[Senate Hearing 110-1133]
[From the U.S. Government Publishing Office]
S. Hrg. 110-1133
OVERSIGHT OF THE
U.S. DEPARTMENT OF TRANSPORTATION'S
CROSS-BORDER TRUCK PILOT PROGRAM
=======================================================================
HEARING
before the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
MARCH 11, 2008
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
DANIEL K. INOUYE, Hawaii, Chairman
JOHN D. ROCKEFELLER IV, West TED STEVENS, Alaska, Vice Chairman
Virginia JOHN McCAIN, Arizona
JOHN F. KERRY, Massachusetts KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota OLYMPIA J. SNOWE, Maine
BARBARA BOXER, California GORDON H. SMITH, Oregon
BILL NELSON, Florida JOHN ENSIGN, Nevada
MARIA CANTWELL, Washington JOHN E. SUNUNU, New Hampshire
FRANK R. LAUTENBERG, New Jersey JIM DeMINT, South Carolina
MARK PRYOR, Arkansas DAVID VITTER, Louisiana
THOMAS R. CARPER, Delaware JOHN THUNE, South Dakota
CLAIRE McCASKILL, Missouri ROGER F. WICKER, Mississippi
AMY KLOBUCHAR, Minnesota
Margaret L. Cummisky, Democratic Staff Director and Chief Counsel
Lila Harper Helms, Democratic Deputy Staff Director and Policy Director
Christine D. Kurth, Republican Staff Director and General Counsel
Paul Nagle, Republican Chief Counsel
C O N T E N T S
----------
Page
Hearing held on March 11, 2008................................... 1
Statement of Senator Dorgan...................................... 1
Statement of Senator Pryor....................................... 40
Witnesses
Cullen, Sr., Paul D., Managing Partner, The Cullen Law Firm,
PLLC; and General Counsel, Owner Operator Independent Drivers
Association, Inc............................................... 89
Prepared statement........................................... 90
Gillan, Jacqueline S., Vice President, Advocates for Highway and
Auto Safety; accompanied by Henry Jasny and Sheryl Jennings
McGurk......................................................... 51
Prepared statement........................................... 53
Prepared statement of Sheryl Jennings McGurk................. 97
Peters, Hon. Mary E., Secretary, U.S. Department of
Transportation; accompanied by Hon. David James Gribbin IV,
General Counsel, U.S. Department of Transportation............. 8
Prepared statement........................................... 10
Scovel III, Hon. Calvin L., Inspector General, U.S. Department of
Transportation................................................. 22
Prepared statement........................................... 24
Appendix
Hoffa, James P., General President, International Brotherhood of
Teamsters, prepared statement.................................. 101
Response to written questions submitted by Hon. Byron L. Dorgan
to:
Paul D. Cullen, Sr........................................... 116
Hon. Mary E. Peters.......................................... 105
Hon. Calvin L. Scovel III.................................... 105
Response to written questions submitted by Hon. Mark Pryor to
Hon. Mary E. Peters............................................ 107
U.S. Chamber of Commerce, prepared statement..................... 99
OVERSIGHT OF THE
U.S. DEPARTMENT OF TRANSPORTATION'S
CROSS-BORDER TRUCK PILOT PROGRAM
----------
TUESDAY, MARCH 11, 2008
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 2:34 p.m. in room
SR-253, Russell Senate Office Building, Hon. Byron L. Dorgan,
presiding.
OPENING STATEMENT OF HON. BYRON L. DORGAN,
U.S. SENATOR FROM NORTH DAKOTA
Senator Dorgan. We will call the hearing to order on the
U.S. Department of Transportation's Cross-Border Pilot Program,
dealing with cross-border Mexican trucking.
Today's hearing will examine the decision by the Department
of Transportation to continue with its Mexican trucking pilot
program, despite what I--and a number of others in the
Congress--feel is clear language from the U.S. Congress,
prohibiting the use of appropriated funds for that purpose.
In my judgment, the intent of Congress is quite clear, the
Department of Transportation is prohibited from using
appropriated funds in this fiscal year to operate this pilot
program.
Secretary Peters, you have testified previously on this
subject, and have commented publicly by your agency that the
Department of Transportation attorneys, your lawyers, are
saying that there is some loophole in the language that would
allow the Department to proceed with the pilot program.
Let me describe the sequence of events that brought us to
this point. At 7:30 p.m. on September 6, 2007, the Department's
Inspector General released a report finding problems with
Mexico's record keeping, relating to accident reports, vehicle
inspections or drivers' violations.
In fact, what the Inspector General who is here today said,
is that there is no central repository of vehicle inspection
records, driver's records, or accident reports. To the extent
that we have any of those reports, they are voluntarily
provided. Outside of that, they don't exist.
One hour after 7:30 p.m. on September 6, when the Inspector
General released his report, before the ink on that report had
dried, the Department of Transportation at 8:30 p.m. on
September 6, announced it would begin to allow Mexican trucks
to do long hauls into the United States as part of the pilot
program.
On September 11, 2007, that's 5 days later--the U.S. Senate
voted 74 to 24, for an amendment that I offered in the U.S.
Senate to the Transportation Appropriations bill, prohibiting
the Department of Transportation from proceeding with the pilot
program. The House of Representatives had previously passed
such an amendment.
Everyone involved, I believe, perfectly well understood
what we were voting on. We were voting to cut off funding for
the pilot program that had just begun. I said so on the floor
of the Senate, many other Senators on both sides of the issue
said so. The final vote was 74 to 24 in favor of cutting off
funding for the pilot program.
A 74-24 vote is not considered a close vote in the U.S.
Senate. It is an overwhelming expression of the Senate that
this pilot program should not be funded.
I have a couple of charts I want to show. Senator McCain
was on the floor of the Senate at that time, in fact, he
opposed my amendment. John and I are good friends, and John
used to chair this Committee. But friendship doesn't always
result in the same voting, and John disagreed with me and he
voted against me--he was on the losing end of the 74-24 vote.
But here's what John McCain said, on the floor of the
Senate, ``unfortunately, the Senate has voted 74-24 to prevent
the pilot from going forward.'' He knew what the vote was, he
understood what he was voting on.
Senator Dorgan. And I simply use Senator McCain's statement
on the floor to say that this was not ambiguous, in any way.
The Senate language was eventually incorporated into the
omnibus appropriations bill, and when the Conference Report was
issued, the conferees noted that the Senate and the House had
approved similar provisions.
Again, there was no question that the Congress was
prohibiting the Administration from proceeding with its pilot
program.
But on January 4, 2008, the Administration announced it
intended to proceed with the program anyway. The Administration
took the position that the omnibus language prohibited on the
creation of some future pilot program, and not the current
program.
Well, I have a letter from the Legislative Council that
drafted this particular provision, and that letter says, ``The
amendment was `intended to preclude the carrying out of any
demonstration program, including the pilot program put into
effect, September 2007.' '' That is from the Senate legislative
council staff that drafted the amendment. That was the intent
of the amendment, that's the way it was drafted.
I have two letters from distinguished professors at law
schools, both of these scholars are Harvard-trained lawyers,
both senior positions in the U.S. Justice Department in their
previous lives, both experts in Administrative Law, and both
say that the omnibus Appropriations bill flatly prohibits the
Department of Transportation from proceeding with the pilot
program.
Yet, the Administration has paid no heed to any of this.
They have found attorneys to justify almost everything, they
have found attorneys to say that torture is legal, and now they
find attorneys to say that the Cross-Border Mexican Trucking
Program that Congress has explicitly prohibited funding for, is
legal, as well.
Let me just mention, I want to go through a couple of
charts, if I might.
First of all, as we go through them, I want to point out
that, for me, if we had equivalent standards between American
trucking and Mexican trucking, I wouldn't be here, at this
hearing. I wouldn't raise questions about a cross-border
trucking pilot, or otherwise. I'd say, if we have equivalent
standards, with respect to driver's records, vehicle records,
accident reports and so on, if we felt the trucking situation
in Mexico was equivalent to ours, you'd find no objection from
me. But that is not the case.
Now, I believe that the Administration has said because
there is a requirement in NAFTA, we have to proceed,
notwithstanding other issues. The other issue, for me, is when
the Inspector General tells me what I generally already knew,
and that is, there is no central repository in Mexico of the
type of information we generally have in this country, with
respect to driver's records, accidents reports, and vehicle
inspections.
The absence of such criteria, in my judgment, should render
us unwilling to proceed with cross-border long-haul trucking,
until such circumstances exist.
The Administration, I believe, has always intended to
decide to do what it wanted to do, notwithstanding what the
Congress told it to do.
This quote is from December 19, 2007, and it's a news
article in the Congress Daily, ``Mexico might limit imports of
pork and rice in retaliation for,'' et cetera, et cetera, and
in this article it says, ``The Bush Administration might find a
way to continue the pilot program, regardless of whether
Congress cuts its funding.'' A spokesman for the Federal Motor
Carrier Safety Administration said, ``It will review its
options.''
Senator Dorgan. I think before there was an announcement in
January, the Administration was trying to make a decision,
``We're going to do what we want to do, it doesn't matter so
much what the Congress thinks.''
This is from a September 11 article--``the day the Senate
voted, 74-24 vote, the Senate approved a proposal by Senator
Byron Dorgan prohibiting the Transportation Department from
spending money on the North American Free Trade Agreement pilot
program giving Mexican trucks greater access to U.S.
highways.'' Obviously, that reporter knew what we had passed,
or at least thought that reporter knew that was what we had
passed.
And then it says, ``John Hill, head of the Federal Motor
Carrier Safety Administration decried the vote, saying that it
is a sad victory for the politics of fear and protectionism.''
My guessing is, that Mr. Hill decried the vote because he
thought we were shutting off the pilot program.
Senator Dorgan. This has been before a circuit court, a 3-
judge court. One of the judges, during the hearing said the
following: Judge Dorothy Nelson, February 12, 2008, said, ``The
Congressional intent is unambiguous. The intention was to halt
the pilot program.'' That, from the bench of a Federal court,
and we'll see what the 3-judge court decides, but at least one
of the judges, during the hearing, seemed to feel that the
intent of Congress was unambiguous.
And finally, I've quoted the DOT Inspector General report,
it says, ``While the DOT officials inspecting Mexican truck
companies took steps to verify the onsite data, we noted that
certain information was not available to them, specifically,
information pertaining to vehicle inspections, accident
reports, and driver violations maintained by Mexican
authorities was not available to the DOT authorities, unless
such information was included in company records.
Senator Dorgan. The DOT official stated that, either such
information was not available from Mexican authorities, or the
databases containing such information were still under
development.
I would say that I don't want to make a Federal case out of
this, but I guess that's why we're here. The fact is, the U.S.
Congress passes Appropriations bills, we fund the Department of
Transportation, we fully expect the Department of
Transportation to comply with our funding requirements. In this
case, we have a long-haul Mexican trucking pilot program, now
underway, despite the fact the U.S. Congress has cut the
funding for that program, and explicitly indicated it can not
continue.
Secretary Peters, the last time you were here, I said that
I supported your nomination, was happy to do so, and now I
regret it. And I regret it because I think you have both been
given bad advice, and willingly taken bad advice. I think that
there is an arrogance here, with respect to Federal agencies--
it's not just yours, there are other examples that I could use
today, but you're here, and we're talking about this agency and
this issue.
There would not be a hearing if the Department of
Transportation had complied with Congressional intent. Congress
has explicitly said you may not proceed with the pilot program.
The Congress didn't say that because it wants to punish
your pilot program, or because it wants to punish you, or
because it doesn't believe in NAFTA, or because it doesn't
believe in good relationships with our southern neighbors, the
Congress took this action because we know--and now all of us
know--that there are not equivalencies with respect to safety
circumstances in Mexican long-haul trucking, and American
trucking.
You can certify one truck, you can certify one company--you
can certify 10 or 100, if you like--and inspect every nut and
bolt and every gasket, but the fact is, that still does not
justify a decision that suggests that there is some sort of
equivalency with respect to safety standards between Mexican
trucking and American trucking. That does not exist. And
because it doesn't exist, the U.S. Senate--by a 74-24 vote--
said you can not continue with the pilot program. And yet, you
continue to do that.
I appreciate the fact that you've come to this hearing, I
intend to ask a series of questions, as you might expect.
We are going to hear from you, Secretary Peters, you are
accompanied by your counsel, D.J. Gribbin, from the Department.
Mr. Calvin Scovel, the Inspector General for the Department of
Transportation is here.
Mr. Scovel, let me say about you, I think our Inspectors
General do a terrific job, I sometimes agree with what they
come out with, sometimes disagree with them. But, I generally
understand that they put a lot of work into these issues, and I
particularly benefit from them, and I appreciate your being
here.
Jackie Gillan in the second panel, who's Vice President of
Advocates for Highway and Auto Safety, and Mr. Paul Cullen,
General Counsel of Owner-Operator Independent Drivers
Association will also testify.
Secretary Peters, I appreciate your coming today, and I
will recognize you for a statement.
STATEMENT OF HON. MARY E. PETERS, SECRETARY, U.S.
DEPARTMENT OF TRANSPORTATION; ACCOMPANIED BY
HON. DAVID JAMES GRIBBIN IV, GENERAL COUNSEL, U.S. DEPARTMENT
OF TRANSPORTATION
Secretary Peters. Chairman Dorgan, thank you so much for
the opportunity to appear before you today to discuss the
Department's Cross-Border Trucking Demonstration Program. It is
entirely fitting that we are having this conversation at a time
when some had begun to question the equity and the benefits of
our existing trade relationships.
This demonstration program should serve as an example of
how trade can be used to create new opportunity, new revenue,
and new success for U.S. workers, and for U.S. companies. That
is because the project was designed to right a decades-old
wrong that has prevented American drivers and trucking
businesses from earning a single cent off of the hundreds of
billions of dollars worth of goods that are shipped by truck
across the U.S.-Mexico border every year.
Mexican trucking companies currently have the ability--
separate and apart from the demonstration project--to operate
within our borders. Since 1982, trucks from Mexico have been
allowed to operate within the U.S., in the commercial zones
that include cities such as Brownsville, El Paso, Nogales and
San Diego.
An additional 800 trucking companies from Mexico continue
to have the right that was granted to them by the Interstate
Commerce Commission and DOT, to operate anywhere in the United
States.
In comparison, U.S. trucks have never had the authority
from the Mexican federal government to operate south of the
border. This means that, before the start of this demonstration
program, not one single American driver has profited from a
cross-border trade that is valued at over $260 billion every
year.
This means that not one single U.S. trucking company has
reaped the rewards of a vast and fast-growing surface trade
with one of our biggest and closest trading partners. And this
means that the United States--the world's most aggressive
proponent of breaking down trade barriers as the best way to
improve domestic and international prosperity--has been locked
out of one of the few markets where our truckers actually have
a real opportunity to compete and to succeed.
It was this imbalance that Presidents Bush, H.W. Bush, and
Bill Clinton sought to end, when they negotiated NAFTA's
trucking provisions. It was this inequity that Congress so
boldly voted to end when it passed NAFTA, and it was this one-
sided market that this Administration pledged to end with the
establishment, last September, of our Cross-Border Trucking
Demonstration Project.
So, when an employee of El Paso-based Stage Coach Cartage
and Distribution became the first-ever U.S. driver to haul
goods into Mexico last September, he did more than turn a
profit--he made history. And he signaled the start of a new
era, in which our drivers, our trucks, and our businesses can
actually share in the profits that exist in the cross-border
trade.
That driver may have been the first, but he was hardly the
last. Indeed, U.S. truckers are now taking advantage of this
project at a rate of more than 2-1, compared to truckers from
Mexico. As of March 3, U.S. drivers have made more than 680
trips into Mexico. Meanwhile, drivers from Mexico have made
fewer than 325 trips beyond the commercial zones as part of
this project.
We are achieving this remarkable advantage in our trade,
while maintaining absolute safety of our highways. Our onsite
audits in Mexico, our rigorous standards for admissions into
this program, and our commitment to inspecting every truck,
every time, have delivered a safety performance record that is
without compare.
To date, the out-of-service rate for trucks in this
program, for example, is less than half that of the U.S.
trucking fleet, and we have not experienced a single safety
incident.
In short, this project supports fair trade. This project
levels the playing field for U.S. workers. This project allows
American businesses to benefit from our trade relationships,
and this project--I respectfully submit, sir--maintains the
safety of our highways, which is my highest priority.
Yet, there are those who reason that the cross-border
trucking will hurt the domestic shipping industry. How we
return to the days when U.S. trucks were prohibited from moving
a single dollar's-worth of goods across the U.S.-Mexico border
would serve American companies better, is beyond comprehension.
There are also those who argue that this project is somehow
unsafe. Yet, the safety record of the participating trucks is
actually better than the record of the U.S. trucking fleet. And
our self-imposed requirement that trucks be equipped with GPS
monitoring devices, allows us to monitor the location, and the
duration, of every participating vehicle's trip.
Others have suggested that this project might compromise
our homeland security. Given the fact that thousands of Mexican
trucks safely enter our country every day outside of this
project, it is ensured that this implication must be that U.S.
trucks now using our border crossings, will engage in unsavory
activities. Needless to say, I do not agree.
And some have suggested that we are not following the ``law
of the land.'' They argue, because last December, Congress told
us not to establish a Cross-Border Trucking Demonstration
Project that we should have dismantled an existing program that
is working significantly in favor of United States truckers.
I know that Congress understands that ``to establish''
means ``to set up or create something new.'' That is why, when
it sought to end an existing Departmental program designed to
require local communities to pay a small portion of the cost of
Essential Air Service, it used the phrase ``to establish or
implement.'' And that is why, when Congress sought to end an
existing rule that allowed Chinese poultry products into the
U.S., it also used the phrase ``to establish or implement.''
When Congress chose, instead, to use narrower language last
December, and rejected the use of the words ``to implement,''
we heeded its wish--we will not establish a new demonstration
program. Yes, we also know that this body would never knowingly
shut the door on U.S. workers' access to business opportunities
and profits, including an Ohio trucking company that just last
week, received authority to operate south of the border.
So, as we engage in today's conversation, I ask that you
consider the following questions. Do you think the best way to
help our workers is to deny them access to new markets? Do you
think that our truckers should sit idle, while other companies
profit from our thriving cross-border trade? Do you think our
trade relationship with Mexico should be balanced against us?
Or, do you feel that U.S. drivers should have an opportunity to
succeed in other markets? Do you think this country should
fulfill its international obligations--especially when there
are many potential benefits to our economy?
I know where I stand on these issues, and while I certainly
appreciate and respect that some of you may not agree, I
proudly support safer roads, more opportunity for our workers,
more earnings for our businesses, and more success for our
economy, and I am pleased to report that many others do, as
well.
Chairman Dorgan, thank you so much for the opportunity to
testify before you today, I would be happy to answer any
questions that you may have. Thank you.
[The prepared statement of Secretary Peters follows:]
Prepared Statement of Hon. Mary E. Peters, Secretary,
U.S. Department of Transportation
Introduction
Chairman Lautenberg and Members of the Committee, thank you for
inviting me today to discuss the Department of Transportation's (DOT's)
demonstration project to implement the long-delayed trucking provisions
of the North American Free Trade Agreement (NAFTA). I am pleased to
describe to you what the Department has done to implement Section 350
of the Fiscal Year 2002 Department of Transportation and Related
Agencies Appropriations Act (P.L. 107-87; 115 Stat. 833, 864-868);
Section 6901 of the U.S. Troop Readiness, Veteran's Care, Katrina
Recovery and Iraq Accountability Appropriations Act of 2007 (P.L. 110-
28; 121 Stat. 112, 183-185); and the additional steps we have taken to
ensure that we safeguard the security of our transportation network
even as we strengthen trade with a close neighbor and important
partner.
Fifteen years ago, the United States pledged to allow the free flow
of commerce across the North American continent. Three U.S. Presidents
and Congress have considered and ultimately supported NAFTA's trucking
provisions and the Supreme Court has rejected unanimously a challenge
to the Department's implementation of those provisions, allowing us to
make that pledge a reality. Unfortunately, the delay in fully
implementing NAFTA's long-haul trucking provisions has impeded the
efficient movement of goods to the markets on both sides of the
southern border to the detriment of the Nation's economy. This
demonstration project started a process to remove this impediment,
creating new opportunities, new hope, and new jobs north and south of
the border.
Background
In 1992, President George H.W. Bush signed NAFTA. It was then
enacted by Congress and signed into law by President William J. Clinton
in 1993, and it became effective on January 1, 1994. Now, 14 years
after we began implementing the agreement, its economic benefits are
clear. U.S. merchandise exports to NAFTA partners have grown more
rapidly than our exports to the rest of the world. Real Gross National
Product Growth for NAFTA partners for the period 1993 to 2006 has been
50 percent for the United States, 54 percent for Canada, and 46 percent
for Mexico.
Americans are reaping the benefits of this success. Each day,
nearly $2.5 billion in trade flows among the United States, Mexico, and
Canada, offering consumers greater choices and strengthening trade and
investment ties with two democratic nations and longtime allies. U.S.
employment has increased substantially as well, rising from 112.2
million jobs in December 1993 to 137.2 million in December 2006, an
increase of 25 million jobs, or 22 percent. The jobs these exports
support are particularly valuable to American workers, as they pay
between 13 and 18 percent more than the U.S. national average. All of
this helps to explain why, between 1993 and 2006, the Nation's real
Gross Domestic Product has nearly doubled. This record demonstrates
that we must move forward to fully implement NAFTA.
One of the agreement's last remaining provisions to be implemented
fully is the cross-border trucking provision. Originally planned to
commence in December 1995 with transportation between Mexico and the
four Border States (Arizona, California, New Mexico, and Texas), it was
to have been implemented fully by January 1, 2000. In December 1995,
Transportation Secretary Pena announced an indefinite delay in opening
the border to long-haul Mexican commercial trucks to address legitimate
concerns about the safety of Mexican trucks that would be traveling on
our highways.
Twelve years later these concerns have been addressed. With safety
and security programs now in place, the time has come to move forward
on a long-standing commitment with Mexico and Canada by proceeding with
the trucking provisions of NAFTA.
Demonstration Project
Over the last thirteen years, there has been an ongoing
conversation about safety, security, environmental, and economic issues
involved with allowing trucks from Mexico to operate in the U.S. beyond
the border zones. This conversation has occurred between DOT and
Mexico's Secretariat of Communications and Transport; it has occurred
between the Presidents of our nations; it has occurred in the U.S.
House and U.S. Senate chambers; it has occurred in the media; and it
has occurred in front of a NAFTA dispute settlement panel, a U.S. Court
of Appeals, and even the U.S. Supreme Court. These conversations made
clear that there were a number of important and difficult issues that
had to be addressed--and have been addressed--before moving forward
with a graduated border opening.
For that reason, the Administration has implemented a one-year
demonstration project to authorize up to 100 Mexican trucking companies
to perform long-haul operations within the U.S. These companies are
limited to transporting international freight and are not authorized to
make domestic deliveries between U.S. cities. Likewise, under this
program, Mexico will grant authority to an equivalent number of U.S.
companies to make deliveries between the U.S. and Mexico. This marks
the first time that American trucks have been allowed to make
deliveries in Mexico in accordance with NAFTA.
Three entities are providing oversight for the demonstration
project. The first, a binational group with representatives from both
the U.S. and Mexico, provides continuous monitoring of the project and
identifies and resolves any implementation issues as they arise. The
second, an independent evaluation panel appointed by the Secretary and
composed of experts knowledgeable of the issue, has been tasked with
measuring and evaluating the demonstration project. Finally, we welcome
the ongoing involvement of the Department's Inspector General and any
ideas he may have to improve the program's effectiveness. We believe
that this combination of close tracking and oversight provides both the
means for addressing implementation issues in a timely fashion and also
an independent means for an objective evaluation of the project.
By granting authority to a limited number of Mexican carriers and
monitoring them closely throughout the duration of the project, we are
able to monitor and evaluate the adequacy of the safety systems we have
developed to address the concerns raised since 1995.
There are no exceptions to safety regulations for trucks or drivers
from Mexico. They must meet all U.S. safety requirements when they
cross the border now, and before they will be allowed to drive beyond
the border zones. All drivers must have a valid commercial driver's
license, proof of medical fitness, and documentation of compliance with
hours-of-services rules. They must be able to understand and respond in
English to questions and directions from U.S. inspectors. They also
must undergo drug and alcohol testing. In addition, all trucks must be
insured by a U.S. licensed insurance company and meet U.S. safety
standards.
Let me put the magnitude of this demonstration project in context.
Today, more than 700,000 interstate and approximately 400,000
intrastate companies are registered to operate in the U.S., with over 8
million large trucks registered here. Meanwhile, the 63 Mexican
trucking companies that have passed the pre-authority safety audit at
this time plan to operate only 304 trucks in the U.S. and employ 257
drivers. As it currently stands, 18 Mexican trucking companies have
secured the U.S.-based insurance required by the program and are
currently operating as part of the demonstration project. These
companies are operating 62 vehicles. However, only 7 percent of their
deliveries in the U.S. have gone beyond the border commercial zones.
It also is important to note that the demonstration project will
not involve hazardous materials transportation, bus transportation of
passengers, or operation of longer combination vehicles by Mexican
carriers.
Safety
Safety is at the heart of all we do at DOT and it has been foremost
in our thoughts as we prepared to change the way trucks from Mexico
operate in the U.S. Development of our safety programs has been guided
by, but not limited to, the 22 requirements that Congress included in
Section 350 of the 2002 Act. The Inspector General's September 6, 2007,
report states that the Federal Motor Carrier Safety Administration
(FMCSA) has addressed each of these requirements. I have attached a
table of these requirements to the written testimony and the actions
FMCSA has taken to satisfy them.
Just over a year ago, I traveled to Monterrey, Mexico, to visit a
Mexican trucking company. There, I witnessed FMCSA personnel conducting
a pre-authorization safety audit on the motor carrier as required by
Section 350. Under the law, at least 50 percent of such audits must
take place at the carrier's place of business in Mexico. For this
demonstration project, FMCSA has committed to and is conducting 100
percent of pre-authority safety audits in Mexico. These audits ensure
that Mexican carriers wishing to operate in the U.S. beyond the border
zones have systems in place to comply with all DOT regulations,
including driver qualification, drug and alcohol testing, hours-of-
service, vehicle maintenance, and insurance.
During the pre-authority safety audit, FMCSA inspectors also
conduct vehicle inspections of the trucks a company wishes to use in
the U.S. The Inspector General's September 6, 2007, report indicated
the FMCSA was only inspecting ``available'' vehicles. FMCSA has changed
this policy and is now inspecting all vehicles the carrier states it
will operate in the U.S. when it conducts the pre-authority safety
audit.
The inspection is a comprehensive 37-step process that involves
checking the vehicle from front to back and top to bottom. At the
conclusion of this inspection, if no defects are discovered, the
vehicle is issued a 90-day Commercial Vehicle Safety Alliance (CVSA)
safety decal. All trucks operating in the test program are required to
display a current decal at all times while operating in the U.S., which
means they will be inspected at least once every 90 days.
