[Federal Register Volume 73, Number 242 (Tuesday, December 16, 2008)]
[Rules and Regulations]
[Pages 76472-76497]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-29253]
[[Page 76471]]
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Part III
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; Final Rule
Federal Register / Vol. 73, No. 242 / Tuesday, December 16, 2008 /
Rules and Regulations
[[Page 76472]]
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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: Final rule.
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SUMMARY: FMCSA amends the New Entrant Safety Assurance Program
regulations to raise the standard of compliance for passing the new
entrant safety audit. The Agency identifies 16 regulations that are
essential elements of basic safety management controls necessary to
operate in interstate commerce and makes a carrier's failure to comply
with any one of the 16 regulations an automatic failure of the safety
audit. Additionally, if certain violations are discovered during a
roadside inspection, the new entrant now will be subject to expedited
actions to correct these deficiencies. The Agency now will also 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. Failure to comply with
either of these requirements will not affect the outcome of the safety
audit; however, the Agency will take appropriate actions to improve
compliance. FMCSA clarifies changes to some of the existing new entrant
regulations and establishes a separate new entrant application
procedure and safety oversight program for non-North America-domiciled
motor carriers.
Finally, the Agency has enhanced the quality and availability of
its educational and technical assistance (ETA) materials to ensure
applicants are knowledgeable about applicable Federal motor carrier
safety standards. Because the Agency believes Form MCS-150A--Safety
Certification for Application for USDOT Number is not an effective
instrument for establishing knowledgeability, it is eliminating that
form.
FMCSA believes this rule will improve the Agency's 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. These changes do not impose additional
regulatory requirements on any new entrant carrier because these
carriers are already required to comply with all applicable rules.
DATES: Effective: This rule is effective: February 17, 2009.
Compliance: Compliance with this rule is required beginning December
16, 2009.
FOR FURTHER INFORMATION CONTACT: Ms. Stephanie Haller, New Entrant
Program Manager, Enforcement and Compliance Division. (202) 366-0178,
[email protected]. Business hours are from 8 a.m. to 4:30 p.m.,
e.t., Monday through Friday, except Federal holidays.
SUPPLEMENTARY INFORMATION:
Privacy Act
Anyone is able to search the electronic form for all comments
received into any of our dockets by the name of the individual
submitting the comment (or signing a 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; Page 19476).
The preamble is organized as follows:
I. Legal Basis for the Rulemaking
II. Regulatory History
A. Interim Final Rule
B. Notice of Proposed Rulemaking
III. Discussion of Comments to the NPRM and Section-by-Section
Analysis of the Final Rule
IV. Rulemaking Analyses
I. Legal Basis for the Rulemaking
Title 49 U.S.C. 31144 authorizes the Secretary of Transportation
(Secretary) to determine whether an owner or operator is fit to operate
safely. Section 210(a) of the Motor Carrier Safety Improvement Act of
1999 [Pub. L. 106-159, 113 Stat. 1764, December 9, 1999] (MCSIA) added
section 31144(g) \1\ directing the Secretary to establish regulations
to require each motor carrier 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. The authority to establish such regulations has
been delegated to the Federal Motor Carrier Safety Administration
(FMCSA). 49 CFR 1.73(g).
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\1\ MCSIA originally codified sec. 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 (Pub. L. 109-59, 119 Stat. 1144, August 10, 2005)
(SAFETEA-LU) recodified this provision as sec. 31144(g).
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Section 210(b) of MCSIA (codified as a note to 49 U.S.C. 31144)
required the Secretary to initiate a rulemaking to establish minimum
requirements for applicant motor carriers seeking Federal interstate
operating authority to ensure such applicants are knowledgeable about
applicable Federal motor carrier safety standards. The Secretary was
directed to consider establishment of a proficiency examination, as
well as other requirements, to ensure applicant knowledgeability.
In addition to expanding the Secretary's authority under section
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 Act of 1984 (the 1984 Act) [49 U.S.C. App.
2505 (1988), recodified at 49 U.S.C. 31136(a)], 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.
The rule changes the New Entrant Safety Assurance Program to
improve the Agency's ability to identify at-risk new entrant motor
carriers and ensures deficiencies are corrected before granting them
permanent registration. It also ensures that applicants will become
knowledgeable about Federal safety regulations before they commence
interstate operations. As such, it implements the section 31136(a)(1)
[[Page 76473]]
mandate that FMCSA regulations ensure CMVs are maintained and operated
safely. It does not add any new operational responsibilities on drivers
pursuant to sections 31136(a)(2)-(a)(4).
II. Regulatory History
A. Interim Final Rule
In response to the statutory mandate in MCSIA, FMCSA published an
interim final rule (IFR) titled New Entrant Safety Assurance Process
(67 FR 31978) on May 13, 2002, which became effective January 1, 2003.
All domestic and Canada-domiciled new entrants are subject to the New
Entrant Safety Assurance Process. 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 existing New Entrant Safety Assurance Program, a motor
carrier seeking to register as a new entrant is directed to the FMCSA
Internet Web site to either obtain an application by mail or complete
the application package online. The application package includes: (1)
Form MCS-150--The Motor Carrier Identification Report; (2) Form MCS-
150A--Safety Certification for Application for USDOT Number, and (3)
application forms to obtain operating authority under 49 CFR part 365,
if appropriate. See 49 CFR 385.305. Form MCS-150A requires the
applicant to self-certify its knowledge of relevant regulations and to
self-certify that basic safety management controls are in place. FMCSA
also provides educational and technical assistance materials, upon
request. If the application is approved, FMCSA grants new entrant
registration through issuance of a United States Department of
Transportation (USDOT) Number and an 18-month safety monitoring period
for the new entrant begins.
A for-hire motor carrier, unless providing transportation exempt
from registration requirements in the ICC Termination Act of 1995 [Pub.
L. 104-88, 109 Stat. 888, December 29, 1995], also is required to
obtain FMCSA operating authority under 49 U.S.C. 13902, prior to
commencing covered operations. Generally, for-hire motor carriers must:
(1) Complete the appropriate OP-1 application form for operating
authority; (2) file a process agent designation with the Agency using
Form BOC-3--Designation of Agents, Motor Carriers, Brokers and Freight
Forwarders; and (3) comply with certain insurance filing requirements
prior to being granted operating authority.
To maintain its new entrant registration, a carrier must
demonstrate sufficient compliance with applicable Federal Motor Carrier
Safety Regulations (FMCSRs) and Hazardous Materials Regulations (HMRs).
Within the first 18 months of a new entrant's operation, FMCSA conducts
a safety audit of the carrier's operations to educate the carrier on
compliance with the FMCSRs and HMRs and to determine if the carrier is
exercising basic safety management controls as defined in 49 CFR 385.3.
The Agency schedules the safety audit after the carrier has been
operating for at least 3 months to ensure sufficient data are on hand
to adequately assess the carrier's operations. The Agency conducts the
safety audit according to the scoring methodology set forth in Appendix
A to part 385.
If the new entrant passes the safety audit, it retains the new
entrant registration and remains subject to the new entrant safety
monitoring system for the remainder of the 18-month period. FMCSA will
grant permanent registration only if the new entrant successfully
completes the monitoring period. If the new entrant fails the safety
audit, the new entrant must provide FMCSA evidence of corrective action
within a specified time period. Carriers operating vehicles designed or
used to transport 16 or more passengers and hazardous materials
carriers must submit evidence within 45 days; passenger carriers
operating vehicles designed or used to transport between 9 and 15
passengers and non-hazardous materials property carriers must do so
within 60 days. FMCSA may extend these compliance periods if it
determines the new entrant is making a good faith effort to remedy the
problems. If within 45 or 60 days, as applicable, the new entrant fails
to respond to the notice or fails to correct the deficiencies, FMCSA
issues an out-of-service order prohibiting further operations in
interstate commerce and revokes the new entrant registration.
A new entrant may appeal the Agency's determination by requesting
an administrative review. The decision rendered by the administrative
review process is final. A new entrant that fails to make corrections
following the safety audit or whose new entrant registration is revoked
for failure to submit to a safety audit must wait at least 30 days to
reapply for new entrant registration.
Section 210(b) of MCSIA directed that the implementing regulations
ensure applicant carriers are knowledgeable about applicable Federal
safety requirements before receiving new entrant registration. As part
of this rulemaking, the Secretary was directed to consider a
proficiency examination, as well as other requirements to ensure
applicants understand applicable safety requirements before being
granted new entrant registration.
In developing the May 2002 IFR, the Agency considered, but decided
against requiring a proficiency examination as the means of ensuring a
new motor carrier applicant's knowledge about applicable safety
regulations. Instead, the Agency established procedures in the IFR to:
(1) Require the new entrant to certify to being knowledgeable about
applicable requirements and to certify procedures are in place for
basic safety management controls as a condition for receiving new
entrant registration; (2) provide the applicant with materials
explaining the Federal safety requirements to ensure that a
knowledgeability foundation is available to all new entrants; (3)
confirm the new entrant's knowledge of safety requirements during the
safety audit; and (4) grant permanent registration only to new entrants
that successfully complete the safety audit and 18-month safety
monitoring system.
B. Notice of Proposed Rulemaking
The Agency received numerous comments to the IFR from industry and
public interest groups regarding the self-certification requirement and
the effectiveness of the safety audit. These comments indicated that
the safety audit is not effective in identifying new entrant motor
carriers lacking basic safety management controls. FMCSA field staff
also recommends enhancing the New Entrant Safety Assurance Program,
based upon its experience in program implementation and administration.
In response, the Agency convened a working group to review and improve
the program. The Agency proposed enhancements to the New Entrant Safety
Assurance Program in a notice of proposed rulemaking (NPRM) titled New
Entrant Safety Assurance Process (71 FR 76730) on December 21, 2006.
The Agency sought to enhance the new entrant program through the
following regulatory proposals and certain non-regulatory actions
described in the NPRM:
Automatic failure of the safety audit. Discovery of any one of 11
specific regulatory violations during the safety audit would result in
automatic failure. The Agency proposed that these 11 regulatory
requirements were essential to demonstrating that basic safety
management controls are in place.
Triggers for expedited action. Discovery of any one of seven
triggering
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incidents, generally determined during a roadside inspection, would
result in FMCSA taking some form of expedited action against the new
entrant. Expedited actions could include a written demand for
corrective action, an expedited safety audit (if the new entrant had
not yet received one) or an expedited compliance review.
Elimination of Form MCS-150A. The Agency proposed to eliminate the
self-certification of carrier knowledge about applicable Federal
requirements. Many carriers were discovered to have falsely certified
having such knowledge, and commenters urged the Agency to remove this
requirement. The Agency concluded that enhanced educational and
technical assistance materials would provide most carriers with
sufficient knowledge of applicable regulations and of how to comply
with such regulations, as required by section 210(b) of MCSIA.
Americans with Disabilities Act (ADA) and household goods (HHG)
compliance.
The Agency proposed to review and include questions regarding a
carrier's compliance with ADA and HHG compliance in the safety audit.
While responses to these questions would not be a factor in determining
the outcome of the safety audit, the Agency would refer violations of
the ADA to the U.S. Department of Justice for further investigation and
may take enforcement actions for violations of HHG regulations.
Educational and Technical Assistance (ETA) materials. The Agency
indicated that it intended to improve and update ETA materials and
provide an interactive CD to enhance carrier knowledge of applicable
Federal safety requirements. As discussed in the next section, the
Agency has made enhancements to the ETA materials.
Corrective action and administrative review processes. The Agency
proposed regulatory changes to clarify procedures relating to the
corrective action and administrative review processes.
Non-North America-domiciled motor carriers. The Agency proposed a
new application process and safety monitoring system for motor carriers
domiciled outside of the United States, Canada and Mexico (NNA-
domiciled motor carriers). These carriers are currently not covered by
a safety monitoring system.
III. Discussion of Comments to the NPRM and Section-by-Section Analysis
of the Final Rule
In response to the December 2006 NPRM, FMCSA received 17 comments
from 21 entities. The commenters included nine State enforcement
agencies; one individual commenter; one motor carrier--Greyhound Lines,
Inc., seven motor carrier industry associations and consultants,
including the American Trucking Associations (ATA), the Owner-Operator
Independent Drivers Association (OOIDA), and the Canadian Trucking
Alliance (CTA); one safety enforcement organization--the Commercial
Vehicle Safety Alliance (CVSA), one union, the Amalgamated Transit
Union and one safety advocacy group, Advocates for Highway and Auto
Safety (Advocates).
Based on public comments and the Agency's review of the December
2006 proposal, FMCSA has made changes in the final rule to the proposed
revisions to part 385.
