $300 application
fee. Conforming amendments are proposed to Sec. Sec. 365.101 and
365.105 to clarify that a non-North America-domiciled motor carrier
would request operating authority by using Form OP-1(NNA)
[[Page 76737]]
and consequently be subject to the application fee.
Form MCS-150 would be used to obtain a USDOT Number. Conforming
amendments have been made to proposed Sec. 390.19 to require a non-
North America-domiciled motor carrier to file the MCS-150 before
beginning operations within the United States and to submit an updated
form every 24 months after issuance of a USDOT Number.
Form BOC-3. The non-North America-domiciled motor carrier
additionally would be required to notify the agency regarding
designation of process agents by either: (1) Submission in the
application package of Form BOC-3--Designation of Agents-Motor
Carriers, Brokers and Freight Forwarders, or (2) a letter stating that
the applicant will use a process agent that will submit the Form BOC-3
electronically.
Proposed Sec. 385.605 would require a non-North America-domiciled
carrier to use only drivers who possess a valid commercial driver's
license and to subject those drivers to drug and alcohol testing as
required under 49 CFR part 382. Acceptable commercial driver's licenses
would include: (1) A CDL, (2) Canadian commercial driver's license or
(3) a Licencia de Federal de Conductor issued by Mexico. FMCSA believes
the CDL and corresponding drug and alcohol testing requirements are
justified because drivers' licenses issued by the various non-North
American countries may not meet FMCSA standards or State licensing
standards regarding commercial motor vehicles not requiring a CDL.
In proposed Sec. 385.607, FMCSA explains how the agency would
process an application for new entrant registration filed by a non-
North America-domiciled motor carrier. To the extent practicable, the
agency would validate the accuracy of information and certifications
with data in its databases, and the databases of the governments of the
country where the carrier's principal place of business is located.
FMCSA would not grant new entrant registration unless the carrier
passes a pre-authorization safety audit (discussed later in this
section). The criteria governing the pre-authorization safety audit are
fully explained in a new Appendix to part 385, subpart H, which is
modeled after the pre-authorization safety audit for certain Mexico-
domiciled carriers.
After completing the pre-authorization safety audit, FMCSA would
issue a USDOT Number if the applicant passes the audit.\4\ However, the
applicant will not be authorized to, and must not, begin operating
within the United States unless it has filed evidence of financial
responsibility pursuant to 49 CFR part 387 and designated a process
agent.
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\4\ Applications by for-hire carriers subject to part 365 would
also be subject to a 10-day protest period. In such cases, a USDOT
Number would not be issued until after the protest period has
elapsed and any protests filed have been denied.
---------------------------------------------------------------------------
The proposed Appendix to 49 CFR part 385, subpart H, sets forth
criteria governing the pre-authorization safety audit. During the pre-
authorization safety audit, FMCSA would validate the accuracy of
information provided in the application and determine whether the
carrier has basic safety management controls necessary to ensure safe
operations. FMCSA would gather information by reviewing a motor
carrier's compliance with ``acute'' and ``critical'' regulations in the
FMCSRs and HMRs. As stated under the discussion of the New Entrant
Safety Assurance Process for U.S. and Canada-domiciled carriers, FMCSA
is studying a new approach to assessing the severity of violations as
part of its announced CSA 2010 initiative. This initiative may
ultimately replace the ``acute and critical'' methodology described in
the Appendix to part 385, subpart H.
Conforming amendments are proposed for Sec. Sec. 387.7 and 387.31
to require all non-North America-domiciled motor carriers--private and
for-hire--to maintain and file evidence of financial responsibility
with the agency as a condition of registration. FMCSA believes
conditioning registration upon receipt of evidence of financial
responsibility is appropriate for all non-North America-domiciled motor
carriers because the financial responsibility standards within their
countries of domicile may not meet U.S. Federal and State requirements.
Section 4120 of The Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users (SAFETEA-LU) [Pub. L.
109-59, 119 Stat. 1762, August 10, 2005] created new Sections
31138(c)(4) and 31139(c) in title 49 of the U.S. Code, authorizing
FMCSA to require filing of evidence of financial responsibility by
private property and passenger motor carriers under its jurisdiction.
However, only those private motor carriers domiciled in non-North
American countries would be subject to financial responsibility filing
requirements under this proposal. FMCSA plans to address the issue of
extending financial responsibility requirements to U.S. and Canada-
domiciled private motor carriers in a separate rulemaking.\5\
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\5\ Mexico-domiciled private carriers are subject to the same
financial responsibility filing requirements as U.S. for-hire
carriers pursuant to 49 U.S.C. 13902(g).
---------------------------------------------------------------------------
The new entrant registration would not become permanent unless the
carrier successfully completes the proposed 18-month safety monitoring
system proposed under new subpart I to part 385. Successful completion
of the safety monitoring system includes having each CMV operated in
the United States pass a North American Standard commercial motor
vehicle inspection every 90 days (as indicated by issuance of a valid
safety decal for each of these vehicles) and obtaining a Satisfactory
safety rating as a result of the required compliance review.
Under proposed Sec. 385.609, the applicant must notify FMCSA
within 45 days of any changes or corrections to certain key information
in the Form OP-1(NNA) or the Form BOC-3--the form used to designate a
process agent. Failure to do so would be grounds for revocation or
suspension of its new entrant registration.
B. Proposed New Form--OP-1(NNA) for Non-North America-Domiciled Motor
Carriers Requesting New Entrant Registration
Proposed Form OP-1(NNA) and its instructions are based extensively
on the OP-1(MX) form with certain modifications applicable to non-North
America-domiciled applicants. Proposed Section I of the form solicits
information about the applicant's name, address, official
representative, and form of business. Proposed Section IA would require
the applicant to disclose any existing operations in the United States,
including whether it had previously applied for a USDOT Number.
Proposed Section II solicits information about any relationships or
affiliations with other entities registered with FMCSA or its
predecessor agencies. This information would help FMCSA verify the
applicant's domicile in a non-North American country and determine
whether the applicant holds similar registration in its country of
domicile. Information regarding registration with the applicant's
country of domicile would enable FMCSA to confirm motor carrier safety
issues with its licensing authority.
Under proposed Section III of the form, the applicant would
identify the type(s) of registration requested. FMCSA would require a
separate filing fee for each type of registration requested. Section
4303(f) of SAFETEA-LU
[[Page 76738]]
imposed a January 1, 2007, deadline for the agency to modify carrier
registrations for non-exempt for-hire motor carriers under 49 U.S.C.
chapter 139 to eliminate distinctions between common and contract
carriers. Accordingly, FMCSA has removed the common and contract
carrier designations from the description of types of registration
under proposed Section III and modified the proposed instructions for
Section III to explain which for-hire registrations require a
registration fee.
Proposed Section IV notifies the applicant of financial
responsibility requirements. Consistent with long-haul Mexico-domiciled
new entrants, all non-North America-domiciled applicants (private and
for-hire) would be required to file evidence of financial
responsibility with the agency as a condition of registration. FMCSA
also proposes making the cargo insurance requirement for non-North
America-domiciled motor carriers consistent with what was proposed in
the Unified Registration System NPRM (70 FR 28990 published May 19,
2005). The May 19, 2005, NPRM proposes that only household goods
carriers must maintain and file evidence of cargo insurance with the
agency. FMCSA would modify proposed Form OP-1(NNA) if the Unified
Registration System final rule results in different cargo insurance
requirements.
Under proposed Section V, the applicant would certify and
substantiate that it has a system in place to ensure compliance with
applicable requirements covering driver qualifications, hours of
service, drug and alcohol testing, vehicle condition, accident
monitoring, and hazardous material transportation. Substantiation would
be in the form of narrative responses describing how the applicant will
monitor hours of service, how it will maintain an accident register and
how it will monitor accidents. FMCSA would also require that the
applicant include the names of individuals in charge of its safety
program and drug and alcohol testing and identify specific locations
where the applicant maintains current FMCSRs. Information obtained
under Section V would enable FMCSA to evaluate, upon initial
application, the safety compliance program of the applicant. FMCSA
would reject an application that could not offer a specific,
unambiguous plan to ensure compliance.
Proposed Section VI of the form would include new registration
requirements for motor carriers of household goods created under
Section 4204 of SAFETEA-LU. Section 4204 amended 49 U.S.C. 13902(a) to
require such an applicant to: (1) Provide evidence of participation in
an arbitration program and a copy of its notice to shippers about the
availability of binding arbitration; (2) identify its tariff and
provide a copy of the notice of the availability of the tariff for
inspection; (3) certify it has read, and is willing to comply with all
U.S. Federal laws regarding consumer protection, estimating, consumers'
rights and responsibilities, and options for limiting liability for
loss and damage; and (4) disclose certain financial, operational and
familial relationship with any other entity involved in the
transportation of household goods within 3 years of the proposed date
of registration.
Proposed Section VII would require the applicant to specify the
scope of registration, indicating intended principal border crossing
points.
Under proposed Section VIII, the applicant would be required to
make specific certifications regarding compliance with laws of the
United States. The applicant would need to affirm its willingness and
ability to provide the proposed service and to comply with all
pertinent statutory and regulatory requirements. Certifications under
proposed Section VIII would remind the applicant of statutory and
regulatory responsibilities which, if neglected or violated, might
subject the applicant to disciplinary or corrective action by FMCSA.
The applicant would need to confirm its understanding that its process
agent is deemed its official representative within the United States
for receipt of filings and notices relating to the administrative and
judicial process in connection with enforcement of Federal statutes and
regulations. Finally, the applicant would need to certify that it is
not currently disqualified from operating a commercial motor vehicle in
the United States.
Proposed Section IX, the final section of the form, includes the
applicant's oath attesting to the accuracy and truthfulness of
application responses and certification of compliance with certain U.S.
Federal and State laws regarding distribution or possession of
controlled substances.
C. Proposed Safety Monitoring System for Non-North America-Domiciled
Motor Carriers
Today's action proposes a new subpart I to part 385 covering the
proposed safety monitoring system for non-North America-domiciled new
entrants.
Proposed Sec. 385.701 defines the following terms used in new
subpart I to part 385:
(1) Compliance review has the same meaning as in 49 CFR Sec.
385.3.
(2) New entrant registration is the provisional registration under
49 CFR part 385, subpart H that FMCSA grants to a non-North America-
domiciled motor carrier to provide interstate transportation within the
United States. It will be revoked if the registrant is not assigned a
Satisfactory safety rating following a compliance review conducted
during the safety monitoring period established in subpart I.
(3) Non-North America-domiciled motor carrier means a motor carrier
of property or passengers whose principal place of business is located
in a country other than the United States, Canada or Mexico.
Proposed Sec. 385.703 describes elements of the safety monitoring
system for non-North America-domiciled new entrant motor carriers. The
safety monitoring system would include roadside monitoring and a
compliance review within 18 months of receiving a USDOT Number.
Additionally, the non-North America-domiciled carrier would be
required--throughout the 18-month safety monitoring period and for
three years after its new entrant registration becomes permanent--to
display on each CMV in its fleet that is operated within the United
States, a valid safety inspection decal. The safety inspection decal
would only be valid for three months.
Under proposed Sec. 385.705, a non-North America-domiciled motor
carrier found in violation of the seven listed serious violations or
infractions would be subject to expedited enforcement action. Such
actions would include an expedited compliance review or, in the
alternative, a demand that the carrier demonstrate in writing that it
has taken immediate corrective action. The proposed infractions
parallel those proposed for U.S. and Canada-domiciled motor carriers
and those already applicable to Mexico-domiciled carriers. The section
clarifies what constitutes a valid commercial driver's license. The
type of action taken by FMCSA in response to any violations would
depend upon the specific circumstances of the violations.
Proposed Sec. 385.705(b) warns that failure to respond to a
request for a written response demonstrating corrective action within
30 days would result in suspension of new entrant registration until
the required showing of corrective action is made.
[[Page 76739]]
Proposed Sec. 385.705(c) emphasizes that a carrier that
successfully responds to a demand for corrective action under this
section still would need to undergo a compliance review during the 18-
month safety monitoring period if it had not already done so.
Under proposed Sec. 385.707, FMCSA explains potential outcomes of
the compliance review--a Satisfactory, Conditional, or Unsatisfactory
rating--and FMCSA follow-up actions in response to each rating. The
proposed section would require the compliance review to be conducted
consistent with existing FMCSA safety fitness evaluation procedures
under 49 CFR part 385, Appendix B. These are the same criteria in use
for U.S., Canada and Mexico-domiciled carriers.
FMCSA sets forth under proposed Sec. 385.709 the specific time
frames for suspension and revocation of new entrant registration. We
believe the proposed procedures strike an appropriate balance between
the need to protect the public from potentially unsafe carriers and
preservation of the carrier's due process rights.
Proposed Sec. 385.711 sets forth procedures for requesting
administrative review of the agency's safety rating or its decision to
suspend or revoke new entrant registration. The request must explain
the error it believes FMCSA committed and a list of all factual and
procedural issues in dispute. In addition, the carrier must include any
information or documents that support its argument. Following the
administrative review, which would be conducted by the FMCSA Associate
Administrator for Enforcement and Program Delivery, the agency would
notify the carrier of its decision. This decision would constitute the
agency's final action. Administrative review would be completed in no
more than 10 days after the request is received.
Under proposed Sec. 385.713, a non-North America-domiciled carrier
whose registration has been revoked would be prohibited from re-
applying for new entrant registration for at least 30 days after the
date of revocation. When reapplying, the non-North America-domiciled
motor carrier again would be required to pass a pre-authorization
safety audit. The carrier would need to demonstrate to the FMCSA's
satisfaction that it has corrected the deficiencies that resulted in
revocation of its registration and that it otherwise has effectively
functioning basic safety management systems in place. If the
application is approved, the carrier's USDOT Number--linked to its
previous safety record--would be reactivated; a new USDOT Number would
not be issued. In this way, the agency could maintain a complete safety
record of the non-North America-domiciled motor carrier.
Proposed Sec. 385.715 provides that the safety monitoring period
for non-North America-domiciled motor carriers would last for at least
18 months from the date it was issued a USDOT Number.\6\ If, at the
conclusion of the 18-month safety monitoring period, the carrier has
received a Satisfactory safety rating and is not currently under a
notice from FMCSA to remedy deficiencies in its basic safety management
practices, the carrier's registration would become permanent.
---------------------------------------------------------------------------
\6\ If a carrier's USDOT Number was revoked and reinstated under
the provisions of proposed Sec. 385.713, the 18-month period would
run from the date of reinstatement.
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If the carrier is under a notice to remedy deficiencies in its
basic safety management practices, the safety monitoring period would
be extended--and its new entrant designation would continue--until
FMCSA determines the carrier is complying with the Federal safety
regulations or revokes its registration under Sec. 385.709.
If FMCSA is unable to conduct a compliance review within the 18-
month period, proposed Sec. 385.715(c) would extend the safety
monitoring period until such time as the agency completes and evaluates
a review.