This safety audit is merely the beginning of FMCSA's oversight. All
Mexican trucks operating beyond the border zones have a unique
identifier, an ``X'' at the end of the DOT number marked on the
vehicle. This is easily visible to FMCSA and State inspectors. When
these trucks reach the border, they are subjected to additional vehicle
inspections and license checks. Under Section 350, FMCSA is required to
check the validity of licenses for at least 50 percent of the drivers
entering the country. However, FMCSA is working to check 100 percent of
drivers and vehicles, each time they enter the country to: (1) verify
the vehicles have the proper safety decals; (2) verify the driver has a
valid license; and (3) ensure the driver can speak English.
FMCSA uses a satellite-based Global Positioning System (GPS) to
track and monitor the vehicles in the demonstration project. The system
locates the vehicle every 30 minutes and records those locations for
future reference. FMCSA is using this information to monitor when the
Mexican vehicles are in the U.S. and measure how many miles they
travel. In addition, FMCSA can use reports from the system to identify
possible hours-of-service violations, verify driver records of duty
status, and identify possible cabotage violations. FMCSA will follow up
possible violations with targeted investigations or complete compliance
reviews as needed.
Since 1995, Congress has appropriated and FMCSA has spent more than
$500 million to improve border inspection stations and hire more than
600 new State and Federal inspectors to enforce truck safety on the
border. We have deployed 125 FMCSA inspectors and an additional 149
auditors and investigators along the southern border at all truck
crossings. Our State partners in Arizona, California, New Mexico, and
Texas have deployed an additional 349 inspectors. These safety
professionals oversee the safety of Mexican trucks providing
transportation in the existing border commercial zones and have made
noteworthy progress in establishing the safety foundation for this
demonstration project. These inspectors conducted more than 210,000
driver and vehicle inspections of Mexico-domiciled carriers in the
commercial zone during Fiscal Year 2006 and performed more than 240,000
automated, real-time, checks of Mexican drivers' licenses. Their
efforts are paying off. Ten years ago, the out-of-service rate for
Mexican trucks was 59 percent. Since the increased enforcement that
resulted from hiring additional FMCSA and State staff, the rate has
dropped to 21 percent last year, which is comparable to the out-of-
service rate we typically observe when we select U.S. trucks for
inspection.
I want to highlight that while these inspectors have been effective
and are helping the Department satisfy its Congressional requirements,
we are looking toward more comprehensive and effective screening
methods for the future. FMCSA is working with the Department of
Homeland Security's (DHS) Customs and Border Protection (CBP) to have
motor carrier safety integrated into the International Trade Data
System, or ITDS, which is part of the Automated Commercial Environment
development effort. When this initiative becomes fully operational
later this year, every Mexican trucking company will have its authority
and insurance checked and every Mexican truck driver will have his or
her license verified each time the driver crosses the border, whether
the vehicle is operating within the commercial zone or involved in
long-haul transportation. Since these computer checks occur prior to a
truck's arrival at the southern border, if a problem is discovered,
notice will be sent back to the company or broker entering the
information so issues can be addressed before the truck even reaches
border points of entry. If the truck arrives at the border, the CBP
Officer will receive notice that there is an issue with the truck and
direct it for further inspection by FMCSA or State inspectors.
While in the U.S., the performance of these Mexican carriers will
be closely monitored. We have established, through rulemaking, a list
of seven safety problems related to driver licensing, operating unsafe
vehicles, drug and alcohol testing, and insurance, which would lead to
action by FMCSA up to and including revocation of a carrier's
provisional authority if not addressed promptly.
FMCSA has worked with State and local law enforcement officials so
they can assist in ensuring Mexican trucks operate safely and within
the limits of their authority. In 2002, FMCSA established regulations
prohibiting all carriers from operating beyond the scope of their
authority and requiring that vehicles operated by non-compliant
carriers be placed out of service. Since that time, every State has
adopted and begun enforcing these provisions. The CVSA has incorporated
this violation into its Out-of-Service criteria, meaning that a Mexican
truck discovered operating beyond the scope of its authority will not
be allowed to continue. We have incorporated these new regulations into
training given to all commercial vehicle inspectors.
FMCSA and the International Association of Chiefs of Police have
developed a commercial motor vehicle awareness training program. We
have trained more than 200 law enforcement officers to instruct other
law enforcement officials on how to identify a Mexican motor carrier,
how to verify the validity of a Mexican driver's commercial license,
how to determine whether the carrier is operating within its authority,
and where to call if they need additional assistance with truck-
specific issues. Through this program, we have developed and
implemented a training program that provides State and local law
enforcement officers in the U.S. detailed information on cabotage
regulations and enforcement procedures.
In addition to the Federal safety requirements, the Mexican trucks
operated in this demonstration project will be required to adhere to
the same State requirements as U.S. trucks, including size and weight
requirements and paying the applicable fuel taxes and registration
fees. In preparation for this project, FMCSA has worked with the four
Border States to develop the capability for these States to register
Mexican trucks in the International Registration Plan and International
Fuel Tax Agreement.
Despite the steps I have outlined above, some argue that the
demonstration project is still unsafe. The current safety record of the
participating trucks in the demonstration program is better than that
of the U.S. trucking fleet. Our requirement that trucks be equipped
with GPS monitoring devices--a provision that goes beyond what Congress
has directed--allows us to monitor constantly and pinpoint the location
and duration of every participating vehicle's trip.
While we have come a long way since the days when Mexico-domiciled
trucks' out-of-service rate was 59 percent, some still maintain that,
because Mexico does not have a regulatory scheme identical to that of
the U.S., Mexican trucks will not operate safely in this country. Yet,
this assertion is not made with respect to what takes place on our
northern border. Canada, for instance, does not require that its
commercial drivers be drug tested randomly. However, when these drivers
operate in the U.S., they must participate in a random drug testing
program. No one is suggesting that because Canada does not test drivers
randomly we should prohibit Canadian trucking companies from operating
in the U.S. However, that is what opponents of the demonstration
program would have us do with Mexican drivers.
Some have suggested that we are not following the law of the land.
They argue that because Congress told us last December not to establish
a cross-border motor carrier demonstration program that we should have
dismantled a previously-established program that is working
significantly in favor of U.S. truckers. U.S. trucks have made more
than twice as many trips into Mexico as Mexican carriers have made into
the interior of the U.S. under this demonstration program.
The Administration has looked very closely at the 2008 DOT
Appropriations Act, particularly section 136. By prohibiting the use of
funds ``to establish'' a cross-border motor carrier demonstration
program, section 136 does not prohibit spending to continue to
implement the ongoing cross-border demonstration project, which was
established in September 2007--well before enactment of the current
Appropriations Act. Consistent with the Appropriations Act prohibition,
FMCSA will not establish any new cross-border demonstration programs
involving Mexican motor carriers. In addition, we will continue to
ensure that previously enacted legislative mandates are followed,
including sections 350 and 6901, as required by section 135 of the
Consolidated Appropriations Act, 2008.
The appropriations bill passed by the House of Representatives last
July (H.R. 3074, 110 Cong. 410 (2007)) would have barred spending
``to establish or implement'' a cross-border demonstration project.
However, the enacted version of the bill is drafted more narrowly and
prohibits only use of funds ``to establish'' such a project.
Security and Environment
While safety is the highest priority, the issues involved in this
demonstration project are not limited to safety. For this reason, the
Department has coordinated closely with other Executive Branch
agencies, particularly with the Department of Homeland Security (DHS)
on border security matters and with the Environmental Protection Agency
(EPA) to address environmental issues. While these agencies can address
better the details of their programs, let me share with you an overview
of what is being done to address these areas.
The majority of vehicles Mexican trucking companies will use for
long-haul operations have been manufactured to meet both U.S. and
Mexican emission standards. In fact, most commercial motor vehicles now
entering the U.S. from Mexico were manufactured in the U.S. or Canada,
meaning that they were manufactured to U.S. emissions standards. As
breakdowns are costly for both carriers and shippers, we expect that
the fleet of trucks used for long-haul cross-border transportation will
be newer and cleaner. We anticipate that Mexican companies will
maintain or expand their use of equipment that is manufactured to meet
U.S. standards. Additionally, Mexico also has upgraded its domestic
vehicle emission requirements in the last 3 years and now has
regulations similar to those currently in effect in the U.S. EPA is
working with the Mexican government to encourage full adoption of new
U.S. truck and fuel standards.
On a yearly basis, CBP processes about 4.5 million trucks through
the U.S.-Mexico Border. It is estimated that the maximum of 100
carriers permitted to participate in this demonstration project will
account for approximately 1,000 trucks, a very small percentage of the
CBP workload. As I indicated earlier, currently, there are 18 Mexican
carriers operating 62 trucks. Clearly, implementing this demonstration
project will not change our border security or immigration security
posture.
Current Processing
All commercial truck cross-border traffic must stop at a designated
border crossing. As required by statute and regulation, each truck is
processed at the border, using automated systems to assist in
determining whether the cargo, truck, and driver are admissible and
whether any of the elements pose a security, immigration, agriculture,
or smuggling risk.
If the CBP Officer determines that further inspection is necessary,
the driver, truck, and cargo are referred for a secondary inspection.
In a secondary inspection, CBP officers have many inspection tools at
their disposal, including access to commercial, criminal and law
enforcement databases, forensic document equipment, agricultural
experts, and large-scale scanning systems.
If the CBP Officer performing primary or secondary inspections
determines that the driver, truck, and cargo are admissible and do not
pose a risk, then the driver is allowed to proceed into the United
States. The Mexican carrier is then able to deliver the cargo to a
location within the commercial border zone, which can range up to 25
miles from the border (or 75 miles from the border within Arizona). The
cargo remains within the commercial zone until it can be picked up by a
U.S. driver and truck.
Current CBP inspections are in addition to and separate from motor
carrier inspections. The current CBP inspections and the current motor
carrier inspections will continue under the demonstration project.
Demonstration Project
Under the demonstration project, processing of Mexican nationals
and commercial trucks is in accordance with CBP guidelines. All cross-
border commercial truck traffic is required to stop at a designated
border crossing. Mexican drivers are required to present an entry
document, and if traveling outside the 25-mile commercial zone (or 75-
mile limit within the State of Arizona), the drivers are issued a Form
1-94 pursuant to regulations, and follow CBP inspection procedures that
include US VISIT (United States Visitor and Immigrant Status Indicator
Technology) biometric vetting, and other security requirements.
CBP processing of drivers, cargo, and conveyances for security
screening and trade enforcement remains consistent for truck carriers
participating in this demonstration project. Participants continue to
provide advanced cargo information as required under the Trade Act of
2002. Participants remain subject to immigration entry requirements for
the driver and crew and to the import requirements of other government
agencies in order to gain entry into U.S. commerce.
After the CBP check, all participating demonstration project
carriers from Mexico proceed to FMCSA's inspection checkpoint--where
every truck and every driver are checked every time they cross the
border.
DOT and DHS continue to partner in this effort to ensure safety and
security requirements are completely addressed and satisfied prior to a
carrier being allowed to proceed to an interior location in the United
States.
Conclusion
Trucks from Mexico have always been allowed to cross the U.S.
border. Until 1982, they could travel anywhere in the United States.
For the last 25 years they have been restricted to specific border
areas in Arizona, California, New Mexico, and Texas. Every day,
thousands of trucks from Mexico enter the United States. Every day,
drivers from Mexico operate safely on roads in major U.S. cities like
San Diego, El Paso, Laredo, and Brownsville. And every day, Federal and
State inspectors ensure trucks are safe to travel on our roads.
We have developed this limited program to demonstrate the
effectiveness of the systems we have deployed to satisfy Section 350 of
the 2002 Appropriations Act and Section 6901 of the 2007 U.S. Troop
Readiness Appropriations Act and to ensure the safety of the U.S.
traveling public.
Thank you for the opportunity to appear before you today. I look
forward to working with this Committee and the transportation community
to ensure a safe transportation system for the citizens of the United
States and to strengthen our trade with Mexico.
Appendix 1
Senator Dorgan. Secretary Peters, I of course will have
questions, but let me call first on the Inspector General
Scovel.
We appreciate your being here, you may proceed.
STATEMENT OF HON. CALVIN L. SCOVEL III, INSPECTOR GENERAL, U.S.
DEPARTMENT OF TRANSPORTATION
Mr. Scovel. Chairman Dorgan, I appreciate the opportunity
to testify today on our ongoing work regarding the Department's
demonstration project for Mexican trucks.
Over the past decade, we have issued over a dozen reports
and testimonies on this issue, and we are pleased to provide
our interim observations, as the Committee reviews the
demonstration project's operation, to date.
Our last report, issued in September, described how FMCSA
had prepared for the demonstration project. We verified that
FMCSA was conducting onsite reviews at applicants' places of
business in Mexico and that safety mechanisms--such as truck
inspections at border crossings--remained in place.
We also raised key issues that the Department needed to
address before initiating the project, such as ensuring
adequate plans to carry out the Department's commitment to
check every demonstration project truck, every time it crossed
the border into the United States, ensuring readiness on the
part of State officials, to enforce demonstration project
rules, and addressing slight differences between the policies,
rules and regulations implemented by FMCSA, and the specific
language of Congressional requirements.
Before initiating the project, the Department was required,
by law, to address the concerns we raised. After we issued our
report, the Department provided a response to Congress,
detailing actions to be taken on each item, and then
immediately initiated the demonstration project.
Yesterday, we issued the report from which this testimony
is drawn. Today I will discuss three interim observations,
based on the demonstration project's first 6 months of
operation.
First, while FMCSA has implemented plans to help ensure
every participating truck is checked, every time it crosses the
border, it has yet to implement a key quality control to ensure
that all checks are being done, even though it committed to do
so in its September 6, 2007 report to Congress.
FMCSA provided us with records to show that nearly 3,700
checks of safety inspection decals, driver's licenses and
English language proficiency were made since the demonstration
project began in September.
However, the agency has not implemented a quality control
measure, a cross-check with Customs and Border Protection
information that is important for ensuring the reliability and
completeness of this information. Without this quality control
procedure, we do not know whether all of the key safety checks
have been done, or how much confidence can be placed in the
information used to evaluate the demonstration project.
Second, fewer carriers and vehicles have participated in
the project than expected, and over 90 percent of the 3,700
trips recorded by FMCSA for the participants are inside the
commercial zones, that is, within a few miles of the border. As
a result, we do not have enough information to draw meaningful
conclusions about safety performance.
As of March 6, 2008, only 19 Mexican carriers have
participated in the project, instead of the 100 anticipated.
While FMCSA advises that more are likely to participate, after
6 months of the project, the number of carriers and the number
of vehicles are far less than needed for statistically reliable
projections about safety.
We will not be able to tell, for example, whether any
significant difference exists between the crash records and
safety performance of U.S. and Mexican trucks.
Third, as the demonstration project proceeds, we continue
to review FMCSA's actions to monitor and enforce safety rules
and project requirements. For example, FMCSA has provided
support and data to an independent evaluation panel, charged
with measuring any adverse safety impacts from the project. The
panel shares our concern about not having enough data to draw
meaningful conclusions at the project's end.
FMCSA also has issued guidance and provided training for
State enforcement officials. In September, we reported that
officials in 5 States did not consider themselves ready to
enforce demonstration project rules. Officials in those same 5
States now report being ready, citing training and guidance
provided by FMCSA.
Our work, to date, has also verified that participants'
insurance information, maintained in FMCSA's records, is valid;
that FMCSA has systems for monitoring Mexican carriers and
driver convictions; and that FMCSA has placed global
positioning devices on some U.S. and Mexican trucks that are
participating in the project. We will continue to review these
areas as the demonstration project progresses.
This completes my statement, I would be happy to answer any
questions you might have.
[The prepared statement of Mr. Scovel follows:]
Prepared Statement of Hon. Calvin L. Scovel III, Inspector General,
U.S. Department of Transportation
Chairman Inouye, Vice Chairman Stevens, and Members of the
Committee:
Thank you for the opportunity to testify today on our ongoing work
regarding the Department of Transportation's (DOT) demonstration
project for Mexican trucks. Over the past decade, we have issued over a
dozen reports and testimonies on this highly charged topic. Our interim
report on the demonstration project, from which this testimony is
drawn, was issued on March 10, 2008.\1\ We are to provide our final
report 60 days after the conclusion of the project.
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\1\ OIG Report Number MH-2008-040, ``Interim Report on NAFTA Cross-
Border Trucking Demonstration Project,'' March 10, 2008. OIG reports
and testimonies can be found on our website: www.oig.dot.gov.
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As you know, in February 2007, the Secretary of Transportation
announced her intention to start a 1-year demonstration project to
allow up to 100 Mexico-domiciled carriers to operate throughout the
United States. Shortly afterward, in May 2007, Congress, set
requirements \2\ to be met before the project could actually start. One
key requirement mandated that the Department, prior to initiating the
project, take action to address any issues raised in an initial report
required by our office, and report to Congress detailing such actions.
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\2\ Section 6901 of the U.S. Troop Readiness, Veterans' Care,
Katrina Recovery, and Iraq Accountability Appropriations Act, 2007
(Public Law 110-28).
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Our initial report on September 6, 2007,\3\ described how the
Federal Motor Carrier Safety Administration (FMCSA) had implemented
significant initiatives in preparation for the demonstration project.
Through direct observations and analyses, our work verified that FMCSA
was conducting promised on-site reviews at applicants' places of
business in Mexico. Additionally, we reported that safety mechanisms,
such as truck inspections at border crossings, remained in place.
Further, our interviews with key state enforcement personnel showed
FMCSA's general readiness to enforce safety rules during the
demonstration project, although officials in five states said they were
not yet ready.
---------------------------------------------------------------------------
\3\ OIG Report Number MH-2007-065, ``Issues Pertaining to the
Proposed NAFTA Cross-Border Trucking Demonstration Project,'' September
6, 2007.
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Our initial report emphasized three issues that the Department
needed to address to Congress before initiating the project. These
were:
Ensuring that adequate plans were in place to carry out the
Department's commitment to check every participating truck
every time it crossed the border into the United States
(including a quality control plan to ensure the system is
effective).
Ensuring that state enforcement officials understood how to
implement guidance on the demonstration project and that
training initiatives filtered down to roadside inspectors.
Addressing our determination that FMCSA had implemented
policies, rules, and regulations that differed slightly from
the language in 3 of 34 specific Congressional requirements.
For this third area, the most significant variation was
limiting inspections during on-site safety reviews to those
trucks that were available at the site at the time of the
inspection, rather than all vehicles planned for use in the
United States. We did not identify any safety impacts arising
from this difference as long as the commitment to check every
participating truck every time it crossed the border was
fulfilled.
To address our issues, the Department included, in its response to
Congress, Commercial Truck Border Crossing Implementation Plans for 25
U.S.-Mexico Border Crossings. The plans were designed to ensure that
every participating truck is checked every time it crosses the border
into the United States. The response also provided FMCSA's outreach
plan designed to ensure that state enforcement personnel have the
information needed to oversee the safety of trucks participating in the
demonstration project. Finally, FMCSA agreed to address the three areas
that differed slightly from the Congressional requirements, including
instituting a policy of reviewing all vehicles planned for use in the
United States.
As required by the May legislation, our ongoing audit is verifying
the degree to which these actions are being carried out. We are
specifically charged with examining mechanisms established to determine
whether the demonstration project is adversely affecting motor carrier
safety, reviewing Federal and state monitoring and enforcement
activities, and assessing the degree to which the demonstration project
consists of a representative and adequate sample of Mexico-domiciled
carriers likely to engage in long-haul operations.
While our mandate is to address those specific issues required by
Congress, we are mindful of the legal questions currently before the
9th Circuit Court of Appeals. Among those is the question of the legal
effect of the language contained in the FY 2008 Appropriations Act
\4\--``None of the funds made available under this Act may be used to
establish a cross-border motor carrier demonstration program. . . .''
In my view, after reading the Senate floor debate from early September,
it is clear that the sponsors of the amendment to the Senate Fiscal
Year 2008 Transportation and Housing Appropriations bill in September
2007 wanted to halt the project by denying funding. The parties to the
court action in the 9th Circuit have briefed and orally argued the
interpretation of the language in the underlying Consolidated
Appropriations Act itself. Given that this matter is joined before the
9th Circuit and is outside my mandate, I will respectfully defer to
that body's judgment.
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\4\ Consolidated Appropriations Act, 2008, Public Law 110-161,
Division K, Title I, Section 136, (2007).
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Given our legislative requirements to review and monitor the
demonstration project, our ongoing audit will continue. Accordingly, as
the year-long demonstration project reaches its 6-month point, today we
make the following three interim observations.
First, FMCSA has implemented plans to ensure every truck is checked
every time it crosses the border, but it has not implemented a key
quality control to ensure that checks are being done, despite a
commitment to do so. As stated in our September 2007 report, these
checks are important because they review the driver's license to ensure
that the vehicle is driven by a licensed driver and verify that the
truck has an inspection decal issued by the Commercial Vehicle Safety
Alliance (CVSA). We verified that FMCSA had developed 25 site-specific
border-crossing plans in conjunction with U.S. Customs and Border
Protection (CBP) personnel to carry out these checks at the border, and
FMCSA's records showed about 3,700 checks were done since the
demonstration project began in September. However, FMCSA has not
implemented a quality control measure that is important for ensuring
the reliability and completeness of this information, even though FMCSA
committed to do so in its September 6, 2007, letter report to
Congress.\5\
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\5\ Enclosure 4 of the Department's September 6, 2007, letter
report to Congress.
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In the report, FMCSA stated that it would acquire crossing data
from CBP and perform a monthly analysis of a random sample of the data
to document the extent to which FMCSA was meeting its goal of checking
every truck every time it crossed the border. Further, if issues were
identified, it would develop strategies to address them. At this time,
FMCSA has not implemented this process. According to a FMCSA official,
FMCSA is still gathering information for this control. Until FMCSA
implements a quality control check using CBP, or another valid source
of data, to establish a baseline for the number of crossings, FMCSA
will not have assurance that all checks are being conducted as
required. Further, to the degree that others use this information to
develop conclusions about the demonstration project, errors and
omissions in crossing data would adversely affect the analysis. We will
give this issue greater scrutiny as our audit continues.
Second, the limited data available at this time means we cannot
draw any meaningful conclusions about the safety performance of the
demonstration project participants. Far fewer carriers and vehicles
have participated in the project than expected, and over 90 percent of
recorded trips by participants are inside the commercial zones. As of
March 6, 2008, 19 Mexican carriers had been granted authority for the
project instead of the 100 anticipated, and 1 of those has recently
withdrawn. The number of vehicles that had been involved as of February
25, 2008, is also significantly lower than anticipated, about 13
percent of the number estimated before the project began. Also, as of
that same date, only 247 trips beyond the commercial zone were recorded
on FMCSA's records, and almost 90 percent of those trips were
reportedly going to one state--California.
Our analysis of the small group of participating carriers shows
that they are representative of certain characteristics of prior
Mexican applicants, such as the number of vehicles. Although no crashes
involving a participant had been recorded on FMCSA's records from the
project's initiation through March 1, 2008, the limited number of
participants and limited safety-related data will prevent FMCSA from
drawing any meaningful conclusions at this time.
Third, FMCSA has taken actions to establish and enhance mechanisms
for assessing adverse safety impacts from the project and for
monitoring and enforcing safety rules for project participants. These
actions include establishing and providing information to an
independent panel \6\ charged with determining whether the safety
performance of participating Mexican carriers differs from the safety
performance of U.S. carriers. However, the independent panel has also
expressed concerns that the low number of participants will affect its
ability to draw meaningful conclusions from the data about the safety
performance of the demonstration project participants.
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\6\ The panel includes former U.S. Representative, Jim Kolbe;
former Department of Transportation (DOT) Deputy Secretary, Mortimer
Downey; and former DOT Inspector General, Kenneth Mead.
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FMCSA's actions have also included providing guidance and training
to state officials. In five states where officials had previously told
us they were not ready to enforce the rules of the demonstration
project, officials advised that they were now ready, citing the
additional training and guidance received from FMCSA. FMCSA is also
recording insurance information from participant carriers, contracting
for a GPS tracking system for participating vehicles, taking steps to
improve data on Mexican driver convictions in the United States, and
monitoring Mexican carrier records. We will continue to monitor and
review these areas as the audit continues.
The balance of my statement discusses these issues in further
detail.
FMCSA Has Not Implemented a Key Quality Control for Ensuring That
Checks of Drivers and Vehicles Crossing the Border Occur as
Planned, Despite a Commitment To Do So
FMCSA's policy requires that CVSA decals, driver's licenses, and
proficiency in the English language be checked for project participants
at each border crossing regardless of whether the truck is staying
within the commercial zone or traveling beyond. This has been referred
to as ``checking every truck every time.'' We verified that FMCSA had
developed 25 site-specific border crossing plans in conjunction with
CBP personnel to carry out these checks at the border, and FMCSA's
records as of February 25, 2008, showed that 3,680 checks were
conducted. However, a key quality control for ensuring the reliability
and completeness of this information has not been implemented even
though FMCSA had committed to do so in its September 6, 2007, letter
report to Congress.\7\
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\7\ Enclosure 4 of the Department's September 6, 2007, letter
report to Congress.
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FMCSA reported to Congress that it would acquire crossing data from
CBP and perform a monthly analysis of a random 10 percent sample of the
data to reconcile CBP data against FMCSA's records. A monthly report of
the results would provide details on each border crossing and identify
any issues related to checking every vehicle every time as well as
including strategies to address those issues. The overall purpose of
the quality control plan was to document the extent to which FMCSA was
meeting its goal of checking every truck every time it crossed the
border. However, according to a FMCSA official, FMCSA is still
gathering information for this control. Until FMCSA implements a
quality control check using CBP, or another valid source of data, to
establish a baseline for the number of crossings, FMCSA will not have
assurance that all checks are being conducted as required.
In addition to ensuring that all vehicles and drivers are checked,
it is also important that accurate information be recorded during the
checks to facilitate the evaluation of the project. We examined FMCSA's
records for about 2,000 truck crossings for participants that occurred
through January 5, 2008. To date, we have identified 44 FMCSA crossing
records that had unclear or incomplete responses, such as stating ``not
applicable'' for recording a primary CVSA decal number or leaving blank
the space for English proficiency testing. To the degree that the
Independent Evaluation Panel uses this information for its work, errors
and omissions in crossing data would adversely affect the panel's
analysis. We will obtain updated data and conduct additional analyses
as the project continues.
The Limited Data Available at This Time Means We Cannot Draw Any
Meaningful Conclusions About the Safety Performance of the
Demonstration Project Participants
Immediately after issuing its report to Congress on September 6,
2007, the Department initiated the demonstration project by granting
provisional authority to the first Mexico-domiciled carrier. However,
far fewer carriers than anticipated are participating in the
demonstration project. As of March 6 of this year, 19 Mexican carriers
have been granted provisional authority, one of which withdrew \8\ on
February 1, 2008. By contrast, in April 2007, the Department had
anticipated granting provisional authority to 25 carriers each month,
until the number reached 100.