A. ``Chameleon'' Carriers--Sec. 385.306
FMCSA described the term ``chameleon carrier'' as a carrier that
attempts to register as a new entrant and operate as a different entity
under a new USDOT Number in an effort to evade enforcement action and/
or out-of-service orders issued against it by the Agency. FMCSA
proposed under Sec. 385.305 that such carriers would be subject to
revocation of registration and may be subject to civil and/or criminal
penalties. All of the comments received on this issue supported FMCSA's
efforts in identifying chameleon carriers. However, some stated that
the Agency did not include details on how it will detect chameleon
carriers. They recommended revising the new entrant application to
request more ``related company'' information. CVSA recommended the
Agency coordinate efforts regarding various information systems and
projects--including the Creating Opportunities, Methods, Practices, and
Securing Safety System (COMPASS), the Licensing & Insurance (L&I)
System, the Comprehensive Safety Analysis 2010 (CSA 2010) Initiative,
the Commercial Vehicle Information Systems and Networks (CVISN),
Unified Carrier Registration (UCR) System, and the Commercial Driver's
License Information System (CDLIS) modernization project--to better
detect chameleon carriers. OOIDA urged the Agency to look at
``chameleon'' freight brokers.
FMCSA Response:
Actions regarding chameleon carriers. New Sec. 385.306 states that
a carrier that provides false or misleading information, or that
conceals material information in connection with the application
process is subject to revocation of its new entrant registration and
civil and/or criminal penalties. The Agency is committed to ensuring
that only safe carriers are permitted to continue operating on our
Nation's highway. FMCSA has the inherent authority to correct, modify,
or revoke new entrant registration issued inadvertently, or obtained by
fraud, misrepresentation or other wrongful means.
If FMCSA determines the reapplying motor carrier is not subject to
an outstanding order to cease operations under a previous USDOT Number,
the Agency will link the history of the old and new companies by
identifying the new USDOT Number as the primary active number. The old
USDOT Number would be listed in the Agency database as one under which
the carrier has also done business, and its safety history, including
enforcement actions against the motor carrier, would be linked to
records on the new entity.
When a carrier applies for a USDOT Number, the system checks the
application against existing motor carrier Census database records to
identify possible duplicate records in an effort to prevent assignment
of multiple USDOT Numbers to a single motor carrier. The Agency
currently is reviewing its information systems to identify ways to
enhance its ability to detect chameleon carriers during the application
process. FMCSA also plans to address the chameleon carrier issue under
a separate rulemaking in response to SAFETEA-LU section 4113 regarding
patterns of safety violations by motor carrier management and will
reassess the need for additional revisions to its information systems
in support of that effort. Finally, under the Unified Registration
System rulemaking, the Agency is streamlining its registration process
so that we can more efficiently track all FMCSA regulated motor
carriers, freight forwarders and brokers.
B. Triggers for Expedited Action--Sec. 385.308
ATA asked the Agency to clarify what the term ``hazardous materials
incident'' means and to identify which hazardous materials incidents
could result in an expedited action. Advocates requested more
information regarding the rationale for including the violation which
involves driver or vehicle out-of-service rates (item 7 on the list
under proposed Sec. 385.308). Another commenter asked if the wording
of proposed Sec. 385.308 means the Agency will take expedited action
whenever one of these violations or incidents is discovered.
FMCSA Response:
Clarification of the term ``hazardous materials incident.'' The
Agency agrees that the description of a hazardous
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materials incident under Sec. Sec. 385.308(a) and (b) is unclear. In
response, the Agency revises Sec. 385.308 (a)(3) to make a hazardous
materials incident criteria consistent with the criteria for a
reportable hazardous materials incident under 49 CFR 171.15 and 171.16
of the HMRs with regard to a single incident involving: (1) A highway
route-controlled quantity of certain radioactive materials (Class 7);
(2) any quantity of certain explosives (Class 1, Division 1.1, 1.2, or
1.3; or (3) any quantity of certain poison inhalation hazard materials
(Zone A or B). The Agency revises 49 CFR 385.308(a)(4) to cross
reference 49 CFR 171.15 and 171.16 for two or more hazardous materials
incidents involving hazardous materials other than those listed in
paragraph (a)(3) under Sec. 385.308.
Driver or vehicle out-of-service rates. Under existing Sec.
385.307(a), the Agency may take expedited action against a motor
carrier if it were discovered to have an ``accident rate or driver or
vehicle violation rate that is higher than the industry average for
similar motor carrier operations.'' The Agency expands the list of
actions that could trigger expedited actions and specifically replaces
existing Sec. 385.307(a) with Sec. 385.308(a)(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.''
From an operational standpoint, the ``50 percent or more'' threshold
will provide for more effective and efficient monitoring of new entrant
performance because it is a non-subjective and easily measured rate.
Requirement to take expedited action. The regulatory text of Sec.
385.308 provides that the Agency may, but is not required to, initiate
expedited action following discovery of a triggering action or
violation. However, the section heading used the word ``will'' instead
of ``may.'' The final rule changes the section heading so that it is
consistent with the regulatory text.
C. Corrective Action and Administrative Review Processes--Sec. Sec.
385.319, 385.323, 385.325, and 385.327
Several commenters supported reducing the timeframes for the
corrective action and administrative review processes. Commenters also
complained that a paper-based system is an inadequate means of ensuring
corrective action for detected deficiencies. Other comments recommended
verification be conducted on-site at the carrier's place of business.
FMCSA Response:
Corrective action and administrative review timeframes. FMCSA
believes the existing timeframes for corrective action and
administrative review should be retained because they reflect a
balanced consideration of the due process rights of motor carriers as
well as demands on the Agency related to processing corrective action
submissions and administrative review requests. Comments on this issue
did not provide compelling reasons for shortening the timeframes for
the corrective action or administrative review processes.
Depending on the nature and severity of identified violations, the
Agency may take expeditious enforcement action against the new entrant
without using the corrective action procedures. FMCSA has authority to
immediately shut down operations of a motor carrier deemed to be an
imminent hazard to highway safety. At all times during which a new
entrant is subject to the safety monitoring system in 49 CFR part 385,
subpart D, it is also subject to the general safety fitness procedures
established in subpart A and to compliance and enforcement procedures
applicable to all carriers regulated by FMCSA. Section 385.335, for
example, expressly recognizes the Agency's authority to conduct a
compliance review instead of a safety audit when circumstances warrant
more intensive scrutiny of a new entrant's safety compliance.
The final rule amends Sec. 385.319, which concerns a new entrant's
responsibilities for correcting deficient safety management practices
discovered during the safety audit, by adding passenger carriers
operating vehicles designed or used to transport between 9 and 15
passengers for compensation to the group of carriers that must remedy
deficiencies within 45 days of notification by FMCSA. This change
achieves consistency with 49 CFR 385.11, which provides a 45-day
corrective action period for ``unfit'' motor carriers transporting
passengers by CMV. The Agency also amends Sec. 385.319(c), as well as
Sec. Sec. 385.323, 385.325, and 385.327, to make them consistent with
timeframes relating to notification of motor carriers of passengers
under Sec. 385.11. Section 385.319 is rewritten to cross reference the
definition of CMV relating to hazardous materials carriers in 49 CFR
390.5 for purposes of consistency.
The administrative review provisions in Sec. 385.327 were
ambiguous with respect to the time during which a carrier was allowed
to file a request for administrative review and when it had to file a
request for administrative review, if it wanted the review to be
completed before its registration was revoked. Accordingly, FMCSA
revises Sec. 385.327 to clarify timeframes for requesting
administrative review of determinations regarding the safety audit. A
new entrant must file the request within 90 days of the date of the
notice of audit failure or within 90 days of the date of notice of
insufficient corrective action. 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 the 15th day will be considered, but it
is possible the revocation would take effect before the administrative
review process is completed, if the carrier waits until after the 15th
day.
On-site verification of corrective action. Regarding on-site
verification of evidence of corrective action, in most instances
written documentation is sufficient to substantiate correction of
deficiencies, and an on-site visit is not required. The Agency believes
its proposed corrective action process is adequate and is an efficient
use of resources.
D. Automatic Failure of the Safety Audit--Sec. 385.321(b)
Some commenters to the NPRM raised concerns regarding the list of
regulatory violations that were proposed to result in automatic failure
of the safety audit. Advocates stated that the proposed list is too
short and should include more hours-of-service-based violations. ATA
stated that regulatory violations which are based on a single driver or
a single CMV would unfairly disadvantage larger carriers. Some asked
why certain regulatory violations, if discovered during the safety
audit, would cause an automatic failure but would not result in
expedited action if discovered during a roadside inspection.
FMCSA Response: Under Sec. 385.321(b), the Agency increases from
11 to 16 the number of regulatory violations that will result in
automatic failure of the safety audit. The Agency will develop
appropriate enforcement guidelines regarding how the Agency will
address egregious safety violations found during the safety audit if
such violations are not part of the automatic failure violation list
and do not result in failure of the safety audit under the evaluation
guidelines in Appendix A to part 385. For example, the guidance will
provide instructions to document all deficiencies regardless of whether
they cause failure of the safety audit, and to include them in the
Motor Carrier Management Information System (MCMIS).
[[Page 76476]]
Automatic failure determination. Committing any one of the
following 16 violations will result in automatic failure of the safety
audit in accordance with guidelines in the table to Sec. 385.321(b).
Table to Sec. 385.321(b)
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Violations that will result in automatic failure of the new entrant
safety audit
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Guidelines for
determining automatic
Violation failure of the safety
audit
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1. Sec. 382.115(a)/Sec. 382.115(b)-- Single occurrence.
Failing to implement an alcohol and/or
controlled substances testing program
(domestic and foreign motor carriers,
respectively).
2. Sec. 382.201--Using a driver known to Single occurrence.
have an alcohol content of 0.04 or greater
to perform a safety-sensitive function.
3. Sec. 382.211--Using a driver who has Single occurrence.
refused to submit to an alcohol or
controlled substances test required under
part 382.
4. Sec. 382.215--Using a driver known to Single occurrence.
have tested positive for a controlled
substance.
5. Sec. 382.305--Failing to implement a Single occurrence.
random controlled substances and/or alcohol
testing program.
6. Sec. 383.3(a)/Sec. 383.23(a)-- Single occurrence.
Knowingly using a driver who does not
possess a valid CDL.
7. Sec. 383.37(a)--Knowingly allowing, Single occurrence.
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.
8. Sec. 383.51(a)--Knowingly allowing, Single occurrence.
requiring, permitting, or authorizing a This violation refers to
driver to drive who is disqualified to drive a driver operating a CMV
a commercial motor vehicle. as defined under Sec.
383.5.
9. Sec. 387.7(a)--Operating a motor vehicle Single occurrence.
without having in effect the required
minimum levels of financial responsibility
coverage.
10. Sec. 387.31(a)--Operating a passenger Single occurrence.
carrying vehicle without having in effect
the required minimum levels of financial
responsibility.
11. Sec. 391.15(a)--Knowingly using a Single occurrence.
disqualified driver.
12. Sec. 391.11(b)(4)--Knowingly using a Single occurrence.
physically unqualified driver. This violation refers to
a driver operating a CMV
as defined under Sec.
390.5.
13. Sec. 395.8(a)--Failing to require a Requires a violation
driver to make a record of duty status. threshold (51% or more
of examined records) to
trigger automatic
failure.
14. Sec. 396.9(c)(2)--Requiring or Single occurrence.
permitting the operation of a commercial
motor vehicle declared ''out-of-service''
before repairs are made.
15. Sec. 396.11(c)--Failing to correct out- Single occurrence.
of-service defects listed by driver in a
driver vehicle inspection report before the
vehicle is operated again.
16. Sec. 396.17(a)--Using a commercial Requires a violation
motor vehicle not periodically inspected. threshold (51% or more
of examined records) to
trigger automatic
failure.
------------------------------------------------------------------------
In response to comments stating that violations based on a single
driver or a single CMV unfairly disadvantage larger carriers, the
Agency has made adjustments to its approach for the automatic failure
determination. Although 14 of the 16 regulatory violations (numbers 1-
12, 14 and 15 in the table to Sec. 385.321(b)) would trigger automatic
failure of the safety audit based on a single occurrence of the
violation, two of the violations will include thresholds. FMCSA
continues to believe the severity of 14 of these violations warrants
the single-occurrence trigger. However, in the case of Sec. Sec.
395.8(a) and 396.17(a), the Agency will require a violation threshold
of 51% to cause automatic failure of the safety audit. (Both of the
threshold violations were included in the December 2006 NPRM). FMCSA
has determined that the appropriate standard is preponderance of the
evidence, often called the ``51% rule.'' In other words, if the driver
did not prepare a record of duty status in more than half of the trips
examined, or the carrier failed to perform periodic inspections on more
than half of the fleet vehicles examined during the safety audit, there
exists a violation threshold indicative of breakdowns in the carrier's
management controls which will result in automatic failure of the new
entrant safety audit. Violation rates of 50% or less will be taken into
consideration in the overall assessment of the carrier's compliance
with applicable regulations, and the Agency may use other means to
improve the carrier's performance, including assessment of civil
penalties following a compliance review of the new entrant.
Discussion of additional regulatory violations. Violation two
(Sec. 382.201) corrects an inadvertent omission from the December 2006
NPRM. While the Agency proposed that a violation of the prohibition
against carriers using a driver who tests positive for controlled
substances would result in automatic failure of the safety audit, it
omitted the corresponding violation regarding the prohibition against
carriers knowingly using a driver who has an alcohol concentration of
0.04 or greater.