Proposed Sec. 385.717 emphasizes that the non-North America-
domiciled motor carrier also would be subject to the same general
safety fitness procedures in 49 CFR part 385, subpart A, and to
compliance and enforcement procedures applicable to all carriers
regulated by the FMCSA.
Proposed Sec. 390.19 explains filing procedures for the MCS-150 in
greater detail and would subject non-North America-domiciled motor
carriers to the biennial update requirement. Additionally, Sec.
390.19(h)(2) proposes a technical correction documenting the existing
requirement for a Mexico-domiciled long-haul motor carrier to
successfully complete a pre-authorization safety audit prior to being
issued a USDOT Number.
Discussion of Comments
FMCSA received 29 responses to the IFR from 19 commenters. The
commenters were five trade associations, four safety consultants, two
public interest groups, three private citizens, a State police
department, a safety enforcement organization, an occupational health
private practice, a union, and a professional association. Five
commenters made multiple submissions.
General Comments. In general, the comments were supportive of the
new entrant requirements in the IFR. The American Trucking Associations
(ATA), American Society of Safety Engineers (ASSE), Commercial Vehicle
Safety Alliance (CVSA), Consolidated Safety Systems (CSS), Daecher
Consulting Group, Inc. (Daecher), the Independent Truckers and Drivers
Association (ITDA), the National Private Truck Council (NPTC), the
Indiana State Police, Schroeder & Associates, the International
Brotherhood of Teamsters (IBT) and Tran Services generally supported
the IFR and offered comments to improve the rulemaking. The Canadian
Trucking Alliance (CTA) supported the IFR to the extent it applies
equally to Canada- and U.S.-domiciled carriers. CVSA stated the SA--if
properly implemented and accompanied by CDL reforms, technology and
increased traffic enforcement--will have a dramatic and measurable
impact on safety. CVSA submitted a petition to delay the implementation
of the New Entrant Safety Assurance Process until States receive
adequate funding and after certain procedural issues relating to the
process are resolved.
Several commenters opposed the IFR for various reasons. Advocates
for Highway and Automobile Safety (AHAS) and Public Citizen opposed the
agency's decision to publish an IFR instead of a notice of proposed
rulemaking. Both urged the agency to permit full public involvement in
the New Entrant Safety Assurance Process rulemaking. AHAS indicated the
quality of FMCSA regulatory drafting and publication would be improved
by providing sufficient documentation of agency reasoning and decisions
in its final regulations. Public Citizen stated the New Entrant Safety
Assurance Process is rooted in self-reporting and devoid of meaningful
oversight. According to Public Citizen, only an extremely negligent new
entrant would be denied operating authority under this process. Public
Citizen urged the agency to:
Permit full public involvement in the New Entrant
rulemaking.
Eliminate from the process all requirements for
uncorroborated self-reporting.
Make a proficiency examination, and third-party, in-person
verification of regulatory compliance and knowledge, prerequisites for
granting operating authority.
Develop a plan that assures the SA will be conducted
within an 18-month time period.
[[Page 76740]]
Establish stricter penalties for noncompliant motor
carriers.
The Transportation Lawyers Association (TLA) commented the IFR
fails to meet the statutory requirement of ensuring a carrier is
knowledgeable about its safety responsibilities prior to commencing
operations. ``FMCSA proposes nothing in this proceeding that will
reduce the `safety learning curve' before a new carrier begins
operating.'' TLA contended that safety certifications and educational
and technical assistance materials have been used by the agency for
many years and have already proven inadequate.
FMCSA Response: In a letter dated April 11, 2003, the agency denied
the CVSA petition to delay implementation of the New Entrant Safety
Assurance Process until January 2004 and addressed CVSA concerns,
including those related to adequate State funding for implementing the
new entrant process, adequate training for State and Federal personnel
charged with conducting safety audits, and recognition of Canadian and
current State new entrant programs. A copy of the letter is in the
docket to this rule.
In developing this proposal, FMCSA fully considered all comments to
the May 2002 IFR and has adopted some of the recommendations. In
response to complaints about self-certifications, this NPRM would
eliminate the Form MCS-150A because safety audits have confirmed
carrier certifications on the MCS-150A and findings at the carrier's
place of business are not always consistent (See the ``Form MCS-150A''
subheading). Later in this section under applicable subject headings,
the agency addresses specific concerns from AHAS, TLA and Public
Citizen regarding the use of proficiency examinations (see the
``Proficiency Examinations'' subheading) and plans to improve the
educational and technical assistance (ETA) materials by including
information on how to comply with the regulations (see the ``ETA
Materials'' subheading). The rule provides additional details about the
scoring methodology and how the agency intends to strengthen the New
Entrant Safety Assurance Process under the previous section titled
``Discussion of the Proposed Rule'' under the ``Strengthening the
Safety Audit'' subheading.
Timing of the SA and 18-month monitoring period. Several commenters
took issue with the timing of the SA and the 18-month monitoring
period. ASSE stated that the 18-month period is too long, Daecher
contended that a 6-month period would be adequate, and Schroeder &
Associates believed the best time to conduct an audit is within 6 to 9
months of beginning operations. Only CSS agreed that an 18-month period
may be necessary to effectively evaluate a carrier from a regulatory
perspective because it affords the carrier an opportunity to execute
certain requirements. The Indiana State Police recommended having a
certified FMCSA representative conduct the SA within 30 days of
issuance of the USDOT Number and CVSA advocated a face-to-face meeting
with the new entrant at the time of the application.
FMCSA Response: As noted above, 49 U.S.C. 31144(g)(1) requires
FMCSA to establish an 18-month period within which new entrant safety
reviews must be conducted. Furthermore, as a practical matter, FMCSA
believes carriers will not have sufficient records to allow the agency
to review and evaluate the adequacy of a carrier's basic safety
management controls until the carrier has been operating for
approximately 3 months.
Scope of the Audit. Some commenters took issue with the SA itself
and recommended broadening the scope of the audit to address more than
just compliance issues. ATA recommended including such topics as
employee hiring, bonus and incentive programs, employee training,
quality control and safety meetings. CVSA recommended including a CVSA
Level 1 or Level 5 inspection on as many of the carrier's vehicles as
possible.
FMCSA Response: FMCSA proposes broadening the scope of the audit to
include additional areas over which it has jurisdiction, such as
operating authority, and household goods and ADA regulatory compliance.
However, as noted previously, only safety-related questions would count
toward the pass/fail determination. The agency also proposes to
strengthen the audit by making specific violations, such as operating
without a required CDL, result in automatic failure of the audit.
Currently, the SA involves a Level 1 or 5 inspection of a sample of the
carrier's vehicles. If there are insufficient vehicles on site at the
time of the audit, the auditor completes the audit and documents why
he/she was unable to conduct the inspections.
Safety Audit and Corrective Actions. Public Citizen opposed having
a new entrant self-certify regarding corrective action for deficiencies
revealed during the SA and asserted FMCSA should require in-person
verification of corrective action. The Teamsters urged the agency to
immediately suspend any new entrant found to be lacking basic safety
management controls during the SA until it has demonstrated corrective
action to the satisfaction of FMCSA. The Indiana State Police urged
FMCSA to place both the vehicle and driver out-of-service until
corrective action is taken if a carrier is found to be operating
without USDOT new entrant registration.
FMCSA Response: The current regulations under Sec. 385.319 provide
that FMCSA must notify a carrier of any inadequacies found during an SA
and advise the carrier what actions it must take to remedy the
inadequacies to avoid having its registration revoked. The carrier must
submit written evidence of corrections taken, and FMCSA reserves the
right to determine whether they are adequate. FMCSA is required to
provide the carrier with official notice of the deficiencies and the
opportunity to correct them. The carrier must respond with more than a
self-certifying statement. For example, acceptable demonstration of
corrective action for a carrier found to not have a drug and alcohol
testing program would be evidence documenting membership in a
consortium. Under Sec. 385.325, if a carrier does not demonstrate
corrective action acceptable to FMCSA, the agency would revoke its new
entrant registration and issue an out-of-service order. If the carrier
is found to be operating a CMV in violation of an out-of-service order,
under Sec. 385.331, it might be fined up to $11,000 per violation in
accordance with 49 U.S.C. 521(b)(2)(A) and 49 CFR part 386, Appendix B
(a)(3).
Form MCS-150A. Several commenters encouraged FMCSA to eliminate the
MCS-150A. ATA contended that many of the certification statements on
the form are already collected on the registration application and
suggested we retain and incorporate certification statements 18 and 19
into the MCS-150. ITDA urged FMCSA to require each new applicant to
provide a written plan demonstrating the applicant's knowledge of motor
carrier safety regulations and its ability to safely operate a trucking
business. Public Citizen regarded the certifications on the MCS-150A as
uncorroborated declarations by the applicant.
FMCSA Response: FMCSA agrees the MCS-150A is not producing the
intended results. FMCSA's review of the New Entrant Safety Assurance
Process has verified many new entrants are falsely certifying to having
safety management controls when they are not actually in place. The
agency proposes to eliminate Form MCS-150A.
Proficiency Examination. Several commenters opposed FMCSA's
decision to not require a proficiency examination for new entrants.
AHAS argued the IFR
[[Page 76741]]
does not adequately consider the use of a proficiency examination to
measure new entrant safety. CSS supported the use of a proficiency
examination as a component of the New Entrant Safety Assurance Process
and offered to discuss its current program with the Department of
Defense (DOD) and associated procedures with FMCSA. CVSA stated that in
addition to using enhanced, comprehensive educational and technical
assistance materials, FMCSA should administer a proficiency examination
to measure a new entrant's knowledge of Federal motor carrier safety
standards. According to CVSA, a new entrant's self-certification alone
is insufficient proof of adequate systems to assure compliance with the
FMCSRs.
Daecher asserted that giving ETA materials to a carrier does not
ensure the carrier will read and understand the information. It
encouraged FMCSA to use a proficiency examination to ensure the carrier
has knowledge of the regulations and related safety information. Public
Citizen urged the agency to make a proficiency examination a
prerequisite for receiving operating authority. According to Public
Citizen, the examination would be a far more comprehensive evaluation
of regulatory knowledge than certifications made on the MCS-150A.
FMCSA Response: The agency believes the planned enhancements to the
ETA materials, as discussed in greater detail below, would provide most
carriers with sufficient understanding of applicable regulations and
assistance on how to comply with the applicable FMCSRs and HMRs and
that a proficiency examination is not necessary. However, the agency
recognizes knowledge alone does not ensure a carrier is in satisfactory
compliance with the regulations. Only a review of the carrier's records
and systems could demonstrate such compliance.
ETA Materials. Several commenters addressed the subject of
educational and technical materials for new entrants. AHAS and ATA
complained FMCSA has not provided an opportunity for public review and
comment on those educational and technical assistance materials new
entrant carriers will receive. They suggested the agency place the ETA
materials in the rulemaking docket or direct readers to where on the
agency web site they can be obtained. CTA recommended revising the ETA
materials to generally and clearly acknowledge distinctions between
U.S. and Canadian rules. According to CTA, this would warn new entrants
that rules can, and do, vary depending on the jurisdiction in which one
operates. ITDA urged FMCSA to establish a process that encourages a new
entrant to seek information and guidance and makes that information and
guidance easily accessible. A private citizen recommended classroom
instruction for new entrants.
FMCSA Response: FMCSA agrees the ETA materials need to be updated
to better inform new entrants about regulatory requirements and how to
comply fully with the requirements. The ETA materials are an integral
component of the entire New Entrant Safety Assurance Process. One of
the reasons stated in the March 2002 IFR for not initiating a
proficiency exam was FMCSA's belief that the educational and technical
assistance provided to new entrants would ensure they understood the
applicable safety regulations. However, it is apparent many new
entrants are not fully compliant and one of the reasons is because the
ETA materials are not as comprehensive as they need to be. FMCSA plans
to review all ETA materials provided to new entrants and improve the
quality, content, and format of the material.
The agency believes enhanced ETA materials, including a new entrant
safety assurance compact disc, would substantially increase a new
entrant's awareness of carrier responsibilities before beginning
operations and would, to a great extent, make them proficient in those
requirements. FMCSA further believes the anticipated benefits of the
enhanced ETA materials more than justify associated agency costs. FMCSA
has determined the contents of these materials are not subject to
notice and comment because they do not establish standards or
procedures, but will place a copy of the updated ETA materials in the
docket to this rule for inspection upon completion.
Safety Monitoring During the 18-month Period. ATA requested
specific details about how the agency intends to monitor new entrants
during the 18-month period. Section 385.307(a) states: ``[t]he new
entrant's roadside safety performance will be closely monitored to
ensure the new entrant has basic safety management controls that are
operating effectively.'' ATA believed this is insufficient information
concerning how the agency will monitor new entrants during the 18-month
period. CSS and CVSA supported development of a unique registration and
USDOT Number to identify new entrants that have not yet passed the SA.
FMCSA Response: FMCSA would continue to monitor a new entrant's on-
road performance using agency information systems and roadside
inspections. Although the agency does not identify a new entrant that
has not yet passed an SA by assigning a unique USDOT Number, FMCSA is
able to target such new entrants for an SA or roadside inspection using
information systems such as SafeStat, the Inspection Selection System
(ISS) and the Motor Carrier Management Information System (MCMIS).
Safety Audit. Other commenters stated FMCSA should disclose the SA
Evaluation Criteria, Forms, and Monitoring Procedures. Both ATA and
AHAS requested the SA evaluation criteria be placed in the rulemaking
docket for review and comment, and complained that FMCSA has not
disclosed the criteria by which a new entrant will be evaluated.
FMCSA Response: Appendix A to 49 CFR part 385 explains the SA
evaluation criteria, including the source of the data and how FMCSA
determines whether a new entrant has basic safety management controls.
Reciprocity. CTA urged FMCSA to exempt from the SA audit
requirement Canada-domiciled new entrant carriers that have undergone a
provincial facility audit during the 18-month monitoring period.
FMCSA Response: Although FMCSA is engaged in ongoing discussion
with its Canadian partners concerning the New Entrant Safety Assurance
Process, today's rulemaking is not proposing an exemption for a Canada-
domiciled new entrant carrier that has passed a provincial facility
audit for several reasons. First, 49 U.S.C. 31144(g)(1) specifies the
regulation must require each new entrant to undergo the safety review
(audit) within the first 18 months of beginning operations. The
statutory language provides no authority to exempt new entrants,
including Canada-domiciled carriers that have successfully undergone a
provincial facility audit, from the SA. Furthermore, the Canadian
provincial facility audit fails to address all of the elements of the
new entrant SA. For example, Canada does not require a carrier to have
a controlled substance and alcohol testing program for its drivers.
FMCSA could verify a Canada-domiciled carrier is aware of, and in
compliance with, the agency's controlled substances and alcohol testing
requirements only by conducting a new entrant SA under part 385.
Moreover, Sec. 31148(b) requires the SA to be conducted by: (1) A
motor carrier safety auditor certified under FMCSA regulations or (2) a
Federal or State employee who on the date of the enactment of Sec.
31148(b) was qualified to perform such an audit or review.
[[Page 76742]]
Canadian provincial officials may not meet these qualifications.