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\8\ The carrier that withdrew, Trinity Industries de Mexico S de R
L de CV, had identified 16 vehicles for use in the project, the largest
number of all demonstration project participants at the time it
withdrew.
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According to FMCSA records, an additional 28 carriers have
qualified for the program, but they have not filed the required proof
of insurance. Even if those carriers were to file the required
insurance proof and were granted provisional authority, the total
number of Mexican carriers would reach only 47--just under half of the
100 carriers originally envisioned.
FMCSA records also show that fewer vehicles than originally
estimated are involved in the project and only a small number of trips
are going beyond the commercial zones. In August 2007, FMCSA estimated
that, based on the number of vehicles approved at that time, 540
vehicles would be participating in the project if 100 Mexican carriers
eventually received provisional authority. By contrast, as of February
25, 2008, only 70 vehicles were identified by the 16 Mexican carriers
\9\ who had participated up to that point, including the carrier that
dropped out. FMCSA's records, as of February 25, 2008, showed 3,680
crossings into the United States by project participants, with 247 or
6.7 percent listing destinations beyond the commercial zones. About 90
percent of the recorded trips beyond the commercial zones were going to
a single state--California.
---------------------------------------------------------------------------
\9\ According to FMCSA data, 19 carriers had received provisional
authority as of March 6, 2008. We limited our analyses to the 16
Mexican carriers that had received authority as of February 25, 2008,
including the carrier that withdrew from the project on February 1,
2008. We did not include in our analysis data related to the three
carriers admitted to the project after February 25, 2008.
---------------------------------------------------------------------------
The table below compares the projected and actual carrier and
vehicle participation.
Source: OIG Analysis of FMCSA data. Data are for carriers granted
provisional authority as of February 25, 2008.
Although we have not independently verified the information,
according to FMCSA officials and press reports, factors such as the
additional costs of insurance, the uncertainty of the project, and the
burdens associated with increased reviews at the border may have played
a role in the limited participation of Mexican carriers.
The current number of participants is not adequate to make
statistically reliable projections or estimates of some important
characteristics, including safety characteristics such as the number of
crashes that could be expected involving long-haul Mexican carriers.
The carriers currently \10\ participating in the project represent
about 2 percent of the 723 original applications for the long-haul
authority that FMCSA provided us. Nonetheless, our analysis of the
first 16 carriers that participated in the demonstration project shows
that for certain other characteristics, such as number of vehicles
reported, the demonstration project participants appear to be
representative of a larger group of Mexican carriers that have applied
for long-haul authority in the United States over the past 10 years.
---------------------------------------------------------------------------
\10\ As of March 6, 2008.
---------------------------------------------------------------------------
For example, the figure below compares the number of vehicles
operated by demonstration project participants and the universe of the
723 long-haul applicants. This figure is based on answers supplied by
the 723 applicants in their application packages to FMCSA and on the
answers the demonstration project participants supplied on their
individual applications.
Source: OIG Analysis of FMCSA data.
We Will Continue To Review and Monitor FMCSA Actions To Establish and
Enhance Mechanisms for Assessing Adverse Safety Impacts From
the Project and for Monitoring and Enforcing Safety Rules for
Project Participants
To its credit, FMCSA has taken actions to help ensure that
participants comply with safety regulations and project requirements.
Based on our interim observations as the year-long demonstration
project reaches its 6-month point, we plan future work in the following
areas.
Guidance for and Training of State Enforcement Officials. FMCSA has
provided guidance and training for state enforcement officials. We
obtained information showing that 421 state officials received further
training on issues related to foreign motor carriers before and after
the project was initiated. To assess the impact of these efforts, we
followed up on the results of our September 6, 2007, report where we
noted that officials in five states were of the opinion that they were
not ready to enforce the requirements of the demonstration project. For
this review, we re-contacted officials in those five states, and all
now indicate that they are ready to enforce demonstration project
requirements for Mexican carriers. Those officials cited completion of
adequate training and receipt of FMCSA guidance as the primary reasons
for their current readiness to enforce demonstration project
requirements. We will continue to monitor FMCSA's training efforts as
the project continues.
Insurance Requirements. FMCSA has recorded insurance information
from project participants in an established database. Our independent
examination of FMCSA's Licensing and Insurance System and our direct
contact with the insurance companies showed that all Mexican carriers
who were issued provisional authority as of February 4, 2008, had the
required $750,000 in bodily injury and property damage liability
insurance We will continue to verify that insurance is maintained by
the participants as the demonstration project continues.
Mexican Conviction Database. FMCSA has established a Mexican
Conviction Database to track traffic convictions of Mexican drivers
occurring in the United States. FMCSA has provided us with data
indicating that problems we identified in August 2007,\11\ with the
Mexican Conviction Database (formerly known as the 52nd State System)
have been corrected by the states. We also verified that a report to
help identify inconsistencies in the database was issued in January
2008. We will conduct further testing at the states as the audit
continues.
---------------------------------------------------------------------------
\11\ OIG Report Number MH-2007-062, ``Follow-up Audit on the
Implementation of the North American Free Trade Agreement's Cross-
Border Trucking Provisions,'' August 6, 2007.
---------------------------------------------------------------------------
Global Positioning System (GPS). FMCSA has contracted with a
company to place global positioning devices on all U.S. and Mexican
trucks participating in the project; and FMCSA demonstrated to us how
the system can identify the position of a particular truck. Data
provided by FMCSA showed that as of February 21, 2008, 82 GPS units had
been installed (38 on Mexican trucks and 44 on U.S. trucks) and plans
were being finalized to install an additional 19 units (on 14 Mexican
trucks and 5 U.S. trucks). As the demonstration project continues we
plan to monitor the installation and use of GPS technology,
particularly as it relates to cabotage and hours-of-service violations.
Mexican Carrier Monitoring System. Our previous audit work
confirmed the establishment of a system for monitoring compliance of
Mexican carriers operating in the United States. We obtained reports
from this system for demonstration project participants, and we will
continue to review these as the audit continues.
In closing, let me assure you that we will continue to closely
monitor and review this demonstration project and to scrutinize other
critical issues regarding the cross-border trucking provisions of the
North American Free Trade Agreement (NAFTA), as required by Congress.
The exhibit to our testimony provides a summary of our September 6,
2007, report on issues pertaining to the demonstration project and a
list of our other prior reports and testimonies.
Mr. Chairman, this concludes my statement. I would be happy to
answer any questions that you or other members of the Committee may
have at this time.
Exhibit. Prior OIG Reports and Testimonies on Cross-border Trucking
Issues
Summary of our Latest Report
OIG Report No. MH-2007-065, ``Issues Pertaining to the Proposed
NAFTA Cross-Border Trucking Demonstration Project,'' September 6, 2007.
We identified three issues pertaining to the proposed demonstration
project.
First, FMCSA had not developed and implemented complete,
coordinated plans for checking trucks and drivers participating in the
demonstration project as they cross the border. Without having site-
specific border crossing plans in place and fully coordinated with CBP
and the state, the Department's commitment to check every demonstration
project truck every time it crosses the border into the United States
is at risk. We also stated that these plans should include quality
control measures to ensure that FMCSA's system for checking each
demonstration project truck is effective. These checks are important
because they review the driver's license to ensure that the vehicle is
driven by a licensed driver and verify that the truck has a current
inspection decal issued by the CVSA. This decal shows that the vehicle
received a safety inspection in the previous 3 months.
Second, we reported that a considerable number (26 of 50) of state
officials, responsible for coordinating motor carrier safety programs,
expressed one or more concerns about the demonstration project, and
officials in 5 states indicated they were not ready to enforce
demonstration project requirements. Despite issuing guidance and
brochures on assessing English language proficiency; detailing cabotage
rules, regulations, and procedures; and initiating a train-the-trainer
program, state concerns indicated that FMCSA should develop a feedback
mechanism to ensure that critical information reaches the roadside
inspectors who enforce Federal safety rules.
Third, we found that FMCSA implemented 3 of 34 provisions in
Section 350(a) of the FY 2002 Appropriations Act using language that
differed slightly from what Congress had specified. The differences
related to which trucks should be inspected during pre-authorization
safety audits, which drivers should undergo electronic license checks
at border crossings, and the inclusion of newer safety rules applicable
to Mexican motor carriers.
Other Prior Reports and Testimonies
OIG Report No. MH-2007-062, ``Follow-up Audit on the Implementation
of the North American Free Trade Agreement's Cross-Border Trucking
Provisions,'' August 6, 2007.
OIG Testimony, CC-2007-029, ``Status of Safety Requirements for
Cross-Border Trucking With Mexico Under NAFTA,'' March 13, 2007.
OIG Testimony, CC-2007-026, ``Status of Safety Requirements for
Cross-Border Trucking With Mexico Under NAFTA,'' March 8, 2007.
OIG Report No. MH-2005-032, ``Follow-up Audit of the Implementation
of the North American Free Trade Agreement's (NAFTA) Cross-Border
Trucking Provisions,'' January 3, 2005.
OIG Report No. MH-2003-041, ``Follow-up Audit on the Implementation
of Commercial Vehicle Safety Requirements at the U.S.-Mexico Border,''
May 16, 2003.
OIG Testimony, CC-2002-179, ``Implementation of Commercial Motor
Carrier Safety Requirements at the U.S.-Mexico Border,'' June 27, 2002.
OIG Report No. MH-2002-094, ``Implementation of Commercial Vehicle
Safety Requirements at the U.S.-Mexico Border,'' June 25, 2002.
OIG Report No. MH-2001-096, ``Motor Carrier Safety at the U.S.-
Mexico Border,'' September 21, 2001.
OIG Testimony, CC-2001-244, ``Motor Carrier Safety at the U.S.-
Mexico Border,'' July 18, 2001.
OIG Report No. MH-2001-059, ``Interim Report on Status of
Implementing the North American Free Trade Agreement's Cross-Border
Trucking Provisions,'' May 8, 2001.
OIG Report No. TR-2000-013, ``Mexico-Domiciled Motor Carriers,''
November 4, 1999.
OIG Report No. TR-1999-034, ``Motor Carrier Safety Program for
Commercial Trucks at U.S. Borders,'' December 28, 1998.
OIG reports, testimonies, and correspondence can be accessed on the
OIG website at www.oig.dot.gov.
Senator Dorgan. Mr. Scovel, thank you very much for your
testimony.
Secretary Peters, you continue to talk about NAFTA, and
this is not a hearing about NAFTA, but I don't want to observe
in this issue opportunities possible because of NAFTA, that
prior to NAFTA's enactment, we had a $1.5 billion trade surplus
in Mexico. In the past year, we had a $74 billion deficit. It
went from a $1.5 billion surplus, to a $74 billion deficit. So,
when we talk about opportunities, I want to talk about the
opportunities to begin providing some balance, and restore some
opportunities for this country.
But, having said that, you--I believe--are telling me that
your attorneys have advised you that you have a right, given
the way you read the statute passed by the U.S. Congress--to
interpret it as prohibiting some future pilot project, but
nonetheless a provision that is unrelated to the current pilot
project, is that your testimony?
Secretary Peters. Chairman Dorgan, it is.
I do have with me, D.J. Gribbin, who is General Counsel of
the agency, and certainly can respond to that question.
But, sir, the Administration looked very closely at the
2008 DOT Appropriation Act. By prohibiting the use of funds to
establish a cross-border motor carrier demonstration program,
we do interpret that the Appropriations Act does not prohibit
spending funding to continue to implement the ongoing
demonstration project, which was established in September 2007.
Senator Dorgan. Mr. Gribbin, have you advised the Secretary
that this language allows the current pilot project to
continue?
Mr. Gribbin. Yes, Senator. When the language passed, the
Secretary asked for a legal opinion on the effect the language
would have on the Department's cross-border program.
Understanding the context in which this language was passed, we
took our traditional, sort of, statutory interpretation
approach, and looked at the plain meaning of the text, applied
the ``every word given effect'' principle, statutory
construction, and the need to read the statute as a whole.
And as the Secretary mentioned in her statement, in the Act
that was passed, several times Congress uses ``establish or
implement.'' The statutory principle of ``every word giving
effect'' requires us to have a look at why Congress would say,
under one section ``establish,'' versus in a different section
say ``establish or implement.''
But, to be honest, actually before we even got to that, we
applied the plain meaning rule, and the plain meaning of
``establish'' is ``to begin,'' ``to start,'' ``to do something
new.''
Now the petitioners in the 9th Circuit have argued that the
``establish'' has a slightly broader meaning, ``to introduce
and cause to grow and multiply.'' But even to introduce, you
have to start with an introduction, which is a beginning, and
so, I think it's clear just under the plain meaning rule, that
establish, in this context, means to start a new program.
Senator Dorgan. Mr. Gribbin, why did the FMCSA have such an
apoplectic seizure when Congress passed this? Your agency said,
``This is awful. This is awful,'' because they interpreted it
to cut off your program, until you got a chance to see if you
could figure out how to interpret these words yourself--did you
talk to FMCSA about why they felt this amendment was going to
be destructive and awful?
Mr. Gribbin. I have not. I assume at that point in time we
hadn't had time to fully analyze the impact of the language
itself.
Senator Dorgan. Do you analyze Congressional intent, at
all?
Mr. Gribbin. Well, the way statutory construction works is,
you start with the plain meaning, does it make sense on its
face? In this case, clearly establish means begin, so in effect
we could stop there.
Now, I know that in the letters that you received from
Professors Segal and Smith, they said there's a problem with
reading this, ``establish'' as just a beginning, because there
are no other beginnings to come. I'm not sure that they're
familiar with section 6901 subsection D--in which Congress
passed just last May, which talks about the establishment of
cross-border trucking programs for coaches, motor coaches, and
hazardous materials.
One of the reasons we were comfortable in finding
``establish'' meaning ``beginning,'' is because actually
Congress had already talked about future demonstrations that
might occur.
Senator Dorgan. But--I'm sorry, you know better than that.
You know why Senator McCain said what he said. He was very
upset after the vote. He understood what the intent of this
was. You just--ignore that? And you ignore what the Legislative
Counsel who drafted it determined these words to mean? You
ignore that whole body of evidence? I don't understand that, I
mean----
Mr. Gribbin. Well--I'm sorry, sir, I didn't mean to
interrupt you.
Senator Dorgan. The consequences are not yours, apparently.
As you know, we've sent a letter asking to see whether you are
violating the Antideficiency Act. We now have a 3-judge panel
that will rule on this. What if the 3-judge panel rules, as the
one judge suggests, that this is unambiguous on its face--
you're wrong. And what if the letter comes back saying,
``You've violated the Antideficiency Act,'' have you just hung
the Secretary up here by some banister someplace, because the
attorney says, ``We'll I've found a creative way to read a word
in a different way,'' but of course everybody disagrees with
you. What are the consequences for you?
Secretary Peters. Let me take that--Senator, if I may, let
me speak first to those two questions, and then I--I'm not an
attorney, I don't even play an attorney on TV, so I will not
try to attempt to answer anything that I'm not qualified to do
so, and our General Counsel is here.
Sir, if the 9th Circuit Court of Appeals rules against us,
we would want to explore, first, our options for appeal, but we
would certainly obey an order of the court.
As to the alleged violation of the Antideficiency Act, we
certainly do not believe that our continuing the cross-border
trucking demonstration is a violation of that Act.
We look forward to cooperating with GAO as they investigate
this incident, this circumstance, and should GAO determine that
our actions do constitute a violation, I would want to consult,
again, with our attorneys as to the specific basis for that
determination, prior to making any decisions.
Mr. Gribbin. But, Senator, I don't think we're anywhere
close to even getting there at this point in time. Again, we
have applied rules of statutory interpretation the Supreme
Court has applied since the early 1800s. I mean, I have been
involved in a fair number of close calls, on what does this
word mean, and to be honest with you, I don't think this is
even a close call.
Establish, as a dictionary definition, clearly means to
begin. Then you look at the statutory construct it is in. If we
were to read establish as meaning ``establish or implement,''
in section 136, in effect, section 135 would have no impact
whatsoever. Section 135 lays out a whole series of restrictions
on the cross-border program. If Section 136 eliminated section
135, why would you have section 135?
Senator Dorgan. I'm obviously not a Constitutional lawyer,
either, I don't intend to debate you with respect to the law.
Let me read the letter from the Legislative Counsel, they
drafted this at the instruction of myself and Senator Specter.
It was passed with two cosponsors in the House, two cosponsors
in the Senate, passed 74-24 in the U.S. Senate.
Here's what the Legislative Counsel that drafted the
provision said. ``The phrase `and implement' was not included
because it was felt the phrase `establish' was to be construed
in its broadest context, and such a broad construction would
include implementation. In fact, the legislative history in the
Senate indicates it was intended to preclude the carrying out
of any demonstration program, including the pilot program put
into effect in September 2007.''
Now, I go back to my point. This is not a hearing in which
we're having a couple of lawyers debate a word. I think there's
an arrogance here that is all-too-common in this
Administration. The arrogance of saying, ``We've found a way to
deal with this.''
They found a way to deal with torture, in fact. Just write
a memo, and say ``Torture's fine.'' Write a memo and say
``Cross-border trucking is fine,'' despite the fact that
Congress said you can't use money for that purpose. There will
be consequences for this. There will be consequences.
So, let me ask a couple of other questions if I might.
Mr. Scovel, we have had the Secretary tell us that a
substantial amount of work has been done to make sure that we
have equivalent standards, and we have safety that has been
ensured. ``Every truck, every time,'' I think was your
statement. Mr. Scovel, can you confirm that every truck, every
time has been inspected, as the Secretary has suggested.
Mr. Scovel. Senator Dorgan, we don't know that every truck
has been checked every time.
Just to recap, very briefly, the development of that. When
the Secretary announced her intention in February 2007 to
initiate the demonstration project or pilot program, the
Department set as a goal to check every truck, every time. In
fact, it was a commitment at that time.
In May 2007, the Congress passed the Iraq supplemental,
instructing my office to review the Department's preparations
for the pilot program, to issue a report to which the
Department would then respond. We thought it was fair, and our
work over the summer to examine the Department's plans to make
good on its commitment to check every truck, every time.
One pitfall that we noted in our September 6 report was the
absence of site-specific plans. That is, for each of the 25
main commercial vehicle crossings between the United States and
Mexico--specific plans coordinated between FMCSA officials, and
Customs and Border Protection Service officials, so that those
FMCSA officials would have a reasonable chance of identifying
demonstration project trucks coming up from Mexico, singling
them out for inspection.
We also identified the need for a quality control measure,
on top of that, so that there would be some assurance that
those trucks checked by FMCSA officials were all of the trucks:
every truck, every time.
FMCSA, in response to our report in September, issued site-
specific plans, and incorporated them into their response to
Congress. The Department identified as a quality control
measure, a plan to draw from Customs and Border Protection, a
data set of demonstration project trucks that had come through
a particular border crossing point, and then to cross-check
that--a sample of 10 percent of CBP data, would be cross-
checked against FMCSA data.
And, we reviewed that methodology, we thought it was
reasonable at the time. Recently, when we were completing our
interim report, we checked again with FMCSA. Again, we thought
it would be fair to ask how they were doing on the quality
control, and we learned that it was not in place.
Therefore, what we have, sir, is a situation where the
Department has made the commitment to check every truck, every
time, but we just don't know if that's been accomplished yet.
We have records, as of February 25, indicating that there
have been 3,680 crossings by project participant trucks. We've
reviewed many of FMCSA's records documenting those, but again,
we don't know whether that's the entire set of Mexican trucks
that have crossed the border under the demonstration project
since September.
Senator Dorgan. Mr. Scovel, because this issue is about the
equivalency of standards--or lack of equivalency--let me ask
you with safety here as a backdrop. And the reason I ask the
question is if you were coming up to a four-way stop sign
tomorrow at some place in this country, and an 18-wheeler that
is on a long-haul mission from Mexico, you would want to know
that that truck, that driver, that company, is operating in a
manner that is as safe as a domestic carrier--driver's records,
vehicle inspection, accident reports--so that we know, we
certify that vehicle, that driver, that your safety at that
intersection, and the safety of your family is equivalent with
respect to the meaning of a U.S. truck.
Can you describe the extent to which the Department of
Transportation is ensuring that drivers have basic English
proficiency when they come into this country?
Mr. Scovel. When FMCSA officials are checking trucks that
are coming through each of the commercial border-crossing
points, they are required to check with the driver, ask a
series of basic questions, and determine English language
proficiency at that time.
Senator Dorgan. Isn't it the case that the proficiency
test, initially, didn't include any test of whether drivers
understood highway signs?
Mr. Scovel. That's my understanding, sir. It's my
understanding also that at this time, the test does include a
method to test Mexican drivers' familiarity with highway signs
in this country.
Senator Dorgan. I understand that's the case. They now are
asking them to at least understand highway signs, but didn't
initially.
Isn't it true that when they show drivers pictures of
highway signs, that marking the driver as English-proficient is
what they do, even if the driver's answer is in Spanish?
Mr. Scovel. I'm not familiar with that particular scenario,
sir.
Senator Dorgan. Is there anyone on your staff that's
familiar with that?
Let me tell you what I understand.
Mr. Scovel. Sure.
Senator Dorgan. My understanding is, if a Mexican driver is
shown a picture of a stop sign, and the driver responds that
the sign means ``alto,'' the Spanish word for ``stop,'' DOT
considers that driver to be English proficient.
Mr. Scovel. If I may have a moment, sir.
Senator Dorgan. Sure.
Mr. Scovel. To partially address your question, this is a
question involving the completeness and accuracy of FMCSA's
records during the border check. In early January, we pulled
2,000 border-crossing records from FMCSA and reviewed them to
see whether they appeared to us to be accurate and complete.
That's a fairly large sample. We identified 44 among them,
however, that were incomplete in some regard. Some of the
answers involved--some of the incompleteness--involved English
language proficiency, as well as notations as to driver's
license number checks, and CVSA decals. That's--44 out of 2,000
is not a large number, but it does indicate some minor problem,
at least, with the preparation of FMCSA's records concerning
data crossings--border crossings, excuse me.
Senator Dorgan. Mr. Scovel, while you're checking on that,
I would like to know the answer to that. If we have now
required that drivers of long-haul Mexican trucks identify
highway signs, but respond to them in a foreign language, it
raises the question of English proficiency, which is part of
the safety issues and safety considerations that I and others
are concerned about.
So, if you would check on that, my understanding is that a
driver responding to a stop sign by identifying it as ``alto''
is described as English-proficient by the Department of
Transportation.
Mr. Scovel. I do have an answer to your question, I was
just handed a document by a member of my staff, it's a
memorandum prepared by the Federal Motor Carrier Safety
Administration dated February 1, 2008.
In the section describing English-language proficiency
tests, there's a notation that, an instruction to the inspector
to ask the driver to explain the meaning of any four selected
highway signs, with a parenthetical note that the driver's
explanation may be in any language, provided the inspector is
able to understand the driver's explanation.
Senator Dorgan. So, if the inspector understands Spanish,
and the driver doesn't speak English, the driver is determined
to be English proficient?
Mr. Scovel. The section that I quoted, sir, would be one
component of the English-language proficiency check.
Senator Dorgan. And my question would be, what was
happening January 31, if this was a February 1 document? Do you
have any notion of that?
Mr. Scovel. I do not.
Senator Dorgan. And I'll tell you why I'm asking you these
questions. The reason I'm asking these questions is, I think
safety is at the root of this issue. As I said when I started
this hearing, if there were no safety questions, if there was
equivalency with respect to the condition of vehicles, the
records of drivers, and so on, and the basic safety conditions
of understanding the language, understanding the highway signs,
there wouldn't be a hearing. I wouldn't be contesting this, I
wouldn't be upset. I mean, we wouldn't have had the amendment
in the first place. But, I'm just trying to understand what's
going on.
Madam Secretary, you took 1 hour on a Thursday night to
issue your rule initiating this cross-border trucking program
after the Inspector General issued the report. I think the
report was issued at 7:30 p.m., and at 8:30 p.m., you announced
the cross-border trucking project.
Now, I'm going to ask you a question about that, but first
I want to ask the Inspector General--in that submission that
evening--and I don't have the date right here--but on that
evening when you submitted the Inspector General's report,
September 6, 7:30 p.m., last year, you released a report. In
the report, you said the following. You said, ``While the DOT
officials inspecting Mexican truck companies took steps to
verify onsite data, we noted certain information was not
available to them. Specifically, information pertaining to
vehicle inspections, accident reports, and driver violations
maintained by Mexican authorities was not available to the
Department of Transportation officials, unless such information
was included in the companies' records.''
Do you stand by that statement?
Mr. Scovel. We do, sir. In fact, if I may elaborate, very
briefly--accident reports, inspections records, driver
violations are not readily available to FMCSA inspectors when
they are onsite, in Mexico, conducting a pre-authority safety
audit. They are required by section 350 of the 2002
Appropriations Act, to review available information. And that's
what they do when they're onsite in Mexico and are reviewing
company records.
The one major database, Mexican national database, that
FMCSA officials have access to is called LIFIS, and that's the
Mexicans' database that records operator authority for their
commercial truck drivers. And it will indicate whether there is
a valid commercial drivers license issued to a particular
individual, whether that individual is required to remain
within Mexico, or whether he's authorized by the Mexican
government to engage in cross-border operations.
Senator Dorgan. But the only information the Department of
Transportation would have about the companies themselves or the
employees of those companies--for the most part--would be if
that information was voluntarily disclosed by the companies, is
that correct?
Mr. Scovel. That's correct, apart from what is available
through the LIFIS system. Yes, sir.
Senator Dorgan. That is nothing comparable to what we have
in this country?
Mr. Scovel. No, it's not.
Senator Dorgan. My understanding is that one of the largest
Mexican carriers who was to originally be involved in the
program was dropped by the Department of Transportation when it
was found that the company had a record of over 100 safety
violations per truck. And the Department of Transportation then
acted as if, well, it was never intended to be part of the
program, but--even under those circumstances, the only
information we have, because there's no central repository of
information in Mexico on these key issues--accident reports,
vehicle inspections, driver's records--is information you
obtain voluntarily. And my guess is that we don't have massive
numbers of inspectors determining whether the voluntarily
provided information is even accurate.
But let me get back this question of 8:30 p.m. on September
6, 2007, Secretary Peters--the Inspector General at 7:30 that
evening, said that the Mexican government does not have a
central repository of records. It seems to me, of things that
would be key to know--how are these drivers doing, what's the
condition of the truck, how many accidents have happened with
this driver on a truck--without that information, 1 hour later,
in the evening you rushed forward and started the pilot
project. It was, as if you were waiting at the starting gate,
didn't matter much what the Inspector General had to say. So,
what was the rush? And it seems to me that whole attitude now
confirms itself with your counsel saying, ``Yes, we're doing
this. We don't care. We'll parse words, we'll go to court and
debate, we don't care very much--we're going to be creative,''
and arrogant, in my judgment.
Secretary Peters. Senator, let me give you a couple of
answers. First of all, the U.S. has commitments to fulfill
under an international obligation, to the NAFTA trade
agreement. So, we do feel that we need to move forward with
this program if we have the authority to do so.