Violation five (Sec. 382.305) involves failure to implement random
controlled substances and/or alcohol testing, a crucial element of any
effective drug and alcohol testing program. The Agency believes
implementation of such random testing is essential to deterring use of
controlled substances or abuse of alcohol by CMV drivers.
Violation six (Sec. Sec. 383.3/383.23) is added to close a gap in
the list of automatic failure regulatory violations relating to CDL
drivers. The NPRM only addressed a carrier that uses a driver with a
suspended, revoked or cancelled CDL or a driver who was disqualified to
operate a CMV. Using a driver who does not obtain a CDL when one is
required is an equally serious safety violation.
Violation 10 (Sec. 387.31(a)) complements regulatory violation
[[Page 76477]]
number nine (Sec. 387.7) by including financial responsibility
requirements for passenger-carrying motor carriers in addition to
property carriers. The December 2006 NPRM inadvertently omitted
financial responsibility requirements for passenger carriers.
Violation 15 (Sec. 396.11(c)), failing to correct out-of-service
defects listed by the driver, complements violation 14 (Sec.
396.9(c)(2)), requiring or permitting the operation of a commercial
motor vehicle declared out-of-service before repairs are made. Section
396.9(c)(2) relates specifically to a vehicle declared out-of-service
as the result of an inspection performed at roadside. Inclusion of
Sec. 396.11(c) will ensure that all documented out-of-service defects
are corrected before the vehicle is operated again, inasmuch as
continued operation of the vehicle could present an imminent hazard to
the public.
Distinctions in the lists of regulatory violations (automatic
failure vs. expedited actions). Generally, the regulatory violations
that would trigger automatic failure of the safety audit are more
readily discernible at the carrier's place of business. The regulatory
violations that would trigger an expedited action are detectable at the
roadside or away from the carrier's place of business. New entrant
motor carriers 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.
E. Elimination of Form MCS--150A--Multiple Conforming Amendments
(Sec. Sec. 385.305, 385.405 and 385.421)
Conforming amendments are made throughout part 385 to eliminate the
requirement to complete Form MCS-150A. The purpose of the MCS-150A was
for an authorized official of the new entrant to certify to his/her
familiarity with relevant regulations and to having a system in place
to ensure compliance with the FMCSRs and applicable HMRs. However,
based on the safety audits conducted to date, FMCSA has found that
self-certification has not been an accurate indicator of
knowledgeability. Therefore, FMCSA eliminates the self-certification
registration requirement and corresponding Form MCS-150A.
F. Enhanced ETA Materials
The Agency has updated, significantly enhanced and expanded
accessibility of its ETA materials. The ETA materials pre-date the New
Entrant Safety Assurance Program and were originally intended to help
motor carriers prepare for a compliance review. In response to comments
regarding the quality of the ETA materials, the Agency has incorporated
new information helpful to new entrants seeking knowledge about how to
comply with applicable Federal safety standards and preparing for the
new entrant safety audit. The new document retains the title
``Educational and Technical Assistance Program--A Motor Carrier's Guide
to Improving Highway Safety'' and includes the following enhancements:
Updated regulatory requirements. The regulatory
information has been updated to include new requirements imposed since
2001.
Revamped Design. Regulatory information is presented in
the same order in which it appears in the Federal Motor Carrier Safety
Regulations (49 CFR parts 300-399). In addition to a table of contents,
two Quick Reference Guides are added to the front of the document to
help readers quickly identify all regulatory requirements relevant to
drivers and employers, respectively. The reference guides are written
in question-and-answer format with topical subheadings. The regulatory
information is attractively presented and easy to understand. We
believe these improvements will motivate new entrants to make more
effective use of the materials to become familiar with applicable
Federal safety standards.
[cir] Expanded coverage of the New Entrant Safety Assurance
Program. The section on Part 385--Safety Fitness Procedures--includes a
clearer discussion of the New Entrant Safety Assurance Program and the
Hazardous Materials Safety Permitting Program.
Because the ETA enhancement project was completed in July 2008,
prior to publication of this final rule, the section on part 385
reflects new entrant program requirements in effect as of that date and
not the new requirements set forth in this final rule; changes made by
this final rule will be included in the next revision to the ETA
materials.
More Accessible. The ETA materials are available
electronically on, and may be downloaded from, the FMCSA Web site. The
electronic version includes links directly to desired content from the
Driver or Employer Quick-Reference Guides.
The Agency also will publish a separate notice soliciting public
comment on other ways to improve carrier knowledgeability of applicable
Federal safety standards.
G. The Application Process for Non-North America-Domiciled Motor
Carriers--Part 385, Subpart H
General. Subpart H to part 385 adopts without change proposals set
forth in the December 2006 NPRM governing the new application process
for non-North America-domiciled motor carriers seeking to operate
within the United States beyond U.S. municipalities and commercial
zones on the U.S.-Mexico international border.
Acceptable licensing for CMV operators used by NNA-domiciled motor
carriers. Advocates commented that only a U.S. or Canadian CDL should
be acceptable.
FMCSA Response: In November 1991 under the terms of an
international agreement, the Administrator of the Federal Highway
Administration (FMCSA's predecessor agency) determined that Mexican
commercial driver's licenses (Licencias Federal de Conductor) are
equivalent to U.S. CDLs. This determination was upheld on judicial
review. For this reason, Sec. 385.605(a) continues to require an NNA-
domiciled motor carrier to use only drivers who possess a valid CMV
driver's license. Included on the list of valid CMV driver's licenses
are the CDL, Canadian Commercial Driver's License and Mexican Licencia
de Federal de Conductor.
H. Form--OP-1(NNA) for Non-North America-Domiciled Motor Carriers
Requesting New Entrant Registration
Advocates strongly opposed reliance on narrative responses to
Section V of the OP-1(NNA) and self-certification responses to proposed
Sections VIII and IX.
FMCSA Response: FMCSA does not adopt Advocates' recommendations for
modifying the Form OP-1(NNA) because the Agency verifies applicant
responses during the pre-authorization safety audit (PASA) and prior to
granting new entrant registration to them. Instead, Form OP-1(NNA)--
Application for U.S. Department of Transportation (USDOT) Registration
by Non-North America-Domiciled Motor Carriers, is adopted as proposed
in the December 2006 NPRM. The Agency corrected the form's
instructions: (1) To reflect the Agency's new Headquarters location;
and (2) to conform to a technical correction to part 387 concerning the
CMV weight threshold.
I. Proposed Safety Monitoring System for Non-North America-Domiciled
Motor Carriers--Part 385, Subpart I
The final rule adopts all provisions regarding the safety
monitoring system for NNA-domiciled motor carriers as set forth in the
December 2006 NPRM without change.
[[Page 76478]]
J. Modification of Safety Audit Guidelines Under Appendix A to Part 385
ADA compliance. Commenters suggested that the new entrant program
should include more of a focus on ensuring passenger carriers'
compliance with the ADA by including compliance with ADA requirements
in the pass/fail determination of the safety audit. Other commenters
also claimed that the Agency's position on ADA enforcement is
contradicted by case law [Peter Pan Bus Lines, Inc. v. Federal Motor
Carrier Safety Administration (471 F. 3d 1350 (DC Cir. 2006)].
Congress addressed the issues raised in the Peter Pan Bus Lines
case by enacting the Over-the-Road Bus Accessibility Act of 2007 [Pub.
L. 110-291, 122 Stat. 2915, July 30, 2008]. This law requires FMCSA to
consider compliance with DOT's ADA regulations as an element of an
over-the-road bus company's fitness for receiving new operating
authority. It also authorizes the Agency to suspend, amend, or revoke a
motor carrier's registration in the event of a willful failure to
comply with DOT's ADA regulations.
Inasmuch as ADA compliance is not indicative of a passenger
carrier's ability to operate its vehicles safely, a finding of
potential ADA noncompliance will not affect the results of the new
entrant safety audit. However, to assist in ensuring ADA compliance,
FMCSA will take the following additional steps:
Begin training enforcement officials to detect ADA
compliance violations. Such training will not be included as an auditor
certification requirement under 49 CFR Part 385, subpart C.
Include a question regarding ADA compliance in the safety
audit.
If ADA noncompliance is discovered in the course of a new
entrant safety audit or compliance review, FMCSA will forward the
information to the U.S. Department of Justice (DOJ), and appropriate
action by DOJ and/or DOT will be taken, pursuant to the memorandum of
understanding to be established between DOJ and DOT as directed by
Public Law 110-291.
Refer any non-compliant motor carrier that is also a
recipient of DOT financial assistance to the Federal Transit
Administration (FTA) for administrative enforcement action, as
appropriate. FTA administers a program that provides financial
assistance to some over-the-road bus carriers and, consistent with
section 504 of the Rehabilitation Act of 1973 and DOT rules
implementing it (49 CFR Part 27), cannot provide such assistance to
carriers who are out of compliance with their ADA obligations.
When appropriate, initiate action to amend, suspend, or
revoke a carrier's new entrant registration based on willful
noncompliance with DOT's ADA regulations (49 CFR Part 37, Subpart H).
K. Conforming Amendments to Part 387
The Agency adopts the December 2006 NPRM proposal to amend part 387
by requiring all non-North America-domiciled motor carriers to file
evidence of financial responsibility with the Agency as a condition for
registration. Sections 387.3(c)(1) and 387.9 are also revised to make a
technical correction to the threshold weights pertaining to CMVs to
read ``over 10,001 pounds'' and ``less than 10,001 pounds,'' as
appropriate.
L. Discussion of Remaining Comments That Will Not Warrant a Regulatory
Change
1. Proficiency Examination. Three commenters urged the Agency to
include a proficiency examination as part of the new entrant program to
ensure applicants are knowledgeable about the applicable regulatory
safety requirements.
FMCSA Response: The Agency is sensitive to concerns expressed by
commenters that there may be additional mechanisms of ensuring
applicant knowledgeability. FMCSA will respond to these concerns by
publishing a notice inviting the public to provide information to
assist the Agency in evaluating the feasibility of alternative
requirements or additional enhancements to the current process for
ensuring applicant knowledgeability, including proficiency
examinations. However, FMCSA believes this final rule fully complies
with section 210(b) of MCSIA, which requires the Agency to consider a
proficiency examination. The Agency has considered the option of
requiring a proficiency examination and has decided not to impose such
a requirement at this time. Commenters to the Agency's notice regarding
the applicant knowledgeability issue will have the opportunity to
address the feasibility of potential alternatives for improving
applicant knowledgeability, including proficiency examinations.
2. PASA and compliance review requirement for all new entrants.
Advocates believe domestic and Canada-domiciled motor carriers, like
NNA-domiciled motor carriers, should be subject to a PASA to obtain new
entrant registration and a compliance review to receive permanent
registration.
Some comments recommended the Agency require a new entrant whose
registration was revoked to successfully undergo a PASA before being
re-issued new entrant registration.
FMCSA Response: The Agency's limited resources are insufficient to
provide for conducting a PASA and compliance review for the 40,000-
50,000 new entrants annually that obtain USDOT Numbers. Section 210 of
MCSIA does not require PASAs or compliance reviews for new entrant
carriers. FMCSA disagrees with the Advocates' and other commenters'
statements about the necessity of conducting PASAs on all new motor
carriers. The Agency continues to believe that its safety monitoring
program and the safety audit, accompanied by expedited actions, will
help to ensure safety given current resources.
Today's final rule does not require reapplying new entrants to
successfully complete a PASA as a condition of obtaining new entrant
registration. If the carrier's new entrant registration was revoked
because the carrier refused to submit to a safety audit, it would be
re-prioritized for an expedited safety audit as soon as practicable
upon reentering the new entrant program. A reapplying carrier is
prohibited from operating in interstate commerce until its new
application is approved. A new 18-month monitoring period would start
upon approval of the new application.
A carrier whose new entrant registration was revoked for failing
the safety audit would have to submit an updated Form MCS-150
application and provide evidence that it has corrected the deficiencies
that resulted in revocation of its registration. The Agency will not
grant new entrant registration, and a carrier may not conduct
interstate operations, unless FMCSA approves the new application and
corrective action plan. Additionally, the carrier will be subject to a
new 18-month safety monitoring period.
To retain historical information on a revoked new entrant's past
performance, FMCSA will 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.
3. Impact of rule on Federal/State resources. Several State
enforcement agencies requested that FMCSA disclose who would be
responsible for handling the increased number of corrective
[[Page 76479]]
actions anticipated due to the higher failure rate likely to occur as a
result of modifications to the new entrant program.
FMCSA Response: States are not responsible for managing corrective
action procedures and administrative review requests. FMCSA handles
these actions, and the Agency will continue to manage these due process
provisions in the new entrant program at this time.
4. Implementation issues/questions. The Public Utilities Commission
of Ohio (PUCO) requested that the Agency address its concerns regarding
implementation of the new entrant program:
Reclassified motor carriers and the new entrant safety
monitoring system. According to PUCO, some motor carriers enter the new
entrant program and later reclassify to an operational status not
subject to new entrant program requirements (such as a PRISM registrant
[an entity that is required by the State but not FMCSA to obtain a
USDOT Number under the Performance and Registration Information System
Management (PRISM) program] or intrastate motor carrier). If the
carrier later reclassifies as a new entrant, PUCO believes the Agency
should disregard time operating outside of the new entrant program when
computing the new entrant's 18-month safety monitoring period.