Alternate Locations for Audits. The IFR also requested comments on
the advisability of conducting some SAs at alternate locations. ATA
agreed the use of locations other than the carrier's place of business
for the SA may be beneficial, but recommended that alternate location
scheduling remain optional and used at the discretion of the motor
carrier scheduled for the audit. CVSA commented that the primary value
of the SA is the personalized evaluation and education provided by the
safety professional and did not believe an adequate audit could be
conducted in a group setting. CVSA supported conducting the SA on-site
at the new entrant's place of business. CSS also opposed the use of
alternate locations for the SA. Although acknowledging there are
obvious economies associated with this approach, CSS contended that the
effectiveness and desired results would be significantly reduced,
particularly if the primary focus of the SA is to assess the new
entrant's safety management controls. Public Citizen acknowledged that
conducting multiple audits simultaneously might expedite the number of
audits conducted and ease agency backlog. However, Public Citizen
contends a new entrant may be reluctant to fully participate in the
process for fear of exposing potential vulnerabilities to its
competitors. Another commenter stated that effective group audits are
not possible because carrier operational types are so varied. Tran
Services applauded the use of alternate locations to simultaneously
provide educational and technical assistance to multiple new entrant
carriers, but opposed conducting SAs in such a setting. The new entrant
would need to bring along too many records, and FMCSA may be unable to
provide an individual carrier the individual attention necessary to
determine if the carrier is in compliance.
FMCSA Response: FMCSA has carefully considered the feasibility of
conducting group audits. The agency believes group audits may present
an excellent opportunity to simultaneously provide many new entrants
with educational and technical assistance in a classroom setting while
auditing the systems and records of individual new entrants in a
private, one-on-one setting. However, experience has shown group audits
are only beneficial in select situations, depending on many factors
including, but not limited to, the number of new entrants within the
given geographical area. For this reason, FMCSA conducts group audits
only in those areas where practicable.
Currently, an SA provides education and technical assistance to a
motor carrier that has recently begun operations. In addition, the SA
provides FMCSA with the opportunity to ensure the carrier's compliance
with applicable Federal safety regulations. Normally, an SA would take
from 2 to 4 hours to complete. Unlike the in-depth compliance review
for motor carriers that are not in the new entrant program, the SA
focuses on education. By conducting these audits at the carrier's place
of business rather than in a classroom setting, auditors gain a broader
perspective of the company's structure and level of compliance with
Federal safety regulations.
Use of Private Contractors to Conduct Safety Audits. The IFR
requested comments on whether private contractors certified by FMCSA
should conduct SAs. AHAS, ASSE, ATA, CVSA, CSS, Daecher, The Indiana
State Police, Public Citizen, Schroeder & Associates, and Tran Services
supported the use of qualified, private contractors to conduct SAs.
AHAS asserted that use of private contractors would ``provide an
opportunity to boost the annual numbers and percentages of motor
carriers that are inspected and audited for safety adequacy.'' AHAS
acknowledged that substantial safeguards must be built in order to
avoid the possibility of fraud and other abuses.
According to ASSE, a certified safety professional (CSP) with
appropriate transportation experience would be well qualified to
perform the audits without further designation. ASSE recommended the
final rule allow the use of private auditors who must be accredited by
either the Council on Engineering and Scientific Specialties Board or
the National Commission on Certifying Agency (NCCA), two nationally
recognized independent accrediting bodies overseeing professional
safety designations for safety, health and environmental professionals
who are qualified to perform audits such as the new entrant SA.
ATA recommended that private contractors receive the same training
as Federal and State investigators and use identical audit and data
collection techniques. ATA asserted that industry support of the use of
private contractors is contingent upon strict oversight of their work.
ATA urged FMCSA to address the use of private contractors for SAs in a
notice outlining proposed contractor training, auditing procedures and
software, and how the Government will measure program effectiveness.
CSS believed that its own experiences in conducting inspections for
DOD support its position that ``there are many well trained and
qualified transportation safety professionals in the private sector.''
Indiana State Police supported the use of FMCSA-certified private
contractors to conduct abbreviated SAs before the carrier begins
operations. Indiana asserted these contractors could provide the basic
educational and technical guidance in a classroom setting when the
USDOT Number would be granted. Indiana stated the private contractor
could bill the new entrant for these services, resulting in a cost
savings to FMCSA.
Schroeder & Associates supported the use of private contractors and
suggested adopting the expertise levels described in FMCSA's March 19,
2002, IFR titled Certification of Safety Auditors, Safety
Investigators, and Safety Inspectors (67 FR 12775) as the standard for
such contractors. Schroeder suggested that FMCSA certify individuals,
not companies, for conducting the SAs. They also suggested that the
agency could model the certification for private contractors after the
former Interstate Commerce Commission Practitioner certification
process, including minimum education and employment standards and a
comprehensive 8-hour essay examination. Schroeder further recommended
that the FMCSA SA course be accessible to non-government personnel with
a waiver for those who successfully test out of the course. Lastly,
they recommended FMCSA require private contractors to conduct a minimum
of 12 inspections annually to maintain certification.
Tran Services asserted Federal, State and private contractors
should be identically certified to ensure uniformity. Tran Services,
and other private companies, already provide safety services, including
``mock DOT audits'' to help companies achieve and maintain compliance.
ITDA opposed the use of private contractor inspectors, and stated that
only Federal and State inspectors should conduct the SA at this time.
ITDA believes that only after the New Entrant Safety Assurance Process
is fully implemented and there is sufficient experience with the
process should FMCSA consider the use of private contractor inspectors.
The IBT interpreted sec. 211 of MCSIA as prohibiting the use of a
private contractor to grant operating authority to a carrier and that
the SA falls within that prohibition. IBT stated the SA is an integral
part of the
[[Page 76743]]
procedure for obtaining permanent operating authority, and is a
precondition for such authority. IBT contended that SAs are so closely
linked with the grant of permanent operating authority that allowing
private contractors to conduct SAs would be a de facto impermissible
delegation of authority.
Due to the anticipated strain on Federal and State enforcement
resources, CVSA recommended the agency use private contractors to
conduct SAs. CVSA argued, given their limited resources, Federal and
State officials should not weaken efforts to conduct compliance
reviews, roadside inspections, and traffic enforcement to implement the
New Entrant Safety Assurance Process. CVSA made the following specific
recommendations regarding the use of private contractors:
Use only properly trained and certified individuals;
Exclude the results of private contractor audits when
determining a carrier's safety rating or for enforcement purposes; and
Prohibit private contractors from conducting roadside
inspections.
CVSA also recommended FMCSA conduct a multi-State, private
contractor pilot program modeled after Canada's third-party auditor
pilot program.
Daecher believed FMCSA should exclusively use qualified private
auditors to conduct the SAs because it is a more easily managed and
cost effective option. According to Daecher, current FMCSA resources
are insufficient to handle the anticipated number of new entrants;
opting not to use private contractors would be detrimental to the New
Entrant Safety Assurance Process and prohibit review of each new
entrant within the 18-month monitoring period. Daecher recommended
establishing a certification program for private contractors to conduct
both safety audits and compliance reviews.
FMCSA Response: Annually, approximately 48,000 motor carriers
register with FMCSA to become new entrants. Federal and State
compliance officers are able to conduct SAs on many of these carriers,
but not all of them. To increase the number of new entrants inspected
and monitored for safety compliance under the New Entrant Safety
Assurance Process, FMCSA has been using private contractors to conduct
safety audits since January 2004.
FMCSA has built into its contracts with private contractors
effective safeguards against fraud and other abuses. The contractors
are required to follow the same policies and procedures followed by
Federal and State safety auditors. In addition, FMCSA closely monitors
the activities of private contractors by obtaining monthly activity
reports and reviewing their internal administrative procedures.
FMCSA is requiring all individuals performing a privately
contracted safety audit to be certified following the same guidelines
applicable to Federal and State safety auditors. They must meet the
same minimum qualifications as Federal and State safety auditors,
including certain education and experience requirements, as well as
testing through the FMCSA International Training Division located in
Arlington, VA. Private contractors must also pass the same proficiency
exams given to Federal and State safety auditors and renew their
certification annually. The maintenance of certification requirement
currently includes performing a minimum of 24 SAs each year.
Completed SAs performed by private contractors receive the same
scrutiny as those performed by Federal and State auditors. Although
private contractors perform SAs, the results of any audit are not final
until reviewed by FMCSA, thus ensuring Federal oversight of the
program.
Since the SA does not result in a safety rating for the motor
carrier being audited, private contractor SAs are not used to determine
a carrier's safety rating. A safety rating is only issued upon
completion of a compliance review. Compliance reviews are only
conducted by Federal or State personnel and cannot be performed by a
private contractor.
FMCSA agrees that private industry offers many trained and
qualified individuals who can be utilized to ensure public safety. The
agency acknowledges the strain brought to bear upon Federal and State
resources due to the large number of incoming new entrant motor
carriers annually registering with FMCSA and hopes to mitigate the
situation by continuing to use private contractors.
Rulemaking Analyses and Notices
Executive Order 12866 (Regulatory Planning and Review) and DOT
Regulatory Policies and Procedures
FMCSA has preliminarily determined this proposed rule is a
significant regulatory action within the meaning of Executive Order
12866 and the U.S. Department of Transportation's regulatory policies
and procedures (DOT Order 2100.5 dated May 22, 1980; 44 FR 11034,
February 26, 1979). While the costs of this NPRM would not exceed the
$100 million annual threshold as defined in Executive Order 12866,
FMCSA believes the subject of new entrant motor carrier requirements
generates considerable public interest and therefore is significant.
FMCSA has analyzed the costs and benefits, as discussed below, and has
preliminarily determined this proposed rule would not be economically
significant. This NPRM has been reviewed by the Office of Management
and Budget (OMB).
A number of studies, some of which were sponsored by FMCSA or its
predecessor agency, have evaluated the safety experience of new
entrants. While the studies differ in emphasis and some particulars,
they all demonstrate new entrants have higher crash rates than more
established carriers and are less likely to comply with Federal
regulations.
As explained previously, this rulemaking makes a number of
revisions to how the agency monitors and evaluates new entrant motor
carriers operating in the United States, and how these carriers apply
for authority. The rulemaking also establishes procedures for the
oversight of non-North American motor carriers. Only a very small
number of non-North American carriers are currently operating in the
United States, and we do not expect this number to grow appreciably in
the future.
OMB guidance states that the agency's analyses should ``focus on
benefits and costs that accrue to citizens and residents of the United
States.'' \7\ The analysis of costs is based on the total number of new
entrants registering with FMCSA. This rule would impose costs on a
small number of Canada-domiciled and non-North America-domiciled motor
carriers operating in the United States. The difference between
including and excluding non-North America-domiciled carriers is
imperceptible after rounding. To obtain cost estimates for the U.S.-
domiciled motor carriers, one should reduce the estimates presented by
3.5 percent. Most of the foreign carriers involved are domiciled in
Canada.
---------------------------------------------------------------------------
\7\ OMB, Circular A-4, September 2003, page 15. Available online
at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf.
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The costs associated with the FMCSRs, HMRs, or the New Entrant
Safety Assurance Process IFR should not be counted as a cost of this
NPRM because these costs were already counted when the various measures
were first promulgated. Thus, there are no societal costs associated
with the proposed changes. We are not proposing any substantive changes
to the
[[Page 76744]]
operational regulatory requirements; motor carriers, including new
entrants, are already required to comply with these regulations.
Therefore, this proposal would not place any new substantive burdens
upon new entrants or any other entity. Rather, as explained above, the
proposed changes would make the enforcement of existing requirements
more rigorous. Any motor carrier already complying with the FMCSRs and
HMRs would not face any change in practices. This proposal would
include modest administrative costs for carriers to become aware of the
new consequences for failing to comply with existing requirements.
Between 1995 and 2002, an average of 47,535 \8\ new entrants began
operations annually. We assumed this number would remain constant. As
noted above, this NPRM would not impose any new operational
requirements on new entrants. The only truly new cost involved would be
the cost to motor carriers of becoming aware of new requirements when
this NPRM is promulgated as a final rule. We assumed it would take an
extra hour for the appropriate motor carrier official of each new
entrant to study the new requirements and discern how to best comply
with them. Using Bureau of Labor Statistics \9\ (BLS) estimates for
hourly wages for Transportation Managers of $33.50 and 31.5 percent
employment benefits, we obtain an hourly compensation of $44.05.
Assuming learning the new audit consequences takes an hour per firm, we
estimate a cost of $2.1 million annually.
---------------------------------------------------------------------------
\8\ These estimates were derived from data contained in the
Motor Carrier Management Information System (MCMIS).
\9\ See the Bureau of Labor Statistics Web site http://www.bls.gov/oes/2003/may/oes_11Ma.htm
dated May 2003.
---------------------------------------------------------------------------
As noted above, this NPRM proposes eliminating the Form MCS-150A
because of its ineffectiveness in ensuring an understanding of required
basic safety management controls. We assume the elimination of this
form would save new entrants 10 minutes each. Using a clerical wage of
$14 per hour, this provision would save new entrants $111,000 annually.
The net administrative cost of this proposed rule to new entrants is
thus $2.0 million per year.
Alternative Analysis
We do not believe this proposed rule would impose significant costs
or benefits other than those intended and counted in the IFR. As
explained previously, this proposed rule would not introduce any new
requirements. All carriers, including new entrants, already are
required to comply with the FMCSRs and applicable HMRs, including all
the standards that would be checked during the safety audit. Therefore,
the costs and benefits of the audit should not be ascribed to this
NPRM; these costs and benefits were included when these regulations
were initially promulgated, so including them now would be double
counting.
However, we did attempt to measure these costs and benefits. While
they are not properly part of this proposed rule, the information may
prove useful for decision makers. This section therefore provides an
alternate description of the impact of this proposal.
We calculated the number of crashes that must be avoided to make
this proposed rule cost beneficial, meaning the benefits would exceed
the costs. We first converted crashes into dollar values to allow for
comparison with the cost figures, based on work by Zaloshnja et al.
They estimated the cost of an average police-reported crash involving
trucks with a gross vehicle weight rating of more than 10,000 pounds
was $59,153 in 2000 dollars.\10\ FMCSA adjusted this figure to 2004
dollars based on the Gross Domestic Product Deflator, which yields a
value of $65,183.
---------------------------------------------------------------------------
\10\ Based on Revised Costs of Large Truck- and Bus-Involved
Crashes, by Eduard Zaloshnja, Ted Miller, and Rebecca Spicer
(National Technical Information Service, Springfield, VA), 2002.
---------------------------------------------------------------------------
New entrant carriers are involved in more crashes than more
experienced carriers. According to a 2000 Volpe study, new entrants
(defined as motor carriers registered for less than 2 years) were more
frequently assessed to have Safety Evaluation Area scores in the worst
quartile.\11\ In fact, new entrants were about twice as likely to have
an Accident SEA score of 75 or above. Therefore, Volpe concludes,
SafeStat results show new entrants to have significantly lower levels
of safety compliance and performance. The overall motor carrier crash
rate from MCMIS is 0.75 crashes per million vehicle miles of travel
(MVMT), while the new entrant crash rate is 25 percent higher, 0.94 per
MVMT.