The Inspector General's report that you referred to--as is
customary--a draft copy of that report had been shared with us,
prior to writing the final report, so we did know what
questions the Inspector General were going to have. And the
three issues, in fact, the three requirements that he
addressed, in that report.
First, ensuring that adequate plans are in place to carry
out the Department's commitment to check every truck, every
time. Sir, as you're aware, the law required only a 50 percent
check. But, because I felt that this demonstration program was
important enough to do so, I personally said that we would
inspect every truck, every time, as it crosses the border--we
will check that it has a safety decal, we will check that they
have a valid driver's license--which is verifiable in the
Mexican commercial driver's license database--and that they
have English proficiency.
So, English proficiency is not a matter of holding up a
shaped sign and asking the driver if they can discern--whether
in Spanish or English--what that sign means. But, the inspector
has a conversation with the driver--where are you going? What
load are you carrying, what's your name? Where did you
originate, how long have you been driving? Those kind of
questions are asked of the drivers as they approach the border
before they're allowed to cross.
Senator Dorgan. Madam Secretary, I apologize for
interrupting, but did you just hear the Inspector General, just
a moment ago?
Secretary Peters. Yes, sir, I did.
Senator Dorgan. He asks the driver three or four questions
and the driver answers in Spanish correctly, that's English
proficient?
Secretary Peters. Sir----
Senator Dorgan. Did you just hear that?
Secretary Peters.--sir, I did hear that. If the driver
answers in English or Spanish when they are showing them the
shape of a sign, they can answer, and that is what the memo
addresses.
Senator Dorgan. Would you consider someone who answers in
Spanish, unable to answer in English, as English proficient? Is
that what you believe?
Secretary Peters. What I'm telling you, sir, is that there
are other tests for determining English proficiency, and this
is a conversation that the inspector has with the drivers, and
asks a series of questions, as I indicated. Where did you
originate? How long have you been driving? What load are you
carrying? What is your destination? Those kind of question are
asked of the drivers to determine their English proficiency.
Senator Dorgan. Madam Secretary, we just heard--and I have
learned, as well--that a driver answering the questions
accurately with respect to highway signs, answering in Spanish,
if they answer correctly, are determining to be fluent in
English?
Secretary Peters. Sir, with all----
Senator Dorgan. Proficient in English.
Secretary Peters.--yes, sir, with all due respect, that
memo addresses the recognition of signs, it does not address,
overall, the issue of English proficiency.
The second issue that the Inspector General referred to in
his September 6 report was ensuring that State enforcement
officials understand how to implement the recent guidance on
the demonstration project and that training initiatives have
filtered down to roadside inspectors. As the Inspector General
indicated, that has been verified.
And third, addressing our determination that Federal Motor
Carrier Safety Administration has implemented the policies, the
rules, and the regulations that differ slightly from the
language in 3 of the 34 specific Congressional requirements.
Those were the three issues that the Inspector General
addressed in his September report.
Sir. The quality control check with Customs and Border
Protection, this language issue--these are exactly the type of
things that a demonstration program is designed to identify,
and the Inspector General's report has been very instructive,
in terms of, for example, identifying the best method, or
methods, for quality control. We're using a layered approach
for quality control, and when we learned, sir, that when the
CBP data was not exactly able to be synched with ours--for
example, a CBP identifier for a truck could be various trucks
that are owned by a specific trucking company. So, there isn't
the ability to relay a data point in their record, directly to
a data point in ours.
In spite of that fact, preliminary numbers are very
favorable, with FMCSA verifying border checks for 95 percent of
the crossings noted for CBP which, these unique carriers can be
identified. The remaining 5 percent of the records are still
being investigated.
We also, sir, have started a process to put a GPS device on
every truck--I'm sorry--on trucks that are participating in the
demonstration program, and continue with CBP to access the data
that they have, in a format that will provide the type of
quality control to verify inspections of every truck, every
time.
We are also working with CBP to have motor carrier safety
integrated into the international trade data system, which is
part of the Automated Commercial Environment Development
Effort, so these efforts are continuing.
And finally, sir, we do have--Mexico does have--a central
repository, as the Inspector General indicated, the Licensia
Federale Informacione System--LIFIS--for all commercial
drivers, license checks can be conducted between that system,
and CDLS/ILS system that we have in the United States.
Sir, what the law requires us to do is to recognize each
other's CDL, as long as there are reasonable assurances that we
have a program that we consider safe.
Canadian drivers, for example, are not subjected to random
drug and alcohol tests, and yet we allow Canadian drivers, and
we allow the Canadian CDL program to be used as part of this
NAFTA Treaty provision.
Senator Dorgan. Madam Secretary, there is nothing in NAFTA
that requires us to allow Mexican long-haul trucking into this
country until it is safe. There is nothing under the trade
agreement that requires that.
And I started by telling you--we started this trade
agreement with Mexico with a $1.5 billion surplus, we now have
a $74 billion deficit, and you're worried about what Mexico's
going to do. The fact is, there is nothing that requires us to
fail to stand up for our own interests and our own safety
standards on American highways, so----
Secretary Peters. Sir, if I might?
Senator Dorgan. Yes.
Secretary Peters. Sir, I did neglect to make one other data
point that staff has passed to me. Seventeen of the 19 Mexican
carrier that are in the Mexican demonstration program were
already operating within the commercial zone, and therefore we
already had records for the inspections, and the crashes for
those carriers and for those trucks.
Senator Dorgan. Madam Secretary, let me try once again--
you've indicated you inspect every truck, every time. The
Inspector General says there's no way to verify that, for any
of us, at this point, because records have not been kept. You
indicate that there is not a circumstance where someone being
asked questions at the border in a Mexican truck, answering in
Spanish, is not certified as English proficient, or proficient
in the language.
I want to try to get at that, because as the Inspector
General indicated, there was a notation with respect to that
provision. Would you read the notation again, Mr. Inspector
General?
Mr. Scovel. This is an instruction to the inspector onsite,
sir. It reads, ``The inspector will ask the driver to explain
the meaning of four selected highway signs. (Note: The driver's
explanation may be in any language, provided the inspector is
able to understand the driver's explanation).'' So, I believe
my earlier testimony was that this was one factor among others
that the inspector could consider in determining whether a
Mexican driver had English language proficiency. By no means
did I mean to say that it was the only factor.
Senator Dorgan. That's a fair point.
But, Madam Secretary, could you tell us why that notation
exists? Why would there be a separate notation that says, ``If
we show highway signs to a Mexican driver, if they can answer
what those highway signs are in Spanish, they'll be determined
to be English proficient.''
Secretary Peters. Sir, the shapes of signs, road signs, a
stop sign, yield sign, for example--these signs are
international in shape, and generally in color, as well. I've
driven extensively in Mexico, and I understand that an octagon,
red, shaped sign, means ``stop'' or ``alto'' in Mexico.
What we were determining with this specific issue, and I
would certainly have to ask the FMCSA Administrator to expand
on that, beyond my personal language of it--but I have been to
a border inspection station, I have watched this test be
administered, and the shape of these signs is international, so
if the driver recognizes that sign and that shape, that driver
knows what to do.
But as the Inspector General just indicated, sir, that is
not the limits of the English proficiency examination that is
given to these drivers.
Senator Dorgan. Madam Secretary, I understood what you
would come today to tell us, that you intend to do what you
intend to do, you have lawyers that tell you what you can and
what you can't do. I think you're making a very big mistake.
And I used to run an agency, and I had lawyers. And, you know,
the fact is, you can get a lawyer to tell you almost anything
with respect to your counsel, I mean, I understand that he
probably loves to debate these words.
We've got people in the legislative counsel, I'm sure there
are going to be people in the circuit court that will love to
debate these things, but I think--this is not rocket science.
You understand exactly what the Congress was intending last
year, you understand exactly what they did, so did Senator
McCain, so did your agency in DOT when they were so upset with
it, and yet you believe you found a loophole.
It's happening in so many agencies in this Administration,
and frankly I'm just sick and tired of it, and so are so many
others. You have a responsibility, and you will meet it one way
or the other, because failure to meet your responsibility under
the law will bear consequences.
My colleague from Arkansas is here, and I have taken a lot
of time.
Senator Pryor, why don't you proceed?
STATEMENT OF HON. MARK PRYOR,
U.S. SENATOR FROM ARKANSAS
Senator Pryor. Thank you, Mr. Chairman. I appreciate your
attention to this.
Let me ask, if I may, Secretary Peters, first--just for a
point of clarification, I'm sorry, I was a few minutes late
getting over here--but you have a chart in front of the table
there, that says, ``All 22 Congressional safety mandates have
been met.'' I understand that chart to mean, past-tense. In
other words, you're saying, literally, all of the mandates that
we've laid out in one of the appropriation bills has been met.
Is that right?
Secretary Peters. Senator Pryor, yes, that is correct.
These requirements were laid out, I believe, in the 2002
Appropriation bill and there have been Inspector General
reports verifying that all of those requirements have been met.
In fact, Senator, exceeded, because instead of only
investigating 50 percent, or checking 50 percent, we are
checking 100 percent.
Senator Pryor. And that is the 2002 Appropriations bill?
Secretary Peters. That's correct, sir.
Senator Pryor. And, I believe mostly what Senator Dorgan
has been asking about is more recent legislation, mostly the
bill that was signed in October 2006.
There was an amendment to that port security law that had
to do with trucking security, in fact, some people might call
that the Pryor amendment, and I wanted to ask about this.
It's Section 703, focused on improving domestic trucking
safety by developing new regulations to determine legal status
verification for all licensed U.S. commercial drivers, develop
commercial driver's license anti-fraud programs, and assist
Federal, State and local law enforcement officials on how to
identify non-compliance.
What steps has the U.S. Department of Transportation taken
to develop a program to meet these mandates?
Secretary Peters. Sir, we have developed those
requirements, if you'll give me just a moment, I'm going to
talk to Administrator Hill to make sure that I answer you
correctly.
Sir, I apologize for the delay. What Mr. Hill has shared
with me is, we're incorporating these provisions in our CDL
rule now. That rule is being finalized, and we hope to issue
that rule later this year.
Senator Pryor. When you say ``later this year,'' I believe
the mandate, the law says, you're supposed to have it done by
April of this year. Will you have it done by April of this
year?
Secretary Peters. Excuse me, sir.
Sir, I'm told that the rule is finalized in terms of DOT,
it's at OMB right now awaiting approval, and sir, I give you my
word that I will do everything possible to have that
implemented by April of this year.
Senator Pryor. OK, maybe I'm reading between the lines, and
I shouldn't be, but I think what I'm hearing is it probably
won't be done by April of this year.
Secretary Peters. That's not what I'm saying, sir. I will
do everything I can to make sure that that rule is implemented
on time.
Senator Pryor. OK, let me ask about Mexican truck drivers
and Mexican carriers--they're required to register with the
International Registration Planner, IRP, and pay a portion of
registration fees to the States as our U.S. carriers pay.
Arkansas has an ad valorem tax, I'm not sure many States
have an ad valorem tax, but U.S. truckers are required to pay
that tax, as they are in many other States that have ad
valorem. Will the Mexican trucking companies be treated the
same as U.S. trucking companies, and do we have an assurance in
our State that somehow these Mexican trucking companies will
pay the same taxes that the U.S. companies pay?
Secretary Peters. Senator, the drivers and the trucks that
are involved in the pilot demonstration, or demonstration
program have to meet every applicable State law when it comes
to the taxes, as you mentioned, under IRP. I will get back to
you very specifically about Arkansas, to make sure that we are
addressing the ad valorem issue, but I do know that a
requirement is that they meet all applicable State laws.
Senator Pryor. One of the concerns I have as you follow up
on that is, it's my understanding that right now, my State does
not have the names of all Mexican carriers, their mileage
through our State and their addresses, and if there is a non-
payment issue, I don't think our State knows who's on the road
and who's not. So, I would really appreciate it if you could
get back with me and tell me how you all track that, and how
you keep the States informed.
Secretary Peters. We certainly will, sir. And one of those
things that we have implemented now is a GPS locator device on
the truck, so that will be able to help us track those trucks,
and know, sir, for example when they go through Arkansas, how
many miles, what time, et cetera.
Senator Pryor. Now that you mention that, has that part of
the plan been implemented? Do all of these Mexican trucks have
the GPS device that U.S. DOT can monitor?
Secretary Peters. I want to verify--I believe that we have
most of them, I don't know if all, let me double-check that.
Sir, approximately 2 weeks after they join the program they
are fitted with the device.
Senator Pryor. OK, so that means every Mexican truck,
except for the ones that have just entered in the last couple
of weeks should have that device?
Secretary Peters. And I don't believe they're allowed to
cross, but I'm not sure.
Are they allowed to cross prior?
OK, they could cross the border prior to that, either in
the commercial zone or beyond.
Senator Pryor. Explain that again?
Secretary Peters. They--in the first 2 weeks, after they
are entered in the program and perhaps don't yet have the GPS
locator device on the truck, they could be able to cross the
border, and enter either the commercial zone or beyond the
commercial zone. We will determine if that has happened, and
again, get back to you on the record with that.
Senator Pryor. OK, I know that various people, various
groups have asked U.S. DOT for documents and information under
the Federal Freedom of Information Act. As I understand it, the
Department of Transportation takes the position that a Federal
court decision is required before you all release those
documents. Is that the Department of Transportation's position?
Secretary Peters. Sir, I'm going to refer to our attorney
on that particular issue, I do not know that.
Mr. Gribbin. We are continuing to gather and review
documents in preparation to release them. Apparently there are
over 80,000 documents that are touched on by that request.
Senator Pryor. Well, do you take the position that you need
some sort of Federal court decision to release those documents?
Mr. Gribbin. No, it's a FOIA request, so we don't need a
court decision.
Senator Pryor. Right.
Mr. Gribbin. But what happens, is a FOIA request came in
for 80,000 documents----
Senator Pryor. And how long ago did that come in?
Mr. Gribbin.--that came in, in October 2006.
Senator Pryor. October 2006, this is March 2008. And 80,000
documents is a lot of documents, I understand that, believe me.
But it's not that many documents. What's the hold-up on
releasing those documents to the public?
Mr. Gribbin. Again, it just--FOIA requests are very
exhaustive, they're very labor-intensive, there are a lot of
documents involved. FOIA requests--we release documents, but
they're subject to certain exemptions. So, we need to, actually
need to go through the documents to make sure that all of the
information we're releasing, for example, does not violate
someone's privacy.
Senator Pryor. But, here again, a year and a half has
passed. And again, I understand 80,000 is a lot of documents,
but a year and a half has passed, you're the lawyer for the
agency, you have a legal team, you have people there that can
do that, why is that taking so long?
Mr. Gribbin. Let me, with your permission, let me go back
and find out exactly the status of this request, and report
back to you.
Senator Pryor. That would be good. And--not to compare
apples to oranges, but in Arkansas the Freedom of Information
Act, the State Act allows the State 3 days to provide
documents. Three days. In my experience in government, is the
longer you give someone to produce documents, the longer
they'll take. And I know that the Federal FOIA does not have a
time requirement, but you should provide these in a reasonable
time. And 80,000 documents--we're not talking about millions
and millions of documents, here. Some FOIA requests do have
millions and millions of documents. This one has 80,000
documents, according to your testimony, and you've had over a
year and a half to process this. I just don't understand why
it's taking you, at the Department of Transportation, so long--
it sounds to me like you're purposely not releasing the
documents. That's what it sounds, to me, like. You care to
comment on that?
Mr. Gribbin. I wouldn't read that intent into it. Senator,
apparently, originally there were 300,000 documents, now we've
figured out that 80,000 are responsive.
But, I will--I note your frustration, and I will get back
to you.
Senator Pryor. Let me ask this--when did you hone it down
to 80,000?
Mr. Gribbin. Over the course of the last quarter.
Senator Pryor. OK, well, here again, I know if you've honed
it down to 80,000, it seems to me you've had ample time, and
you've basically admitted that you've reviewed the 80,000
documents. My strong recommendation is that you release those
as quickly as possible, unless there's a provision under the
Federal FOIA that says you shouldn't release those. But, as you
and I both know, because we're both lawyers, you can redact
information, et cetera, et cetera, so I would strongly suggest
that you release that, and also I'd appreciate you getting back
with the Committee on the status of that FOIA request.
Let me ask one last question, if I may, Secretary Peters,
and Senator Dorgan, I'm sorry I'm impeding on your time, but as
I understand the Department of Transportation's position--you
are going ahead with this pilot project, even though there is a
specific law, specific statutory provision that tells you not
to--and we can fight about that and discuss that--I believe
that when Congress says you shouldn't do this, you shouldn't do
it. I've heard your testimony today, and I know your position
on that today. But, here's my question, specifically. Do you
believe that you have the legal authority right now to expand
the pilot project beyond what you're doing today?
Secretary Peters. Senator, I'm going to answer that
briefly, and then ask our attorney to be very specific about
that.
But, sir, we are in the first year of a demonstration
program now. I will not make a decision until, toward the end
of that year, when we have a chance to look at all of the data,
to talk to the Inspector General, to look at the CBP data, talk
to the independent evaluation panel, and determine whether we
go forward with an additional year of the program, or not.
Again, let me make sure that the lawyer here gets me to get
it right.
Mr. Gribbin. Thank you, Madam Secretary.
The--I'm sort of, to pull back just a second--the
Department has reached the legal conclusion that based upon
meaning of the terms and the statutory context and other rules
of statutory interpretation, that ``establish'' does not mean
``begin,'' ``establish'' means--``establish'' means ``begin,''
it doesn't mean ``and implement.'' And so we have, the
Secretary has the legal authority to continue forward, that
that language did not stop her.
And in fact, I don't think as you want--as a legislative
branch, I don't think you want the Executive Branch looking
past the clear language of a statute into what we deem to be
Congressional intent. I mean, that's a very slippery slope, and
pretty dangerous.
But, I would say right now, the Secretary's authority vis-
a-vis the cross-border trucking program is constrained by
Section 530, by Section 6901. So, she does not have the
ability, currently, to expand the program.
Senator Pryor. OK. Expand it beyond what exists today?
Mr. Gribbin. Exactly. Plus, she's constrained by the newly
enacted Section 136, which does not allow her to establish a
demonstration program. So, any expansion that would include
buses, any expansion that would include hazardous materials,
would clearly be establishing a new program. Section 136, as
recently enacted, would prohibit that.
Senator Pryor. That's all I have, Mr. Chairman.
Senator Dorgan. Mr. Gribbin, I understand you've given the
Secretary advice, here. But it is true--we don't want you to
look beyond the written law, and it's also true that we don't
want you to ignore the law. And we don't want you to be
creative enough, and arrogant enough, to decide the law doesn't
apply to you, and that's what's happening here, I believe.
Let me ask both Secretary Peters, and also you, Mr.
Gribbin, have you visited with the White House about your
decision to ignore the statute passed by the Congress?
Mr. Gribbin. Senator, with all due respect, I don't think
we're being either creative, or arrogant. What we're trying to
do--similarly when we have appropriation--we have a series--
during my time as Chief Counsel of the Federal Highway
Administration, and as General Counsel, there are a series of
times where Congress passes something with the intent of
affecting a certain action, but the language they use doesn't
get it there. And it's most--actually, most common in
Appropriations bills, where there will be an Appropriation
rider that will fund a specific project, a word will be left
out, and we understand Congressional intent, we understand
exactly what the sponsors meant to do, we know all of that. But
without the appropriate legal language, we as a Department
can't effectuate that change.
Senator Dorgan. Well, with due respect, Mr. Gribbin, I
don't know your background, but with due respect, the people
that write these legislative pieces for us are called the
Legislative Counsel. They actually have a fair amount of
experience, that's what they do for a living. And I have a
letter from the Legislative Counsel telling us exactly what
they intended with this language, and why. And it ought not be
ambiguous to you. It ought not give you room to decide that the
Secretary should ignore the law.
So, with due respect to your legal background, I would just
tell you, the people who do this for a living wrote it, they
knew exactly what was intended with it, and they would expect
an attorney working for the Secretary of Transportation to
interpret it in a proper way, and that has not been done, in my
judgment.
I ask the question once again, Secretary Peters, and Mr.
Gribbin, have you discussed this with the White House?
Mr. Gribbin. Before I get there, I would note that the
Legislative Counsel in her letter to you, in discussing what
she was trying to effectuate, used the phrase ``establish or
implement.'' Had that phrase--same phrase--actually been
reflected in the statute, it would not have been any discussion
whatsoever about the effect of that.
In addition, she also, earlier, she mentions the phrase, I
said, she used ``establish,'' instead of adding ``and
implement,'' in effect, it should be ``or implement.''
So, this is a post-enactment, and courts, to be honest,
have been highly dismissive of any post-enactment
communications reflecting upon the intent of Congress.
Again, our job is to look at, what did the House pass? What
did the Senate pass? What did the Conference Committee decide
in conference, ``or implement,'' what came out? Based on the
legislative history, if we were to get to the legislative
history, it's pretty clear that the language that was enacted,
that was signed by the President, does not block the current
demonstration program.
But, I'm sorry, I failed to answer your----
Senator Dorgan. No, no, the time is yours, Mr. Gribbin--
that is a long and tortured trail to get to that ending point,
but it's wrong. And, you know, you have the right to advise the
Secretary.
I ask my question again, Madam Secretary and Mr. Gribbin,
have you discussed these issues with the White House?
Mr. Gribbin. As part of, especially something that has the
visibility of an issue like this, we routinely consult with the
Justice Department and White House Counsel, and did so on this
matter.
Senator Dorgan. And so, Madam Secretary, who did you
discuss this with at the White House?
Secretary Peters. Sir, I'm going to let Mr. Gribbin talk
about the discussions with legal counsel at both the White
House, and of course, the Department of Justice as well,
because he conducted those discussions.
Senator Dorgan. And you've had no discussions with the
folks at the White House on this subject?
Secretary Peters. Sir, I am answering that part of the
question right now, sir. The question that I asked after this
Fiscal Year 2008 Consolidated Appropriations Act was passed, is
whether or not it required that we shut down the demonstration
program. And as Mr. Gribbin has indicated, Senator, that was
not the interpretation.
I discussed with the White House, I specifically discussed
with the Office of Legislative Affairs--I'm sorry, yes,
Legislative Affairs--the U.S. commitment to fulfill our
international obligations under the NAFTA trade agreement, and
based on the interpretation of the law not requiring that we
shut the program down, I made a decision not to shut the
program down.
Senator Dorgan. Let me, if I might, without causing you
discomfort, Mr. Scovel, in your release of March 11, that's
yesterday, you indicate, ``While our mandate is to address
those specific issues required by Congress, we're mindful of
the legal questions currently before the 9th Circuit Court of
Appeals. Among those is the question of the legal effect of the
language contained in the 2008 Appropriations Act, `None of the
funds made available under this Act may be used to establish a
cross-border motor carrier demonstration program.' In my view,
after reading the Senate floor debate from early September,
it's clear the sponsors of this amendment--sponsors of the
amendment to the Senate Fiscal Year 2008 Transportation and
Housing Appropriations bill, wanted to halt the project by
denying funding. The parties to the court action have briefed
orally and argued the interpretation. Given that the matter is
joined before the 9th Circuit, I'll respectfully defer to the
body's judgment.''
I, again, find it almost unbelievable that we're here
listening to this. It's clear to me, it's clear exactly what
the drafters meant, and they do that for a living, with all due
respect to the Counsel at the Transportation Department. It's
clear what the Congress meant, and Madam Secretary, the
separation of powers in this government of ours requires each
to be respectful of the other. I don't believe the current
Transportation Department approach is respectful of the U.S.
Congress, in this respect.
And, as I indicated, you will do what you will do, but I
will tell you that there are consequences for that. And, you
know, there will be other occasions where the Congress will
address your issues, and in other ways, and I asked you to come
to this hearing, because I wanted to try to understand exactly
what it was you were trying to do here.
I think you are on very thin ice in describing a program
that, number one, was not ready. You're suggesting, somehow,
that Mr. Scovel's report gave you the green light. Mr. Scovel
said some good things, and some things that were troubling in
the Inspector General report that came out, 7:30 that evening.
Mr. Scovel, I don't think you were giving them any light--you
weren't necessarily giving them a green light, were you?
Mr. Scovel. It wasn't ours to give a light, sir. We wanted
to point out facts for the consideration of policymakers on
both sides of the debate.
Senator Dorgan. Well, that's important to understand,
because the Department of Transportation has represented your
report as giving them a green light.
Do you have any further questions of this panel, Senator
Pryor?
Senator Pryor. I do, Mr. Chairman. If I may, just ask a
couple, I'll try to be very brief.
Madam Secretary, there's a company, a Mexican carrier
called Trinity Industries de Mexico--they were participating in
the pilot program, they were pulled out of the program last
month, but they had over 1,000 safety violations, and 75 out-
of-service orders during the 12 months from September 2006 to
September 2007.
I'm a little puzzled when I learned about this, because
I've heard you say here today, and on other occasions, that
safety is your primary consideration. So, how do you explain
how a company like this could be in the program in the first
place? Did DOT not do a background inspection on this company?
Did DOT miss, did DOT ignore? Was DOT not prepared to let this
company through? Tell the Committee, if you can, how this
company was allowed to participate?
Secretary Peters.--was advised that they were withdrawing
because of the high level of scrutiny that their vehicles were
subject to as a result of participation in the demonstration
program.
This motor carrier has been operating in the Mexican
economy for over 30 years, they have established business
practice within the commercial zone. They ultimately did not
feel that they would operate outside of the commercial zone,
and so that was the reason for withdrawing this company.
This company did pass the pre-authority safety audit, sir,
it did. But, as part of that requirement, and another step in
the layered enforcement of this issue, was the inspection at
the border each and every time they crossed the border,
regardless of whether they were going into the commercial zone,
or intended to go beyond. They did not go beyond the commercial
zone during their participation in the project, though.
Trinity crossed the border a little over 1,100 times, never
leaving the commercial zone, and at their request, their
operating authority was withdrawn.
Senator Pryor. Well, if I might just ask on that point, is
it the case that this company has a record of over 100 safety
violations per truck, and you're saying, ``Well, maybe so, but
they're only operating within 25 miles of the border.''
Are you aware that they've had over 100 violations per
truck?
Secretary Peters. Senator, I am not at all excusing their
behavior, and let me verify that fact, because I don't want to
speak to that without ensuring that I know that's accurate.
Senator Pryor. But--go ahead.
Secretary Peters. Senator I apologize for the delay. What's
been explained to me is that many of the times that Trinity
crossed, they were bringing in new trailers, trailers that had
not been inspected prior, and they were finding violations with
those trailers.
We don't have verification with us now, but we'll get back
to you in the record as to, if that was accurate in terms of
hundreds of violations, per vehicle or per trailer.
Senator Dorgan. If this is a company that has 100
violations per vehicle, one would worry about the 25 miles
inside our border that they are operating, and let alone, the
long-haul trucking. So, if I were you, I would look
aggressively, I mean, we wouldn't want that within 25 miles of
the border, would we?
Senator Pryor?
Senator Pryor. And also, Madam Secretary, just to make sure
I understand your testimony a moment ago, you said this company
voluntarily withdrew from the program, not DOT making this
company withdraw, is that right?