Treatment of relocated new entrant motor carriers. PUCO
asks the Agency to ensure, in instances where a new entrant transfers
its operations to a new State, there is sufficient time provided to the
new jurisdiction to be able to schedule and conduct the safety audit
prior to the end of the 18-month period.
Treatment of new entrant motor carriers that change
operational status to evade the safety audit. PUCO recommends the
Agency track motor carriers that continually change their status in an
effort to avoid a safety audit to ensure that they undergo a safety
audit or compliance review within a specified time period.
Implementation date for the new entrant rule. PUCO
requests the Agency provide sufficient time for it to make staffing
changes and conduct training when establishing the final rule
compliance date.
FMCSA Response:
Reclassified motor carriers and the new entrant safety monitoring
system. The Agency agrees that time spent operating as a motor carrier
outside of FMCSA jurisdiction should not count toward completion of the
18-month new entrant safety monitoring process. For example, if a motor
carrier completes 6 months of the safety monitoring period before
converting to a status that is not subject to the new entrant program
then upon re-entering the new entrant program the clock would resume
from 6 months onward. Time operating as a non-new entrant would not be
credited toward the new entrant safety monitoring period.
Treatment of relocated new entrant motor carriers. Existing
regulations under Sec. 385.333(d) permit a carrier to continue
operations as a new entrant if a safety audit or compliance review has
not been performed by the end of the 18-month monitoring period through
no fault of the motor carrier. The carrier may continue operating until
FMCSA conducts a safety audit or compliance review and makes a final
determination regarding the adequacy of its safety management controls.
This provision gives FMCSA the flexibility to extend the safety
monitoring period for any new entrant that relocates from one State to
another before completion of the safety audit. A new entrant motor
carrier that relocates would continue to be subject to the new entrant
program. FMCSA information systems would continue to monitor the new
entrant's status through completion of the safety audit and the 18-
month safety-monitoring period.
Treatment of new entrant motor carriers that change operational
status to evade the safety audit. A motor carrier may voluntarily
revoke its new entrant registration at any time. Nonetheless, the
Agency is aware that there may be instances in which a motor carrier
may use this option to evade the new entrant safety audit. Because
MCMIS reveals that an extremely small number of motor carriers may be
manipulating operational status in this way, the Agency does not
believe a regulatory change is warranted. The Agency analyzed data from
MCMIS regarding changes in status for the period from January 2003
through October 2007. MCMIS records the initial issuance of new entrant
registration as the first change and subsequent changes are tracked as
change 2, 3, etc. For example, a carrier that receives new entrant
registration in May 2007, changes its operations solely to intrastate
nonhazardous materials transportation in May 2008, and then resumes
interstate operations and re-enters the new entrant program in August
2008, is considered as having three changes. For purposes of the
report, the Agency considered four or more changes as frequent and
found that of 200,000 new entrants, only 130 indicated frequent
changes. Instead of a regulatory change, the Agency will address this
issue operationally by altering the audit prioritization formula.
Besides the prioritization algorithm under the Safety Status
Measurement System (SAFESTAT), several means exist to trigger a
compliance review of a motor carrier. The Agency will consider the
frequency of changes in operating status as a reason for conducting a
compliance review on a motor carrier. There may be instances where a
motor carrier may legitimately request frequent changes in operational
status. However, the Agency believes it is appropriate to prioritize
carriers for a compliance review if there are frequent changes in
status. Existing Sec. Sec. 385.333 and 385.335 indicate that a new
entrant may be subject to a compliance review during the 18-month
safety-monitoring period and that the Agency may take such action at
its discretion.
Implementation date for the new entrant rule. In establishing a 1-
year compliance date for this final rule, the Agency has taken into
consideration and provided time for staffing changes, information
system modifications, and training.
5. New entrant related notifications to other jurisdictions.
Missouri DOT claimed that a more aggressive new entrant program will
cause a dramatic increase in the failure rate of motor carriers. It
recommended development of a real-time database for notification of
State enforcement personnel. CVSA also recommended that the
notification take place in several different media types and formats,
both electronic and print. This issue was not directly addressed in the
2002 IFR or the 2006 NPRM.
FMCSA Response: The Agency already provides the States with Web-
based access to information about motor carriers, including new
entrants. If an enforcement officer has Web access, the officer can
check new entrant status in ``real-time'' through FMCSA's enforcement
query system designed to dramatically increase access to motor carrier
safety information for State and Federal law enforcement personnel.
6. Reciprocity agreement with Canada concerning provincial audits.
CTA requested FMCSA exempt Canada-domiciled new entrants that had
undergone a provincial facility audit during the 18-month monitoring
period from the requirement to pass a safety audit under the New
Entrant Safety Assurance Process. CTA reiterated that provincial audits
suffice for purposes of FMCSA's New Entrant Safety Assurance Process.
CVSA recommended developing reciprocity agreements for safety audits
with Canada and Mexico.
FMCSA Response: The Agency acknowledges CTA's concerns but the
[[Page 76480]]
Agency cannot exempt Canada-based carriers from the new entrant program
required by 49 U.S.C. 31144(g)(1). Section 31144(g)(1) does not provide
FMCSA authority to exempt new entrants from the safety audit
requirement. FMCSA is currently working with Canadian officials to
examine the feasibility of establishing a reciprocity agreement
concerning compliance reviews conducted on motor carriers in their
respective country of domicile. The Agency will consider working with
Canadian officials on reciprocity of new entrant safety audits.
7. Group audits and audits conducted at alternate locations. In
comments to the NPRM, CVSA questioned whether group audits provide a
proper environment for the safety audits.
FMCSA Response: The Agency will continue conducting group audits
and conducting audits at alternate locations, as appropriate. Congress
directed the Agency under section 210(a) of MCSIA to consider alternate
locations where safety audits may be conducted for the convenience of
small businesses. We believe conducting audits at alternate locations
can be beneficial for both motor carriers and the Agency. Group audits
can be an efficient means of simultaneously educating and auditing
larger groups of motor carriers than are covered during single-carrier
audits. Typically, Federal or State enforcement personnel determine a
date to convene the group audit and contact several new entrants by
telephone to schedule them to attend. After all carriers are scheduled
by phone, the enforcement official sends a confirmation letter with the
appointment date, time and location and instructions on specific
records and information to bring to the audit.
Group audits take place away from the respective carriers'
principal places of business, generally in a large conference room
either at the State agency or at a local hotel. The audit commences
with an educational presentation for the entire group, including a
question-and-answer period and educational materials. After the
presentation, several individual safety audits are conducted
simultaneously throughout the room. The room is configured with tables
spaced sufficiently to provide adequate privacy for the carrier
official and safety auditor. A safety auditor conducts a one-on-one
interview with the carrier official and examines the carrier's safety
records. In some instances, enforcement personnel have been able to
conduct multiple sessions, auditing as many as 48 carriers in a single
day. At the conclusion of the audit, the carrier is provided with a
written notice of determination and information on corrective actions
for any detected deficiencies. A carrier that fails the safety audit is
subject to revocation of registration if corrective action is not
completed.
Nonetheless, we recognize that group audits only are 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, the Agency conducts group audits only in those areas where
practicable. Safety auditors are also careful to judiciously separate
the educational and auditing functions in such a way as to maintain
carrier privacy.
8. Program assessment. CVSA recommends that FMCSA conduct a
thorough program assessment to examine the impact of the safety audit.
FMCSA Response: We agree, but will defer until the enhancements
made by this final rule have been fully implemented and sufficient time
has elapsed to enable evaluation of program changes.
9. Comments beyond the scope of the rule. Advocates criticized the
Agency for what it calls use of SafeStat and the roster of acute and
critical regulations as the guideposts for determining which carriers
pose increased safety risks. OOIDA stated it believes the report titled
``Analysis of New Entrant Motor Carrier Safety Performance and
Compliance Using SafeStat'' is ``scientifically challenged'' and should
not be the basis for FMCSA to impute an increase in the safety risks
associated with new entrant motor carriers. The report is in the docket
for this rule.
FMCSA Response: Discussions of SafeStat for identifying at-risk
carriers and prioritizing them for compliance reviews are beyond the
scope of the New Entrant Safety Assurance Process final rule. Moreover,
SafeStat itself has no bearing on the implementation of the new entrant
program since Congress has mandated that all new entrants submit to the
safety audit before receiving permanent registration, nor does it have
any bearing on the analysis of its effectiveness.
IV. Rulemaking Analyses
Executive Order 12866 (Regulatory Planning and Review) and DOT
Regulatory Policies and Procedures
FMCSA has determined that this final 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).
FMCSA has analyzed the costs and benefits, as discussed below, and has
determined this rule will be economically significant. The benefits of
this rule will exceed the $100 million annual threshold as defined in
Executive Order 12866. A full Regulatory Evaluation is included in the
docket for this rule. This rule has been reviewed by the Office of
Management and Budget (OMB).
Overview of Analysis
This rule imposes costs on all new entrants. Although the costs
associated with existing regulations were counted when these measures
were first promulgated, OMB guidance on regulatory analysis suggests
that unless full compliance with these rules and regulations was
already being achieved, the compliance costs associated with this rule
should be counted.\2\ All new entrants will face costs associated with
the time their staff spends reviewing ETA materials and participating
in the safety audit. These would be the only costs borne by new
entrants that are found to comply with the applicable FMCSRs and HMRs.
New entrants not in compliance with safety regulations will have
additional costs associated with actions taken by them to achieve
higher levels of compliance to pass the safety audit or to properly
correct deficiencies after failing it. FMCSA will place out-of-service
any new entrant that opts not to incur the higher compliance costs
implicit with this more rigid enforcement scheme. The discussion of
costs is followed by a discussion of safety benefits.
---------------------------------------------------------------------------
\2\ Circular A-4 (September 2003).
---------------------------------------------------------------------------
OMB guidance also states that an Agency's analyses should ``focus
on benefits and costs that accrue to citizens and residents of the
United States.'' \3\ The Agency estimates that only about 3.5 percent
of new entrants are based outside of the U.S.\4\ This analysis reports
the total costs to all new entrants and separately the small fraction
of costs borne by non-U.S. entities. However, the estimates of benefits
include all carriers because all safety benefits from this rule occur
within the United States.
---------------------------------------------------------------------------
\3\ Ibid.
\4\ Derived using data from 1995 through 2002 contained in the
Motor Carrier Management Information System (MCMIS). Approximately
96.5 percent of new entrants are based in the U.S., 3.3 percent are
based in Canada, 0.2 percent are based in Mexico, and a minor
fraction are based in other countries.
---------------------------------------------------------------------------
Number of New Entrants
FMCSA estimates that this final rule will affect about 40,000 motor
carriers
[[Page 76481]]
annually. Although about 68,700 MCS-150A forms are filed each year,
data on the number of safety audits that have been performed each year
indicate that about 40 percent of these carriers do not remain in the
new entrant program through the safety audit phase. Because this final
rule imposes new criteria for passing the safety audit, the number of
new entrant carriers actually audited is most relevant for the economic
analysis of this rule.
Costs
New entrants will bear costs for time spent reviewing ETA
materials, time spent with a safety auditor during the safety audit,
and compliance costs to rectify any deficiencies found during the
safety audit. FMCSA also assumes that some new entrants, when
confronted with a safety audit failure, will choose to end interstate
operations. The Agency assumes that these exiting firms will leave a
gap to be filled by replacement new entrants, and that these
replacement firms will bear some costs to setting up operations and
acquiring the equipment of exiting firms. All of these costs are
discussed in detail below.
Paperwork Costs
All new entrants will bear a cost of reviewing the ETA materials.
FMCSA assumed that it would take 3 hours for the chief safety officer
of each new carrier to study the new materials. In the NPRM, the Agency
assumed that reading this material would take just 1 hour, but after
having reconsidered the content of the ETA package, FMCSA reasoned that
carriers would be better served by spending considerably more time
studying it.
Labor costs should account for both average hourly wages and
average benefits of motor carrier employees. The Bureau of Labor
Statistics' (BLS) National Compensation Survey (NCS) provides estimates
of wages, salaries, and benefits for several industries. According to
the December 2006 NCS, employer hourly costs for benefits are equal to
52.9 percent of hourly wages in the transportation and warehousing
industries.\5\ May 2006 wage data from the BLS Occupational Employment
Statistics (OES) survey indicate that the median hourly wage for
managers in the trucking industry was $34.35.\6\ Adding benefits equal
to 52.9 percent of that wage yields compensation of $52.52 per hour.
The total cost to all new entrants is approximately $6.3 million
annually ($52.52 per hour x 3 hours x 40,000 new entrants).
---------------------------------------------------------------------------
\5\ http://stats.bls.gov/ncs/ebs/home.htm.