---------------------------------------------------------------------------
\11\ Volpe Center, Analysis of New Entrant Motor Carriers Safety
Performance and Compliance Using SafeStat, March 2000, pp. 3-2, 3-7,
and 5-4.
---------------------------------------------------------------------------
The net cost of this proposed rule is $2.0 million per year. For
this proposed rule to be cost beneficial, it would have to deter 31
crashes ($2.0 million/$65,183), or one fatal crash.\12\
---------------------------------------------------------------------------
\12\ For economic evaluations in the Department of
Transportation, the value of a statistical life is to be $3.0
million. However, since there cannot be fractional fatal crashes, we
round up to one.
---------------------------------------------------------------------------
Alternative Costs Associated With Proposed Changes to Safety Audit
Scoring System
As of October 2004, 33,787 new entrant SAs had been completed. Only
253 of new entrants audited under the program failed the SA under the
existing scoring criteria, which is only 0.75 percent of those
receiving an SA.
Had the list of proposed automatic failure criteria been
incorporated into our regulations at the time these audits were
conducted, 19,559 of the audited carriers would have failed, almost 58
percent of those audited. Therefore, the proposed scoring change would
have resulted in an additional 19,306 new entrant carriers failing the
audit (19,559 - 253 = 19,306). On an annual basis, this translates to
27,162 carriers failing the audit under the new criteria if there is no
change in carrier behavior.\13\
---------------------------------------------------------------------------
\13\ (19,559 - 253) * (47,535/33,787) = 27,162.
---------------------------------------------------------------------------
However, it is unlikely the number of carriers that would fail the
audit or whose new entrant authority would be revoked would be this
large. The cost of not correcting violations of the 11 automatic
failure provisions is currently low. New entrants cited for one of
these violations are not placed out of service. In fact, it is possible
for new entrants to continue operating for some time before remedying
their violations. This proposal would dramatically raise the cost of
failing to comply with these provisions, with violators possibly losing
their authority and being placed out of business. Raising the cost of
not correcting a violation, therefore, would encourage new entrants to
comply with the regulatory requirements, either before they are audited
or after they fail the audit.
We believe new entrants would be sensitive to the increased cost of
violations and would respond accordingly. We assume half of the new
entrants that would otherwise be put out of service instead would
adjust their practices and behavior to comply with the regulations. We
assume of the 27,162 new entrants failing one or more of the automatic
failure criteria, 13,581 would be placed out of service, and 13,581
would make whatever changes are necessary to continue operations. These
costs are now discussed in turn.
Alternative Cost of Replacing New Entrants \14\
---------------------------------------------------------------------------
\14\ Not all non-compliant carriers will be replaced by other
new entrants. It is possible that carriers already in operation will
absorb freight or passengers previously transported by firms placed
out of service. Although it is possible existing carriers may be
able to operate more efficiently by increasing existing load
factors, they may also have to divert vehicles and drivers from
other loads or buy/hire new ones to provide the service. To provide
a conservative estimate, we assume the cost of these resources will
be mostly the same whether the loads are carried by existing
carriers expanding or transferring capacity or by new entrants
coming into the market to meet this demand. The only differences
would be registration and licensing costs. We assume that there is
no possibility that the replacing firm is the non-compliant firm
repackaged as a new firm. Without this illegal practice, the
replacing firm would either be a completely new motor carrier or an
existing motor carrier expanding its operation. Since there is not a
big difference, we choose to report the larger of the two cost
possibilities.
---------------------------------------------------------------------------
As discussed in footnote 14, we assume that non-compliant carriers
will
[[Page 76745]]
be replaced by other new entrants. These replacement new entrants could
purchase equipment from out-of-service carriers, so the cost of
equipment and facilities is a transfer between entities. The absolute
costs of starting these new firms would include fees for application,
licensing, registration, surveying potential markets, advertisements,
training, and transactions costs for transferring assets. Our all-
inclusive estimate for these costs is $4,000 per carrier replaced in
this fashion. Therefore, replacing the 13,581 carriers that would be
placed out of service would yield a total cost of $54.3 million
annually.
Alternative Cost for New Entrants That Adjust
As discussed above, the costs and benefits of complying with the
FMCSRs and HMRs (if applicable) are not attributable to this proposal
since we are not proposing to change existing operational requirements.
However, this evaluation also includes an estimate of costs and
benefits assuming these were new requirements. These estimates are
presented to assist decision makers in considering the impacts of this
proposal. While these estimates do not represent the real costs of this
proposal, they illustrate possible impacts of this proposal.
New entrants that change their practices and remain in service
would also face some costs. The cost of coming into compliance would
vary, depending on a number of factors, including the size of the new
entrant and the specific regulation (or regulations) violated. We
conservatively assume the average cost for carriers failing one of the
11 automatic failure criteria but desiring to continue operations would
be $1,000. Therefore, the total cost for these 13,581 new entrants
would be approximately $13.6 million.
The maximum cost of this proposed rule is estimated at
approximately $67.9 million per year ($54.3 million + $13.6 million).
The ten-year undiscounted cost would be almost $679 million, while the
discounted cost would be $477 million.
Alternative Benefits
The theoretical benefits accrue from removing the least safe
carriers from the road and replacing them with safer carriers. This
change would result in a difference in expected crashes. Using the
Compliance Review Impact Assessment Model, we assumed each failing new
entrant removed and replaced would have had a crash rate of 1.13
crashes per million vehicle miles traveled (MVMT), which is 50 percent
higher than the crash rate for established motor carriers. According to
MCMIS, new entrants average 400,000 VMT per year. We assume freight
that had been carried by closed carriers would be carried by
replacement new entrants. According to MCMIS, new entrants have an
overall crash rate of 0.94 crashes per MVMT. Therefore, closing unsafe
carriers results in a 17 percent reduction in the per million mile
crash rate ((1.13-0.94)/1.13).
We estimate new entrants eventually placed out of service or
required to modify their operations are currently involved in
approximately 11,200 baseline crashes annually. This is the sum of two
calculations. For carriers that would be placed out of service, the
calculation is the sum of 13,581 new entrants times 400,000 miles per
new entrant times 1.13 crashes per MVMT. The calculation is similar for
new entrants that continue operations, except their crash rate is 0.94
crashes per MVMT.
Closing 13,581 carriers would result in almost 1,020 fewer crashes
in the first year, 967 in the second year (since 5 percent of the
closed carriers would have gone out of business in any case), and fewer
each succeeding year. However, an additional 13,581 carriers would be
closed in each succeeding year, so the total crashes deterred by
closing carriers increases over the analysis period as the reduction
caused by the 5 percent business failure rate would be more than offset
by the additional carriers closed each year. Over 10 years, more than
48,000 crashes would be deterred by placing unsafe carriers out of
service.
The SAs also would reduce crashes among those new entrants allowed
to continue operations after coming into compliance. Over 10 years,
almost 5,700 crashes would be deterred from carriers that take action
to remedy violations. For both classes of carriers, the SAs would
result in 54,000 fewer crashes over 10 years.
As noted above, the average cost of a motor-carrier-involved crash
is $65,183. By deterring 54,000 crashes, this proposed rule thus would
yield a 10-year savings of $3.5 billion undiscounted. At a 7 percent
discount rate, this would translate into a benefit of $2.3 billion.
Most of these benefits would come from the crash reduction of closed
carriers. This benefit would greatly exceed the costs described
previously. The discounted ten-year net benefit of this NPRM would be
$1.8 billion, and the benefit cost ratio would be 4.8 to 1.
Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. Sec.
3501, et seq.), Federal agencies must obtain approval from OMB for each
collection of information they conduct, sponsor, or require through
regulations. FMCSA has determined there are three currently approved
information collections that would be affected by this NPRM: (1) OMB
Control No. 2126-0013 titled ``Motor Carrier Identification Report''
(FMCSA Forms MCS-150, MCS-150A, and MCS-150B), approved at 74,896
burden hours through July 31, 2007; (2) OMB Control No. 2126-0015
titled ``Designation of Agents, Motor Carriers, Brokers and Freight
Forwarders (FMCSA Form BOC-3) approved at 5,000 burden hours through
April 30, 2008; and (3) OMB Control No 2126-0016 titled ``Licensing
Applications for Motor Carrier Operating Authority'' (FMCSA Forms OP-1,
OP-1 (FF), OP-1 (MX) and OP-1 (P), approved at 55,738 burden hours
through August 31, 2008. Table 1 depicts the current and proposed
burden hours associated with the information collections.
[[Page 76746]]
Table 1.--Current and Proposed Information Collection Burdens
----------------------------------------------------------------------------------------------------------------
Burden hours
OMB approval No. currently Burden hours Change
approved proposed
----------------------------------------------------------------------------------------------------------------
2126-0013....................................................... 74,896 66,977 -7,919
2126-0015....................................................... 5,000 5,002 2
2126-0016....................................................... 55,738 55,786 48
-----------------------------------------------
Net Change.................................................. .............. .............. -7,869
----------------------------------------------------------------------------------------------------------------
The following is an explanation of how each of the information
collections shown above would be affected by this proposal.
OMB Control No. 2126-0013. This NPRM would eliminate the
requirement for new entrants to complete the Form MCS-150A (Safety
Certification for Applications for USDOT Number) because it does not
provide the certification intended. Proposed amendments to 49 CFR part
385, subpart E--Hazardous Materials Safety Permits would remove
references to the MCS-150A and would not impact the MCS-150B in any
way. The estimated annual paperwork burden for this information
collection would be 66,977 hours [74,896 currently approved annual
burden hours - 7,923 (47,535 new entrants x 10 minutes/60 minutes to
complete the MCS-150A form) + 4 (12 non-America-domiciled motor
carriers x 20 minutes/60 minutes to complete the Form MCS-150) =
66,977].
OMB Control No. 2126-0015. The non-North America-domiciled motor
carriers would also be required to notify the agency regarding
designation of process agents by either: (1) submission in the
application package of Form BOC-3 (Designation of Agents, Motor
Carriers, Brokers and Freight Forwarders), or (2) a letter stating that
the applicant will use a process agent that will submit the Form BOC-3
electronically. The estimated annual paperwork burden for this
information collections would be 5,002 hours [5,000 currently approved
annual burden hours + 2 hours (12 new entrant non-North America-
domiciled motor carriers x 10 minutes/60 minutes to complete Form BOC-
3) = 5,002 hours].
OMB Control No. 2126-0016. The proposed rule would create a new
Form OP-1(NNA) titled ``Application for U.S. Department of
Transportation (USDOT) Registration by Non-North America-Domiciled
Motor Carriers.'' A non-North America-domiciled motor carrier is one
whose principal place of business is located in a country other than
the United States, Canada or Mexico. These entities would use the OP-
1(NNA) when requesting either a USDOT new entrant registration as a
private or exempt for-hire carrier or operating authority as a non-
exempt for-hire carrier. The estimated annual paperwork burden for this
information collection would be 55,786 hours [55,738 currently approved
annual burden hours + 48 hours (12 new entrant non-North America-
domiciled motor carriers x 4 hours to complete Form OP-1(NNA)) = 55,786
hours].
The proposals in this NPRM, affecting three currently-approved
information collections, would result in a net decrease of 7,869 burden
hours in the agency's information collection budget.
FMCSA requests comments on: (1) whether the collection of
information is necessary or useful for the agency to meet its goal of
reducing truck crashes, (2) the accuracy of the estimated information
collection burden; (3) ways to enhance the quality, utility, and
clarity of the information collected; and (4) ways to minimize the
information collection burden on respondents, including the use of
automated collection techniques or other forms of information
technology.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA), as amended by the Small
Business Regulatory Enforcement and Fairness Act (SBREFA), requires
Federal agencies to analyze the impact of rulemakings on small
entities, unless the agency certifies the proposed rule will not have a
significant economic impact on a substantial number of small entities.
FMCSA believes these proposals do not meet the threshold values for
requiring a full-blown regulatory flexibility analysis. Nonetheless,
because of the public interest in these proposals, we have prepared a
regulatory analysis and placed a copy in the docket to this NPRM. The
initial regulatory flexibility analysis (IRFA) for the proposed rule is
set forth below.
(1) A description of the reasons why action by the agency is being
considered. FMCSA implemented the New Entrant Safety Assurance Process
in January 2003. Under the program, a carrier receives new entrant
registration and must undergo an 18-month monitoring period, including
an SA. During the audit, FMCSA verifies the carrier has in place basic
safety management controls and identifies any areas needing correction.
A new entrant is granted permanent registration only after successfully
completing the SA and the 18-month monitoring period.
The agency received numerous comments to the May 2002 IFR
announcing the New Entrant Safety Assurance Process, including
recommendations for improvement and alternatives to the program. By
late summer 2003, the agency and its State partners had collected
sufficient data and had sufficient experience administering the program
to assess its effectiveness. The Administrator formed a working group
comprised of field and Headquarters staff to conduct a program review.
This group identified several key improvements to clarify, strengthen
and correct the new entrant regulations. Today's action proposes
measures to make the New Entrant Safety Assurance Process better. It
also proposes a separate new entrant application procedure and safety
oversight program for non-North America-domiciled motor carriers.
(2) A succinct statement of the objectives of, and legal basis for,
the proposed rule. Section 210 of MCSIA required the Secretary of
Transportation to establish regulations specifying minimum requirements
for motor carriers seeking to operate in interstate commerce for the
first time to ensure such carriers are knowledgeable about applicable
Federal motor carrier safety standards. MCSIA also directed the
Secretary to require, by regulation, that each motor carrier granted
new operating authority undergo an SA within the first 18 months of
operations. MCSIA also required the Secretary to establish the elements
of the safety review, including basic safety management controls, to
consider the effect the regulations would have on small businesses and
to consider establishing alternate locations where the review may be
conducted for the convenience of the small businesses.
[[Page 76747]]
An IFR, with request for comments, was published May 13, 2002, and
became effective January 1, 2003. The IFR established new minimum
requirements for all applicant motor carriers domiciled in the United
States and Canada seeking to operate in interstate commerce. Under the
IFR, all new entrants, regardless of whether they need to register with
FMCSA under 49 U.S.C. 13901, are required to complete a Form MCS-150A--
Safety Certification for Applications for USDOT Number. Additionally,
during the initial 18-month period of operations, FMCSA would evaluate
the new entrant's safety management practices through an SA and monitor
its on-road performance prior to granting the new entrant permanent
registration. The objective of this NPRM is to enhance the safety of
new entrants and thereby reduce the number of crashes which involve
these carriers.
(3) A description of and, where feasible, an estimate of the number
of small entities to which the proposed rule would apply. The trucking
industry, and to a lesser extent the bus industry, is populated by
several very large firms and many small firms. We believe most motor
carriers start small. The proposed rule would cover all U.S. and
Canada-domiciled carriers and a very small number of motor carriers
domiciled outside of North America.