Secretary Peters. Senator, that is accurate, however they
did know that we were concerned with their vehicles, and they
did withdraw prior to the time that we did not--we said that
they were not eligible to work in the program.
Senator Pryor. So, how did they get in the program in the
first place?
Secretary Peters. Sir, they passed the required pre-
authority safety audit, at which time----
Senator Pryor. Whoa, whoa, whoa--how do you pass one of
those if you have as many violations as this company has? How
do you pass that?
Secretary Peters.--Senator, I think what I tried to explain
earlier, and perhaps not well enough, is that the vehicles that
were inspected at the time they passed the pre-authority safety
audit, were not the vehicles that they were subsequently--or
the trailers, rather--that they were subsequently bringing
across the border. So, when they were approved at the pre-
authority safety audit, that would have meant the records on
the drivers, the equipment--both the trucks and the trailers--
at the site, that intended to be used in the program were
inspected at that time.
Subsequently, they brought different trailers across the
border, and we did find violations with those trailers.
Senator Pryor. But isn't it a red flag when you see the
chronic history of violations with this company? Isn't it a red
flag that they should not be in this program?
Secretary Peters. Senator, it certainly is with this
company, however, I would stress the fact that of the 19
carriers, this was an anomaly. We have not had that record with
the other carriers.
Senator Pryor. OK. Well, nonetheless, Mr. Chairman, one of
those things that concerns me about that is it's this company
that had this chronic history of violations--they get through
the DOT process, and then they voluntarily get out of the
program--it's not the DOT that makes them get out, it's that
the company has voluntarily asked to be let out of the program.
One last question, if I can, Mr. Chairman--and I appreciate
your patience--but, I want to be very clear, I want to make
sure I understand the Department of Transportation's position
on this, and that is--does the U.S. Department of
Transportation accept a Mexican CDL as equivalent to a U.S.
CDL?
Secretary Peters. Senator, we do, with some exceptions. For
example, we do require that anyone who drives in the United
States on a commercial driver's license, including Mexicans,
pass, for example, a drug and alcohol test, that it is
administered by a U.S.-certified laboratory. That is a
requirement that we have, they have to abide by that
requirement. You mentioned earlier, some other requirements
about paying fuel taxes and things like that--every Mexican
truck, every Mexican driver who drives into the United States
has to comply with our laws, here in the United States.
Senator Pryor. Well, I hear what you're saying, but my
understanding of the Mexican CDL system, as compared to the
U.S. CDL system, is that Mexico has some vague requirements,
Mexico has some requirements that would probably not meet U.S.
standards. And I think we are on very dangerous ground if we
just carte blanche accept a Mexican CDL as an equivalent to the
U.S. CDL, because it's not. It's not the same. The U.S. has
stricter, tougher standards for our drivers than Mexico does.
And I think we're on very dangerous ice when it comes to safety
on our highways if we just give carte blanche to these Mexican
truck companies to allow their drivers with Mexican CDLs to
come into this country.
Secretary Peters. Senator, the program does require us to
recognize each other's CDLs. The Mexican CDL is somewhat
different, but not substantively different than the American
CDL.
And as I pointed out earlier, for example, Canadian drivers
who participate and drive into the U.S. on a regular basis, are
not required in Canada, to submit to random drug and alcohol
tests. When they drive in the United States, they are subjected
to that requirement, and that is the same thing that happens
with Mexican drivers who come into the United States, have to
meet our requirements, as well.
Senator Dorgan. Secretary Peters, there's nothing that
requires us in any trade agreement to sign up to, or submit to
something that we believe diminishes safety on American roads.
I mean, you keep suggesting somehow, that we are required under
NAFTA to do this now. That is not the case. I want to let you
go, because we have another panel, but I do want to make this
point--you said that the company that had 100 safety violations
per truck--which is kind of sketchy information that we have,
voluntarily withdrew. I mean, most of us from the outside
observe that as an embarrassment to the Department of
Transportation, and they quietly had them withdraw.
But, if they are still operating within 25 miles of the
border, first of all, the question Senator Pryor asked is right
on point--why would they have been voluntarily withdrawing, why
would you not have kicked them out of the program immediately
when discovering that information? And why are they still
operating within 25 miles of the border?
Mr. Scovel, I wonder if you would--at the written request
of Senator Pryor and myself--look at this narrow issue, with a
company that apparently voluntarily withdrew, what kind of
safety violations existed? What were the circumstances of the
withdrawal? Would the Inspector General, if we put this in
writing, and make a request of this committee, would you look
at that narrow issue, so that we could understand it, a bit?
Mr. Scovel. Of course, sir. And I will add that, as part of
our continuing study of the demonstration project, with a final
report that's due within 60 days of the conclusion of the
project, we are reviewing the safety records of the
participants, and we will include this one, as well, sir.
Senator Dorgan. All right.
Secretary Peters. Senator, if I may correct, sir. I did
misread the statement that was handed to me about Trinity, and
it said that their operating authority was withdrawn. Was taken
away. So, it would infer to me that it was not voluntary, and
so I misread that statement, and I do apologize.
Senator Dorgan. Well, we will get the full story of Trinity
from the Inspector General's office.
Secretary Peters. And, again, sir, to demonstrate the
anomaly that this trucking company presents, the out-of-service
rate for trucking companies that are participating in a
demonstration program is 10 percent--well under, substantially
under--the U.S. rate of service, or out-of-service trucks, or
the rates for trucks that are participating out of Canada, as
well. Ten percent, as opposed to about 25 percent.
Senator Dorgan. Well, let me at least talk about Trinity--
100 violations per vehicle, and they're still operating in the
first 25 miles without any obstruction by the Department of
Transportation?
Secretary Peters. Sir, I don't believe, when those trucks
are taken out-of-service, or when those trailers are taken out-
of-service, they are not allowed to come into the United States
at all.
Senator Dorgan. Well, that would be the case if you
inspected every truck, every time, which I believe is not the
case. Certainly not the case with the whole universe of trucks
in the 25-mile zone.
But let me try to understand, as I let you go--you've
coordinated with the White House on this, you've talked to the
counsel at the White House with respect to your policy, you--
through your attorney--have taken a policy that says we have
read what the Congress has passed, we've decided we don't agree
with it, we don't agree with the way it's worded, we believe we
have room to slither through the side here, someplace, and do
what we want to do, and you believe that you have legal
authority to ignore what Congress, I believe, clearly has
intended.
As I said before, I think there will be consequences for
that, my hope is that you would consult, once again, with the
White House, and both decide that there are too many examples
of this to add one more. And I hope, Madam Secretary, that you
will think better.
I believe I've treated you respectfully, but I certainly
don't respect the decision that you and the Department of
Transportation have made.
I appreciate your coming to the Committee and explaining
it. It angers me even more having had this discussion, because
I believe that government works when people of good faith are
doing what they believe to be right, and I believe that is not
the case with the Department of Transportation. You may have
the last word.
Secretary Peters. Senator, I certainly give you that
belief, and I would ask that you give us the belief that we are
doing what we think is right, as well. There is no intent to
disrespect you, or this Congress, sir.
Senator Dorgan. There are too many examples in this
Administration, starting at the White House, down through the
Department of Justice, and to the agencies with respect to
torture and a dozen other issues, when this Administration has
decided what the Congress has done matters little to them. And
this appears to be one of them, regrettably.
Madam Secretary, I appreciate your appearing before the
Committee. I will, with consent, send you additional inquiries,
and we will wait for the Inspector General, as well, to give us
some additional information.
Mr. Inspector General, again, thank you for your work, the
Inspectors General, play a very significant role in our
government, I appreciate the work you've given us.
Mr. Gribbin, thank you for accompanying the Secretary here,
and we will excuse all of you. Thank you very much.
We have one additional panel, and I would like to call
Jackie Gillan, Vice President of the Advocates for Highway and
Auto Safety to come forward, and Mr. Paul Cullen, General
Counsel, Owner Operator Independent Drivers Association to come
forward.
And I would ask those who wish to visit prior to this panel
leaving to go outside the room and visit outside the room.
Let me thank Jackie Gillan for coming today. Jackie is Vice
President of Advocates for Highway & Auto Safety, she will
speak as a safety advocate, and she'll talk about the testimony
she's just heard today, and the review that she has made of the
Department of Transportation.
Let me ask, if we can, to have the room be settled.
And, is Mr. Cullen present? Mr. Cullen, will be back in
just a moment.
Ms. Gillan, why don't you proceed at this point, and we
will then hear from Mr. Cullen.
Ms. Gillan?
STATEMENT OF JACQUELINE S. GILLAN, VICE PRESIDENT,
ADVOCATES FOR HIGHWAY AND AUTO SAFETY;
ACCOMPANIED BY HENRY JASNY AND
SHERYL JENNINGS McGURK
Ms. Gillan. Thank you, Senator Dorgan.
Good afternoon, my name is Jackie Gillan, and I am Vice
President of Advocates for Highway and Auto Safety. I am
accompanied today by Henry Jasny, our General Counsel, as well
as Sheryl Jennings McGurk, who lost her parents and nephew in a
crash involving an unsafe truck from Mexico.
Senator Dorgan. Thank you, proceed.
Ms. Gillan. Today, I am here to talk about the cross-border
truck pilot program. Although DOT portrays the program as a
modest, even benign, initiative, on the contrary, it is an
unsafe and illegal program that puts the motoring public at
risk.
My written statement contains many details about why
Advocates opposes the pilot program, but my oral testimony now
will focus on three specific topics: One, DOT's unreliable
screening process to keep unsafe carriers out of the pilot
program; two, DOT's violation of Federal law and its own legal
precedent in continuing to conduct the pilot program; and,
three, why this pilot program amounts to junk science, because
of the low number of participants, and the lack of data being
collected, a concern shared by the DOT Inspector General in the
report released yesterday.
Let me make it clear at the outset that Advocates' only
interest in the issue of cross-border trucking is to ensure
that trucks entering the United States from Mexico are
equipped, driven and maintained at a high level of safety.
Each year, about 5,000 people are killed in truck crashes,
and over 105,000 more are injured. Opening the border to unsafe
trucks and drivers at the present time will only contribute to
this unacceptable mortality and morbidity toll.
During the past 15 years, DOT's history of cross-border
trucking with Mexico has been characterized by risky decisions,
poor safety judgments, and keeping the public in the dark.
Public safety was salvaged, only with the bipartisan
intervention of Congress.
In 2007, Congress passed legislation directing DOT to
publish the safety audits of all participants in the pilot
program for public review before the program started. But only
some safety audits were published beforehand, others were not
divulged until after the pilot program was underway.
And as an example, the safety audit of Trinity Industries
of Mexico, the company with the largest number of trucks in the
program, was not revealed until October 2007.
I won't go into the details we've already discussed the
fact that this motor carrier company had an extraordinarily
high number of safety violations the previous year, and yet
they were placed in the pilot program, risking the safety of
all Americans on our highways.
DOT finally considered the program and the problem so bad
that it permitted them to withdraw voluntarily.
We are very happy that you raised the same questions that
safety groups have been thinking about ever since we found out
about this problem with this company--how did they ever get
into the pilot program? And, how do we know the real safety
records of other companies participating in the pilot program,
that DOT assures us are very safe?
And finally, as you stated, why is DOT allowing this
company to continue operating in the United States in the
commercial border zones?
It is exactly this pattern of safety lapses and bad
decisions by the DOT that Congress anticipated when legislation
was adopted with strong bipartisan support to cut off funding
for the pilot program. The language of Section 136 of the
Consolidated Appropriations Act of 2007, and the Senate debate
that took place, clearly demonstrate that the word
``establish'' in the provision applies to the conduct of the
pilot program itself, not just the act of setting up that
program.
Even under DOT's mistaken view that the statute only
prohibits the use of funds to establish the pilot program, DOT
can still carry out the intent of Congress by applying the
doctrine of equitable interpretation. My formal testimony
discusses this legal doctrine in much more detail, but
essentially, equitable interpretation holds that where the
specific words used in a law would thwart the intent of
Congress, agencies are permitted--indeed compelled--to
implement the Congressional intent of the law.
The National Highway Traffic Safety Administration, NHTSA,
another agency within DOT, invoked the doctrine of equitable
interpretation just last month, in order to ensure that the
wording of a statute does not frustrate Congressional intent to
promote tire registration, and NHTSA cited a 1983 precedent
within DOT for using the legal principle. By applying this
legal doctrine, DOT can, indeed, implement the intent of
Congress in Section 136.
Finally, the cross-border truck pilot program is junk
science, and a waste of taxpayer dollars, because it will
collect insufficient data to make valid safety decisions. The
pilot program is already halfway over and only about 6 percent
of the trucks originally planned for by DOT are even in the
program.
The IG report states on page 8, ``We are concerned that the
low number of participants will affect the panel's ability to
draw any meaningful conclusions from the data about the safety
performance of the demonstration project participants.'' This
tells us that there will not be enough data on which to base
any objective safety findings.
Let me conclude by saying that the pilot program should be
stopped immediately. It threatens public safety, it wastes
taxpayer dollars, it will not yield valid findings, and in all
likelihood, it will be misused and mischaracterized by DOT to
support a decision later this year to fully open the border to
Mexican motor carriers to travel throughout the United States.
The American public will pay with their lives. Congress
should not let this happen. Thank you very much.
[The prepared statement of Ms. Gillan follows:]
Prepared Statement of Jacqueline S. Gillan, Vice President,
Advocates for Highway and Auto Safety
Introduction
Good afternoon, Mr. Chairman and Members of the Senate Committee on
Commerce, Science, and Transportation. My name is Jacqueline Gillan,
and I am the Vice President of Advocates for Highway and Auto Safety
(Advocates) and am accompanied by Henry Jasny, General Counsel.
Advocates is an alliance of consumer, health and safety organizations,
and insurance companies and associations, working together make our
roads and highways safer. Founded in 1989, Advocates encourages the
adoption of Federal and state laws, policies and programs that save
lives and reduce injuries. Our organization has worked closely with
this Committee and has been integrally involved in many issues related
to large truck safety, including the introduction of long-haul freight
shipments that originate in Mexico but will be destined for all points
in the United States. In particular, we appreciate the bi-partisan
leadership of members of this Committee on a wide range of motor
carrier safety initiatives including hours of service requirements,
stronger enforcement of motor carrier rules and other issues affecting
the health and safety everyday of commercial drivers and families on
our roads and highways.
Today, I am here to testify about the incomplete, haphazard and
unsafe policy that the U.S. Department of Transportation (DOT), through
the Federal Motor Carrier Safety Administration (FMCSA), has taken
toward the opening of the southern border to long-haul freight
shipments by Mexican carriers throughout the United States. Because of
Advocates' focus on highway and truck safety, we have been involved in
the issue of the safety of trucks crossing into the U.S. for 15 years.
Let me make clear from the outset that Advocates' focus and only
interest in the issue of cross-border trucking is to ensure that
commercial vehicles entering the U.S. from Mexico are equipped, driven
and maintained at a high level of safety so that they do not contribute
to an increased number of, and an already unacceptable level of truck-
involved crashes and fatalities that occur each year in the U.S.
DOT portrays the Cross-Border Truck Pilot Program as a modest, even
benign initiative that provides temporary operating authority to a
limited number of motor carriers domiciled in Mexico and the United
States to enable cross-border commercial freight operations. The agency
also wants the American public to ``trust'' them that safety will not
diminish in any way and that all safety rules and laws will be obeyed.
The DOT Pilot Program is, in actuality, an inappropriate, unsafe and
illegal program that opens yet another front in a safety battle to
protect the motoring public from unnecessary risk and undue fatalities
and injuries that already occur each year in truck-involved crashes.
Advocates is all too familiar with the grim statistics. About 5,000
people are killed annually on our highways in truck-involved crashes
and over 105,000 more are injured. Even after the establishment of a
modal administration--the FMCSA--within DOT that is dedicated entirely
to improving truck safety there has been little, if any, improvement in
this annual toll. Although large trucks represent only three (3)
percent of all registered motor vehicles, they are involved in about 13
percent of fatalities on an annual basis. When a large truck has a
fatal crash involvement with a passenger vehicle, 98 percent of the
people who die are in the small vehicle.\1\
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\1\ Fatality Facts, Insurance Institute for Highway Safety (2005).
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Nearly 10 years ago, in 1999, just before the FMCSA was established
as a separate safety administration, the then-Secretary of
Transportation set a goal of reducing the number of annual truck-
involved fatalities by 50 percent. As we close in on the 10-year period
for fulfillment of that goal, Mr. Chairman, DOT and FMCSA are nowhere
near accomplishing that safety mission. Moreover, in the intervening
years, DOT and FMCSA have failed to achieve any of the short or long-
term safety goals they have set for themselves. Thus, when it comes to
relying on these agencies for results or adherence to their
commitments, we are cautious because they have a poor track record.
DOT Has Not Done Its Safety Job At the Border
It comes as no surprise to those of us that have been involved in
truck safety issues for nearly twenty years that DOT and FMCSA have not
made safety their highest priority. From its inception, FMCSA has not
promoted the highest degree of safety in motor carrier and truck
regulations. At almost every turn safety groups have had to oppose
FMCSA because it either did not issue safety regulations, or when the
agency did act its regulations were weak and ineffective. DOT and FMCSA
have also not been forthright or forthcoming with the American public
on issues and information regarding cross-border safety.
For example, as early as 1992, even before the North American Free
Trade Agreement (NAFTA) \2\ was signed, DOT agreed with Mexican
transportation authorities that the U.S. commercial drivers' license
(CDL) and the Mexican Licencia Federal de Conductor (LFC) were
equivalent. Although, in fact, there were and remain many points of
difference between the two licenses and the accompanying requirements,
DOT issued its agreement with Mexican authorities as a Memorandum of
Understanding (MOU), \3\ forged in private and not made public until
after the U.S. and Mexican governments had already concluded the
agreement in secret. The U.S. public was not afforded any prior notice
or any opportunity to provide comment and suggestions before the
announcement of the MOU. In fact, neither DOT nor the Mexican
transportation authorities has provided copies of the legal
requirements of the LFC, in either Spanish or English, for public
review.
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\2\ North American Free Trade Agreement (NAFTA) (Dec. 1992) took
effect in 1994.
\3\ Commercial Driver's License Reciprocity With Mexico, 57 FR
31454 (July 16, 1992).
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There has been a series of such problems regarding DOT's efforts to
open the border:
In the late 1990s DOT asserted that the border could be
opened even though no infrastructure improvements had been
made, border inspection staffing was inadequate in many places,
and other problems prevented safety inspections;
DOT ignored the fact that state laws did not allow for the
issuance of out-of-service orders (OOS) to foreign motor
carriers for violations of their operating authority;
DOT has failed repeatedly to provide the public with copies
and translations of relevant Mexican motor carrier and motor
vehicle laws and regulations;
In 2002, FMCSA proposed an illegal two-year moratorium of
the Federal law that requires motor vehicles, including
commercial trucks and buses, that enter the U.S. to meet all
Federal motor vehicle safety standards. Additionally, the
agency still does not enforce this legal requirement for trucks
crossing into the commercial zones along the U.S. border.
DOT's plans and activities to open the southern U.S. border to
commercial vehicles from Mexico, has consistently lacked any adequate
preparations for the potential increase in commercial vehicle traffic
entering the U.S. and continuing beyond the existing border commercial
zones. In 2001, even as DOT was poised to fully open the border, there
were few border ports of entry that even had facilities capable of
conducting full safety inspections on large trucks. Many border
inspection facilities did not have weigh-in-motion (WIM) scales to
enforce U.S. weight limits and those that existed were often not in
working condition. Vehicle inspection staff was limited so truck safety
inspections often could not be conducted at certain times of day and
night at some crossing points, and there were no computerized databases
for checking either truck credentials or drivers' licenses. The border
inspection infrastructure was so ill-prepared to inspect the flow of
commercial vehicles that Congress was forced to step in and enact
benchmarks to ensure that DOT met its obligations to protect both
public safety and security. As a result, Congress passed Section 350 of
the 2002 DOT Appropriations Act \4\ that imposed specific requirements
for DOT to meet as a precondition to allowing Mexico-domiciled
commercial vehicles to travel beyond the border zones.
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\4\ Making Appropriations for the Department of Transportation and
related agencies for the fiscal year ending September 30, 2002, and for
other purposes, Pub. L. 107-87 (Dec. 18, 2001).
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A series of reports by the DOT Office of Inspector General (IG)
were required over the years since to ensure that DOT complied with
Section 350.\5\ Each report documented the shortcomings of DOT's
efforts and the reasons why it had not met the preconditions
established for the opening of the border.\6\ While some progress has
been made in reaching those benchmarks, not all of the requirements of
Section 350 have been fulfilled. Bus inspection facilities at major
ports of entry are still not completed ( 350(a)(9) and (c)(1)(F)) and
there is still no government-to-government agreement regarding the
transportation of hazardous materials ( 350(b)).\7\
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\5\ Sec. 350(c)(1).
\6\ Implementation of Commercial Vehicle Safety Requirements at the
U.S.-Mexico Border, Federal Motor Carrier Safety Administration, DOT
Office of Inspector General, Rpt. No. MH-2002-094 (June 25, 2002) was
the first in a series of reports documenting the actions of DOT and
FMCSA compliance.
\7\ Although passenger and hazardous materials transportation are
explicitly excluded from the existing pilot program, 72 FR 46286, it is
inevitable that this non-scientific, demonstration program for general
freight will serve as a basis for conducting future similar initiatives
to broaden cross-border access to commercial vehicles carrying
passengers and hazardous materials shipments.
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DOT Has Not Provided Public Information On the Truck Pilot Program
From the very beginning of the Cross-Border Truck Pilot Program,
DOT has followed the same pattern of misleading Congress and failing to
inform the public. Even when the pilot program was still under
development, DOT refused to acknowledge that it existed. In fact, at
her confirmation hearing, Secretary Peters told this Committee that DOT
had no immediate plans to operate a pilot program. In response to a
question from Senator Pryor, regarding FMCSA consideration of a pilot
program, the Secretary stated: ``Sir, I have also heard that, Senator,
and I have asked the question, and there are no immediate plans to do
so.'' \8\ Senator Pryor went on to say that ``[I]f there are plans, I'd
be curious about what statutory authority there is to do that. Do you
know what statute might give the agency authority?'' The Secretary
responded: ``Sir. I do not. And I understand your concern about the
issue and, if confirmed, would look forward to getting to the bottom of
the so-called rumors in addressing the issue.'' \9\
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\8\ Transcript of the Hearing of the Senate Commerce, Science, and
Transportation Committee on the Nomination of Mary Peters, to be
Secretary of the Department of Transportation, Sept. 20, 2006.
\9\ Id.
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Secretary Peters was confirmed on September 30, 2006. On October
17, 2006, my organization, Advocates, filed a Freedom of Information
Act (FOIA) request with FMCSA seeking records related to the
development of the Pilot Program.\10\ The agency advised us to wait and
then, on December 30, 2006, further advised Advocates that although
there were ``hundreds, if not thousands, of potentially responsive
documents,'' this would further delay the agency's response, and that
while the request was not being denied, FMCSA would not release any
Pilot Program records at that time.\11\ The DOT Pilot Program was
officially announced on February 23, 2007,\12\ less than 5 months after
the Secretary was confirmed and 4 months after Advocates had requested
records pertaining to the program. Since DOT had provided no public
information or disclosure about the pilot program, and had not given
Advocates any indication that it would provide the relevant documents
under FOIA, \13\ Advocates was forced to file suit in Federal district
court where the case is now pending.\14\
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\10\ Freedom of Information Act (FOIA) request letter dated October
17, 2006, from Gerald A. Donaldson, Senior Research Director, Advocates
for Highway and Auto Safety, to FOIA Office, FMCSA.
\11\ Letter dated December 30, 2006, from Tiffanie C. Coleman. FOIA
Officer, FMCSA, to Gerald A. Donaldson, Advocates for Highway and Auto
Safety.
\12\ 72 FR 23883, 23884 (May 1, 2007).
\13\ FOIA requires agencies to provide a substantive response to
requestors within 20 business days of receiving a request for agency
records. 5 U.S.C. 552(a)(6)(A)(i).
\14\ Advocates for Highway and Auto Safety v. FMCSA, C.A. No. 07-
00467 (D.D.C.).
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DOT's approach of denying information to the public and providing
as little accurate information as possible has pervaded the entire
effort regarding its attempts to open the border. As a result, Congress
has twice required in legislation that DOT and FMCSA publish for public
notice and comment basic regulations and policy information pertaining
to truck safety and the application of domestic motor carrier safety
rules to trucks crossing the U.S.-Mexico border. Section 350 of the
2002 Appropriations Act required DOT to publish five (5) separate sets
of regulations and policies that DOT had not previously issued or made
public.\15\
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\15\ Sec. 350(a)(10)(A)-(E).
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More recently, because DOT and FMCSA would not provide the public
with information about the Pilot Program, Congress included in
legislation enacted in 2007 a series of five (5) more publication
requirements specifically linked to the Pilot Program. DOT was required
to afford public notice and opportunity for public comment on:
the results of DOT's pre-authorization safety audits (PASAs)
conducted on Mexican motor carriers;
specific measures to protect the health and safety of the
public;
DOT measures to ensure compliance with requirements that
drivers have English language proficiency and restrictions on
illegal shipment of domestic freight from point-to-point within
the U.S. (cabotage);
the standards DOT intends to use to evaluate the program
and;
a list of Mexican motor carrier safety laws and regulations
that DOT considers equivalent to U.S. laws and regulations and
which DOT will accept as comparable for enforcement purposes
under the Pilot Program.\16\
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\16\ Section 6901(b)(2)(B), U.S. Troop Readiness, Veterans' Care,
Katrina Recovery, and Iraq Accountability Appropriations Act of 2007
(Iraq Accountability Act), Pub. L. 110-28 (May 30, 2007).
While DOT has met some of these requirements, the problem is that
DOT has not provided this information of its own accord, but has had to
be ordered to cooperate and inform both Congress and the public through
legislative direction. This, however, is not even the worst part of
DOT's dysfunctional approach to opening the border. Unfortunately, DOT
has chosen to openly flout Federal law in order to carry out the cross-
border Pilot Program in defiance of Congress.
The Pilot Program Is Being Carried Out In Violation of Law
DOT has been both implacable and persistent in defying the legal
requirements for allowing cross-border long-haul trucking. Despite the
fact that Section 350 of the 2002 Appropriations Act prohibited
``vehicles owned or leased by a Mexican motor carrier [. . .] to
operate beyond the United States municipalities and commercial zones
under conditional or permanent operating authority granted by the
[FMCSA] until--'' all the listed requirements are completed,\17\ DOT
has forged ahead even though all those conditions have not been
entirely met.
---------------------------------------------------------------------------
\17\ Section 350(c).