\6\ http://www.bls.gov/oes/oes_dl.htm. Standard Occupational
Classification (SOC) 11-0000, North American Industry Classification
System (NAICS) 48400, Truck Transportation. Because, passenger
carriers (NAICS 485200, Interurban Bus Transportation) account for
just 1.5 percent of new entrants, and managers for these entities
earn similar wages, including them had essentially no effect on our
wage assumption.
---------------------------------------------------------------------------
This rule eliminates the Form MCS-150A, Safety Certification for
Applications for USDOT Number, which was implemented in the IFR. This
form takes 9 minutes to complete. According to May 2006 OES data, the
base hourly general clerical wage for the trucking industry \7\ is
$11.12, and adding benefits equal to 52.9 percent of that wage yields
$17 per hour. Although about 40,000 new entrants continue interstate
operations through the safety audit, about 68,700 file this form
annually. Eliminating this form avoids a $0.2 million annual cost to
all new entrants.
---------------------------------------------------------------------------
\7\ SOC 43-9061, NAICS 484000.
---------------------------------------------------------------------------
Costs of Safety Audit
In 2007, FMCSA commissioned a study on the cost to the Agency and
carriers of conducting safety audits.\8\ This study estimated that the
cost to motor carriers consists entirely of the cost of employee time
spent with the auditor during the safety audit. A motor carrier manager
\9\ is assumed to be involved in the safety audit for 4 hours, 1 hour
during the pre-visit telephone interview and 3 hours during the onsite
portion of the safety audit. Based on May 2005 wages estimates, the
total cost is estimated to be $216.68; using May 2006 wages, the Agency
estimates the cost to be $220.60. FMCSA and its State partners conduct
on average about 40,000 safety audits per year, at a total annual cost
to new entrants of $8.8 million dollars.
---------------------------------------------------------------------------
\8\ ``Safety Audit Cost Estimation''. http://www.fmcsa.dot.gov/facts-research/research-technology/report/Safety-Audit-Cost-Estimation-Oct2007.pdf.
\9\ NAICS 484000, 11-1021 General and Operations Managers in the
Truck Transportation Industry.
---------------------------------------------------------------------------
Compliance and Out-of-Service (OOS) Costs
This final rule imposes additional costs on those new entrants who
will fail the stricter safety audits established by this rule. FMCSA
divides these carriers into two categories, those that take required
action and come into compliance, and those that do not and are placed
out of service. Although the normal costs of remedial action for an
individual carrier are likely to be small and would seemingly not
discourage compliance, the Agency assumes that there will be a
substantial number of carriers in both categories.
FMCSA calculated the safety audit failure rate under the provisions
of this final rule over a period running from January 2003 through
September 2007 and estimated that 69,551 of the 145,246 safety audits
performed over this period would have been failures. This translates
into a failure rate of 47.9 percent, and applying this failure rate to
the 40,000 safety audits conducted each year, the Agency estimates that
19,154 new entrants will fail safety audits annually. These carriers
will be required to take the appropriate actions to come into
compliance with the applicable regulations and to demonstrate to the
Agency that they have remedied deficiencies by submitting corrective
action plans.
One would not necessarily expect such a high failure rate to
persist after the rule is implemented. Upon implementation of this
rule, many carriers will take the appropriate action to pass the
stricter new entrant safety audit, and the actual failure rate will be
significantly lower than 47.9 percent.\10\ Nevertheless, this high
failure rate will be used in this analysis because it represents that
fraction of carriers who will have to bear additional costs to come
into compliance with the rule, whether they do so before or after their
safety audit occurs.
---------------------------------------------------------------------------
\10\ In ``Crime and Punishment: An Economic Approach'' (1968),
economist Gary Becker showed that raising the expected value of
punishments serves as a deterrent to potential offenders. The
expected value includes both the likelihood of being caught and the
severity of the punishment.
---------------------------------------------------------------------------
New entrants may also be subject to expedited actions in addition
to safety audits that would require them to take steps to demonstrate
that they have taken appropriate actions to come into compliance with
applicable FMCSRs. Based on FMCSA's experience with Mexico-domiciled
border zone carriers subject to similar expedited action procedures,
the Agency estimates that 15 percent of new entrants will incur costs
in responding to expedited action requests that are similar to those
they would incur to remedy deficiencies found during a safety audit.
The cost of coming into compliance would vary according to many
factors. These include the size of the new entrant, the specific
violations, and the severity of the violation. For example, provided
that all vehicle repairs are undertaken eventually, the remedial action
for a one-time violation of Sec. 396.9(c), ``operating a CMV after it
has been declared out of service, and before repairs have been made,''
aside from any business exigency that might
[[Page 76482]]
motivate non-compliance, has very little cost; a carrier would simply
be required to undertake repairs in a timely manner rather than put
them off. A small new entrant without a drug and alcohol testing
program could join a testing consortium for no more than $1,000
annually. However, a large carrier could spend several thousand dollars
to establish a system to periodically inspect its CMVs. After
considering the small size of most new entrants and the low cost of
complying with most of these violations, the Agency assumes that, if
all corrective action scenarios were ranked by cost, the example of the
small new entrant joining a drug testing program would be
representative of the median cost incurred to correct a deficiency that
resulted in a safety audit failure. FMCSA estimated in the NPRM a
$1,000 cost for compliance costs and, after having received no comment
on it, continues to believe that it is a reasonable estimate on which
to base its cost calculations.
In addition to compliance costs, a motor carrier will bear some
small costs for preparing and submitting to FMCSA a corrective action
plan that shows that the motor carrier has remedied deficiencies that
were found during the safety audit. Although some carriers will come
into compliance before the safety audit occurs, for simplicity the
Agency calculated these notification costs for all carriers that will
face additional compliance costs. Notifying FMCSA that the appropriate
actions have been taken will use about $2.00 in materials (e.g., an
envelope, postage, and copies of documents that show what actions the
carrier has taken). Assembling this information should take little
time, but the motor carrier may have additional contact with FMCSA, so
the Agency has assumed that on average a manager at the motor carrier
will spend no more than an hour preparing and submitting the corrective
action plan. The manager's wage calculated above shows a cost of about
$53 per hour of this employee's time. The total cost of submitting a
corrective action plan will be $55 per carrier. Total compliance costs
are $1,055 per carrier.
Although compliance costs are low, many new entrants may
nevertheless not take the steps to avoid being placed out of service.
These carriers would be able to recover the costs of their equipment
and facilities by selling them to new owners, but some other smaller
costs, listed in Table 4 of the regulatory evaluation, are
unrecoverable, or ``sunk,'' regardless of whether or not the carrier
continues operations. Although exit from the industry is economically
costless to an individual carrier, these sunk costs would be borne by
the new entrants that replace exiting motor carriers. In this way,
carriers placed out of service will increase costs borne by the motor
carrier industry as a whole.
Carriers entering the interstate trucking business to replace
exiting new entrants will bear several costs. These include
application, licensing, and registration fees; and advertising,
training, and asset transfer costs. Several third-party firms offer to
complete all the administrative requirements for a fee of $500, and the
market price for these services is used in this analysis. Advertising
costs vary widely among motor carriers, depending upon their location,
market, personal taste, and other factors. According to the Census
Bureau's Business Expense Survey, an average of $3,900 was spent on
advertising in 2002 per trucking establishment.\11\ Many new entrants
may rely on freight brokers, and therefore spend little or nothing on
advertising. Rather than attempt to calculate a precise average based
on the composition of the new entrant group, the Agency chose an
estimate for advertising in the middle of the range, $2,000. Average
transactions cost for transferring assets are assumed to be about $200
each. Costs for training are highly variable and depend on many
factors, such as the size and type of the motor carrier and the
experience of its staff. FMCSA assumes that this will on average take
40 labor-hours to accomplish. The median wage in the trucking industry
for all employees was $16.95 per hour, and adding 52.9 percent for
benefits yields about $26 per hour. This labor rate multiplied by 40
hours yields an estimate of learning costs that is slightly over $1,000
dollars. Included is another $300 to account for any other small start-
up costs. Total costs are $4,000 per replacement carrier, and are
presented in Table 4 of the regulatory evaluation, which is reproduced
here. The assumption of $4,000 was presented in the NPRM and, after
having received no comment on it, the Agency continues to believe that
it is a reasonable estimate on which to base cost calculations.
---------------------------------------------------------------------------
\11\ http://www.census.gov/csd/bes/07/part3.htm. Advertising
costs were $437 million for the 112,642 trucking establishments
(NAICS code 484000) included in the 2002 Economic Census. See http://www.census.gov/econ/census02/ for Economic Census data.
Table 4--Estimated Industry Entry Costs per New Entrant
------------------------------------------------------------------------
------------------------------------------------------------------------
Application Fee, License Fee, Registration Fee................ $500
License Fee
Advertising................................................... 2,000
Transactions Cost to Transfer Assets.......................... 200
Training and Other Costs...................................... 1,300
---------
Total..................................................... 4,000
------------------------------------------------------------------------
For the sake of simplicity, the Agency has assumed that every new
entrant that ceases interstate operations will be replaced by another
(albeit safer) new entrant. Obviously, the dynamics of entry into and
exit from the interstate motor carrier industry are more complex. Many
new entrants are not wholly new entities, but carriers who were engaged
in intrastate operations; these carriers, upon surrendering interstate
authority, may return to intrastate-only operations. Some existing
firms will absorb firms placed out of service, and will bear only a
portion of these costs. Consequently, the total cost estimated to
replace an exiting new entrant likely represents an upper bound.
The estimates of total costs require assumptions on the number of
carriers that will remedy deficiencies after having failed a safety
audit or received an expedited action letter, and the number that will
exit the industry to avoid compliance costs. Fifteen percent of
carriers (6,000) will be required to take the appropriate actions to
achieve compliance after receiving an expedited action letter. FMCSA
assumes that 50 percent (9,577) of the carriers that would fail the
stricter safety audits will take the appropriate actions to achieve
compliance, and that the other 50 percent of carriers (9,577) will exit
the industry. According to Agency research, the normal motor carrier
attrition rate is around 5 percent per year, so this analysis accounts
for this fraction of motor carriers that would have exited the industry
regardless of whether or not they were placed out of service after
failing a safety audit.\12\ Reducing the estimated number of OOS
carriers by 5 percent left 9,098 new entrants that would be replaced as
a result of the final rule. Annual costs to complying carriers are
estimated to be $16.4 million ((6,000 + 9,577) x $1,055), and annual
costs associated with new entrants exiting the
[[Page 76483]]
industry are estimated to be $36.4 million (9,098 x $4,000).
---------------------------------------------------------------------------
\12\ FMCSA calculated the average annual attrition rate using
MCMIS and SafeStat data on the numbers of new entrants and active
motor carriers over sample periods from five to ten years. The
results fell into a range of 3 to 6 percent.
---------------------------------------------------------------------------
Summary of Costs
Costs are summarized in Table 5 of the regulatory evaluation, which
is reproduced here. Total annual costs are estimated to be $67.9
million, and are identical in all years. Costs discounted over 10 years
at a 7 percent rate will be $477.2 million. The 3.5 percent of carriers
not based in the U.S. would bear just $16.7 million of these costs;
because this small amount does not materially impact the results, it
will not be discussed further.
Table 5--Summary of Estimated Costs
[Millions]
------------------------------------------------------------------------
------------------------------------------------------------------------
Annual Costs.................................................. $67.9
Paperwork................................................... 6.3
Safety Audits............................................... 8.8
Compliance Costs............................................ 16.4
OOS Costs................................................... 36.4
Costs over 10 Years, Discounted at 7%......................... 477.2
Paperwork................................................... 44.3
Safety Audits............................................... 62.0
Compliance Costs............................................ 115.3
OOS Costs................................................... 255.6
------------------------------------------------------------------------
Safety Benefits
FMCSA expects substantial safety benefits from stricter enforcement
of FMCSRs during new entrant safety audits. Research from the Volpe
National Transportation Systems Center (Volpe Center) demonstrates that
new entrant driver and carrier violations of regulations are positively
correlated with crash rates.\13\ As noted earlier, the Agency believes
that safety audits could be more effective in identifying motor
carriers that are noncompliant with the FMCSRs. The implementation of
this rule will allow safety auditors to better flag noncompliant new
entrants, and, because the ultimate goal of this rule is to improve
motor carrier safety, the Agency believes that reducing violations of
the FMCSRs will consequently lead to reductions in crash rates.
---------------------------------------------------------------------------
\13\ Volpe Center (April 1998). ``New Entrant Safety Research,
Final Report.''
---------------------------------------------------------------------------
The motor carrier crash rate from MCMIS is 0.75 crashes per million
vehicle miles traveled (MVMT), and the new entrant crash rate is 25
percent higher, 0.94 per MVMT.\14\ FMCSA assumes that the new entrants
placed out of service are less-safe than typical new entrants and crash
1.13 times per MVMT, a 50 percent higher rate than that of established
motor carriers. This distribution of crash rates is consistent with
recent MCMIS data: For all motor carriers, the crash rate of the worst
25th percentile is 50 to 70 percent higher than the overall rate.