FMCSA estimated in the regulatory evaluation accompanying this
proposal that an average of 47,535 motor carriers entered the industry
each year from 1995-2002 seeking interstate authority. Roughly 23,400
of these new entrants are estimated to be non-exempt for-hire carriers
that must register under 49 U.S.C. 13901, 20,300 are estimated to be
exempt for-hire and private carriers not subject to Sec. 13901, and
the roughly 3,800 remaining new registrants are of other types
(including 1,922 brokers/freight forwarders, 1,200 Mexico-domiciled
commercial zone carriers, and 664 other carriers). These estimates were
derived from data contained in the Motor Carrier Management Information
System (MCMIS).
The Regulatory Flexibility Act requires Federal agencies to analyze
the impact of proposed and final rules on small entities. Small
Business Administration (SBA) regulations (13 CFR part 121) define a
``small entity'' in the motor carrier industry by average annual
receipts, which are currently set at $23.5 million per firm. FMCSA
estimated based upon the 1997 Economic Census (U.S. Census Bureau),
North American Industrial Classification System (NAICS) Code 484
``Truck Transportation'' segments, the number of small trucking
entities potentially affected by our proposed rules. There are 100,048
for-hire trucking firms within NAICS Code 484. Of these, 75,491, or
roughly 75 percent, had annual receipts of less than $21.5 million.
While SBA has changed its size definitions, updated data is not yet
available. Therefore, this analysis uses the old definition. The actual
percent of small businesses is probably somewhat greater than our
estimate, but the difference is not likely to be significant. Because
FMCSA does not have annual sales data on private carriers, the agency
assumed the revenue and operations characteristics of the private new
entrant firms would be similar to those of new entrant for-hire
carriers. Using these assumptions, the agency estimates almost 35,651
of the total 47,535 new entrants (or 75 percent) are considered small
entities. This assumption is generally consistent with an alternative,
industry-based approach used to estimate the number of small trucking
firms, where size is defined by the number of power units (i.e.,
tractors or single-unit trucks) owned or leased by motor carriers.
Also, MCMIS data indicate 80 percent of new entrant motor carriers
within the industry owned or leased six or fewer power units.
(4) A description of the proposed reporting, recordkeeping and
other compliance requirements of the proposed rule, including an
estimate of the classes of small entities which would be subject to the
requirements and the type of professional skills necessary for
preparation of the report or record. Except for a small number of non-
North America-domiciled motor carriers, this proposed rule would impose
no additional reporting, recordkeeping, or other compliance requirement
beyond those currently required of all motor carriers. This proposed
rule would change the consequences for violating certain existing
safety rules. Indeed, this proposed rule eliminates one form, the MC-
150A, integrating a few of the data elements from the MC-150A into Form
MC-150. Therefore, there will be one less form for motor carriers to
complete.
(5) An identification, to the extent practicable, of all Federal
rules, which may duplicate, overlap, or conflict with the proposed
rule. FMCSA is not aware of any areas where this proposed rule would
duplicate, overlap, or conflict with any other Federal rules. However,
under a separate rulemaking (a notice of proposed rulemaking titled
Unified Registration System published in the May 19, 2005, Federal
Register at 70 FR 28989), the agency is proposing to unify three of its
information systems for motor carriers into a single, on-line
replacement system. The ``replacement system'' NPRM proposes a more
streamlined registration process. The USDOT Number registration process
for new entrants would be included in the replacement system NPRM.
The replacement system rulemaking is a very complex undertaking and
would address the USDOT Number, financial responsibility and commercial
aspects of registration; it only touches on ministerial aspects of the
New Entrant Safety Assurance Process. Today's proposed rule covers the
complete New Entrant Safety Assurance Process, not just registration.
It is for these reasons the agency is pursuing these efforts in
separate rulemakings. The agency would address any impacts to
administrative elements of the New Entrant Safety Assurance Process
when the proposed rule announcing the replacement system is promulgated
as a final rule.
Accordingly, FMCSA preliminarily determines the proposed action
discussed in this document would not have a significant economic impact
on a substantial number of small entities.
Privacy Impact Analysis
FMCSA conducted a privacy impact assessment of this proposed rule
as required by Section 522(a)(5) of the FY 2005 Omnibus Appropriations
Act, Pub. L. 108-447, 118 Stat. 3268 (Dec. 8, 2004) [set out as a note
to 5 U.S.C. Sec. 552a]. The assessment considers any impacts of the
proposed rule on the privacy of information in an identifiable form and
related matters. The entire privacy impact assessment is available in
the docket for this proposal.
Unfunded Mandates Reform Act
This proposed rule would not impose a Federal mandate resulting in
the net expenditures by State, local, or tribal governments, in the
aggregate, or by the private sector, of $120.7 million or more in any
one year. 2 U.S.C. 1531, et seq.
National Environmental Policy Act
FMCSA has analyzed this proposed rule for the purpose of the
National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321, et
seq.) and has determined under the agency's National Environmental
Policy Act Implementing Procedures, FMCSA Order 5610.1C (published at
69 FR 9680, March 1, 2004, with an effective date of March 30, 2004)
this proposed action is categorically excluded under Appendix 2,
paragraph 6.f of the Order from further environmental documentation.
That categorical exclusion relates to
[[Page 76748]]
establishing regulations implementing the following activities, whether
performed by FMCSA or by States pursuant to the Motor Carrier Safety
Assistance Program (MCSAP), which provides financial assistance to
States to reduce the number and severity of crashes and hazardous
materials incidents involving commercial motor vehicles: (1) Driver/
vehicle inspections; (2) traffic enforcement; (3) safety audits; (4)
compliance reviews; (5) public education and awareness; and (6) data
collection; and provides reimbursement for the expenses listed under
paragraphs 6.d(i) through 6.d(v). This action proposes amendments to
the New Entrant Safety Assurance Process for carriers newly registering
to operate in interstate commerce. The agency believes the proposed
action would include no extraordinary circumstances having any effect
on the quality of the environment.
FMCSA has also analyzed this proposal under section 176(c) of the
Clean Air Act (CAA), as amended (42 U.S.C. 7401 et seq.), and
implementing regulations promulgated by the Environmental Protection
Agency. We performed a conformity analysis of the CAA according to the
procedures outlined in appendix 14 of FMCSA Order 5610.1C. This
proposed rule would not result in any emissions increase, nor would it
have any potential to result in emissions above the general conformity
rule's de minimis emission threshold levels. Moreover, it is reasonably
foreseeable the proposed rule change would not increase total CMV
mileage, change the routing of CMVs, change how CMVs operate, or change
the CMV fleet-mix of motor carriers. This proposed action would revise
the program for assuring the safety of new entrant motor carriers.
Executive Order 12988 (Civil Justice Reform)
This proposed action meets applicable standards in sections 3(a)
and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize
litigation, eliminate ambiguity, and reduce burden.
Executive Order 13045 (Protection of Children)
We have analyzed this proposed rule under Executive Order 13045,
``Protection of Children from Environmental Health Risks and Safety
Risks.'' This proposed rule does not concern a risk to environmental
health or safety that would disproportionately affect children.
Executive Order 12630 (Taking of Private Property)
This proposed rule would not effect a taking of private property or
otherwise have taking implications under Executive Order 12630,
Governmental Actions and Interference with Constitutionally Protected
Property Rights.
Executive Order 13132 (Federalism)
This proposed action has been analyzed in accordance with the
principles and criteria contained in Executive Order 13132 dated August
4, 1999, and it has been preliminarily determined this proposed action
would not have a substantial direct effect or sufficient federalism
implications on States, limiting the policymaking discretion of the
States. Nothing in this document would directly preempt any State law
or regulation. It would not impose additional costs or burdens on the
States. This proposed action would not have a significant effect on the
States' ability to execute traditional State governmental functions. To
the extent that States incur costs for conducting these SAs, they would
be reimbursed 100 percent with Federal funds under MCSAP.
Executive Order 12372 (Intergovernmental Review)
The regulations implementing Executive Order 12372 regarding
intergovernmental consultation on Federal programs and activities do
not apply to this program.
Executive Order 13211 (Energy Supply, Distribution, or Use)
This proposed action is not a significant energy action within the
meaning of section 4(b) of the Executive Order because it is not
economically significant and is not likely to have a significant
adverse effect on the supply, distribution, or use of energy.
Privacy Act
Anyone is able to search the electronic form of all comments
received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review DOT's
complete Privacy Act Statement in the Federal Register published on
April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit
http://dms.dot.gov.
List of Subjects
49 CFR Part 365
Administrative practice and procedure, Brokers, Buses, Freight
forwarders, Motor carriers, Moving of household goods, Reporting and
recordkeeping requirements.
49 CFR Part 385
Administrative practice and procedure, Highway safety, Motor
carriers, Motor vehicle safety, Reporting and recordkeeping
requirements.
49 CFR Part 387
Buses, Freight, Freight forwarders, Hazardous materials
transportation, Highway safety, Insurance, Intergovernmental relations,
Motor carriers, Motor vehicle safety, Moving of household goods,
Penalties, Reporting and recordkeeping requirements, Surety bonds.
49 CFR Part 390
Highway safety, Intermodal transportation, Motor carriers, Motor
vehicle safety, reporting and recordkeeping requirements.
For the reasons stated in the preamble, the Federal Motor Carrier
Safety Administration proposes to amend title 49, Code of Federal
Regulations, chapter III, subchapter B as set forth below:
PART 365--RULES GOVERNING APPLICATIONS FOR OPERATING AUTHORITY
1. The authority citation for part 365 continues to read as
follows:
Authority: 5 U.S.C. 553 and 559; 16 U.S.C. 1456; 49 U.S.C.
13101, 13301, 13901-13906, 14708, 31138, and 31144; 49 CFR 1.73.
2. Amend Sec. 365.101 by adding a new paragraph (i) to read as
follows:
Sec. 365.101 Applications governed by these rules.
* * * * *
(i) Applications for non-North America-domiciled motor carriers to
operate in foreign commerce as for-hire motor carriers of property and
passengers within the United States.
3. Amend Sec. 365.105 by revising paragraph (a) to read as
follows:
Sec. 365.105 Starting the application process: Form OP-1.
(a) All applicants must file the appropriate form in the OP-1
series, effective [effective date of final rule]. Form OP-1 for motor
property carriers and brokers of general freight and household goods;
Form OP-1(P) for motor passenger carriers; Form OP-1(FF) for freight
forwarders of
[[Page 76749]]
household goods; Form OP-1(MX) for Mexico-domiciled motor property
carriers, including household goods and motor passenger carriers; and
Form OP-1(NNA) for non-North America-domiciled motor property and motor
passenger carriers. A separate filing fee in the amount set forth at 49
CFR 360.3(f)(1) is required for each type of authority sought in each
transportation mode.
* * * * *
PART 385--SAFETY FITNESS PROCEDURES
4. The authority citation continues to read as follows:
Authority: 49 U.S.C. 113, 504, 521(b), 5105(e), 5109, 5113,
13901-13905, 31136, 31144, 31148, and 31502; sec. 350 of Pub. L.
107-87; and 49 CFR 1.73.
Sec. 385.305 [Amended]
5. Amend Sec. 385.305 to remove paragraph (b)(3) and to
redesignate paragraph (b)(4) as (b)(3).
6. Add Sec. 385.306 to subpart D to read as follows:
Sec. 385.306 What are the consequences of furnishing misleading
information or making a false statement in connection with the
registration process?
A carrier that furnishes false or misleading information, or
conceals material information in connection with the registration
process, is subject to the following actions:
(a) Revocation of registration.
(b) Assessment of the civil and/or criminal penalties prescribed in
49 U.S.C. 521 and 49 U.S.C. chapter 149.
7. Amend Sec. 385.307 to revise paragraph (a) to read as follows:
Sec. 385.307 What happens after a motor carrier begins operations as
a new entrant?
* * * * *
(a) The new entrant's roadside safety performance will be closely
monitored to ensure the new entrant has basic safety management
controls that are operating effectively.
* * * * *
8. Add Sec. 385.308 to subpart D to read as follows:
Sec. 385.308 What will cause an expedited action?
(a) A new entrant that commits any of the following actions,
identified through roadside inspections or by any other means, may be
subjected to an expedited safety audit or a compliance review or may be
required to submit a written response demonstrating corrective action:
(1) Using drivers to operate a commercial motor vehicle as defined
under Sec. 383.5 without a valid commercial driver's license. An
invalid commercial driver's license includes one that is falsified,
revoked, expired, or missing a required endorsement.
(2) Operating vehicles that have been placed out of service for
violations of the Federal Motor Carrier Safety Regulations or
compatible State laws and regulations without taking necessary
corrective action.
(3) Involvement in a hazardous materials incident, due to carrier
act or omission, involving any of the following:
(i) A highway route controlled quantity of a Class 7 (radioactive)
material as defined in Sec. 173.403 of this title.
(ii) Any quantity of a Class 1, Division 1.1, 1.2, or 1.3 explosive
as defined in Sec. 173.50 of this title.
(iii) Any quantity of a poison inhalation hazard Zone A or B
material as defined in Sec. Sec. 173.115, 173.132, or 173.133 of this
title.
(4) Involvement in two or more hazardous materials incidents, due
to carrier act or omission, involving any hazardous material not
identified in paragraph (a)(3) of this section and defined in chapter I
of this title.
(5) Using a driver who tests positive for controlled substances or
alcohol or who refuses to submit to required controlled substances or
alcohol tests.
(6) Operating a motor vehicle that is not insured as required by
part 387 of this chapter.
(7) Having a driver or vehicle out-of-service rate of 50 percent or
more based upon at least three inspections occurring within a
consecutive 90-day period.
(b) If a new entrant that commits any of the actions listed in
paragraph (a) of this section:
(1) Has not had a safety audit or compliance review, FMCSA will
schedule the new entrant for a safety audit as soon as practicable.
(2) Has had a safety audit or compliance review, FMCSA will send
the new entrant a notice advising it to submit evidence of corrective
action within 30 days of the service date of the notice.
(c) FMCSA may schedule a compliance review of a new entrant that
commits any of the actions listed in paragraph (a) of this section at
any time if it determines the violation warrants a thorough review of
the new entrant's operation.
(d) Failure to respond within 30 days of the notice to an agency
demand for a written response demonstrating corrective action will
result in the revocation of the new entrant's registration.
9. Revise Sec. 385.319 to read as follows:
Sec. 385.319 What happens after completion of the safety audit?
(a) Upon completion of the safety audit, the auditor will review
the findings with the new entrant.
(b) Pass. If FMCSA determines the safety audit discloses the new
entrant has adequate basic safety management controls, the agency will
provide the new entrant written notice as soon as practicable, but not
later than 45 days after completion of the safety audit, that it has
adequate basic safety management controls. The new entrant's safety
performance will continue to be closely monitored for the remainder of
the 18-month period of new entrant registration.
(c) Fail. If FMCSA determines the safety audit discloses the new
entrant's basic safety management controls are inadequate, the agency
will provide the new entrant written notice, as soon as practicable,
but not later than 45 days after the completion of the safety audit,
that its USDOT new entrant registration will be revoked and its
operations placed out-of-service unless it takes the actions specified
in the notice to remedy its safety management practices.