---------------------------------------------------------------------------
Moreover, DOT has stubbornly pursued the Pilot Program policy in
defiance of the compelling requirements included in the Iraq
Accountability Act enacted into law in May, 2007. As mentioned, the Act
required DOT to publish comprehensive data on the Mexican motor carrier
safety audits or PASAs, that DOT conducted both before and after the
law was enacted.\18\ However, that law clearly states that the
Secretary of Transportation shall publish that information ``[p]rior to
the initiation of the pilot program. . . .'' \19\ The fact is that DOT
did not publish all of the PASA information about all the participating
Mexican motor carriers prior to the start of the Pilot Program in
September, 2007. DOT has only published information about some of the
motor carriers and did not provide all such information before the
Pilot Program began. Since DOT announced that it would add 25
participating motor carriers to the Pilot Program each month for the
first four (4) months, it was fully anticipated that the agency would
have completed the PASAs and published them for all 100 participating
motor carriers prior to the start of the program.\20\ Instead, DOT only
published superficial pass/fail information on PASAs \21\ that had been
conducted prior to commencing the Pilot Program on September 6,
2007.\22\ Although DOT subsequently updated the PASA list,\23\ that
information was not published until after the Pilot Program had already
gotten underway. Equally important, DOT provided only the most
superficial results of its safety audit but did not provide any
information regarding the safety violations that were found.
---------------------------------------------------------------------------
\18\ Section 6901(b)(2)(B)(i).
\19\ Id. 6901(b).
\20\ See discussion under One-Year Limit for the Demonstration
Project, 72 FR 46270-71.
\21\ 72 FR 31877 (June 8, 2007).
\22\ News Release, FMCSA 05-07, U.S. DOT Office of Public Affairs
(Sept. 6, 2007) available at: http://www.fmcsa.dot.gov/about/news/news-
releases/2007/090707.htm.
\23\ 72 FR 58929 (Oct. 17, 2007).
---------------------------------------------------------------------------
The delay in providing information is not trivial and I want to
explain why it is quite important to safety. The motor carrier, Trinity
Industries de Mexico (DOT No. 610385) (Trinity Industries), was not
included in the PASA information published by DOT before the Pilot
Program started in September, 2007. The fact that Trinity Industries de
Mexico had passed the safety audit was not made public until October
2007, by which time this motor carrier had already been given authority
to operate 14 drivers and 16 trucks throughout the U.S.\24\ Only after
DOT had already granted operating authority to Trinity Industries and
published the superficial information showing that the company had
passed all the Pilot Program safety requirements,\25\ did an
independent investigation of the company reveal the disturbing truth.
In the year prior to obtaining authority to participate in the Pilot
Program, Trinity Industries had a disgraceful record when operating in
the commercial zones in the U.S. The investigation conducted by the
Owner-Operator Independent Drivers Association (OOIDA) found that 10
trucks owned by Trinity Industries had accumulated 604 inspection
violations and a total of 1,123 violations in all, including 74 out-of-
service (OOS) orders for vehicles and one OOS for a driver.\26\ Because
DOT violated the law, the public did not have the opportunity to
investigate this motor carrier before the Pilot Program began. Not only
did Trinity Industries have operating authority to transport freight
throughout the U.S. for a period of several months, but even after the
company withdrew from the Pilot Program it has still been allowed to
operate in the commercial border zones despite its record of over 1,100
violations.
---------------------------------------------------------------------------
\24\ Id. At 58933. Although Table 2, Column I only lists 16 trucks
for Trinity Industries as ``Vehicles Identified Who Motor Carrier
Intends to Operate in the United States,'' two pages later, Table 4,
Column Q lists 25 trucks as ``Number U.S. Vehicles Inspected Which
Carrier Intends to Operate in the U.S.'' for Trinity Industries.
\25\ Id. At 58934. (``*--This motor carrier is an additional
successful applicant which has passed the Pre-Authority Safety Audit
after the June 8, 2007, Federal Register Notice.'').
\26\ Declaration of Catherine O'Mara, Exhibit 1, filed in Owner-
Operator Independent Drivers Association, Inc. v. United States
Department of Transportation, et al., Dec. 3, 2007, No. 07-73987 (9th
Cir.); see also companion Declaration of Rick Craig filed in same case
for specific violations of truck safety requirements.
---------------------------------------------------------------------------
The poor safety record for Trinity Industries arguably placed the
American people at increased risk of death and injury from potential
crashes involving their trucks and motor carrier operations. Even DOT
considered the problem so bad that it permitted Trinity Industries to
withdraw from the Pilot Program as of February 1, 2008. However, DOT
made no public announcement of Trinity Industries safety problems or of
the company's withdrawal from the Pilot Program. And, as usual, no
public announcement or press release from DOT, only a footnote on an
FMCSA website, documents this sordid case.\27\
---------------------------------------------------------------------------
\27\ The only public notice of Trinity Industries' withdrawal from
the Pilot Program is a note to FMCSA's list of participating motor
carriers available at: http://www.fmcsa.dot.gov/cross-border/cross-
border-carriers.htm.
---------------------------------------------------------------------------
The real issue that Congress needs to investigate immediately,
given Trinity Industries poor safety record, is how and why did DOT
``pass'' Trinity Industries as a safe motor carrier, grant operating
authority and allow it to participate in the Pilot Program? The public
also needs to know if there are other such companies that DOT has
accepted as ``safe'' even though their operating record contains
serious and dangerous safety violations and overall does not reflect a
high standard for safety. Because DOT did not provide that information
to the public before the Pilot Program began, the extent of the threat
to the safety of the American people remains unknown.
DOT Determined to Conduct Pilot Program Despite Intent of Congress
This review shows that the decision of the Secretary of
Transportation to defy Congress and ignore the funding ban contained in
the current year's appropriations law \28\ is just the latest link in a
long chain of events in which DOT, at nearly every juncture, has sought
to open the U.S. southern border to long-haul trucks before the border
was ready or the trucks and drivers were proven safe.
---------------------------------------------------------------------------
\28\ Consolidated Appropriations Act, 2008, Title I, Division K,
136, Pub. L. 110-161 (Dec. 26, 2007).
---------------------------------------------------------------------------
Section 136 of the Consolidated Appropriations Act clearly
prohibits DOT from using Fiscal Year 2008 funds to continue the Pilot
Program. By restricting funds ``to establish'' the Pilot Program, the
language includes a prohibition on the use of those funds to carry out
the program as well, since carrying out the program is contingent upon
the establishment of the program. If DOT could not use the funds to
establish the program, then it also cannot use the funds to continue
the program since that subsequent act flows directly from the action
that is specifically prohibited. This makes perfect sense from a policy
perspective because agencies should not be encouraged to outmaneuver
Congressional legislation simply by taking action before a law can be
enacted. As a matter of policy, Federal agencies should not be able to
circumvent the will of Congress through pre-emptive unilateral action.
Beyond the policy question, DOT is parsing the statutory language
in order to distill a highly technical and narrow reading of the word
``establish.'' By artificially disconnecting the act of establishing
the Pilot Program from the implementation of the program, DOT hopes to
cloak its continuation of the pilot program as a legal act. But DOT's
narrow, legalistic interpretation of Section 136 cannot stand in the
face of the legislative history of the provision and DOT's own
precedents.
First, DOT cannot read the word ``establish'' in such a narrow
manner because the clear legislative history of the discussions in both
the Senate, where Section 136 originated, and in the House, which
passed similar language, make it abundantly clear that the provision
was intended to cut off funds not just for the startup of the program
or for the formal announcement of its commencement, but to ``prohibit
the use of funds to continue this pilot project.'' \29\ Such statements
were made repeatedly in the U.S. Senate and make clear that Congress
knew and intended that the language, i.e., the term ``establish,'' when
enacted would result in a complete cessation of pilot program
activities.\30\ Senator Dorgan, the sponsor of this language, stated
``the U.S. House of Representatives has already passed by voice vote a
provision that says `no money in this appropriation bill shall or can
be used to continue this pilot project.' . . . I propose we do exactly
the same thing. This amendment is identical to that which the House has
passed.'' \31\ Senators who opposed the language also clearly
understood it would prevent DOT from continuing to fund the Pilot
Program.\32\
---------------------------------------------------------------------------
\29\ Sen. Byron Dorgan, 153 Cong. Rec. S11299 (Sept. 10, 2007).
\30\ See also, e.g., 153 Cong. Rec. S11307 (Sept. 10, 2007) (Sen.
Specter: ``it seems to me this program ought not to go forward, and the
amendment which Senator Dorgan has advanced is very sound.'').
\31\ 153 Cong. Rec. S11308-309 (Sept. 10, 2007) (emphases added);
see also id. at S11389 (Sen. Dorgan: ``So I offer on behalf of myself
and Senator Specter an amendment . . . that says let's stop this pilot
program. It should not have been initiated last Thursday.) (emphasis
added); and, id. at S11391 (Sen. Dorgan: ``It is why Senator Specter,
I, and others have offered an amendment to stop this pilot project.'')
(emphasis added).
\32\ 153 Cong. Rec. 11315 (Sept. 10, 2007) (Sen. Lott: ``But we
should defeat the Dorgan amendment. We should allow the pilot program
to go forward . . .''); id. at S11468 (Sept. 12, 2007) (Sen. McCain:
``Unfortunately, the Senate has voted 74 to 24 to prevent the pilot
program from going forward.'') (emphasis added).
---------------------------------------------------------------------------
Moreover, the Senate language that was enacted as Section 136 was
originally adopted after the House had already passed its version of
the funding prohibition. Although the House used the term ``establish
or implement'' in its bill to cut off funding for the Pilot Program,
the Senate sponsors made it amply clear in the legislative discussion
that the Senate language was intended to have the identical effect as
the House language. Thus, even if the wording was not identical, the
intent of the two houses of Congress was the same.
Second, it should be pointed out that the Senate acted after DOT
had already ``established'' the Pilot Program by granting operating
authority to the first Mexican motor carrier on September 6, 2007. The
Senate had actual knowledge that the Pilot Program had already been
``established'' at the time the Senate debate took place. Senator
Dorgan specifically referred to initiation of the Pilot Program that
had taken place several days before.\33\ DOT's view that the word
``establish'' refers only to an act that had already transpired renders
Section 136 meaningless. However, since Acts of Congress are to be
interpreted to have meaning and be given a reasonable construction,
adopting DOT's position is untenable, especially where another
interpretation exists that would make Section 136 meaningful. The
legislative history provides a clear and reasonable interpretation that
gives meaning to the provision, that is, that Congress intended to
prohibit funding for the continuation of the Pilot Program, not just
its commencement.
---------------------------------------------------------------------------
\33\ See 153 Cong. Rec. S11389 (Sen. Dorgan: ``[the Pilot Program]
should not have been initiated last Thursday.'').
---------------------------------------------------------------------------
Finally, even if DOT's strained interpretation of Section 136 was
plausible, DOT should invoke the legal doctrine of equitable
interpretation of statutory language in order to implement the intent
of Congress. According to the well-known doctrine of equitable
interpretation, ``a statutory requirement need not be literally applied
in instances in which the underlying Congressional intent is otherwise
satisfied.'' \34\ This principle ensures that the language of a statute
will not be used to thwart Congressional intent.
---------------------------------------------------------------------------
\34\ Tire Registration and Recordkeeping, notice of proposed
rulemaking, 73 FR 4157, 4159 (Jan. 24, 2008). (Copy of notice
attached).
---------------------------------------------------------------------------
Under equitable interpretation, where the specific words used in
the law thwart or interfere with the intent of Congress, agencies are
permitted, indeed compelled, to ignore the statutory language in order
to carry out Congressional intent. In this situation, since DOT's
interpretation of the word ``establish'' in Section 136 would stand in
the way of the express intent of Congress to prohibit continued funding
for the cross-border Pilot Program, invoking equitable interpretation
allows DOT to look past the words and implement the intent.
Since ``One DOT'' is the motto of the department, it is clear that
what is an acceptable legal practice for one administration in DOT
should also be appropriate for the other branches of DOT. We need not
look far for precedent in applying the doctrine of equitable
interpretation. Within DOT one of its own modal administrations, the
National Highway Traffic Safety Administration (NHTSA), has applied the
doctrine of equitable interpretation in very similar circumstances
explicitly to fulfill Congressional intent.
Just over 1 month ago, the NHTSA invoked the doctrine of equitable
interpretation in order to ensure that the wording of a statute does
not frustrate Congressional intent to promote tire registration. The
agency was acting on a long-standing precedent because in 1983 the
NHTSA Administrator stated that ``[u]nder the principles of equitable
interpretation, the language of the amendments need not be applied in
instances where it is clearly contrary to the underlying Congressional
intent.'' \35\ The same legal approach can be taken to Section 136 and
the Pilot Program.
---------------------------------------------------------------------------
\35\ Letter from Diane K. Steed to the Hon. Timothy E. Wirth, dated
February, 1983, available at: http://isearch.nhtsa.gov/gm/83/1983-
1.12.html. (Copy of letter attached).
---------------------------------------------------------------------------
DOT and FMCSA interpret the language of Section 136 to apply only
to actions that ``establish'' the Pilot Program. Yet, the legislative
debate shows that the wording of the Senate amendment was intended to
``stop'' the Pilot Program. The legislative history and universal
understanding of the action was to prevent the Pilot Program from
proceeding, not only to prevent it from being established (an event
that had already taken place). As the NHTSA precedent points out, DOT
agencies can look past the specific wording of a law if they are
concerned that it stands in the way of carrying out the intent of
Congress. Since NHTSA has twice invoked the doctrine of equitable
interpretation, there appears no reason for DOT not to invoke that
doctrine in the current circumstances. DOT should apply the doctrine of
equitable interpretation and implement the clearly stated intent of
Congress in Section 136.
The Pilot Program Is Junk Science
Finally, it has become evident that the cross-border truck Pilot
Program announced with such fanfare just over a year ago, and
``established'' just six (6) months ago, is a failure. Although up to
100 companies and as many as 1,000 trucks were supposed to participate,
there are currently only 16 Mexican motor carriers and a total of only
55 trucks that are authorized to participate.\36\ DOT has claimed that
``100 out of 989 carriers, or about 10 percent . . . will generate
enough data for a meaningful safety analysis.'' \37\ But the current
participation is a far cry from the numbers that DOT originally
estimated, and the 55 trucks are less than a third of the 155 trucks
that DOT had identified as intended for use in the U.S. during its
initial round of safety audits.\38\
---------------------------------------------------------------------------
\36\ Information available at: http://www.fmcsa.dot.gov/cross-
border/cross-border-carriers.htm.
\37\ 72 FR 46263, 46271 (Aug. 17, 2997).
\38\ 72 FR 31877, 31888 (June 8, 2007).
---------------------------------------------------------------------------
When first announced, it was evident that DOT did not intend that
the Pilot Program would be a serious scientific test of the safety of
Mexican long-haul trucks in the U.S., and thus, the program did not
have to meet the requirements for scientifically conducted pilot
programs. That is one reason why Congress stepped in to require DOT to
comply with the existing Federal statute governing commercial motor
vehicle pilot programs, 49 U.S.C. 31315(c).\39\ The purpose of the
pilot program statute is to ensure that when new methods and
alternative regulations are being tested that a basic level of
scientific methodology is used in the collection of data to ensure that
the pilot programs yield scientifically valid results.
---------------------------------------------------------------------------
\39\ Iraq Accountability Act, 6901(a)(2).
---------------------------------------------------------------------------
Although Advocates opposes cross-border long-haul trucking at this
time because not all safety measures have been addressed, if DOT is
going to operate the Pilot Program it should follow scientific methods
and have a plan that includes collecting sufficiently objective and
credible data. In fact, the Pilot Program law requires DOT to do
exactly that. As it exists today, however, the Pilot Program has
absolutely no chance of meeting this minimal scientific goal and legal
requirement.
The data that DOT needs to collect consists of border and roadside
inspection results, including inspection violations and out-of-service
(OOS) orders for serious safety violations, records of other non-
inspection stops and violations, as well as crash, injury and fatality
data. Scientifically valid determinations about safety can only be made
if a sufficient amount of data is collected during the test period. As
FMCSA stated, ``[i]n addition to the number of participants, the volume
of the data depends on the frequency with which the participating
carriers operate in the United States.'' \40\ Since Federal border
inspections are based on the number of crossings, fewer trucks mean
less data. Also, state roadside inspections are based not just on the
number of trips but the length and route of the trips and how many
roadside inspection facilities a truck encounters, again, fewer trucks
mean fewer inspections and insufficient data.
---------------------------------------------------------------------------
\40\ 72 FR 46271.
---------------------------------------------------------------------------
Finally, truck crash, injury and fatality data is analyzed based on
exposure measures of total distance of travel. For cars, the exposure
measure used by DOT is 100 million vehicle miles of travel and for
trucks the exposure measure is 100 million truck vehicle miles of
travel (100 MTVMT). Thus, in order for the Pilot Program to collect a
sufficient amount of objective data, trucks in the Pilot Program must
travel millions upon millions upon millions of miles in the U.S. While
this may have been possible with 100 carriers and 1,000 trucks, since
only 16 motor carriers and 55 trucks are participating, and now that
half the allotted one-year Pilot Program time has already expired,
there is no possibility that the Pilot Program has the ``reasonable
number of participants necessary to yield statistically valid
findings.'' \41\
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\41\ 49 U.S.C. 31315(c)(2)(C).
---------------------------------------------------------------------------
DOT originally claimed that the Pilot Program would consist of up
to 100 motor carriers, about 10 percent of the motor carriers that had
applied for U.S. operating authority,\42\ but less than 2 percent of
Mexican carriers that applied for operating authority are currently
participating in the program. More important, only a fraction of the
1,000 trucks that DOT expected would participate in the Pilot Program
actually entered, and the largest single participating truck fleet
dropped out when Trinity Industries withdrew from the Pilot
Program.\43\ As a result, only 5.5 percent of the 1,000 trucks DOT
originally planned for are involved in the Pilot Program. This small
number of participating vehicles cannot provide the exposure needed to
produce credible data or that will result in valid findings.
---------------------------------------------------------------------------
\42\ 72 FR 46271.
\43\ As discussed, Trinity Industries, the company that had the
most trucks eligible for participation, see infra note 24, withdrew
from the Pilot Program as of Feb. 1, 2008.
---------------------------------------------------------------------------
In summary, Mr. Chairman, the Pilot Program should be stopped and
stopped now, not only because DOT is legally obligated to do so, but
also because the Pilot Program cannot provide statistically valid
findings regarding the safety of the participating motor carriers. The
Pilot Program is an extreme example of junk science that threatens
safety and wastes American tax dollars on a faulty and dangerous
experiment using the motoring public as guinea pigs. Safety groups are
concerned that in September, DOT will once again jeopardize highway
safety by using this ``junk science'' to justify a bad decision that
leads to opening borders for all Mexican motor carriers wishing to
travel anywhere throughout the United States.
That concludes my testimony and I will gladly answer any questions
you and members of the Committee may have.
Attachment 1
Mexican Border and DOT Pilot Program Chronology
------------------------------------------------------------------------
------------------------------------------------------------------------
Mar. 11, 2008 Senate Commerce, Science, and
Transportation Committee holds hearing on
DOT Cross-Border Pilot Program.
Mar. 5, 2008 After six (6) months, half way through the
one-year Pilot Program, only 16 Mexican
trucking companies with a total of 55
trucks are participating in the Pilot
Program. The small number of
participating trucks is only 5.5 percent
of the 1,000 trucks that DOT expected
might participate in the Pilot Program.
DOT said that it needed about 100
companies, or 10 percent of the 989
Mexican trucking companies that applied
for U.S. operating authority, to
participate in order to collect enough
data to evaluate the safety of the
program. The 16 companies represent less
than 2 percent of the applicant companies
and less than one-fifth of the
participation that DOT said was needed to
collect sufficient data.
Feb. 12, 2008 Oral argument is held in U.S. 9th Circuit
Court of Appeals on cases brought by
Public Citizen, Teamsters, Sierra Club
and OOIDA challenging DOT Pilot Program
as illegal.
Feb. 1, 2008 Trinity Industries de Mexico, the Mexican
company with largest number of trucks in
the Pilot Program withdraws from the
program following revelation that company
amassed of over 1,100 violations in
previous year for trucks operating in the
commercial zones along the U.S. border.
Despite withdrawal from the long-haul
Pilot Program, DOT continues to allow
Trinity to operate in the commercial
zones.
Dec. 26, 2007: DOT is prohibited from funding cross-
border Pilot Program by Section 136 of
Title I, Division K, of the Consolidated
Appropriations Act, 2008, Pub. L. 110-161
(Dec. 26, 2007). DOT asserts that the
language in Section 136 does not bar the
continuation of the Pilot Program.
Sept. 10, 2007: U.S. Senate adopts an amendment on a vote
of 75 to 23 offered by Senators Dorgan (D-
ND) and Specter (R-PA) to the FY 2008 DOT
Appropriations bill to block funding for
cross-border long-haul trucking pilot
program and to continue to limit
operations by Mexico-domiciled motor
carriers to commercial zones inside the
U.S. Amendment is nearly identical to
provision passed by House on July 24,
2007.
Sept. 7, 2007: The Owner-Operator Independent Drivers
Association (OOIDA) files lawsuit in U.S.
Court of Appeals (D.C. Circuit)
challenging legality of DOT Pilot Program
and emergency motion to stay DOT action.
Motion is denied and case is transferred
to 9th Circuit and joined with case filed
by Public Citizen, Teamsters and Sierra
Club.
Sept. 6, 2007: Department of Transportation (DOT) Office
of Inspector General (OIG) files report
required by Section 6901 of the U.S.
Troop Readiness, Veterans' Care, Katrina
Recovery, and Iraq Accountability
Appropriations Act, 2007, detailing DOT
compliance with actions required under
Section 350 of the FY 2002 DOT
Appropriations Act. OIG report details
specific areas in which DOT has not
completed required safety actions.
DOT files letter with Congress responding
to DOT OIG report and provides additional
information purporting to address
shortcomings in border preparation that
OIG report identified as not meeting
Congressional requirements in Section 350
of the FY 2002 DOT Appropriations Act.
DOT holds press conference to announce
start of cross-border pilot program and
announce grant of preliminary operating
authority to first Mexico-domiciled long-
haul motor carrier.
Aug. 29, 2007: Public Citizen, Int'l Brotherhood of
Teamsters, Sierra Club and others file
lawsuit in U.S. Court of Appeals (9th
Circuit) challenging legality of DOT
pilot program and file emergency motion
to stay DOT action. The court denies the
motion for a stay on August 31, 2007.
Aug. 17, 2007: Federal Motor Carrier Safety
Administration (FMCSA) publishes response
to public comments and states that after
final OIG report is submitted as required
by Section 6901 of the U.S. Troop
Readiness, Veterans' Care, Katrina
Recovery, and Iraq Accountability
Appropriations Act, 2007, and DOT takes
action to respond to OIG report, DOT will
commence granting preliminary operating
authority to Mexico-domiciled motor
carriers to travel beyond commercial
zones on U.S.-Mexico border.
Aug. 6, 2007: DOT OIG issues latest follow-up audit
report required under Section 350 of the
FY 2002 DOT Appropriations Act. Report
still finds that several outstanding
issues remain incomplete, including the
sufficiency and quality of information in
Mexican and U.S. license databases, the
availability of bus inspection
facilities, compliance of Mexican
commercial vehicles with U.S. safety
standards and compliance with U.S. drug
and alcohol testing requirements. Prior
OIG audit reports were issued on Dec. 28,
1998, Nov. 4, 1999; May 8, 2001; Sept.
21, 2001; June 25, 2002; May 16, 2003;
and Jan. 3, 2005.
July 24, 2007: House votes to amend FY 2008 DOT
Appropriations bill (H.R. 3074) to block
funding for cross-border long-haul
trucking pilot program and to continue to
limit operations by Mexico-domiciled
motor carriers to commercial zones inside
the U.S.
June 8, 2007: FMCSA publishes notice responding to
Section 6901 of the U.S. Troop Readiness,
Veterans' Care, Katrina Recovery, and
Iraq Accountability Appropriations Act,
2007, but agency fails to provide
specific information that meets either
letter or spirit of the law. FMCSA
provides only 20 days for public comment.
May 25, 2007: Congress requires DOT to comply with
existing laws regarding the safety of
cross-border trucking and pilot programs,
and directs DOT to provide further
information on the pilot program under
Section 6901 of the U.S. Troop Readiness,
Veterans' Care, Katrina Recovery, and
Iraq Accountability Appropriations Act,
2007, Pub. L. 110-28 (May 25, 2007).
May 16, 2007: House passes Safe American Roads Act of
2007, H.R. 1773, by 411-3 vote,
indicating strong bipartisan support for
measures to ensure that opening of the
U.S. border to long-haul, Mexico-
domiciled interstate operators does not
diminish safety on U.S. highways and
roads.
May 1, 2007: FMCSA publishes initial notice on pilot
program providing no new information and
which does not mention either the safety
requirements included in Section 350 of
the FY 2002 DOT Appropriations Act
(2001), or the procedures required for
the conduct of pilot programs enacted in
the Transportation Equity Act for the
21st Century (TEA-21) (1998). The public
is given 30 days to comment.
Mar. 13, 2007: House Subcommittee on Highways and
Transit, Transportation and
Infrastructure Committee, holds hearing
on DOT pilot program.
Mar. 8, 2007: Senate Subcommittee on Transportation and
Housing and Urban Development & Related
Agencies, Committee on Appropriations,
holds hearing on DOT pilot program.
Reveals document dated September 2006,
indicating agreement between U.S. and
Mexican authorities on how to proceed and
that full opening of U.S. border will
follow pilot program.
Feb. 13, 2007: DOT Secretary Peters announces that U.S.
and Mexico have agreed to on- site
inspections of Mexico-domiciled motor
carriers to conduct pre-authorization
safety audits and, therefore, cross
border pilot program with 100
participating Mexico-domiciled motor
carriers can commence within 60 days.
Document on DOT website states that
planning for pilot program began in June
2004.
Oct. 17, 2006: Advocates for Highway and Auto Safety
files request for pilot program records
with FMCSA under the Freedom of
Information Act (FOIA).
Sept. 26, 2006: At Senate confirmation hearing, Secretary
of Transportation-designate Mary Peters
testifies that no plans to conduct a
pilot program to permit Mexican-domiciled
trucks to operate throughout the U.S.
exist and that she will notify Congress
if such a plan is developed by DOT.
Jan. 3, 2005: DOT OIG issues follow-up audit report that
indicates several problems remain to be
resolved under Section 350. This is
latest OIG audit report on serious safety
deficiencies of U.S. Federal and state
oversight of the safety of Mexico-
domiciled trucks and buses entering the
U.S.
2003-2006: U.S. and Mexican authorities negotiate
over Section 350 requirement that pre-
authorization safety audits of Mexican-
domiciled motor carriers take place on-
site in Mexico.
Nov. 22, 2002: DOT Secretary certifies that section
350(a) requirements have been met.
Dec. 21, 2001: The Government Accounting Office (GAO)
issues latest report finding that the
U.S. is not prepared to meet the safety
oversight needs of growing commercial
traffic from Mexico.
Dec. 18, 2001: Enactment of FY 2002 DOT Appropriations
Act includes Section 350 imposing
requirements on DOT regarding the Safety
of Cross-Border Trucking. DOT OIG
required to issue reports to verify
progress of DOT in meeting requirements.