According to MCMIS, new entrants average 0.4
---------------------------------------------------------------------------
\14\ All crash rates are average crash rates weighted by MVMT.
---------------------------------------------------------------------------
Safety Benefits of the Safety Audit
The effectiveness of stricter safety audits in reducing crash rates
cannot be determined until several years after this rule goes into
effect. However, one can make inferences from studies that demonstrate
the effectiveness of compliance reviews (CRs) at reducing crash rates.
The ``Compliance Review Effectiveness Model'' (June 2006),\15\ created
by the Volpe Center, compared the crash rates of motor carriers before
and after CRs conducted in years 2000 through 2003. The model shows
that motor carriers subject to compliance reviews in 2003 experienced a
17.5 percent reduction in their crash rates relative to the rate from
an un-reviewed control group one year after the review, and projects
extended benefits averaging about 17.5 percent below the control
group's crash rate for the subsequent three years.
---------------------------------------------------------------------------
\15\ http://ai.volpe.dot.gov/CarrierResearchResults/PDFs/ProgramEffectiveness/CREM_O6.pdf.
---------------------------------------------------------------------------
Safety audits are less comprehensive than CRs, and safety issues
that may be found during a CR might not be observed in a safety audit.
Safety audits may be less successful than CRs at discovering, and
mandating corrections to, behavior that leads to crashes. The
effectiveness of the safety audit at improving carrier safety will also
be enhanced by improved compliance in response to expedited action
letters. The Agency cannot predict whether all carriers subject to
expedited actions would have failed the safety audit, but it assumes
this to be the case. Consequently, the Agency did not separately
estimate safety improvements from expedited actions, but assumed that
these effects will be contained within the impact of the overall safety
audit. Bounded by no effect and the effectiveness of a CR, the Agency
assumes that the safety audits implemented under this rule fall in the
middle, and will be half as effective as CRs, that is, they hold crash
rates 8.75 percent below the baseline rate for 4 years after they have
been conducted. An 8.75 percent reduction of the crash rate from the
0.94 rate, multiplied by the number of new entrants that take remedial
actions to comply with the FMCSRs, multiplied by the annual new entrant
MVMT (0.082 x 9,577 x 0.4) results in the rule having avoided 316
crashes each year in year one. In years two through four, the baseline
crash rate will fall slightly as accumulated experience ``teaches'' new
entrants to be safer carriers, so the crash reduction attributed to the
safety audit is reduced somewhat. New entrants entering in the second
year will experience the same reductions, which will overlap the crash
reductions from the first year carriers. About 619 crashes will be
avoided in the second year, 928 crashes in the third, and 1,238 crashes
the fourth through tenth years. Cumulative over 10 years, 10,529
crashes will have been avoided.
Safety Benefits From Exiting Carriers
FMCSA assumes new entrants that replace exiting carriers will have
an overall crash rate that is the same as the average rate for all new
entrants, 0.94 crashes per MVMT. There would be no characteristics of
these replacement carriers that would cause them to have an overall
crash rate on average any better or worse than that of the new entrant
population as a whole. As research presented in the Volpe Center's
``Background to New Entrant Safety Fitness Assurance Process'' (March
2000) shows, carriers improve their safety performance as they gain
more years of experience. The worst carriers would be improving their
safety performance at approximately the same rate as average new
entrants. Nevertheless, the difference in the crash rates of these two
groups will decline over time: Poor-performing carriers will experience
larger declines in their crash rates by virtue of their crash rates
having started at a higher level. Over 10 years, the average difference
in crash rates would be about 0.17 crashes per MVMT.
As the worst-performing new entrants continually terminate
interstate operations, the number of crashes avoided by their exiting
the industry will accumulate. As stated, the carriers that replace them
will have on average 0.17 fewer crashes per MVMT, and multiplying that
difference times the number of replaced carriers and overall new
entrant MVMT (0.17 x 9,098 x 0.4) yields 619 crashes in the first year.
This group of new entrants will be pared down by 5 percent due to
normal attrition in each subsequent year, as would the number of
crashes avoided that can be attributed to their exit. New entrants
arriving in subsequent years will repeat this pattern for crashes
avoided, and these patterns will overlap those of all preceding years.
Over 10 years, about 29,400 crashes will be avoided.
Summary of Safety Benefits
[[Page 76484]]
Table 6 of the regulatory evaluation, which is reproduced here,
highlights estimates of the number of crashes avoided in several
example years.
Table 6--Crashes Avoided in Individual Years
--------------------------------------------------------------------------------------------------------------------------------------------------------
Year 1 Year 2 Year 5 Year 10 10-Year total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Continuing Carriers...................................... 316 619 1,238 1,238 10,529
Closed Carriers.......................................... 619 1,206 2,799 4,965 29,400
----------------------------------------------------------------------------------------------
Total................................................ 935 1,826 4,037 6,203 39,929
--------------------------------------------------------------------------------------------------------------------------------------------------------
FMCSA estimates that about 39,929 crashes will be avoided over 10
years. The average cost of a motor-carrier-involved crash is
$146,410.\16\ This includes both direct costs such as medical,
emergency services, and property damage, and indirect costs such as
lost productivity and diminished quality of life. By deterring 39,929
crashes, this rule will yield a 10-year benefit, discounted at a 7
percent rate, of $3,778.0 million.
---------------------------------------------------------------------------
\16\ Zaloshnja, Eduard and Ted Miller (December 2006). ``Unit
Costs of Medium and Heavy Truck Crashes.'' Figures in this report
are for 2005: We adjusted the $91,112 cost for a large truck crash
and the $3,604,518 cost for a fatal crash to 2006 dollars using the
annual percent change in the gross domestic product deflator (http://www.bea.gov/national/index.htm#gdp). Zaloshnja and Miller use a
$3.0 million value of a statistical life (VSL) for their estimates;
the Agency has recomputed these figures using a $5.8 million VSL, in
accordance with DOT guidance on the treatment of the economic value
of a statistical life in Departmental analyses issued February 5,
2008 (http://ostpxweb.dot.gov/policy/reports/080205.htm).
---------------------------------------------------------------------------
Summary of Costs and Benefits
This rule ensures better compliance with FMCSRs. The costs and
benefits over 10 years, discounted at a 7 percent rate, will be $477.2
million and $3,778.0 million, respectively. Net benefits will be
$3,300.8 million, and the benefit/cost ratio will be 7.9. FMCSA
estimates that 39,929 crashes will be avoided over 10 years.
Eliminating these crashes will avoid 487 fatalities.\17\ The 10-year
discounted cost per life saved will be $1.0 million.
---------------------------------------------------------------------------
\17\ FMCSA's Large Truck Crash Facts, 2005 indicates that 1
percent of crashes involve fatalities, claiming 1.15 lives per fatal
crash.
---------------------------------------------------------------------------
Alternative Assumptions on Improvements in Carrier Safety
Benefits estimates are sensitive to assumptions about the reduction
in the crash rates that the implementation of this final rule will
achieve. The above estimates indicate that 464 crashes would have to be
avoided each year for this rule to yield positive net benefits. Even if
safety audits do nothing to improve safety and decrease crash rates,
some risky carriers will still end interstate operations as a result of
the rule. Positive net benefits would still occur if this rule did
nothing but prompt the worst 5.7 percent (about 2,300 carriers per
year) of new entrants to exit the industry. Conversely, if all new
entrants remained in the industry and took the appropriate corrective
actions, safety audits would need to be just 7.1 percent as effective
as compliance reviews in reducing crash rates for the rule to yield
positive net benefits. The reduction in crash rates needed to produce
positive net benefits would be just 1.3 percent of the average new
entrant crash rate of 0.94 per MVMT; the safety audit would have to
prevent about 0.01 crashes per MVMT.
Alternate Discount Rate and Crash Costs
The Agency also computed costs and benefits using a 3 percent
discount rate over a 10-year horizon. Because costs are constant and
benefits increase over the time, the ratio of benefits to costs
improves as a result of using this lower discount rate. Using a 7
percent discount rate, FMCSA computed benefits using alternate values
of a large truck crash cost which incorporate different economic values
of statistical life (VSL). The baseline VSL was $5.8 million; here
values of $3.2 million and $8.4 million are also used. Even the lowest
VSL still results in strong positive net benefits. Table 7 of the
regulatory evaluation, which is reproduced here, shows the results of
these analyses.
Table 7--Alternate Discount Rate and Crash Costs
----------------------------------------------------------------------------------------------------------------
Value of
statistical Average Costs Safety
Discount rate life crash cost (millions) benefits B/C ratio
(millions) (millions)
----------------------------------------------------------------------------------------------------------------
3%.............................................. $5.8 $146,410 $579.6 $4,813.0 8.3
-------------------------- -------------------------
5.8 46,410 .......... 3,778.0 7.9
-------------------------- -------------------------
7%.............................................. 3.2 91,582 477.2 2,363.2 5.0
-------------------------- -------------------------
8.4 201,237 .......... 5,192.8 10.9
----------------------------------------------------------------------------------------------------------------
Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 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 will be affected by this final rule: (1)
OMB Control No. 2126-0013 titled ``Motor Carrier Identification
Report'' (FMCSA Forms MCS-150, MCS-150A, and MCS-150B), approved at
119,270 burden hours through March 31, 2011; (2) OMB Control No. 2126-
0015 titled ``Designation of Agents, Motor Carriers, Brokers and
Freight Forwarders (FMCSA Form BOC-3) approved at 14,833 burden hours
through June 30, 2011; and (3) OMB Control No. 2126-0016 titled
``Licensing Applications for Motor Carrier Operating Authority'' (FMCSA
Forms OP-1, OP-1 (FF), OP-
[[Page 76485]]
1 (MX), and OP-1 (P), approved at 55,738 burden hours through August
31, 2008, (pending revision at OMB). The table below depicts the
current and future burden hours associated with the information
collections.
Table--Current and Future Information Collection Burdens
----------------------------------------------------------------------------------------------------------------
Annual burden
OMB approval No. hours currently Future annual Change
approved burden hours
----------------------------------------------------------------------------------------------------------------
2126-0013.................................................... 119,270 108,969 -10,301
13 MCS--150.................................................. 108,825 108,829 4
13 MCS--150A................................................. 10,305 0 -10,305
13 MCS--150B................................................. 140 140 0
2126-0015.................................................... 14,833 14,835 2
2126-0016.................................................... 55,738 55,786 48
Net Change............................................... ............... ............... -10,251
----------------------------------------------------------------------------------------------------------------
The following is an explanation of how each of the information
collections shown above will be affected by this final rule.
OMB Control No. 2126-0013. This final rule will 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 results intended. Amendments to 49 CFR part 385, subpart E-
Hazardous Materials Safety Permits will remove references to the MCS-
150A and will not impact the MCS-150B in any way. The estimated annual
paperwork burden for this information collection will be 108,969 hours
[119,270 currently approved annual burden hours - 10,305 (68,700
respondents x 9 minutes/60 minutes to complete the MCS-150A form) + 4
(12 non-North America-domiciled motor carriers x 20 minutes/60 minutes
to complete the Form MCS-150) = 108,969].
OMB Control No. 2126-0015. Non-North America-domiciled motor
carriers will 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 collection will be 14,835 hours [14,833 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) = 14,835 hours].
OMB Control No. 2126-0016. The final rule will 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 changes in this final rule, affecting three currently-approved
information collections, would result in a net decrease of 10,251
burden hours in the Agency's information collection budget.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601-612) (the Act)
requires Federal agencies to consider the effects of their regulatory
actions on small businesses and other small entities and to minimize
any undue disproportionate burden. To achieve this, the Act requires
that agencies describe how they have addressed these concerns by
including a Final Regulatory Flexibility Analysis (FRFA) with each
final rule. The Agency has prepared the FRFA set forth below. The full
version of this FRFA is included in the Regulatory Evaluation that has
been placed in the docket for this rule.
(1) Objectives of, and need for, the final rule. The objective of
this final rule is to improve the compliance of new interstate carriers
(known in this rule as new entrants) with the existing FMCSRs and HMRs
and thereby reduce the number and severity of crashes in which these
carriers are involved. In response to concerns about the safety of new
entrant motor carriers, Congress enacted section 210 of MCSIA. Section
210(a) directed the Secretary to require that each motor carrier
granted operating authority undergo a safety audit within the first 18
months of operation. Section 210(b) required the Secretary to establish
regulations specifying minimum knowledgeability requirements for motor
carriers applying to obtain interstate operating authority. 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.
To implement this mandate, FMCSA published an IFR on May 13, 2002
(67 FR 31978), which became effective January 1, 2003 titled ``New
Entrant Safety Assurance Process.'' New entrants are granted
provisional operating authority and subjected to an 18-month safety
monitoring period. When a new entrant registers for a USDOT Number, it
must complete Form MCS-150A--Safety Certification for Applications for
USDOT Number to certify understanding of applicable safety regulations
and receives ETA materials, upon request. Additionally, during the
initial 18-month period of operations, FMCSA evaluates the new
entrant's safety management practices by monitoring the carrier's on-
road performance prior to granting the carrier permanent registration
and by conducting an on-site review of its operations called a safety
audit.