(1) 60-day corrective action requirement. All new entrants, except
those specified in paragraph (c)(2) of this section, must take the
specified actions to remedy inadequate safety management practices
within 60 days of the date of the notice.
(2) 45-day corrective action requirement. The new entrants listed
below must take the specified actions to remedy inadequate safety
management practices within 45 days of the date of the notice:
(i) A new entrant that transports passengers in a CMV designed or
used to transport between 9 and 15 passengers (including the driver)
for direct compensation.
(ii) A new entrant that transports passengers in a CMV designed or
used to transport more than 15 passengers (including the driver).
(iii) A new entrant that transports hazardous materials in a CMV as
defined in paragraph (4) of the definition of a ``Commercial Motor
Vehicle'' in Sec. 390.5 of this subchapter.
10. Revise Sec. 385.321 to read as follows:
[[Page 76750]]
Sec. 385.321 What failures of safety management practices disclosed
by the safety audit will result in a notice to a new entrant that its
DOT new entrant registration will be revoked?
(a) General. The failures of safety management practices consist of
a lack of basic safety management controls as described in Appendix A
of this part or failure to comply with one or more of the regulations
set forth in paragraph (b) of this section and will result in a notice
to a new entrant that its DOT new entrant registration will be revoked.
(b) Automatic failure of the audit. A new entrant will
automatically fail the safety audit if found in violation of any one of
the following 11 regulations:
(1) Sec. 382.115(a) or (b)--Failing to implement an alcohol and/or
controlled substances testing program (domestic and foreign motor
carriers, respectively).
(2) Sec. 382.211--Using a driver who has refused to submit to an
alcohol or controlled substances test required under part 382.
(3) Sec. 382.215--Using a driver known to have tested positive for
a controlled substance.
(4) Sec. 383.37(a)--Knowingly allowing, requiring, permitting, or
authorizing an employee with a commercial driver's license which is
suspended, revoked, or canceled by a State or who is disqualified to
operate a commercial motor vehicle.
(5) Sec. 383.51(a)--Knowingly allowing, requiring, permitting, or
authorizing a driver who is disqualified to drive a commercial motor
vehicle.
(6) Sec. 387.7(a)--Operating a motor vehicle without having in
effect the required minimum levels of financial responsibility
coverage.
(7) Sec. 391.15(a)--Using a disqualified driver.
(8) Sec. 391.11(b)(4)--Using a physically unqualified driver.
(9) Sec. 395.8(a)--Failing to require a driver to make a record of
duty status.
(10) Sec. 396.9(c)(2)--Requiring or permitting the operation of a
motor vehicle declared ``out-of-service'' before repairs are made.
(11) Sec. 396.17(a)--Using a commercial motor vehicle not
periodically inspected.
11. Revise Sec. 385.323 to read as follows:
Sec. 385.323 May FMCSA extend the period under Sec. 385.319(c) for a
new entrant to take corrective action to remedy its safety management
practices?
(a) FMCSA may extend the 60-day period in Sec. 385.319(c)(1) for
up to an additional 60 days provided FMCSA determines the new entrant
is making a good faith effort to remedy its safety management
practices.
(b) FMCSA may extend the 45-day period in Sec. 385.319(c)(2) for
up to 10 days if the new entrant has submitted evidence that corrective
actions have been taken pursuant to Sec. 385.319(c) and the agency
needs additional time to determine the adequacy of the corrective
action.
12. Amend Sec. 385.325 to revise paragraph (b) to read as follows:
Sec. 385.325 What happens after a new entrant has been notified under
Sec. 385.319(c) to take corrective action to remedy its safety
management practices?
(a) * * *
(b) If a new entrant, after being notified that it is required to
take corrective action to improve its safety management practices,
fails to submit a written response demonstrating corrective action
acceptable to FMCSA within the time specified in Sec. 385.319,
including any extension of that period authorized under Sec. 385.323,
FMCSA will revoke its new entrant registration and issue an out-of-
service order effective on:
(1) Day 61 from the notice date for new entrants subject to Sec.
385.319(c)(1).
(2) Day 46 from the notice date for new entrants subject to Sec.
385.319(c)(2).
(3) If an extension has been granted under Sec. 385.323, the day
following the expiration of the extension date.
* * * * *
13. Revise Sec. 385.327 to read as follows:
Sec. 385.327 May a new entrant request an administrative review of a
determination of a failed safety audit?
(a) If a new entrant receives a notice under Sec. 385.319(c) that
its new entrant registration will be revoked, it may request FMCSA to
conduct an administrative review if it believes FMCSA has committed an
error in determining that its basic safety management controls are
inadequate. The request must:
(1) Be made to the Field Administrator of the appropriate FMCSA
Service Center.
(2) Explain the error the new entrant believes FMCSA committed in
its determination.
(3) Include a list of all factual and procedural issues in dispute
and any information or documents that support the new entrant's
argument.
(b) FMCSA may request that the new entrant submit additional data
and attend a conference to discuss the issue(s) in dispute. If the new
entrant does not attend the conference or does not submit the requested
data, FMCSA may dismiss the new entrant's request for review.
(c) A new entrant must submit a request for an administrative
review within one of the following time periods:
(1) If it does not submit evidence of corrective action under Sec.
385.319(c), within 90 days after the date it is notified that its basic
safety management controls are inadequate.
(2) If it submits evidence of corrective action under Sec.
385.319(c), within 90 days after the date it is notified that its
corrective action is insufficient and its basic safety management
controls remain inadequate.
(d) If a new entrant wants to assure that FMCSA will be able to
issue a final written decision before the prohibitions outlined in
Sec. 385.325(c) take effect, the new entrant must submit its request
no later than 15 days from the date of the notice that its basic safety
management controls are inadequate. Failure to submit the request
within this 15-day period may result in revocation of new entrant
authority and issuance of an out-of-service order before completion of
administrative review.
(e) FMCSA will complete its review and notify the new entrant in
writing of its decision within:
(1) 45 days after receiving a request for review from a new entrant
that is subject to Sec. 385.319(c)(1).
(2) 30 days after receiving a request for review from a new entrant
that is subject to Sec. 385.319(c)(2).
(f) The Field Administrator's decision constitutes the final agency
action.
(g) Notwithstanding this subpart, a new entrant is subject to the
suspension and revocation provisions of 49 U.S.C. 13905 for violations
of DOT regulations governing motor carrier operations.
14. Revise Sec. 385.329 to read as follows:
Sec. 385.329 May a new entrant that has had its DOT new entrant
registration revoked and its operations placed out of service reapply?
(a) A new entrant whose DOT new entrant registration has been
revoked, and whose operations have been placed out of service by FMCSA,
may reapply for new entrant authority no sooner than 30 days after the
date of revocation.
(b) If the DOT new entrant registration was revoked because of a
failed safety audit, the new entrant must do all of the following:
(1) Submit an updated MCS-150.
(2) Submit evidence that it has corrected the deficiencies that
resulted in revocation of its registration and will otherwise ensure
that it will have basic safety management controls in effect.
(3) Begin the 18-month new entrant monitoring cycle again as of the
date the re-filed application is approved.
[[Page 76751]]
(c) If the DOT new entrant registration was revoked because FMCSA
found that the new entrant had failed to submit to a safety audit, it
must do all of the following:
(1) Submit an updated MCS-150.
(2) Begin the 18-month new entrant monitoring cycle again as of the
date the re-filed application is approved.
(3) Submit to a safety audit upon request.
(d) If the new entrant is a for-hire carrier subject to the
registration provisions under 49 U.S.C. 13901 and also has had its
operating authority revoked, it must re-apply for operating authority
as set forth in part 365 of this title.
15. Revise Sec. 385.331 to read as follows:
Sec. 385.331 What happens if a new entrant operates a CMV after
having been issued an order placing its interstate operations out of
service?
A new entrant that operates a CMV in violation of an out-of-service
order is subject to the penalty provisions in U.S.C. 521(b)(2)(A) for
each offense as adjusted for inflation by 49 CFR part 386, Appendix B.
16. Amend Sec. 385.337 to revise paragraph (a) to read as follows:
Sec. 385.337 What happens if a new entrant refuses to permit a safety
audit to be performed on its operations?
(a) If a new entrant refuses to permit a safety audit to be
performed on its operations, FMCSA will provide the carrier with
written notice that its registration will be revoked and its operations
placed out of service unless the new entrant agrees in writing, within
10 days from the service date of the notice, to permit the safety audit
to be performed. The refusal to permit a safety audit to be performed
may subject the new entrant to the penalty provisions of 49 U.S.C.
521(b)(2)(A), as adjusted for inflation by 49 CFR part 386 Appendix B.
* * * * *
17. Amend Sec. 385.405 to revise paragraph (a) to read as follows:
Sec. 385.405 How does a motor carrier apply for a safety permit?
(a) Application form(s). (1) To apply for a new safety permit or
renewal of the safety permit, a motor carrier must complete and submit
Form MCS-150B, Combined Motor Carrier Identification Report and HM
Permit Application.
(2) The Form MCS-150B will also satisfy the requirements for
obtaining and renewing a USDOT Number; there is no need to complete
Form MCS-150, Motor Carrier Identification Report.
* * * * *
18. Amend Sec. 385.421 by revising paragraph (a)(2) to read as
follows:
Sec. 385.421 Under what circumstances will a safety permit be subject
to revocation or suspension by FMCSA?
(a) * * *
(2) A motor carrier provides any false or misleading information on
its application (Form MCS-150B) or as part of updated information it is
providing on Form MCS-150B (see Sec. 385.405(d)).
* * * * *
19. Amend part 385 by adding a new subpart H consisting of new
Sec. Sec. 385.601 through 385.609 and an Appendix to subpart H to read
as follows:
Subpart H--Special Rules for New Entrant Non-North America-Domiciled
Carriers
Sec.
385.601 Scope of rules.
385.603 Application.
385.605 New entrant registration driver's license and drug and
alcohol testing requirements.
385.607 FMCSA action on the application.
385.609 Requirement to notify FMCSA of change in applicant
information.
Appendix to Subpart H of Part 385--Explanation of Pre-Authorization
Safety Audit Evaluation Criteria for Non-North America-Domiciled
Motor Carriers
Subpart H--Special Rules for New Entrant Non-North America-
Domiciled Carriers
Sec. 385.601 Scope of rules.
The rules in this subpart govern the application by a non-North
America-domiciled motor carrier to provide transportation of property
and passengers in interstate commerce in the United States.
Sec. 385.603 Application.
(a) Each applicant applying under this subpart must submit an
application that consists of:
(1) Form OP-1(NNA)--Application for U.S. Department of
Transportation (USDOT) Registration by Non-North America-Domiciled
Motor Carriers;
(2) Form MCS-150--Motor Carrier Identification Report; and
(3) A notification of the means used to designate process agents,
either by submission in the application package of Form BOC-3--
Designation of Agents-Motor Carriers, Brokers and Freight Forwarders or
a letter stating that the applicant will use a process agent service
that will submit the Form BOC-3 electronically.
(b) The Federal Motor Carrier Safety Administration (FMCSA) will
only process an application if it meets the following conditions:
(1) The application must be completed in English;
(2) The information supplied must be accurate, complete, and
include all required supporting documents and applicable certifications
in accordance with the instructions to Form OP-1(NNA), Form MCS-150 and
Form BOC-3; and
(3) The application must be signed by the applicant.
(c) An applicant must submit the application to the address
provided in Form OP-1(NNA).
(d) An applicant may obtain the application forms from any FMCSA
Division Office or download them from the FMCSA Web site at: http://www.fmcsa.dot.gov/forms/forms.htm
.
Sec. 385.605 New entrant registration driver's license and drug and
alcohol testing requirements.
(a) A non-North America-domiciled motor carrier must use only
drivers who possess a valid commercial driver's license--a CDL,
Canadian Commercial Driver's License, or Mexican Licencia de Federal de
Conductor--to operate its vehicles in the United States.
(b) A non-North America-domiciled motor carrier must subject each
of the drivers described in paragraph (a) of this section to drug and
alcohol testing as prescribed under part 382 of this subchapter.
Sec. 385.607 FMCSA action on the application.
(a) FMCSA will review and act on each application submitted under
this subpart in accordance with the procedures set out in this part.
(b) FMCSA will validate the accuracy of information and
certifications provided in the application by checking, to the extent
available, data maintained in databases of the governments of the
country where the carrier's principal place of business is located and
the United States.
(c) Pre-authorization safety audit. Every non-North America-
domiciled motor carrier that applies under this part must
satisfactorily complete an FMCSA-administered safety audit before FMCSA
will grant new entrant registration to operate in the United States.
The safety audit is a review by FMCSA of the carrier's written
procedures and records to validate the accuracy of information and
certifications provided in the application and determine whether the
carrier has established or exercises the basic safety management
controls necessary to ensure safe operations. FMCSA will evaluate the
results of the safety audit using the criteria in the Appendix to this
subpart.
(d) Applications of non-North America-domiciled motor carriers
[[Page 76752]]
requesting for-hire operating authority under part 365 of this chapter
may be protested under Sec. 365.109(b). Such carriers will be granted
new entrant registration after successful completion of the pre-
authorization safety audit and the expiration of the protest period,
provided the application is not protested. If a protest to the
application is filed with FMCSA, new entrant registration will be
granted only if FMCSA denies or rejects the protest.
(e) If FMCSA grants new entrant registration to the applicant, it
will assign a distinctive USDOT Number that identifies the motor
carrier as authorized to operate in the United States. In order to
initiate operations in the United States, a non-North America-domiciled
motor carrier with new entrant registration must:
(1) Have its surety or insurance provider file proof of financial
responsibility in the form of certificates of insurance, surety bonds,
and endorsements, as required by Sec. 387.7(e)(2), Sec. 387.31(e)(2)
and Sec. 387.301 of this subchapter, as applicable; and
(2) File a hard copy of, or have its process agent(s)
electronically submit, Form BOC-3--Designation of Agents--Motor
Carriers, Brokers and Freight Forwarders, as required by part 366 of
this subchapter.
(f) A non-North America-domiciled motor carrier must comply with
all provisions of the safety monitoring system in part 385, subpart I
of this subchapter, including successfully passing North American
Standard commercial motor vehicle inspections at least every 90 days
and having safety decals affixed to each commercial motor vehicle
operated in the United States as required by Sec. 385.703(c) of this
subchapter.
(g) FMCSA may remove a non-North America-domiciled carrier's new
entrant designation no earlier than 18 months after the date its USDOT
Number is issued and only after successful completion to the
satisfaction of FMCSA of the safety monitoring system for non-North
America-domiciled carriers set out in part 385, subpart I of this
subchapter. Successful completion includes obtaining a Satisfactory
safety rating as the result of a compliance review.
Sec. 385.609 Requirement to notify FMCSA of change in applicant
information.
(a)(1) A motor carrier subject to this subpart must notify FMCSA of
any changes or corrections to the information the Form BOC-3--
Designation of Agents--Motor Carriers, Brokers and Freight Forwarders
that occur during the application process or after having been granted
new entrant registration.