Feb. 6, 2001: North American Free Trade Agreement
(NAFTA) Arbitral Panel issues ruling
requiring U.S. to open border but permits
the U.S. to adopt safety requirements for
Mexico-domiciled motor carriers that are
different from those for U.S.-domiciled
motor carriers. DOT states that it will
open border to Mexico-domiciled
commercial vehicles by January 2002.
Mar. 3, 2000: GAO issues a report finding that there is
insufficient coordination of resources
between Federal and state motor carrier
safety personnel to address increased
commercial traffic from Mexico entering
the U.S.
Nov. 9, 1999: DOT OIG issues follow-up audit report
finding that there are numerous, illegal
operations of Mexico-domiciled motor
carriers operating outside the restricted
boundaries of the southern commercial
zones in 20 states; many Mexican trucks
and buses have no insurance, drivers have
no valid licenses, U.S. Federal databases
are incomplete and inaccurate on Mexican
truck and bus registrations; and many
Mexican vehicles have serious safety
violations.
Dec. 28, 1998: DOT OIG issues first oversight audit
report.
Aug. 8, 1997: GAO issues another NAFTA-related report on
safety deficiencies of U.S. border
inspection efforts of Mexico-domiciled
commercial buses and vans entering the
U.S. to operate in the southern
commercial zones.
April 9, 1997: GAO issues another oversight report on
NAFTA-related issues of Mexico-domiciled
motor carrier safety. GAO documents U.S.
Federal funds provided to Mexico from
1991-1995 to strengthen the use of
Mexican motor carrier inspection
resources in Mexico and the essential
failure of the effort by 1996.
Feb. 29, 1996: U.S. GAO releases reports reviewing
concerns about safety of Mexico-domiciled
motor carriers in the U.S. including the
lack of motor carrier safety oversight in
Mexico and the lack of any Mexican
commercial driver hours of service
limits.
Dec. 18, 1995: President Clinton postpones implementation
of NAFTA cross-border trucking provision
based on safety and environmental
concerns.
Nov. 1993: Congress approves NAFTA.
Dec. 1992: Representatives of U.S., Canada and Mexico
finalize NAFTA to include allowing Mexico-
domiciled motor carriers to conduct
interstate operations throughout U.S. by
Dec. 18, 1995.
July 16, 1992: U.S. DOT declares equivalence of U.S.
Commercial Driver License (CDL) with
Mexican Licencia Federal de Conductor
(LFC) in Memorandum of Understanding
published without prior notice or
opportunity for public comment. 57 FR
31454 (July 16, 1992). Actual provisions
of the LFC are not made public.
1982: President Reagan lifts moratorium for
Canadian trucking. 47 FR 54053 (1982).
Sept. 20, 1982: Congress bans interstate transportation by
trucks and buses domiciled in Mexico and
Canada. Legislation provides the
President with the authority to modify
the moratorium. Bus Regulatory Reform Act
of 1982, Pub. L. 97-261 (Sept. 20, 1982).
------------------------------------------------------------------------
Attachment 2
Federal Register/Vol. 73, No. 16/Thursday, January 24, 2008/Proposed
Rules
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 574
[Docket No. NHTSA-2008-0014]
RIN 2127-AK11
Tire Registration and Recordkeeping
Agency: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation (DOT).
Action: Notice of proposed rulemaking (NPRM).
Summary: Our regulation for tire identification and recordkeeping
requires manufacturer owned tire distributors and dealers to register
the names and addresses of the people to whom they sell or lease new
tires, and specifies the use of standardized paper forms for this
purpose. It also requires independent distributors and dealers to
provide purchasers with standardized registration forms they can
complete and mail to the manufacturer or its designee.
We propose to amend the regulation by codifying existing
interpretations regarding opportunities under the regulation for
electronic registration of tire sales and leases and by creating new
opportunities. The names and addresses of purchasers and lessees are
used by a tire manufacturer to contact those people in the event that
the manufacturer must conduct a campaign to recall and remedy tires
that either fail to comply with an applicable Federal motor vehicle
safety standard or have a safety-related defect.
Dates: Comments must be received on or before March 24, 2008.
Addresses: You may submit comments to the docket number identified
in the heading of this document by any of the following methods:
Federal eRulemaking Portal: go to http://
www.regulations.gov. Follow the online instructions for
submitting comments.
Mail: DOT Docket Management Facility, M-30, U.S. Department
of Transportation, West Building, Ground Floor, Rm. W12-140,
1200 New Jersey Avenue, SE., Washington, DC 20590.
Hand Delivery or Courier: West Building Ground Floor, Room
W12-140, 1200 New Jersey Avenue, SE., between 9 a.m. and 5 p.m.
Eastern time, Monday through Friday, except Federal holidays.
Fax: (202) 493-2551.
Regardless of how you submit your comments, you should mention the
docket number of this document.
You may call the Docket Management Facility at 202-366-9826.
Privacy Act: Please see the Privacy Act heading under Rulemaking
Analyses and Notices.
Instructions: For detailed instructions on submitting comments and
additional information on the rulemaking process, see the Public
Participation heading of the Supplementary Information section of this
document. Note that all comments received will be posted without change
to: http://www.regulations.gov, including any personal information
provided.
For Further Information Contact: For non-legal issues, Mr. Jeff
Woods, Vehicle Dynamics Division, Office of Vehicle Safety Standards
(Telephone: 202-366-6206) (Fax: 202-366-7002). Mr. Woods' mailing
address is National Highway Traffic Safety Administration, NVS-122,
1200 New Jersey Avenue, SE., Washington, DC 20590.
For legal issues, Ms. Dorothy Nakama, Office of the Chief Counsel
(Telephone: 202-366-2992) (Fax: 202-366-3820). Ms. Nakama's mailing
address is National Highway Traffic Safety Administration, NCC-112,
1200 New Jersey Avenue, SE., Washington, DC 20590.
Supplementary Information:
Table of Contents
I. Background
A. Tire Registration Requirements
B. Rate of Tire Registration
C. Increasing the Effectiveness and Reducing the Cost of Tire
Registration Through Electronic Registration
1. 1984 Interpretation to Representative Wirth
2. 2003 Interpretation to RMA
3. 2005-2007 Issues Regarding Clearance of the Tire
Registration Requirements Under the Paperwork Reduction
Act
II. Need for Rulemaking
III. Today's Notice of Proposed Rulemaking
A. Tires Sold by Independent Tire Dealers--Alternative Means of
Tire Registration
B. Tires Sold by Dealers Controlled by Tire Manufacturers--
Electronic Tire Registration
IV. Rulemaking Analyses and Notices
A. Executive Order 12866 and DOT Regulatory Policies and
Procedures
B. Regulatory Flexibility Act
C. National Environmental Policy Act
D. Executive Order 13132 (Federalism)
E. Civil Justice Reform
F. Paperwork Reduction Act
G. National Technology Transfer and Advancement Act
H. Unfunded Mandates Reform Act
I. Plain Language
J. Regulation Identifier Number (RIN)
K. Privacy Act
V. Public Participation
I. Background
A. Tire Registration Requirements
As originally enacted, the National Traffic and Motor Vehicle
Safety Act of 1966 (now codified at Title 49 U.S.C. Chapter 301 Motor
Vehicle Safety) did not include a requirement for tire registration.
However, in May 1970, Congress amended the law to mandate that every
tire manufacturer shall maintain records of the names and addresses of
the first purchaser of tires produced by that manufacturer.\1\ NHTSA
was given the authority to establish procedures to be followed by
manufacturers in establishing and maintaining such records, including
procedures to be followed by distributors and dealers to assist
manufacturers in securing the names and addresses of first purchasers.
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\1\ Pub. L. 91-265.
---------------------------------------------------------------------------
Pursuant to this authority, in a final rule published in the
Federal Register (35 FR 17257) on November 10, 1970, NHTSA established
the initial tire identification and recordkeeping requirements of 49
CFR part 574. The rule required all tire dealers to record the name and
address of the purchaser to whom they sold the tire, along with the
dealer's name and address, and forward that information to the tire
manufacturer.
However, under the Motor Vehicle Safety and Cost Savings
Authorization Act of 1982 (Pub. L. 97-331), Congress amended the Safety
Act to mandate that the obligations of independent distributors and
dealers be limited to giving ``a registration form (containing the tire
identification number) to the first purchaser.'' The tire purchaser
could then mail the form to the tire manufacturer. Congress also
mandated that NHTSA should prescribe a standardized registration form
and that tire manufacturers had to ensure that they gave sufficient
copies of these forms to their dealers.
Congress adopted these amendments after the House Committee on
Energy and Commerce found in its report on the 1982 amendments that
tire dealers whose business was owned or controlled by a tire
manufacturer (these dealers accounted for just under \1/3\ of tire
sales) registered between 80 and 90 percent of the tires they sold.\2\
However, independent tire dealers, which accounted for more than \2/3\
of tire sales, registered only 20 percent of the tires they sold.
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\2\ H.R. Rep. No. 576, 97th Cong. 2d Sess. 8-9 (1982).
---------------------------------------------------------------------------
The changes mandated by the 1982 amendments were established in an
interim final rule published on May 19, 1983 (48 CFR 22572). The
regulation required tire manufacturers to provide both independent and
non-independent distributors and dealers with standardized tire
registration forms. The regulation specified the exact content of the
forms given to independent distributors and dealers. No other
information may appear on the forms.\3\ When an independent distributor
or dealer sells or leases a tire to a consumer, the distributor or
dealer must fill in the tire identification number and its name and
address on a registration form and give the form to the consumer. The
consumer may then fill in his or her name and address, add a stamp and
mail the form to the manufacturer or its designee. In a follow-up final
rule published on February 8, 1984 (49 FR 4755), the agency made slight
revisions to the tire registration form to improve its clarity and also
reduced the size of the form so that it could be mailed using post card
postage.
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\3\ July 18, 2003 letter from Jacqueline Glassman to Ann Wilson of
RMA. Letter is available at: http://isearch.nhtsa.gov/files/
onlinetireregistration.html.
---------------------------------------------------------------------------
As part of the agency's implementation of the Transportation Recall
Enhancement, Accountability, and Documentation (TREAD) Act (Pub. L.
106-414) that was enacted on November 1, 2000, the agency increased the
tire registration record retention requirements for tire manufacturers
from 3 years to 5 years. The record retention period was extended in a
final rule published in the Federal Register (67 FR 45822) on July 10,
2002.
B. Rate of Tire Registration
In the Motor Vehicle Safety and Cost Savings Authorization Act of
1982, Congress directed NHTSA to conduct an evaluation after 2 years of
voluntary registration to determine the extent to which the voluntary
registration procedures for independent dealers were successful in
increasing the registration of tires.\4\ NHTSA was also charged with
determining the extent to which independent dealers have encouraged
purchasers to register their tires and the extent to which independent
dealers have complied with the new procedures. Finally, NHTSA was
charged with deciding whether to impose any additional requirements to
``significantly increase'' registration of tires sold by independent
dealers.
---------------------------------------------------------------------------
\4\ See Motor Vehicle Safety and Cost Authorization Act of 1982,
Pub. L. 97-331.
---------------------------------------------------------------------------
Per that Congressional directive, NHTSA reported on its evaluation
of voluntary tire registration by independent dealers in 1985 and
1987.\5\ We found that:
---------------------------------------------------------------------------
\5\ For a discussion of NHTSA's Evaluation Reports on Voluntary
Tire Registration, see 53 FR 44632-33, November 4, 1988.
1. Registration rates for independent dealers declined by half,
from 18.1 percent under previous law to 9.3 percent under
---------------------------------------------------------------------------
voluntary registration.
2. Registration rates for company stores had remained steady at
86 percent during this same period.
3. Tire manufacturers had provided plenty of registration
forms.
4. There were no records of any tire registrations for more
than 70 percent of the independent dealers.
From this, NHTSA reached the conclusion that many independent
dealers did not routinely give registration forms to tire purchasers.
NHTSA stated that we did not think it would be the best use of our
enforcement resources to bring compliance actions against independent
tire dealers. Instead, NHTSA proposed in 1986 \6\ four potential steps
to improve tire registration by independent dealers:
---------------------------------------------------------------------------
\6\ Advance notice of proposed rulemaking; 51 FR 45916; December
23, 1986.
---------------------------------------------------------------------------
1. Require prepaid postage on the registration form; and/or
2. Undertake a public education campaign and a brief
explanation of the tire registration process in tire
information pamphlets; and/or
3. A central clearinghouse for all registration forms
distributed to consumers by independent dealers; or
4. Rescind the tire registration requirements and allow tire
manufacturers to devise their own contractual ways of ensuring
they meet the statutory obligation for tire manufacturers to
``establish and maintain records of the names and addresses of
first purchasers.''
After reviewing the pubic comments, NHTSA published a termination
of rulemaking notice in November 1988 \7\ announcing that none of the
four suggestions had been demonstrated to likely significantly increase
the level of tire registration by independent dealers under voluntary
registration. NHTSA also noted that the agency would continue to rely
on media and public announcements to alert the public of tire recalls,
so public safety would not be jeopardized by the low registration rate
for tires sold by independent dealers.
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\7\ Termination of rulemaking; 53 FR 44621, November 4, 1988.
---------------------------------------------------------------------------
Although the agency has not conducted a subsequent evaluation, it
believes that the registration rate for tires sold or leased by
independent distributors and dealers remains largely unchanged. In a
submission sent to the agency earlier this year, the Rubber
Manufacturers Association (RMA) indicated that the return rate for the
mail-in registration cards is no more than 10 percent.\8\
---------------------------------------------------------------------------
\8\ Docket NHTSA-2006-26554-3.
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C. Increasing the Effectiveness and Reducing the Cost of Tire
Registration Through Electronic Registration
1. 1984 Interpretation to Representative Wirth
In 1984, Representatives Wirth and Rinaldo wrote a letter to the
agency expressing several concerns. First, they noted that the agency
had stated in a recent rulemaking that the Vehicle Safety Act did not
permit independent dealers to return the mail-in registration cards
directly to the manufacturer without first providing the form to the
purchaser with the required information filled in by the dealer.
Second, they expressed support for computerized tire registration and
argued that the 1982 amendments to the Vehicle Safety Act should be
interpreted as permitting independent dealers to give the purchaser a
mail-in registration form on which they had not filled in any of the
required information if they attached to the form a copy of the
computerized invoice bearing that information.
In its response, the agency stated while a literal interpretation
of the 1982 amendments would not permit independent dealers to do that,
under an equitable interpretation, they would be.\9\ Under the
principles of equitable interpretation, a statutory requirement need
not be literally applied in instances in which the underlying
Congressional intent is otherwise satisfied. The agency stated:
---------------------------------------------------------------------------
\9\ February 1983 letter from Diane K. Steed to the Honorable
Timothy E. Wirth. Letter is available at: http://isearch.nhtsa.gov/gm/
83/1983-1.12.html.
Based on the principles of equitable interpretation, we believe
---------------------------------------------------------------------------
that an independent tire dealer or distributor who
(1) Registers tires by computer;
(2) Attaches a computer-printed invoice containing all of the
information necessary for registration to a blank standardized
registration form; and
(3) Furnishes the two documents to the customer when the tires
are purchased; fully satisfies the tire registration
amendments.
2. 2003 Interpretation to RMA
On July 18, 2003,\10\ the agency responded to a letter from RMA
asking whether Part 574 permits tire manufacturers to offer electronic
registration in addition to the required mail-in form. RMA stated that
it wanted to provide independent tire distributors and dealers with a
supplemental form that notifies consumers that they may also register
their tires by electronic means, e.g., by directing the consumer to a
website or a toll-free telephone registration line. In support of its
request, RMA noted that the agency had recently concluded that child
restraint manufacturers could provide consumers with a supplemental
form encouraging electronic registration.\11\ RMA said that no more
than 10 percent of tire registration cards were being returned to the
manufacturers and that the information was often incomplete or the
writing illegible. RMA expressed the belief that offering tire
registration via the Internet, by telephone or other electronic means
would improve the registration rate and aid manufacturers in fulfilling
their notification obligations.
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\10\ July 18, 2003 letter to Ann Wilson of RMA.
\11\ Letter to John K. Stipancich, January 3, 2003; letter to Mark
A. Rosenbaum, Esq., April 12, 2001.
---------------------------------------------------------------------------
In its response, the agency said it agreed that the rationales in
its letters relating to child restraint registration were also
applicable to tire registration. The agency concluded that Part 574
permits the provision of information about electronic registration as a
supplement to the required mail-in form for independent distributors
and dealers.
Likewise, as to non-independent distributors and dealers, the
agency said that electronic registration could be offered to them. The
agency cautioned, however:
This interpretation does not relieve non-independent
distributors and dealers from the requirements of section
574.8(b) that they themselves record the purchaser's name and
address, the tire identification number(s) of the tire(s) sold,
and a suitable identification of themselves as the selling
dealer on a tire registration form and return the completed
forms to the tire manufacturers or their designees. While we
would interpret Part 574 to permit non-independent distributors
and dealers to accomplish these tasks by electronic means, they
may not transfer this responsibility to consumers.
3. 2005-2007 Issues Regarding Clearance of the Tire Registration
Requirements Under the Paperwork Reduction Act
The information collected by tire dealers from tire purchasers and
retained by tire manufacturers is considered to be a ``collection of
information'' \12\ as defined by the Office of Management and Budget
(OMB). The significance of this definition is that approval of the
``collection of information'' is subject to OMB review. OMB has
promulgated 5 CFR Part 1320 ``Controlling Paperwork Burdens on the
Public.'' OMB states that the purpose of Part 1320 is to implement the
provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. chapter
35) (PRA) concerning collections of information. The procedures
established in Part 1320 are designed to ``reduce, minimize and control
burdens and maximize the practical utility and public benefit of the
information created, collected, disclosed, maintained, used, shared and
disseminated by or for the Federal Government.''
---------------------------------------------------------------------------
\12\ See 5 CFR 1320.3(a)(3).
---------------------------------------------------------------------------
Before a Federal agency can collect certain information from the
public (which includes the Federal Government's directing that the
information be collected from new tire purchasers by tire dealers to
give to tire manufacturers, also called third-party information), it
must receive approval from OMB. If OMB approves a collection of
information, it assigns an OMB control number and an expiration date.
OMB will not ``approve any collection of information for a period
longer than 3 years.'' (See 5 CFR section 1320.12(e)(1).) The OMB
control number assigned to the Part 574 collection of information is
2127-0050. The current status of OMB's approval is available online at
http://www.reginfo.gov/public/do/PRASearch.
Because the Part 574 collection of information requirements are
longstanding, we have, for many years, asked for and been granted, OMB
approval to collect the information. As part of the periodic process to
request OMB to renew approval of an existing collection of information,
on December 28, 2005, we published in the Federal Register (70 FR
76909) an announcement that NHTSA planned to ask OMB for a renewal of
approval to collect the Part 574 information, and sought public comment
on the proposed renewal.
We received two comments in response. The first was from the
National Automobile Dealers Association (NADA). NADA represents 20,000
franchised automobile and truck dealers that act as independent tire
dealers when they sell tires to consumers under differing situations.
The second comment was from Tire Recall Registry, Inc. (TRR). It raised
several issues, most of which were related to its advocating electronic
registration of tires. TRR cited the July 18, 2003 NHTSA interpretation
letter to RMA in which NHTSA stated that information about and
opportunities for electronic registration could be used to supplement
the paper form specified by Part 574. TRR stated its belief that
requiring paper forms resulted in an unnecessary burden under the OMB
regulations at 1320.3(b)(1), given that electronic means could be used
instead, thus reducing the collection of information burden.
On August 31, 2006, OMB renewed the collection of information for
Part 574 for a period of 6 months, instead of 3 years due to its
concerns about the burdens associated with tire registration. OMB posed
several questions for the agency to answer regarding DOT's compliance
with PRA requirements, the effectiveness rates of the tire registration
requirements, possible means to reduce the paperwork burden and
encourage tire dealers and purchasers to register tires by permitting
electronic registration, and a discussion of alternatives that might be
permitted for electronic registration, including the use of electronic
registration in lieu of the paper mail-in form. The questions were to
be answered as part of NHTSA's next request to renew the Part 574
collection of information. On December 8, 2006, NHTSA published a
Federal Register document (71 FR 71238) \13\ seeking comments on the
OMB questions and proposing to renew the Part 574 collection of
information.
---------------------------------------------------------------------------
\13\ Docket No. NHTSA-06-26554.
---------------------------------------------------------------------------
In response to the December 2006 document, five organizations
submitted comments. In addition to comments from RMA and NADA, comments
were submitted by Computerized Information and Management Services,
Inc. (CIMS), National Tire Registry Recall.com (NTRR), and the Tire
Industry Association (TIA). Except for CIMS, all commenters supported
efforts to expand the methods of registering new tire purchaser
information to include website registration by the purchaser and
electronic registration performed by independent tire dealers.
RMA stated that the continued registration of new tire purchasers
is a critically important safety issue so that purchasers can be
notified in the event of a product recall or other safety problem. It
urged NHTSA to either interpret or revise Part 574 to allow an
electronic alternative to the current paper card system. RMA said that
it has data showing that less than 10 percent of tire registration
cards [from independent tire dealers] are currently being returned to
the tire manufacturer and many of these cards are inaccurate,
incomplete, or illegible. RMA asked NHTSA to interpret or amend the
current regulations in the following areas:
1. Modify Part 574 to permit tire distributor or dealer either
(a) to provide consumer with the paper registration form
bearing instructions about the opportunity to register the
tires at the tire manufacturer's website or (b), on a voluntary
basis, to register the tires electronically at point of sale
(without having to provide any type of registration form to the
consumer).
2. The current regulation only requires [independent]
distributors to provide the form to first purchasers with the
tire identification number and the dealer's name and address.
Any revisions to the regulations to permit electronic or point-
of-sale registration should not create any new or additional
obligations for tire dealers or distributors by requiring them
to register the tires.
3. The tire manufacturer's obligations should remain the same.
They should only be required to continue to provide the paper
forms to tire dealers and distributors and, upon receipt of the
forms, retain the purchaser information for 5 years.
4. Through a NHTSA interpretation letter, a supplemental form
regarding electronic tire registration is permitted. However,
the agency should amend its regulations to permit information
about such registration to be placed directly on the existing
paper registration form.
NADA generally supported the RMA comments regarding permitting
website registration of tires, and referred to the agency's provisions
for electronic registration of child safety seats in 49 CFR 571.213 as
being instructive in this regard. In addition to allowing registration
by website or fax, NADA stated that tire dealers should also be
permitted to register the tires for the purchaser, upon obtaining
permission or a release from the purchaser to do so.
NADA noted that it has stated in the past that franchised
automobile and truck dealers act as independent tire dealers as well.
Commenting on past NHTSA announcements of intent to renew the Part 574
collection of information, NADA questioned in those prior renewals, and
also in the current one, NHTSA estimates of 12,000 new tire dealers and
distributors, when NADA stated that there are 20,000 franchised
automobile and truck dealers.
CIMS stated that it provides tire registration services to over 80
percent of tire manufacturers/brand owners in the replacement tire
market and to over 12,000 tire dealers and distributors. CIMS is
opposed to making changes to the existing tire registration
regulations. CIMS stated that the current tire registration regulations
are working, and that independent tire dealers using the CIMS All Brand
Form can comply with the tire registration regulation for one penny or
less per tire. It stated that allowing electronic registration of tires
will only cause more confusion, will remove the tire purchasers' rights
and ability to ensure that their tires are registered, and will
increase the liability of independent tire dealers if the tire
registration information is not completely transmitted to the tire
manufacturer or if they jeopardize the privacy of tire purchaser
information.
CIMS indicated that tire registrations by year are as follows:
1997--37,000,000
2000--41,000,000 (Prior to Ford/Firestone recall)
2003--54,000,000 (Corresponds with NHTSA estimates, Docket No.
06-26554)
2006--59,000,000
CIMS stated that there will be added costs associated with
electronic tire registration including developmental costs, software
upgrades and employee training. CIMS did not provide any specific cost
estimates.
NTRR stated its belief that changes are needed and that electronic
registration would enhance public safety, and would be consistent with
Paperwork Reduction Act priorities. NTRR stated that allowing
electronic registration as an alternative, not merely as a supplement,
would improve registration rates over the current methods. NTRR stated
that the July 18, 2003 interpretation letter from NHTSA to RMA leaves
unanswered the extent to which electronic registration and other
alternatives to paper forms can be used in compliance with 49 CFR part
574. NTRR also stated that the tire registration form specified in Part
574 does not display the required OMB control number, and suggested
that NHTSA does not adequately address privacy and confidentiality
concerns under the PRA.
TIA stated that it has worked closely with the RMA in reviewing the
need to revise the current tire registration regulations in 49 CFR part
574, and that it agrees with the four principles identified by RMA for
revisions to the regulations. TIA stated that any revisions to the
regulations should not create any new or additional obligations for
tire dealers and thus should not require the tire dealers to register
the tires. TIA stated that many TIA member tire dealers endorse
electronic registration and are making electronic registration of new
tires possible. TIA recommended that NHTSA adopt the changes
recommended by RMA as quickly as possible.
In an additional Federal Register document on March 21, 2007 (72 FR
1334) \14\ in which we asked that if the public had additional
comments, to provide the comments directly to OMB by April 20, 2007, we
provided a summary of the comments in response to the December 2006
document. In this March 2007 document, NHTSA specifically stated that
we are:
---------------------------------------------------------------------------
\14\ Docket No. NHTSA-06-26554.
* * * considering revisions to update 49 CFR part 574 to
provide, to the extent consistent with the agency's authority,
allowances for electronic and other possible means of
registering new tires at the point of sale. First, the agency
will consider the inclusion of website registration information
to be placed on the tire registration form in 574.7. Second,
the agency plans to update the registration form to include the
OMB control number. Third, the agency will fully evaluate what
appropriate regulations are permissible to allow independent
tire dealers to electronically register the tires on a
voluntary basis for the consumer, within the requirements
specified in Title 49, U.S.C. Chapter 301, Section 30117--
providing information to, and maintaining records on,
---------------------------------------------------------------------------
purchaser.
Therefore, the agency will undertake rulemaking in 2007 to
address these issues and provide the public with the
opportunity to comment on the proposed changes. (See 72 FR at
page 13345)
As stated in the March 2007 notice, the agency is now proceeding with
rulemaking to consider allowing registration via the Internet or other
electronic means for new tire purchasers.
II. Need for Rulemaking
NHTSA is proposing to amend the Part 574 tire registration
procedures to facilitate Internet and other electronic registration of
tires, including voluntary registration of tires by independent tire
dealers. We believe this rulemaking is needed to ensure that the
regulation permits, to the extent consistent with the agency's
authority, the use of new technologies in registering tires. In
addition to potentially reducing costs, the procedures could also
result in improved tire registration rates. A higher new tire
registration rate would help in the identification of first purchasers
of defective or nonconforming tires, so that the purchasers may take
appropriate action in the interest of motor vehicle safety. As
described below, NHTSA's most recent data on tire registration rates
were included in a termination of rulemaking notice published in the
Federal Register on November 4, 1988 (53 FR 44632).