In response to comments on the IFR indicating new entrants lacking
basic safety management controls were passing the safety audit, and
after having collected additional data, FMCSA published an NPRM titled
``New Entrant Safety Assurance Process'' on December 21, 2006 (71 FR
76730). The NPRM proposed enhancements to strengthen and clarify the
new entrant program. Notably, the Agency proposed eliminating Form MCS-
150A because this form was deemed ineffective at assessing carrier
familiarity with safety regulations. To
[[Page 76486]]
meet the requirements of section 210(b), the Agency will continue to
rely on ETA materials to provide an effective foundation for knowledge
of safety regulations, and has enhanced the currency and availability
of these materials to further their support of the knowledgeability
provision. In addition, the Agency will confirm knowledge of applicable
regulations during the safety audit. The NPRM also proposed to revise
the grading criteria for the safety audit so carriers would
automatically fail if a violation was found in any one of 11
regulations.
This final rule adopts the following NPRM proposals with
consideration to additional public comments. The final rule:
Eliminates Form MCS-150A. To promote carrier
knowledgeability of safety regulations, the Agency has enhanced the
currency of ETA materials, provides online access to these materials,
and distributes paper copies to motor carriers.
Adds new Sec. 385.308 to identify violations that will
result in expedited action.
Revises Sec. 385.327 to clarify the process for
administrative review.
Revises Sec. 385.329(b) to clarify how a new entrant
whose authority has been revoked can reapply.
Revises Sec. 385.337(a) to clarify that refusal to submit
to a safety audit may subject a new entrant to civil penalties.
Revises Sec. 385.306 to clarify actions that may be taken
against a carrier who provides incomplete or untruthful information on
the Form MCS-150.
Establishes a new safety monitoring system and application
process for NNA-domiciled motor carriers, who were not covered by the
IFR.
Establishes a list of 16 regulatory violations that would
result in automatic failure of the safety audit, five more than were
proposed by the NPRM. Many of the originally-proposed provisions were
clarified, and two of them were adjusted to require a pattern of
violations rather than a single occurrence of non-compliance to result
in automatic failure of the safety audit.
(2) Summary of the public comments on the initial RFA (IRFA), and
Agency response. The comment period for the NPRM ended on February 20,
2007. FMCSA received a total of 17 comments in response to the NPRM,
representing 21 entities. No comments addressed the IRFA directly.
However, one commenter, OOIDA, submitted a comment relevant to the
FRFA. Specifically, OOIDA stated that the FMCSA proposal will increase
the small business failure rate and is ``reactive'' and ``punitive'' to
small businesses.
FMCSA is mandated under section 210 of MCSIA to establish
regulations specifying minimum knowledgeability requirements for motor
carriers applying to obtain interstate operating authority, and
furthermore to require new entrants to undergo a safety audit within
the first 18 months of operation. Failure of the safety audit will
occur when a carrier fails to comply with safety regulations that the
Agency has determined to be essential in demonstrating effective safety
management controls.
It is worth noting that no matter how the new entrant program could
have been structured, for it to be effective as envisioned by Congress
some new entrants would have to change their behavior to come into
compliance with existing FMCSRs. The Agency's analysis of past safety
audits indicates that the majority of new entrants already demonstrate
adequate safety management controls, even under the more stringent
safety audit standards imposed by this rule. New entrants have many
opportunities to educate themselves on and come into compliance with
the existing FMCSRs. Nevertheless, FMCSA expects that some new entrants
will still surrender interstate operating authority rather than comply
with the safety regulations (although they would not necessarily be
precluded from engaging in intrastate-only operations). The only way
for the Agency to eliminate all adverse business impacts on small
carriers would be to allow non-compliance by a small subset of
carriers. This is not in the public's interest and the interest of
other motor carriers, small and large.
(3) Description and an estimate of the number of small entities to
which the rule will apply. New entrants tend to be the smallest firms
in the industry. FMCSA estimates that on average 68,700 motor carriers
apply for interstate authority each year, as evidenced by a count of
filings of Form MCS-150A. About 40,000 of these carriers remain in the
new entrant program through the safety audit phase. The Small Business
Administration (SBA) regulations (13 CFR Part 121) specify the small
business size standard for the motor carrier industry as not more than
$23.5 million in average annual receipts per firm. Revenue data for
most carriers are not available, but motor carriers are required to
report to the Agency on Form MCS-150 the number of power units they
own. A survey by OOIDA indicates that revenue per tractor is about
$120,539,\18\ and using this amount, FMCSA assumes that firms
possessing fewer than 195 power units would fall below the $23.5
million revenue threshold for small business designation. Data from
MCMIS indicate that about 99.8 percent of new entrants--effectively all
of them--are small businesses.
---------------------------------------------------------------------------
\18\ OOIDA 2003 Cost of Operations Survey. http://www.ooida.com/Documents/2003_Cost_Ops.pdf. Survey is $110,527 per tractor; FMCSA
adjusted this to 2006 prices using the GDP deflator.
---------------------------------------------------------------------------
(4) Projected reporting, recordkeeping, and other compliance
requirements of the final rule. This rule improves the efficacy of the
new entrant safety audits in identifying instances of poor compliance
and directing new entrants to correct their business practices.
Although FMCSA estimates that non-compliant carriers could spend on
average $1,000 to come into compliance with safety regulations, these
costs are associated with requirements of existing regulations, and are
borne by the majority of motor carriers who already comply with the
FMCSRs. This rule imposes no new substantive requirements on any motor
carrier. It is also important to note that the safety audit is not a
compliance intervention, i.e., no civil penalties for non-compliance
are imposed.
The rule does impose some small administrative and paperwork
requirements. FMCSA will continue to provide online access to and
distribute hard copies of ETA materials, which all new entrants should
spend time reviewing. The Agency estimates that a manager or company
official at each carrier will spend about 3 hours with the enhanced
materials, at a labor cost of about $157. The cost of a carrier's time
spent during the safety audit is estimated to be $220.60. In total, the
new entrant program imposes total one-time expense of $377.60 on each
new entrant. A new entrant that fails its safety audit or receives an
expedited action demand letter will also be required to submit a
corrective action plan, proof that it has remedied deficiencies in key
areas of regulatory compliance. This will also be handled by a manager
or company official, and FMCSA estimates that the total cost of
submitting a corrective action plan is $55, including materials and
labor. With average revenue per tractor estimated to be $120,539, the
maximum cost the smallest new entrant, a carrier with just one power
unit, would incur costs equal to about 0.3 percent of a single year's
revenue. In most cases, these new costs would be borne only once.
Consequently, FMCSA does not judge the cost of this rule to be
significant.
(5) Steps the Agency has taken to minimize the significant adverse
[[Page 76487]]
economic impact on small entities. Because an interim final rule has
been in effect for several years before this final rule, FMCSA has been
able to implement the best policies based on several years of
experience.
The safety audit received perhaps the greatest amount of
consideration. The purpose of the safety audit is to educate the
carrier about the applicable safety regulations and to assess the
adequacy of its basic safety management controls. If a carrier's safety
management controls are deemed inadequate, the Agency also requires
corrective actions by the carrier before granting permanent operating
authority. When the new entrant program was implemented in 2003, FMCSA
established a safety audit that, while educational, had such lenient
assessment criteria--the pass rate was greater than 99 percent--that it
did very little to compel carriers who lacked basic safety management
controls to improve. The Agency did not believe that education alone
was enough to encourage voluntary compliance. Analysis of recent crash
data indicates that the crash rate of new entrants is still
significantly higher than that of the overall carrier population.
Because improved safety is the ultimate goal of the new entrant
program, a stricter safety audit seemed absolutely necessary. However,
in adopting 16 automatic failure criteria, FMCSA has been careful to
implement standards that are designed to flag substantial deficiencies
in the new entrant's basic safety management controls. Even then, FMCSA
will provide guidance to carriers as they make the required corrective
actions.
FMCSA has also made other changes to better educate carriers on
safety regulations before their safety audits. To enhance the content
and availability of the ETA materials, FMCSA has improved the
information content. In addition, the Agency has published the ETA
materials online and will also mail ETA materials to new entrants.
FMCSA will keep the ETA materials up to date. FMCSA is eliminating the
requirement to self-certify knowledge of Federal safety requirements
during the application process (Form MCS-150A--Safety Certification for
Applications for USDOT Number) because the Agency believes it fails to
demonstrate that carriers have the requisite familiarity with motor
carrier safety regulations. The Agency anticipates that the educational
focus at the beginning of the new entrant program resulting from the
improved, updated, and more accessible ETA materials will increase the
likelihood that carriers will begin their operations with adequate
safety management controls, which, in addition to reducing safety audit
failures, could also help avert costly mistakes later, such as crashes
and violations caught at roadside inspections.
Pursuant to section 210(a) of MCSIA, FMCSA considered alternate
locations where safety audits may be conducted (other than on-site at
the carrier's principle place of business) for the convenience of small
businesses. FMCSA will conduct group audits in areas where practicable,
while being careful to maintain carrier privacy. FCMSA believes
conducting audits at alternate locations is beneficial, practical, and
cost effective for both the Federal Government and the carriers, given
the right circumstances.
Privacy Impact Analysis
FMCSA conducted a privacy impact assessment of this rule as
required by section 522(a)(5) of division H of the FY 2005 Omnibus
Appropriations Act, Public Law 108-447, 118 Stat. 3268 (Dec. 8, 2004)
[set out as a note to 5 U.S.C. 552a]. The assessment considers any
impacts of the final rule on the privacy of information in an
identifiable form and related matters. This rule would neither enlarge
the scope of personally identifiable information collected nor change
the sharing of that information. The entire privacy impact assessment
is available in the docket for this rule.
Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act of 1995 requires that agencies
prepare analyses of rules that would result in the expenditure by
State, local, and tribal governments, or by the private sector, of $100
million or more in any one year. Department of Transportation guidance
requires the use of a revised threshold figure of $136.1 million, which
is the value of $100 million in 2008 after adjusting for inflation.
FMCSA has determined that the impact of this rulemaking will not be
that large in any projected year.
National Environmental Policy Act
FMCSA has analyzed this final 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 action is
categorically excluded under Appendix 2, paragraph 6.f of the Order
from further environmental documentation. That categorical exclusion
relates to 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.f.(6)(C)(i) through 6.f.(6)(C)(v).
This action amends the New Entrant Safety Assurance Process for
carriers newly registering to operate in interstate commerce. The
Agency believes this action will include no extraordinary circumstances
having any effect on the quality of the environment.
FMCSA has also analyzed this action 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.C. This rule
will 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 action will revise the
program for assuring the safety of new entrant motor carriers.
Executive Order 12898 (Environmental Justice)
FMCSA will evaluate the environmental effects of any action
implemented in subsequent phases of this proceeding in according with
Executive Order 12898 and DOT Order 5610.2 on addressing Environmental
Justice in Minority Populations and Low-Income Populations (published
at 62 FR 18377, April 15, 1997) to determine if there are environmental
justice issues associated with its provisions or any collective
environmental impact resulting from its promulgation. Environmental
justice issues would be raised if there were ``disproportionate'' and
``high and adverse impact'' on minority or low-income populations.
[[Page 76488]]
Executive Order 12988 (Civil Justice Reform)
This 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 rule under Executive Order 13045,
``Protection of Children from Environmental Health Risks and Safety
Risks.'' This rule does not concern a risk to environmental health or
safety that would disproportionately affect children.
Executive Order 12630 (Taking of Private Property)
This rule will 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 action has been analyzed in accordance with the principles and
criteria contained in Executive Order 13132, dated August 4, 1999, and
it has been determined this action will not have a substantial direct
effect or sufficient federalism implications on States by limiting the
policymaking discretion of the States. Nothing in this document will
directly preempt any State law or regulation. It will not impose
additional costs or burdens on the States. This action will 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 safety audits, they will 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 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.
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 practices 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.
0
In consideration of the foregoing, FMCSA amends parts 365, 385, 387,
and 390 of title 49, Code of Federal Regulations as follows:
PART 365--RULE GOVERNING APPLICATIONS FOR OPERATING AUTHORITY
0
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.
0
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.
0
3. Amend Sec. 365.105 by revising paragraph (a) to read as follows:
Sec. 365.105 Starting the application process: Form OP-1.
(a) Each applicant must file the appropriate form in the OP-1
series. Form OP-1 must be filed when requesting authority to operate as
a motor property carrier, a broker of general freight, or a broker of
household goods; Form OP-1(P) must be filed when requesting authority
to operate as a motor passenger carrier; Form OP-1(FF) must be filed
when requesting authority to operate as a freight forwarder; Form OP-
1(MX) must be filed by a Mexico-domiciled motor property, including
household goods, carrier, or a motor passenger carrier requesting
authority to operate within the United States; and effective December
16, 2009.
Form OP-1(NNA) must be filed by a non-North America-domiciled motor
property, including household goods, carrier or a motor passenger
carrier requesting authority to operate within the United States. A
separate filing fee in the amount set forth at 49 CFR 360.3(f)(1) is
required for each type of authority sought.