(2) A motor carrier subject to this subpart must notify FMCSA of
any changes or corrections to the information in Sections I, IA or II
of Form OP-1(NNA)--Application for U.S. Department of Transportation
(USDOT) Registration by Non-North America-Domiciled Motor Carriers that
occurs during the application process or after having been granted new
entrant registration.
(3) A motor carrier must notify FMCSA in writing within 45 days of
the change or correction to information under subparagraphs (a)(1) or
(a)(2) of this section.
(b) If a motor carrier fails to comply with paragraph (a) of this
section, FMCSA may suspend or revoke its new entrant registration until
it meets those requirements.
Appendix to Subpart H of Part 385--Explanation of Pre-Authorization
Safety Audit Evaluation Criteria for Non-North America-Domiciled Motor
Carriers
I. General
(a) FMCSA will perform a safety audit of each non-North America-
domiciled motor carrier before granting the carrier new entrant
registration to operate within the United States.
(b) FMCSA will conduct the safety audit at a location specified
by the FMCSA. All records and documents must be made available for
examination within 48 hours after a request is made. Saturdays,
Sundays, and Federal holidays are excluded from the computation of
the 48-hour period.
(c) The safety audit will include:
(1) Verification of available performance data and safety
management programs;
(2) Verification of a controlled substances and alcohol testing
program consistent with part 40 of this title;
(3) Verification of the carrier's system of compliance with
hours-of-service rules in part 395 of this subchapter, including
recordkeeping and retention;
(4) Verification of proof of financial responsibility;
(5) Review of available data concerning the carrier's safety
history, and other information necessary to determine the carrier's
preparedness to comply with the Federal Motor Carrier Safety
Regulations, parts 382 through 399 of this subchapter, and the
Federal Hazardous Material Regulations, parts 171 through 180 of
this title;
(6) Inspection of available commercial motor vehicles to be used
under new entrant registration, if any of these vehicles have not
received a decal required by Sec. 385.703(c) of this subchapter;
(7) Evaluation of the carrier's safety inspection, maintenance,
and repair facilities or management systems, including verification
of records of periodic vehicle inspections;
(8) Verification of drivers' qualifications, including
confirmation of the validity of the CDL, Canadian Commercial
Driver's License, or Mexican Licencia de Federal de Conductor, as
applicable, of each driver the carrier intends to assign to operate
under its new entrant registration; and
(9) An interview of carrier officials to review safety
management controls and evaluate any written safety oversight
policies and practices.
(d) To successfully complete the safety audit, a non-North
America-domiciled motor carrier must demonstrate to FMCSA that it
has the required elements in paragraphs (c)(2), (3), (4), (7), and
(8) above and other basic safety management controls in place which
function adequately to ensure minimum acceptable compliance with the
applicable safety requirements. FMCSA developed ``safety audit
evaluation criteria,'' which uses data from the safety audit and
roadside inspections to determine that each applicant for new
entrant registration has basic safety management controls in place.
(e) The safety audit evaluation process developed by FMCSA is
used to:
(1) Evaluate basic safety management controls and determine if
each non-North America-domiciled carrier and each driver is able to
operate safely in the United States; and
(2) Identify motor carriers and drivers who are having safety
problems and need improvement in their compliance with the FMCSRs
and the HMRs, before FMCSA issues new entrant registration to
operate within the United States.
II. Source of the Data for the Safety Audit Evaluation Criteria
(a) The FMCSA's evaluation criteria are built upon the
operational tool known as the safety audit. FMCSA developed this
tool to assist auditors and investigators in assessing the adequacy
of a non-North America-domiciled carrier's basic safety management
controls.
(b) The safety audit is a review of a non-North America-
domiciled motor carrier's operation and is used to:
(1) Determine if a carrier has the basic safety management
controls required by 49 U.S.C. 31144; and
(2) In the event that a carrier is found not to be in compliance
with applicable FMCSRs and HMRs, the safety audit can be used to
educate the carrier on how to comply with U.S. safety rules.
(c) Documents such as those contained in driver qualification
files, records of duty status, vehicle maintenance records, and
other records are reviewed for compliance with the FMCSRs and HMRs.
Violations are cited on the safety audit. Performance-based
information, when available, is utilized to evaluate the carrier's
compliance with the vehicle regulations. Recordable accident
information is also collected.
III. Overall Determination of the Carrier's Basic Safety Management
Controls
(a) The carrier will not receive new entrant registration if
FMCSA cannot:
(1) Verify a controlled substances and alcohol testing program
consistent with part 40 of this title;
[[Page 76753]]
(2) Verify a system of compliance with the hours-of-service
rules of this subchapter, including recordkeeping and retention;
(3) Verify proof of financial responsibility;
(4) Verify records of periodic vehicle inspections; and
(5) Verify the qualifications of each driver the carrier intends
to assign to operate commercial motor vehicles in the United States,
as required by parts 383 and 391 of this subchapter, including
confirming the validity of each driver's CDL, Canadian Commercial
Driver's License, or Mexican Licencia de Federal de Conductor, as
appropriate.
(b) If FMCSA confirms each item under III(a)(1) through (5)
above, the carrier will receive new entrant registration, unless
FMCSA finds the carrier has inadequate basic safety management
controls in at least three separate factors described in part IV
below. If FMCSA makes such a determination, the carrier's
application for new entrant registration will be denied.
IV. Evaluation of Regulatory Compliance
(a) During the safety audit, FMCSA gathers information by
reviewing a motor carrier's compliance with ``acute'' and
``critical'' regulations of the FMCSRs and HMRs.
(b) Acute regulations are those where noncompliance is so severe
as to require immediate corrective actions by a motor carrier
regardless of the overall basic safety management controls of the
motor carrier.
(c) Critical regulations are those where noncompliance relates
to management and/or operational controls. These are indicative of
breakdowns in a carrier's management controls.
(d) The list of the acute and critical regulations, which are
used in determining if a carrier has basic safety management
controls in place, is included in Appendix B, VII, List of Acute and
Critical Regulations to part 385 of this subchapter.
(e) Noncompliance with acute and critical regulations are
indicators of inadequate safety management controls and usually
higher than average accident rates.
(f) Parts of the FMCSRs and the HMRs having similar
characteristics are combined together into six regulatory areas
called ``factors.'' The regulatory factors, evaluated on the
adequacy of the carrier's safety management controls, are:
(1) Factor 1--General: Parts 387 and 390;
(2) Factor 2--Driver: Parts 382, 383 and 391;
(3) Factor 3--Operational: Parts 392 and 395;
(4) Factor 4--Vehicle: Parts 393, 396 and inspection data for
the last 12 months;
(5) Factor 5--Hazardous Materials: Parts 171, 177, 180 and 397;
and
(6) Factor 6--Accident: Recordable Accident Rate per Million
Miles.
(g) For each instance of noncompliance with an acute regulation,
1.5 points will be assessed.
(h) For each instance of noncompliance with a critical
regulation, 1 point will be assessed.
(i) Vehicle Factor. (1) When at least three vehicle inspections
are recorded in the Motor Carrier Management Information System
(MCMIS) during the twelve months before the safety audit or
performed at the time of the review, the Vehicle Factor (part 396)
will be evaluated on the basis of the Out-of-Service (OOS) rates and
noncompliance with acute and critical regulations. The results of
the review of the OOS rate will affect the Vehicle Factor as
follows:
(i) If the motor carrier has had at least three roadside
inspections in the twelve months before the safety audit, and the
vehicle OOS rate is 34 percent or higher, one point will be assessed
against the carrier. That point will be added to any other points
assessed for discovered noncompliance with acute and critical
regulations of part 396 to determine the carrier's level of safety
management control for that factor.
(ii) If the motor carrier's vehicle OOS rate is less than 34
percent, or if there are less than three inspections, the
determination of the carrier's level of safety management controls
will only be based on discovered noncompliance with the acute and
critical regulations of part 396.
(2) Over two million inspections occur on the roadside each year
in the United States. This vehicle inspection information is
retained in the MCMIS and is integral to evaluating motor carriers'
ability to successfully maintain their vehicles, thus preventing
them from being placed OOS during roadside inspections. Each safety
audit will continue to have the requirements of part 396,
Inspection, Repair, and Maintenance, reviewed as indicated by the
above explanation.
(j) Accident Factor. (1) In addition to the five regulatory
factors, a sixth factor is included in the process to address the
accident history of the motor carrier. This factor is the recordable
accident rate, which the carrier has experienced during the past 12
months. Recordable accident, as defined in 49 CFR 390.5, means an
accident involving a commercial motor vehicle operating on a public
road in interstate or intrastate commerce which results in a
fatality; a bodily injury to a person who, as a result of the
injury, immediately receives medical treatment away from the scene
of the accident; or one or more motor vehicles incurring disabling
damage as a result of the accident requiring the motor vehicle to be
transported away from the scene by a tow truck or other motor
vehicle.
(2) Experience has shown that urban carriers, those motor
carriers operating entirely within a radius of less than 100 air
miles (normally urban areas), have a higher exposure to accident
situations because of their environment and normally have higher
accident rates.
(3) The recordable accident rate will be used in determining the
carrier's basic safety management controls in Factor 6, Accident. It
will be used only when a carrier incurs two or more recordable
accidents within the 12 months before the safety audit. An urban
carrier (a carrier operating entirely within a radius of 100 air
miles) with a recordable rate per million miles greater than 1.7
will be deemed to have inadequate basic safety management controls
for the accident factor. All other carriers with a recordable
accident rate per million miles greater than 1.5 will be deemed to
have inadequate basic safety management controls for the accident
factor. The rates are the result of roughly doubling the United
States national average accident rate in Fiscal Years 1994, 1995,
and 1996.
(4) FMCSA will continue to consider preventability when a new
entrant contests the evaluation of the accident factor by presenting
compelling evidence that the recordable rate is not a fair means of
evaluating its accident factor. Preventability will be determined
according to the following standard: ``If a driver, who exercises
normal judgment and foresight, could have foreseen the possibility
of the accident that in fact occurred, and avoided it by taking
steps within his/her control which would not have risked causing
another kind of mishap, the accident was preventable.''
(k) Factor Ratings
(1) The following table shows the five regulatory factors, parts
of the FMCSRs and HMRs associated with each factor, and the accident
factor. Each carrier's level of basic safety management controls
with each factor is determined as follows:
(i) Factor 1--General: Parts 390 and 387;
(ii) Factor 2--Driver: Parts 382, 383, and 391;
(iii) Factor 3--Operational: Parts 392 and 395;
(iv) Factor 4--Vehicle: Parts 393, 396 and the Out of Service
Rate;
(v) Factor 5--Hazardous Materials: Part 171, 177, 180 and 397;
and
(vi) Factor 6--Accident: Recordable Accident Rate per Million
Miles;
(2) For paragraphs IV (k)(1)(i) through (v) (Factors 1 through
5), if the combined violations of acute and or critical regulations
for each factor is equal to three or more points, the carrier is
determined not to have basic safety management controls for that
individual factor.
(3) For paragraphs IV (k)(1)(vi), if the recordable accident
rate is greater than 1.7 recordable accidents per million miles for
an urban carrier (1.5 for all other carriers), the carrier is
determined to have inadequate basic safety management controls.
(l) Notwithstanding FMCSA verification of the items listed in
part III (a)(1) through (5) above, if the safety audit determines
the carrier has inadequate basic safety management controls in at
least three separate factors described in part III, the carrier's
application for new entrant registration will be denied. For
example, FMCSA evaluates a carrier finding:
(1) One instance of noncompliance with a critical regulation in
part 387 scoring one point for Factor 1;
(2) Two instances of noncompliance with acute regulations in
part 382 scoring three points for Factor 2;
(3) Three instances of noncompliance with critical regulations
in part 396 scoring three points for Factor 4; and
(4) Three instances of noncompliance with acute regulations in
parts 171 and 397 scoring four and one-half (4.5) points for Factor
5.
Under this example, the carrier will not receive new entrant
registration because it scored three or more points for Factors 2,
4, and 5 and FMCSA determined the carrier had
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inadequate basic safety management controls in at least three
separate factors.
20. Amend part 385 by adding a new Subpart I consisting of new
Sec. Sec. 385.701 through 385.717 to read as follows:
Subpart I--Safety Monitoring System for Non-North America-Domiciled
Carriers
Sec.
385.701 Definitions.
385.703 Safety monitoring system.
385.705 Expedited action.
385.707 The compliance review.
385.709 Suspension and revocation of non-North America-domiciled
carrier registration.
385.711 Administrative review.
385.713 Reapplying for new entrant registration.
385.715 Duration of safety monitoring system.
385.717 Applicability of safety fitness and enforcement procedures.
Subpart I--Safety Monitoring System for Non-North American Carriers
Sec. 385.701 Definitions.
Compliance review means a compliance review as defined in Sec.
385.3 of this part.
New entrant registration means the provisional registration under
part 385, subpart H of this subchapter that FMCSA grants to a non-North
America-domiciled motor carrier to provide interstate transportation
within the United States. It will be revoked if the registrant is not
assigned a Satisfactory safety rating following a compliance review
conducted during the safety monitoring period established in this
subpart.
Non-North America-domiciled motor carrier means a motor carrier of
property or passengers whose principal place of business is located in
a country other than the United States, Canada or Mexico.
Sec. 385.703 Safety monitoring system.
(a) General. Each non-North America-domiciled carrier new entrant
will be subject to an oversight program to monitor its compliance with
applicable Federal Motor Carrier Safety Regulations (FMCSRs), Federal
Motor Vehicle Safety Standards (FMVSSs), and Hazardous Materials
Regulations (HMRs).
(b) Roadside monitoring. Each non-North America-domiciled carrier
new entrant will be subject to intensified monitoring through frequent
roadside inspections.
(c) Safety decal. Each non-North America-domiciled carrier must
have on every commercial motor vehicle it operates in the United States
a current decal attesting to a satisfactory North American Standard
Commercial Vehicle inspection by a certified FMCSA or State inspector
pursuant to 49 CFR Sec. 350.201(k). This requirement applies during
the new entrant operating period and for three years after the
carrier's registration becomes permanent following removal of its new
entrant designation.
(d) Compliance review. FMCSA will conduct a compliance review on a
non-North America-domiciled carrier within 18 months after FMCSA issues
the carrier a USDOT Number.
Sec. 385.705 Expedited action.
(a) A non-North America-domiciled motor carrier committing any of
the following actions identified through roadside inspections, or by
any other means, may be subjected to an expedited compliance review, or
may be required to submit a written response demonstrating corrective
action:
(1) Using drivers not possessing, or operating without, a valid
CDL, Canadian Commercial Driver's License, or Mexican Licencia Federal
de Conductor. An invalid commercial driver's license includes one that
is falsified, revoked, expired, or missing a required endorsement.
(2) Operating vehicles that have been placed out of service for
violations of the Federal Motor Carrier safety regulations without
taking the necessary corrective action.
(3) Involvement in, due to carrier act or omission, a hazardous
materials incident within the United States involving:
(i) A highway route controlled quantity of a Class 7 (radioactive)
material as defined in Sec. 173.403 of this title;
(ii) Any quantity of a Class 1, Division 1.1, 1.2, or 1.3 explosive
as defined in Sec. 173.50 of this title; or
(iii) Any quantity of a poison inhalation hazard Zone A or B
material as defined in Sec. Sec. 173.115, 173.132, or 173.133 of this
title.
(4) Involvement in, due to carrier act or omission, two or more
hazardous material incidents occurring within the United States and
involving any hazardous material not listed in paragraph (a)(3) of this
section and defined in chapter I of this title.
(5) Using a driver who tests positive for controlled substances or
alcohol or who refuses to submit to required controlled substances or
alcohol tests.
(6) Operating within the United States a motor vehicle that is not
insured as required by part 387 of this chapter.
(7) Having a driver or vehicle out-of-service rate of 50 percent or
more based upon at least three inspections occurring within a
consecutive 90-day period.
(b) Failure to respond to an agency demand for a written response
demonstrating corrective action within 30 days will result in the
suspension of the carrier's new entrant registration until the required
showing of corrective action is submitted to the FMCSA.
(c) A satisfactory response to a written demand for corrective
action does not excuse a carrier from the requirement that it undergo a
compliance review during the new entrant registration period.
Sec. 385.707 The compliance review.
(a) The criteria used in a compliance review to determine whether a
non-North America-domiciled new entrant exercises the necessary basic
safety management controls are specified in Appendix B to this part.
(b) Satisfactory Rating. If FMCSA assigns a non-North America-
domiciled carrier a Satisfactory rating following a compliance review
conducted under this subpart, FMCSA will provide the carrier written
notice as soon as practicable, but not later than 45 days after the
completion of the compliance review. The carrier's registration will
remain in provisional status and its on-highway performance will
continue to be closely monitored for the remainder of the 18-month new
entrant registration period.
(c) Conditional Rating. If FMCSA assigns a non-North America-
domiciled carrier a Conditional rating following a compliance review
conducted under this subpart, it will initiate a revocation proceeding
in accordance with Sec. 385.709 of this subpart. The carrier's new
entrant registration will not be suspended prior to the conclusion of
the revocation proceeding.
(d) Unsatisfactory Rating. If FMCSA assigns a non-North America-
domiciled carrier an Unsatisfactory rating following a compliance
review conducted under this subpart, it will initiate a suspension and
revocation proceeding in accordance with Sec. 385.709 of this subpart.
Sec. 385.709 Suspension and revocation of non-North America-domiciled
carrier registration.
(a) If a carrier is assigned an ``Unsatisfactory'' safety rating
following a compliance review conducted under this subpart, FMCSA will
provide the carrier written notice, as soon as practicable, that its
registration will be suspended effective 15 days from the service date
of the notice unless the carrier demonstrates, within 10 days of the
service date of the notice, that the
[[Page 76755]]
compliance review contains material error.
(b) For purposes of this section, material error is a mistake or
series of mistakes that resulted in an erroneous safety rating.
(c) If the carrier demonstrates that the compliance review
contained material error, its new entrant registration will not be
suspended. If the carrier fails to show a material error in the
compliance review, FMCSA will issue an Order:
(1) Suspending the carrier's new entrant registration and requiring
it to immediately cease all further operations in the United States;
and
(2) Notifying the carrier that its new entrant registration will be
revoked unless it presents evidence of necessary corrective action
within 30 days from the service date of the Order.
(d) If a carrier is assigned a ``Conditional'' rating following a
compliance review conducted under this subpart, the provisions of
paragraphs (a) through (c) of this section will apply, except that its
new entrant registration will not be suspended under paragraph (c)(1)
of this section.
(e) If a carrier subject to this subpart fails to provide the
necessary documents for a compliance review upon reasonable request, or
fails to submit evidence of the necessary corrective action as required
by Sec. 385.705 of this subpart, FMCSA will provide the carrier with
written notice, as soon as practicable, that its new entrant
registration will be suspended 15 days from the service date of the
notice unless it provides all necessary documents or information. This
suspension will remain in effect until the necessary documents or
information are produced and:
(1) The carrier is rated Satisfactory after a compliance review; or
(2) FMCSA determines, following review of the carrier's response to
a demand for corrective action under Sec. 385.705, that the carrier
has taken the necessary corrective action.
(f) If a carrier commits any of the actions specified in Sec.
385.705(a) of this subpart after the removal of a suspension issued
under this section, the suspension will be automatically reinstated.
FMCSA will issue an Order requiring the carrier to cease further
operations in the United States and demonstrate, within 15 days from
the service date of the Order, that it did not commit the alleged
action(s). If the carrier fails to demonstrate that it did not commit
the action(s), FMCSA will issue an Order revoking its new entrant
registration.
(g) If FMCSA receives credible evidence that a carrier has operated
in violation of a suspension order issued under this section, it will
issue an Order requiring the carrier to show cause, within 10 days of
the service date of the Order, why its new entrant registration should
not be revoked. If the carrier fails to make the necessary showing,
FMCSA will revoke its registration.
(h) If a non-North America-domiciled motor carrier operates a
commercial motor vehicle in violation of a suspension or out-of-service
order, it is subject to the penalty provisions in 49 U.S.C.
521(b)(2)(A), as adjusted by inflation, not to exceed amounts for each
offense under part 386, Appendix B of this subchapter.
(i) Notwithstanding any provision of this subpart, a carrier
subject to this subpart is also subject to the suspension and
revocation provisions of 49 U.S.C. 13905 for repeated violations of DOT
regulations governing its motor carrier operations.
Sec. 385.711 Administrative review.
(a) A non-North America-domiciled motor carrier may request FMCSA
to conduct an administrative review if it believes FMCSA has committed
an error in assigning a safety rating or suspending or revoking the
carrier's new entrant registration under this subpart.
(b) The carrier must submit its request in writing, in English, to
the Associate Administrator for Enforcement and Program Delivery,
Federal Motor Carrier Safety Administration, 400 Seventh Street, SW.,
Washington DC 20590.
(c) The carrier's request must explain the error it believes FMCSA
committed in assigning the safety rating or suspending or revoking the
carrier's new entrant registration and include any information or
documents that support its argument.
(d) FMCSA will complete its administrative review no later than 10
days after the carrier submits its request for review. The Associate
Administrator's decision will constitute the final agency action.
Sec. 385.713 Reapplying for new entrant registration.
(a) A non-North America-domiciled motor carrier whose provisional
new entrant registration has been revoked may reapply for new entrant
registration no sooner than 30 days after the date of revocation.
(b) The non-North America-domiciled motor carrier will be required
to initiate the application process from the beginning. The carrier
will be required to demonstrate how it has corrected the deficiencies
that resulted in revocation of its registration and how it will ensure
that it will have adequate basic safety management controls. It will
also have to undergo a pre-authorization safety audit.
Sec. 385.715 Duration of safety monitoring system.
(a) Each non-North America-domiciled carrier subject to this
subpart will remain in the safety monitoring system for at least 18
months from the date FMCSA issues its new entrant registration, except
as provided in paragraphs (c) and (d) of this section.
(b) If, at the end of this 18-month period, the carrier's most
recent safety rating was Satisfactory and no additional enforcement or
safety improvement actions are pending under this subpart, the non-
North America-domiciled carrier's new entrant registration will become
permanent.
(c) If, at the end of this 18-month period, FMCSA has not been able
to conduct a compliance review, the carrier will remain in the safety
monitoring system until a compliance review is conducted. If the
results of the compliance review are satisfactory, the carrier's new
entrant registration will become permanent.
(d) If, at the end of this 18-month period, the carrier's new
entrant registration is suspended under Sec. 385.709(a) of this
subpart, the carrier will remain in the safety monitoring system until
FMCSA either:
(1) Determines that the carrier has taken corrective action; or
(2) Completes measures to revoke the carrier's new entrant
registration under Sec. 385.709(c) of this subpart.
Sec. 385.717 Applicability of safety fitness and enforcement
procedures.
At all times during which a non-North America-domiciled motor
carrier is subject to the safety monitoring system in this subpart, it
is also subject to the general safety fitness procedures established in
subpart A of this part and to compliance and enforcement procedures
applicable to all carriers regulated by the FMCSA.
21. Amend Appendix A to part 385, section III to add new paragraph
(i) to read as follows:
Appendix A to Part 385--Explanation of Safety Audit Evaluation Criteria
* * * * *
III. Determining if the Carrier Has Basic Safety Management
Controls
* * * * *
(i) FMCSA also gathers information on compliance with applicable
household goods and Americans with Disabilities Act of 1990
requirements, but failure to comply with these requirements does not
affect the
[[Page 76756]]
determination of the adequacy of basic safety management controls.
* * * * *
PART 387--MINIMUM LEVELS OF FINANCIAL RESPONSIBILITY FOR MOTOR
CARRIERS
22. The authority citation for part 387 continues to read as
follows:
Authority: 49 U.S.C. 13101, 13301, 13906, 14701, 31138, and
31139; and 49 CFR 1.73.
23. Amend Sec. 387.7 by revising paragraph (e) to read as follows:
Sec. 387.7 Financial responsibility required.
* * * * *
(e)(1) The proof of minimum levels of financial responsibility
required by this section shall be considered public information and be
produced for review upon reasonable request by a member of the public.
(2) In addition to maintaining proof of financial responsibility as
required by subparagraph (d) of this section, non-North America-
domiciled private and for-hire motor carriers shall file evidence of
financial responsibility with FMCSA in accordance with the requirements
of subpart C of this part.
* * * * *
24. Amend Sec. 387.31 by revising paragraph (e) to read as
follows:
Sec. 387.31 Financial responsibility required.
* * * * *
(e)(1) The proof of minimum levels of financial responsibility
required by this section shall be considered public information and be
produced for review upon reasonable request by a member of the public.
(2) In addition to maintaining proof of financial responsibility as
required by subparagraph (d) of this section, non-North America-
domiciled private and for-hire motor carriers shall file evidence of
financial responsibility with FMCSA in accordance with the requirements
of subpart C of this part.
* * * * *
PART 390--FEDERAL MOTOR CARRIER SAFETY REGULATIONS; GENERAL
25. The authority citation for part 390 continues to read as
follows:
Authority: 49 U.S.C. 508, 13301, 13902, 31133, 31136, 31502,
31504, and sec. 204, Pub. L. 104-88, 109 Stat. 803, 941 (49 U.S.C.
701 note); sec. 114, Pub. L. 103-311, 108 Stat. 1673, 1677; sec.
217, Pub. L. 106-159, 113 Stat. 1748, 1767; and 49 CFR 1.73.
26. Revise Sec. 390.19 to read as follows:
Sec. 390.19 Motor carrier identification report.
(a) Applicability. Each motor carrier must file the Form MCS-150 or
Form MCS-150B with FMCSA as follows:
(1) A U.S., Canada-, Mexico-, or non-North America-domiciled motor
carrier conducting operations in interstate commerce must file a Motor
Carrier Identification Report, Form MCS-150.
(2) A motor carrier conducting operations in intrastate commerce
and requiring a Safety Permit under 49 CFR part 385, subpart E of this
chapter must file the Combined Motor Carrier Identification Report and
HM Permit Application, Form MCS-150B.
(b) Filing schedule. Each motor carrier must file the appropriate
form under paragraph (a) of this section at the following times:
(1) Before it begins operations; and
(2) Every 24 months, according to the following schedule:
------------------------------------------------------------------------
USDOT Number ending in Must file by last day of
------------------------------------------------------------------------
1......................................... January.
2......................................... February.
3......................................... March.
4......................................... April.
5......................................... May.
6......................................... June.
7......................................... July.
8......................................... August.
9......................................... September.
0......................................... October.
------------------------------------------------------------------------
(3) If the next-to-last digit of its USDOT Number is odd, the motor
carrier shall file its update in every odd-numbered calendar year. If
the next-to-last digit of the USDOT Number is even, the motor carrier
shall file its update in every even-numbered calendar year.
(c) Availability of forms. The forms described under paragraph (a)
of this section and complete instructions are available from the FMCSA
Web site at http://www.fmcsa.dot.gov for (Keyword ``MCS-150,'' or
``MCS-150B'') from all FMCSA Service Centers and Division offices
nationwide; or by calling 1-800-832-5660.
(d) Where to file. The required form under paragraph (a) of this
section must be filed with FMCSA Office of Information Management. The
form may be filed electronically according to the instructions at the
agency's web site, or it may be sent to Federal Motor Carrier Safety
Administration, Office of Information Technology, MC-RIO, 400 Seventh
Street, SW, Washington, DC 20590.
(e) Special instructions for for-hire motor carriers. A for-hire
motor carrier should submit the Form MCS-150, or Form MCS-150B, along
with its application for operating authority (Form OP-1, OP-1(MX), OP-
1(NNA) or OP-2), to the appropriate address referenced on that form, or
may submit it electronically or by mail separately to the address
mentioned in paragraph (d) of this section.
(f) Only the legal name or a single trade name of the motor carrier
may be used on the forms under paragraph (a) of this section (Form MCS-
150 or MCS-150B).
(g) A motor carrier that fails to file the form required under
paragraph (a) of this section, or furnishes misleading information or
makes false statements upon the form, is subject to the penalties
prescribed in 49 U.S.C. 521(b)(2)(B).
(h)(1) Upon receipt and processing of the form described in
paragraph (a) of this section, FMCSA will issue the motor carrier an
identification number (USDOT Number).
(2) The following applicants must additionally pass a pre-
authorization safety audit as described below before being issued a
USDOT Number:
(i) A Mexico-domiciled motor carrier seeking to provide
transportation of property or passengers in interstate commerce between
Mexico and points in the United States beyond the municipalities and
commercial zones along the United States-Mexico international border
must pass the pre-authorization safety audit under Sec. 365.507 of
this subchapter. The agency will not issue a USDOT Number until
expiration of the protest period provided in Sec. 365.115 of this
subchapter or--if a protest is received--after FMCSA denies or rejects
the protest.
(ii) A non-North America-domiciled motor carrier seeking to provide
transportation of property or passengers in interstate commerce within
the United States must pass the pre-authorization safety audit under
Sec. 385.607(c) of this subchapter. If the carrier also requests
operating authority under part 365 of this chapter, the agency will not
issue a USDOT Number until expiration of the protest period or--if a
protest is received--after FMCSA denies or rejects the protest.
(3) The motor carrier must display the number on each self-
propelled CMV, as defined in Sec. 390.5, along with the additional
information required by Sec. 390.21.
(i) A motor carrier that registers its vehicles in a State that
participates in the Performance and Registration Information Systems
Management (PRISM) program (authorized under section 4004 of the
Transportation Equity Act for the 21st Century [(Pub. L. 105-178, 112
Stat. 107]) is exempt from the requirements of this section,
[[Page 76757]]
provided it files all the required information with the appropriate
State office.
Issued on: December 11, 2006.
John H. Hill,
Administrator.
Note: The following form will not appear in the Code of Federal
Regulations.
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[FR Doc. 06-9759 Filed 12-20-06; 8:45 am]
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