* * * * *
PART 385--SAFETY FITNESS PROCEDURES
0
4. The authority citation for part 385 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 Public Law
107-87; and 49 CFR 1.73.
Sec. 385.305 [Amended]
0
5. Amend Sec. 385.305 to remove paragraph (b)(3) and to redesignate
paragraph (b)(4) as (b)(3).
0
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.
0
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.
* * * * *
0
8. Add Sec. 385. 308 to subpart D to read as follows:
Sec. 385.308 What may cause an expedited action?
(a) A new entrant that commits any of the following actions,
identified through
[[Page 76489]]
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 a driver not possessing a valid commercial driver's
license to operate a commercial vehicle as defined under Sec. 383.5 of
this chapter. An invalid commercial driver's license includes one that
is falsified, revoked, expired, or missing a required endorsement.
(2) Operating a vehicle 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) Being involved in, through action or omission, a hazardous
materials reportable incident, as described under 49 CFR 171.15 or
171.16, involving--
(i) A highway route controlled quantity of certain radioactive
materials (Class 7).
(ii) Any quantity of certain explosives (Class 1, Division 1.1,
1.2, or 1.3).
(iii) Any quantity of certain poison inhalation hazard materials
(Zone A or B).
(4) Being involved in, through action or omission, two or more
hazardous materials reportable incidents as described under 49 CFR
171.15 or 171.16, involving hazardous materials other than those listed
above.
(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 commercial motor vehicle without the levels of
financial responsibility required under part 387 of this subchapter.
(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.
0
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.
0
10. Revise Sec. 385.321 to read as follows:
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
USDOT 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 USDOT new entrant registration will be
revoked.
(b) Automatic failure of the audit. A new entrant will
automatically fail a safety audit if found in violation of any one of
the following 16 regulations:
Table to Sec. 385.321--Violations That Will Result in Automatic
Failure of the New Entrant Safety Audit
------------------------------------------------------------------------
Guidelines for determining
Violation automatic failure of the
safety audit
------------------------------------------------------------------------
1. Sec. 382.115(a)/Sec. 382.115(b)-- Single occurrence.
Failing to implement an alcohol and/or
controlled substances testing program
(domestic and foreign motor carriers,
respectively).
2. Sec. 382.201--Using a driver known to Single occurrence.
have an alcohol content of 0.04 or
greater to perform a safety-sensitive
function.
3. Sec. 382.211--Using a driver who has Single occurrence.
refused to submit to an alcohol or
controlled substances test required under
part 382.
4. Sec. 382.215--Using a driver known to Single occurrence.
have tested positive for a controlled
substance.
5. Sec. 382.305--Failing to implement a Single occurrence.
random controlled substances and/or
alcohol testing program.
6. Sec. 383.3(a)/Sec. 383.23(a)-- Single occurrence.
Knowingly using a driver who does not
possess a valid CDL.
[[Page 76490]]
7. Sec. 383.37(a)--Knowingly allowing, Single occurrence.
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.
8. Sec. 383.51(a)--Knowingly allowing, Single occurrence. This
requiring, permitting, or authorizing a violation refers to a
driver to drive who is disqualified to driver operating a CMV as
drive a commercial motor vehicle. defined under Sec. 383.5.
9. Sec. 387.7(a)--Operating a motor Single occurrence.
vehicle without having in effect the
required minimum levels of financial
responsibility coverage.
10. Sec. 387.31(a)--Operating a Single occurrence.
passenger carrying vehicle without having
in effect the required minimum levels of
financial responsibility.
11. Sec. 391.15(a)--Knowingly using a Single occurrence.
disqualified driver.
12. Sec. 391.11(b)(4)--Knowingly using a Single occurrence. This
physically unqualified driver. violation refers to a
driver operating a CMV as
defined under Sec. 390.5.
13. Sec. 395.8(a)--Failing to require a Requires a violation
driver to make a record of duty status. threshold (51% or more of
examined records) to
trigger automatic failure.
14. Sec. 396.9(c)(2)--Requiring or Single occurrence.
permitting the operation of a commercial
motor vehicle declared ``out-of-service''
before repairs are made.
15. Sec. 396.11(c)--Failing to correct Single occurrence.
out-of-service defects listed by driver
in a driver vehicle inspection report
before the vehicle is operated again.
16. Sec. 396.17(a)--Using a commercial Requires a violation
motor vehicle not periodically inspected. threshold (51% or more of
examined records) to
trigger automatic failure.
------------------------------------------------------------------------
0
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 an additional 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.
0
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?
* * * * *
(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, and 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.
* * * * *
0
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 issues(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
registration 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.
0
14. Revise Sec. 385.329 to read as follows:
[[Page 76491]]
Sec. 385.329 May a new entrant that has had its USDOT new entrant
registration revoked and its operations placed out of service reapply?
(a) A new entrant whose USDOT new entrant registration has been
revoked, and whose operations have been placed out of service by FMCSA,
may reapply for new entrant registration no sooner than 30 days after
the date of revocation.
(b) If the USDOT 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.
(c) If the USDOT 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.
(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 chapter.
0
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 49 U.S.C. 521(b)(2)(A)
for each offense as adjusted for inflation by 49 CFR part 386, Appendix
B.
0
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.
* * * * *
0
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.
* * * * *
0
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)).
* * * * *
0
19. Amend part 385 by adding and reserving subparts F and G, and 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) 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;
(3) The application must include the filing fee payable to the
FMCSA in the amount set forth at 49 CFR 360.3(f)(1); and
(4) 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.
[[Page 76492]]
(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) An application of a non-North America-domiciled motor carrier
requesting for-hire operating authority under part 365 of this
subchapter may be protested under Sec. 365.109(b). Such a carrier 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 not re-designate a non-North America-domiciled
carrier's registration from new entrant to permanent prior to 18 months
after the date its USDOT Number is issued and subject to successful
completion 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 Section 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 paragraphs (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 I (c)(2), (3), (4), (7), and
(8) of this appendix 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, inspectors, and investigators in assessing
the adequacy of a non-North
[[Page 76493]]
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, 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, drug and
alcohol testing 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;
(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 paragraphs III (a)(1)
through (5) of this appendix, 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 of this appendix. 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 of this chapter 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 of this chapter.
(2) Roadside inspection information is retained in the MCMIS and
is integral to evaluating a motor carrier's ability to successfully
maintain its vehicles, thus preventing being placed OOS during a
roadside inspection. Each safety audit will continue to have the
requirements of part 396 of this chapter, 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) [Reserved]
(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) of this appendix
(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 paragraph IV (k)(1)(vi) of this appendix, 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
paragraphs III (a)(1)
[[Page 76494]]
through (5) of this appendix, if the safety audit determines the
carrier has inadequate basic safety management controls in at least
three separate factors described in paragraph III of this appendix,
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 inadequate basic
safety management controls in at least three separate factors.
0
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.
The following definitions apply to this subpart:
Compliance review means a compliance review as defined in Sec.
385.3 of this part.
New entrant registration means the provisional registration under
subpart H of this part 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 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 a driver 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 a vehicle placed out of service for violations of the
Federal Motor Carrier Safety Regulations without taking the necessary
corrective action.
(3) Being involved in, through action or omission, a hazardous
materials reportable incident, as described under 49 CFR 171.15 or
171.16, within the United States involving--
(i) A highway route controlled quantity of certain radioactive
materials (Class 7).
(ii) Any quantity of certain explosives (Class 1, Division 1.1,
1.2, or 1.3).
(iii) Any quantity of certain poison inhalation hazard materials
(Zone A or B).
(4) Being involved in, through action or omission, two or more
hazardous materials reportable incidents, as described under 49 CFR
171.15 or 171.16, occurring within the United States and involving any
hazardous material not listed in paragraph (a)(3) of this section.
(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 commercial motor vehicle
without the levels of financial responsibility required under part 387
of this subchapter.
(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
[[Page 76495]]
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 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 is 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, 1200 New Jersey Avenue,
SE., 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) If the provisional new entrant registration was revoked because
the new entrant failed to receive a Satisfactory rating after
undergoing a compliance review, 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) Successfully complete a pre-authorization safety audit in
accordance with Sec. 385.607(c) of this part.
(4) Begin the 18-month new entrant monitoring cycle again as of the
date the re-filed application is approved.
(c) If the provisional new entrant registration was revoked because
FMCSA found that the new entrant had failed to submit to a compliance
review, it must do all of the following:
(1) Submit an updated MCS-150.
(2) Successfully complete a pre-authorization safety audit in
accordance with Sec. 385.607(c) of this Part.
(3) Begin the 18-month new entrant monitoring cycle again as of the
date the re-filed application is approved.
(4) Submit to a compliance review 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 subchapter.
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
[[Page 76496]]
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.
0
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 determination of the adequacy of basic safety management
controls.
* * * * *
PART 387--MINIMUM LEVELS OF FINANCIAL RESPONSIBILITY FOR MOTOR
CARRIERS
0
22. The authority citation for part 387 is revised to read as follows:
Authority: 49 U.S.C. 13101, 13301, 13906, 14701, 31138, 31139,
and 31144; and 49 CFR 1.73.
0
23. Amend Sec. 387.3 by revising paragraph (c)(1) to read as follows:
Sec. 387.3 Applicability.
* * * * *
(c) Exception. (1) The rules in this part do not apply to a motor
vehicle that has a gross vehicle weight rating (GVWR) of less than
10,001 pounds. This exception does not apply if the vehicle is used to
transport any quantity of a Division 1.1, 1.2, or 1.3 material, any
quantity of a Division 2.3, Hazard Zone A, or Division 6.1, Packing
Group I, Hazard Zone A, or to a highway route controlled quantity of a
Class 7 material as it is defined in 49 CFR 173.403, in interstate or
foreign commerce.
* * * * *
0
24. 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 paragraph (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.
* * * * *
0
25. Revise Sec. 387.9 to read as follows:
Sec. 387.9 Financial responsibility, minimum levels.
The minimum levels of financial responsibility referred to in Sec.
387.7 of this subpart are hereby prescribed as follows:
Schedule of Limits--Public Liability
------------------------------------------------------------------------
Type of carriage Commodity transported January 1, 1985
------------------------------------------------------------------------
(1) For-hire (In interstate Property $750,000
or foreign commerce, with a (nonhazardous).
gross vehicle weight rating
of 10,001 or more pounds).
(2) For-hire and Private (In Hazardous substances, 5,000,000
interstate, foreign, or as defined in 49 CFR
intrastate commerce, with a 171.8, transported
gross vehicle weight rating in cargo tanks,
of 10,001 or more pounds). portable tanks, or
hopper-type vehicles
with capacities in
excess of 3,500
water gallons; or in
bulk Division 1.1,
1.2 and 1.3
materials. Division
2.3, Hazard Zone A,
or Division 6.1,
Packing Group I,
Hazard Zone A
material; in bulk
Division 2.1 or 2.2;
or highway route
controlled
quantities of a
Class 7 material, as
defined in 49 CFR
173.403.
(3) For-hire and Private (In Oil listed in 49 CFR 1,000,000
interstate or foreign 172.101; hazardous
commerce, in any quantity; waste, hazardous
or in intrastate commerce, materials, and
in bulk only; with a gross hazardous substances
vehicle weight rating of defined in 49 CFR
10,001 or more pounds). 171.8 and listed in
49 CFR 172.101, but
not mentioned in (2)
above or (4) below.
(4) For-hire and Private (In Any quantity of 5,000,000
interstate or foreign Division 1.1, 1.2,
commerce, with a gross or 1.3 material; any
vehicle weight rating of quantity of a
less than 10,001 pounds). Division 2.3, Hazard
Zone A, or Division
6.1, Packing Group
I, Hazard Zone A
material; or highway
route controlled
quantities of a
Class 7 material as
defined in 49 CFR
173.403.
------------------------------------------------------------------------
0
26. 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 paragraph (d) of this section, non-North America-domiciled
private and for-hire motor carriers shall file evidence of financial
responsibility with FMCSA in
[[Page 76497]]
accordance with the requirements of subpart C of this part.
* * * * *
PART 390--FEDERAL MOTOR CARRIER SAFETY REGULATIONS; GENERAL
0
27. The authority citation for part 390 is revised to read as follows:
Authority: 49 U.S.C. 508, 13301, 13902, 31133, 31136, 31144,
31502, 31504, and sec. 204, Public Law 104-88, 109 Stat. 803, 941
(49 U.S.C. 701 note); sec. 114, Public Law 103-311, 108 Stat. 1673,
1677; sec. 217, Public Law 106-159, 113 Stat. 1748, 1767; and 49 CFR
1.73.
0
28. 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 No. 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 (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 Management, MC-RIO, 1200 New
Jersey Avenue, SE., 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. 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.
(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 [(Public Law 105-178,
112 Stat. 107]) is exempt from the requirements of this section,
provided it files all the required information with the appropriate
State office.
Issued on: December 4, 2008.
John H. Hill,
Administrator.
[FR Doc. E8-29253 Filed 12-15-08; 8:45 am]
BILLING CODE 4910-EX-P