As discussed earlier, NHTSA found in a 1985 study that under the
mandatory tire registration program for independent tire dealers, the
registration rate was 18.1 percent. In 1987, NHTSA found that, under
the voluntary independent tire dealer registration program, the tire
registration rate among independent tire dealers had decreased to 9.5
percent. If the number of tires registered using computers is
subtracted from 9.5 percent, the return rate for paper tire
registration forms was only 8 percent. In 1987, the tire registration
rate for tires sold by company-controlled dealers was found to be
greater than 86 percent.
We have not performed additional surveys on tire registration rates
since 1987. However, February 6, 2007 comments from RMA stated that
``no more than 10 percent of tire registration cards are currently
returned to manufacturers and a significant number of these cards are
inaccurate, incomplete or illegible.'' Thus, regarding the response
rate to paper forms for new tires sold through independent dealers, the
agency believes that tire registration rates have not changed
substantially for the past 20 years.
For these reasons, the agency does not agree with those that
believe the current paper-form based tire registration program is
effective. Even if electronic registration does not result in
significantly more purchaser responses (for new tire sales through
independent dealers), NHTSA believes the overall effectiveness rate of
tire registration would improve, because voluntary electronic
registration would eliminate illegibility or other ambiguity caused by
hand-written information. For purchasers who do not like to fill in
information by hand, electronic registration could also reduce the
overall burden of registration.
III. Today's Notice of Proposed Rulemaking
After carefully reviewing the public comments to NHTSA's December
2006 publication of the announcement of its request to OMB to extend
approval of the Part 574 tire registration collection of information,
we have concluded that Part 574 should be amended to facilitate
Internet and other electronic registration of tires, including
voluntary registration of tires by independent tire dealers. Our
proposal follows an approach similar to the ones suggested by RMA and
NADA.
Specifically, under our proposal:
Independent tire dealers could, in lieu of providing a paper
registration form to the consumer, voluntarily register a tire
by Internet or other electronic means, so long as such means
were authorized by the tire manufacturer. These dealers would
also have the option of providing to the consumer the mailable
standardized paper registration form that includes the tire
identification number (TIN) and the dealer's name and address
(this is the current requirement set forth in Part 574), or
using the same standardized paper registration form, but
voluntarily completing the form and registering the tire by
sending the form to the tire manufacturer or its designee.
The standardized paper registration form would be permitted
to identify a website authorized by the tire manufacturer at
which the consumer could register the tires instead of mailing
in the form.
We are proposing to remove the figures showing the
standardized paper registration form from the CFR. Some
requirements that were expressed by referring to the forms in
the regulatory text would be added to the regulatory text, but
the regulation would no longer specify as many details
concerning the format of the forms.
We are also proposing regulatory text that would make it
clear that dealers owned or controlled by tire manufacturers
may register tires by electronic means, consistent with a past
interpretation. The figure showing the form used for these
tires would also be removed.
Our proposal would not impose new obligations on tire dealers or
tire manufacturers. Instead, it would accommodate and facilitate
Internet and other electronic registration of tires, including
voluntary registration of tires by independent dealers. We note that we
are proposing a provision that would clarify that tire manufacturers
must meet requirements concerning retention of information for
registration information submitted to them by electronic or other means
they authorize, in addition to that submitted to them on the
standardized paper forms.
The details of our proposal are discussed below.
A. Tires Sold by Independent Tire Dealers--Alternative Means of Tire
Registration
As noted in our March 2007 document, we are considering revisions
to update 49 CFR part 574 to allow, to the extent consistent with the
agency's authority, for use of electronic and other possible means of
registering new tires at the point of sale.
The statutory requirements relevant to independent tire dealers are
found at 49 U.S.C. 30117(b)(2)(B), which reads as follows:
The Secretary shall require each distributor and dealer whose
business is not owned or controlled by a manufacturer of tires
to give a registration form (containing the tire identification
number) to the first purchaser of a tire. The Secretary shall
prescribe the form, which shall be standardized for all tires
and designed to allow the purchaser to complete and return it
directly to the manufacturer of the tire. The manufacturer
shall give sufficient copies of forms to distributors and
dealers.
Not surprisingly, given the pre-Internet date of enactment of the
statute, the statutory provision appears to contemplate a mail-in paper
form (``the manufacturer shall give sufficient copies of forms to
distributors and dealers''). Also, the legislative history (House
report) \15\ refers to forms that are suitable for mailing and
addressed to the manufacturer or its designee.
---------------------------------------------------------------------------
\15\ H.R. Rep. No. 97-576, p. 8.
---------------------------------------------------------------------------
One relevant issue is the effect of voluntary tire registration by
independent tire dealers on their obligations under section
30117(b)(2)(B). While the statute provides for a program in which
purchasers of tires from independent tire dealers may register their
tires by returning a form to the tire manufacturer, NHTSA's letter to
Congressman Timothy Wirth \16\ addressed the situation in which
independent tire dealers may wish to register tires voluntarily for
consumers. Invoking the principles of equitable interpretation, the
agency concluded that voluntary registration would partially relieve
independent dealers of their statutory obligations. Under those
principles, a statutory requirement need not be literally applied in
instances in which the underlying Congressional intent is otherwise
satisfied. More specifically, the agency stated:
---------------------------------------------------------------------------
\16\ February 1983 letter from Diane K. Steed to the Honorable
Timothy E. Wirth. Letter is available at: http://isearch.nhtsa.gov/gm/
83/1983-1.12.html.
Based on the principles of equitable interpretation, we believe
that an independent tire dealer or distributor who (1)
registers tires by computer; (2) attaches a computer-printed
invoice containing all of the information necessary for
registration to a blank standardized registration form; and (3)
furnishes the two documents to the customer when the tires are
purchased; fully satisfies the tire registration amendments. *
---------------------------------------------------------------------------
* *
While, as discussed below, we now believe that this interpretation
goes to some extent beyond what is necessary to satisfy Congressional
intent, we believe the basic principle is correct. In particular, if an
independent tire dealer voluntarily registers tires for the consumer,
it serves no purpose to require the full procedures necessary to enable
consumers to also register those tires.
Several other issues are whether the statute can be interpreted to
permit the use of electronic forms in lieu of paper forms and, assuming
that the answer to that issue is ``yes,'' the meaning of the statutory
command to ``* * * give a registration form (containing the tire
identification number) to the first purchaser * * *'' in the context of
electronic forms. As to the term ``form,'' it could be interpreted
broadly enough to include electronic as well as paper forms,
notwithstanding the statutory language and legislative history
mentioned above that suggests the forms are to be paper ones.
As to the term ``give,'' it could readily be interpreted in the
context of the statute to mean physically provide either ``take away''
means of registration (i.e., mailable form) or means of ``on-the-spot''
registration (i.e., an in-store computer terminal accessible to
purchaser). It is not apparent how the term could be further
interpreted to mean simply inform the purchaser about the opportunity
to use means not physically present in the dealer's store (e.g., use of
a computer terminal located at the purchaser's home or elsewhere.) It
is even less apparent how such further interpretation could be given
the term ``give'' given the additional requirement that the form given
the purchaser ``* * * contain the tire identification number * * *''
A possible scenario that could be viewed as meeting all of the
statutory requirements would be one in which the purchaser was provided
access to a computer at the dealership where the screen showed the form
with the tire identification numbers already filled in, and the
purchaser could register the tires with the manufacturer by entering
his or her name and address and clicking on a button to register the
tires. We do not know whether manufacturers and dealerships would be
interested in an option along these lines, but note that we are
requesting comments below on this type of approach. We also note that a
number of approaches for electronic registration by purchasers would
appear not to meet these statutory requirements, but could be viewed as
supplemental means of transmitting tire registration to manufacturers.
In light of the above discussion and in considering alternative
means for registration of tires sold by independent dealers, we
believe: (1) The regulation must include a basic procedure consistent
with the statutory requirement that enables purchasers of tires from
independent tire dealers to register their tires by returning a form
with the TIN already filled in to the tire manufacturer; (2) the
regulation may provide options under which an independent tire dealer
may voluntarily register tires for consumers, in which case the dealer
need not meet the full procedures necessary to enable consumers to
register those tires; and (3) the regulation may accommodate means that
tire manufacturers may provide for tire registration (e.g., Internet
registration) that consumers may use instead of mailing in the form.
Voluntary registration by independent dealers.
As indicated above, after reviewing our 1984 interpretation to
Congressman Wirth, we now believe that it went to some extent beyond
what was necessary to satisfy Congressional intent. In particular, the
agency believes that electronic registration of the tires by
independent dealers would satisfy the statutory requirements, without
the need to provide an additional blank form to the purchaser. The
purpose of the statutory requirement is to enable the purchaser to
register the tire purchase with the manufacturer. As such, if the
dealer registers the tires electronically for the purchaser and
provides a blank form to the purchaser, confusion could result, since
the purchaser might think there was a need to submit the paper form to
the manufacturer.
Regarding the statement in the interpretation that the purchaser be
given a computer-printed invoice with the information on the tire
registration paper form, the agency now believes that statement also
exceeds what is necessary. The tire registration information is kept by
the tire manufacturer (or its designee). There is no need for the
dealer or purchaser to retain that information, and NHTSA has no record
retention requirement for either tire dealers or tire purchasers.
Instead of duplicating the required information on the invoice given to
the purchaser, the agency believes that a written statement on the
invoice regarding the registration of the tires by the dealer would be
sufficient to inform the consumer that the tires have been registered.
We are therefore proposing that independent tire dealers have the
option of voluntarily electronically registering tires with the tire
manufacturer. We note, however, that whether this option can be used
depends on the tire manufacturer's providing a means to receive this
information electronically, or designating an agent to do so for it.
The agency is not aware of what specific means might be used to provide
electronic registration, such as specific software that identifies tire
sales and then automatically uses the Internet to transmit the
information to the tire manufacturer or its designee. However, the
agency believes that many company-controlled tire dealers have
autonomous systems in place to register the tires as part of the sale
transaction. Such systems do not require additional or separate actions
by sales personnel to register the tires. The agency welcomes
additional details on the methods that are currently in place and also
other methods that might be used, including how independent tire
dealers may be able to register tires electronically.
Our proposal also includes an option in which independent tire
dealers could use the standardized paper registration form, but
voluntarily complete the form and register the tires by sending the
form to the tire manufacturer or its designee.
One issue that arises with independent dealers being permitted to
register tires voluntarily for consumers is whether they could charge a
separate registration fee. We have tentatively concluded that this
should not be permitted, as it could discourage registration and cause
confusion. We request comments on this issue.
Another issue that arises with electronic registration of tires is
the security of the information being transmitted. The proposed
regulatory text would require that electronic registration be by secure
means, e.g., use of https on the web. We request comments on the need
for such a provision, and whether it should be more specific. We note
that in September 2005 we decided not to include an ``encryption''
requirement for electronic registration of child safety seats.\17\ We
may or may not adopt a requirement concerning secure means for
electronic registration of tires, but would like to have the benefit of
public comments before reaching a decision.
---------------------------------------------------------------------------
\17\ 70 FR 53569, 53572-73, September 9, 2005.
---------------------------------------------------------------------------
Regarding CIMS' comment that additional burden would shift to the
tire dealer if it decided to use electronic registration, NHTSA notes
that registration by independent tire dealers would be voluntary.
Nothing in this rulemaking would require independent tire dealers to
register tires for the purchaser.
NADA's comments regarding an optional electronic registration
program stated that the tire dealer should obtain permission or a
release from the purchaser before being permitted to register the tires
on behalf of the purchaser. The agency believes that this would create
an additional collection of information or other burden that would not
be necessary if, instead, a registration statement is provided to the
purchaser indicating that the tire dealer is performing tire
registration for the purchaser. We also observe that such releases are
not required for tire dealers controlled by tire manufacturers, which
are required to register tires for consumers.
For the new electronic registration requirements, NHTSA also
proposes to permit the tire manufacturer to designate a third party to
collect or store the tire registration information. Such third party
designation is currently allowed for the paper registration forms under
574.7, and NHTSA is not aware of any reason not to extend third party
designation to electronic tire registrations methods. Since we do not
have any detailed information on how designees would collect and retain
tire registration information, the agency welcomes additional details
that would assist the agency in establishing requirements.
Alternative means of registration by tire purchasers.
Consistent with our interpretation letter to RMA, we are including
in the proposed regulatory text a provision stating that tire
manufacturers may voluntarily provide means for tire registration via
the Internet, by telephone or other electronic means.
RMA and NADA commented that the tire registration paper form should
be allowed to include instructions for purchasers about registering
tires directly on the tire manufacturer's website. NADA stated that the
electronic registration provisions for child safety seats in FMVSS No.
213 are instructive about the value of permitting this. TIA stated that
it agreed with the four principles for new tire registration
requirements described by RMA (one of which is to allow website
registration). NTRR's comments did not specifically address putting
website information on the paper form.
The agency tentatively agrees that including, at the tire
manufacturer's option, a website address for purchasers to register
tires could facilitate registration for tire purchasers, and also
improve the quality of information received by the tire manufacturer.
As RMA stated, many of the paper registration forms that are received
by tire manufacturers are inaccurately filled out, incomplete, or
illegible. By allowing purchasers to type in the information directly
on the tire manufacturer's website, the issue of illegibility should be
eliminated.
NHTSA checked several tire manufacturers' websites, for both
widely-known tire brands and lesser-known tire brands, and found in all
but one case that the tire manufacturers already have website-based
tire registration capability. Inclusion of website registration
information would be performed at the option of the tire manufacturer.
We are proposing simple text to keep information on the form to a
minimum: ``Instead of mailing this form, you can register online at
[insert tire manufacturer's website address]''. This proposed language
deviates slightly from the FMVSS No. 213 text that includes references
to registering online on both sides of the form, although the text on
the mailing label side of that form is on a part of the form that is
removed prior to mailing. However, the tire registration form is not of
that design, and much of the form space is needed for recording the
tire identification numbers. We welcome comments on the proposed text
and location of the optional website registration information.
We request comments on whether information about other possible
means of supplemental registration should be permitted to be placed on
the tire registration paper form. We note, as indicated above, that the
available space on the form is limited.
Other possible options for tire registration.
We request comments on whether the regulation should specify
additional options for registering tires sold by independent tire
dealers that would be consistent with our statutory authority. We
intend for the scope of this proposal to be broad and, depending on the
comments, may adopt additional options in the final rule.
We note that, as indicated above, it is our goal to accommodate and
facilitate Internet and other electronic registration of tires,
including voluntary registration of tires by independent dealers. We
also note that since additional options would also be voluntary, there
is no reason to specify ones that would be unlikely to be used by
independent tire dealers, tire manufacturers, and/or consumers.
We seek comment on whether there should be some type of option in
which independent tire dealers might be able to use electronic forms in
lieu of paper forms to enable consumers to register their tires. Such
an approach might, for example, involve independent tire dealers
setting up computer terminals at their dealerships in which tire
purchasers would see a form on the computer screen with the TIN and
possibly other information already filled in, which tire purchasers
could use to register their tires. We note that if such an approach
involved the consumer's being given the electronic form with the TIN
filled in, the approach could, consistent with the requirements of 49
U.S.C. 30117(b)(2)(B), be an option that independent tire dealers could
use in lieu of paper forms. We also note that if such an option were
permitted in lieu of paper forms instead of as a supplement, the
electronic form would need to be standardized.
We specifically request that any commenters recommending additional
options for tire registration, beyond those in the proposed regulatory
text, provide specific recommended regulatory text for those additional
options.
Registration forms.
As discussed above, for tires sold by independent tire dealers,
NHTSA is required by statute to prescribe a standardized tire
registration form for all tires. Specifically, 49 U.S.C. 30117(b)(2)(B)
provides ``(t)he Secretary shall prescribe the form, which shall be
standardized for all tires * * *''
The statute provides that tire manufacturers must give sufficient
copies of the registration forms to distributors and dealers. Also,
Part 574.8 permits distributors and dealers to use registration forms
obtained from other sources.
Pursuant to the requirement to prescribe a standardized tire
registration form, NHTSA has adopted requirements through rulemaking
and placed them in Part 574. The details of some of the requirements,
including size and data elements, are set in the regulatory text. The
details of certain other requirements are not set out in the regulatory
text. Instead, the regulatory text requires that forms conform in
content and format to the forms depicted in the figures included in
Part 574. See 574.7(a)(2).
To promote flexibility, we are proposing to remove the figures
showing the forms in Part 574. To ensure that the forms remain
standardized, we are proposing to add some requirements to the
regulatory text that are currently expressed by referring to the
figures, but with fewer details concerning format. We are also
proposing to update the size standards to reflect the current U.S.
Postal Service's ``Domestic Mail Manual'' (Updated 12-6-07) at Section
6.3 ``Cards Claimed at Card Rates'' that specifies physical standards
that postcards must meet in order to be eligible for mailing at card
rates.
Under our proposal, on the address side of the form, the following
would continue to be required to be provided: The name and address of
the manufacturer or its designee, and, in the upper right hand corner,
the statement: ``Affix a postcard stamp.''
The other side of the form would continue to include the tire
manufacturer's name (unless it already appears on the address side),
and the statement: ``IMPORTANT, In case of a recall, we can reach you
only if we have your name and address.'' There would also continue to
be a statement indicating that sending in the card will add a person to
the manufacturer's recall list. However, the regulation would no longer
specify that the statement indicate that a person ``must'' send in the
card to be on the recall list, since manufacturers may provide
alternative means of registering tires.
Under our proposal, if a tire manufacturer provides a website where
its tires can be registered, it may (but is not required to) include
the following sentences: ``Instead of mailing this form, you can
register online at [insert tire manufacturer's registration website
address]''.
The form would also include the admonition: ``Do it today.''
The form would also continue to include space for recording the
tire identification numbers for six tires. There would also continue to
be shading to distinguish between areas of the form to be filled in by
sellers and customers.
As indicated above, under our proposal, the regulation would no
longer specify as many details concerning the format of the form.
We request comments on the removal of these figures and on what
requirements expressed by reference to the figures should be added to
the regulatory text.
Registration rates.
We request comments on the current registration rates of tires sold
by independent tire dealers. Commenters are asked to provide
information concerning the total number of such tires that are sold and
the number of those tires that are currently being registered by each
alternative means, e.g., the number of tires registered by returning
the paper form, the number registered using the tire manufacturer's
website, etc. The agency requests that commenters provide the specific
basis for any numbers or rates that are provided. We also request
comments on how and why these registration rates may change if the
agency adopts this proposed rule.
Other issues.
We request comments on other issues related to our proposal. As
indicated above, we intend the scope of this proposal to be broad.
We specifically invite comments related to NHTSA's provisions for
electronic registration of child safety seats in S5.8.2 of FMVSS No.
213. See final rule published in the Federal Register (70 FR 53569) on
September 9, 2005.\18\ The agency considered a number of issues related
to electronic registration and electronic registration forms in that
rulemaking. To what extent should the requirements we adopt related to
electronic registration of tires be similar/different from the ones we
adopted for child safety seats, and why?
---------------------------------------------------------------------------
\18\ Docket NHTSA-2005-22324.
---------------------------------------------------------------------------
B. Tires Sold by Dealers Controlled by Tire Manufacturers--Electronic
Tire Registration
The tire registration form in Figure 4 of Part 574 is the form that
is to be filled out by company-controlled tire dealers and returned to
the manufacturer upon the sale of new tires. We note that we have no
data on the continued use of this form, or what percentage of company-
controlled dealers continue to use this form versus submit the
registration information to the tire manufacturer using electronic
means.
As noted above, the agency has previously provided an
interpretation letter to the RMA (July 18, 2003 agency letter) stating
that while company-controlled dealers are permitted to register tires
electronically:
This interpretation does not relieve non-independent
distributors and dealers from the requirements of section
574.8(b) that they themselves record the purchaser's name and
address, the tire identification number(s) of the tire(s) sold,
and a suitable identification of themselves as the selling
dealer on a tire registration form and return the completed
forms to the tire manufacturers or their designees. While we
would interpret Part 574 to permit non-independent distributors
and dealers to accomplish these tasks by electronic means, they
may not transfer this responsibility to consumers.
In this NPRM, NHTSA is proposing to include a provision expressly
reflecting this existing option in the Part 574 requirements.
Specifically, NHTSA proposes that electronic means be permitted as an
alternative to the paper registration forms specified in S574.7(b). As
earlier stated, we have little information on how these systems are
configured, so we are proposing simple language and we welcome comments
on alternative language.
As to Part 574's requirements for these forms, requirements
concerning data elements are set forth in the regulatory text, and the
regulatory text also specifies that the forms must be similar in format
and size to that in Figure 4. We note that the statutory requirement
that NHTSA prescribe a standardized tire registration form does not
apply to ones for tires sold by dealers controlled by tire
manufacturers.
To promote flexibility, we are proposing to remove Figure 4 showing
the registration forms to be used. We are proposing to add several
requirements currently expressed by reference to the figure, and
otherwise leave all other details to the tire manufacturer. Under our
proposal, the form would continue to be required to include:
A statement indicating where the form should be returned,
including the name and mailing address of the manufacturer or
its designee.
The tire manufacturers' logo or other identification, if the
manufacturer is not identified as part of the statement
indicating where the form should be returned.
The statement: ``IMPORTANT; FEDERAL LAW REQUIRES TIRE
IDENTIFICATION NUMBERS MUST BE REGISTERED.''
We request comments on the removal of this figure and on what
requirements expressed by reference to the figure should be added to
the regulatory text.
VI. Rulemaking Analyses and Notices
A. Executive Order 12866 and DOT Regulatory Policies and Procedures
NHTSA has considered the impact of this rulemaking action under
Executive Order 12866 and the Department of Transportation's regulatory
policies and procedures. The Office of Management and Budget reviewed
this rulemaking document under E.O. 12866, ``Regulatory Planning and
Review.'' This rulemaking action has been determined to be significant
under the DOT Policies and Procedures because of public interest.
In this document, NHTSA is proposing to amend Part 574 by
permitting collection of the names and addresses of first purchasers of
new tires by Internet and other computerized means. Nothing in the
proposed rule, if made final, would require any tire dealer to use
these new procedures. All collection of the names and addresses of
first purchasers of new tires may continue to be collected as at
present. However, we believe that permitting electronic means of tire
registration will increase the rate of registrations, which will in
turn increase the effectiveness of future tire recalls and thus improve
motor vehicle safety.
There would be some cost impacts, in terms of time and/or money,
associated with increased registrations of tires by electronic means.
Since the options we are proposing are voluntary, we do not know to
what extent they will be utilized by independent tire dealers and tire
manufacturers. However, we are providing analysis to show the potential
cost impacts.
Increased registrations by consumers using the Internet.
Under the proposed rule, tire manufacturers can provide, on a
voluntary basis, Internet registration information on the tire
registration form that is given to purchasers by independent tire
dealers. Consumers could then register their tires online instead of
filling out the paper form and mailing it to the tire manufacturer or
its designee. The cost of printing this information on the form is
negligible, and therefore there would be no cost increase to tire
manufacturers that are responsible for printing the forms and providing
them to independent tire dealers. However, the tire manufacturers
offering the option of Internet-based tire registration on their
websites would incur some cost to include a registration site. The
agency has found that most tire manufacturers already have tire
registration sites included on their websites. This method of
registration would save consumers the cost of a postcard postage stamp,
and it would save costs for tire manufacturers because they (or their
designee) would not have to transcribe the information on the paper
forms into a tire registration database.
In the table which follows, we are providing estimates of the
monetized costs associated with various rates of increased tire
registration using the Internet. Under this scenario, paper forms would
continue to be provided to purchasers, but the additional registrations
would occur via the Internet rather than by the forms being mailed in.
Therefore, although tire registrations would increase, mailing and
other paperwork costs would remain the same. We are assuming, for
purposes of these estimates, that the costs associated with the current
level of tire registration would not change. The additional costs
associated with this scenario would be the time consumers spent
registering tires via the Internet that they otherwise would not
register. We also assume that because the tire registration information
is collected using purely electronic means, there would be no
additional labor burden for the tire manufacturer for recordkeeping
associated with these additional registrations. To monetize the costs
of consumers filling out paper forms or using the Internet, a labor
rate of $14.61 per hour is used.\19\
---------------------------------------------------------------------------
\19\ The median hourly rate among all occupations, May 2006,
according to the Bureau of Labor Statistics; see http://www.bls.gov/
oes/current/oes_nat.htm#b00-0000.
Consumer Cost Projections Associated with Increased Tire Registrations with Consumers Registering Tires Using
the Internet
----------------------------------------------------------------------------------------------------------------
Future tire registrations using
Internet-based registration by
Current tire consumers
registrations --------------------------------------
10 percent 15 percent 20 percent
increase increase increase
----------------------------------------------------------------------------------------------------------------
Consumer Hour Burden Estimates:
Number of Consumers 10,000,000 11,000,000 11,500,000 12,000,000
Total Tire Registrations 54,000,000 59,400,000 62,100,000 64,800,000
Tire Registration Hours 225,000 247,500 258,750 270,000
Monetized Costs (Consumer time valued @ $14.61/Hour $3,287,250 $3,615,975 $3,780,338 $3,944,700
----------------------------------------------------------------------------------------------------------------
Voluntary registration by independent tire dealers.
Under the proposed rule, independent tire dealers could voluntarily
register tires for consumers, if this was authorized by the tire
manufacturer. Dealers that did this would incur additional costs to
upgrade their computer systems, with both initial startup costs and
then costs for periodic maintenance of the systems. We assume that many
independent tire dealers, especially the larger ones, already collect
tire purchaser information as part of the sales process. For these
manufacturers, we believe it may be possible to upgrade the sales
system to include automatic electronic registration on behalf of the
purchaser. We do not know the details of how this process may work,
which would be up to the tire manufacturer and the independent tire
dealers. The process might also include companies designated by the
tire manufacturers to provide services in this area. We also do not
know what actual startup and annual costs might be to independent tire
dealers. However, once these systems are installed, tire registration
rates would be 100 percent for tires sold through these dealers. This
compares with overall current registration rates of 10 percent for
tires sold through independent dealers.
The costs associated with voluntary tire registration by
independent tire dealers would be offset, or partially offset, by the
fact that these dealers would no longer need to provide paper forms to
consumers, or fill out these forms with tire identification numbers.
The agency has estimated that there are a total of 59,000 tire
dealers in the U.S., including 13,000 that are company-controlled
dealers. The remaining 46,000 tire dealers include 20,000 car and truck
dealers and 26,000 independent tire dealers.
There are two unknowns for estimating the cost impacts on
independent tire dealers--how many independent dealers would
voluntarily upgrade computer systems to register tires, and what the
cost of these computer systems would be in terms of initial cost and
annual maintenance. Each year, a number of independent dealers will
install or upgrade computer systems, and they continue to maintain
their systems in subsequent years. We will assume that an initial
installation cost of providing an upgraded system is $750 and that
annual maintenance thereafter is $200. We do not know whether each tire
manufacturer would work directly with each independent tire dealer, or
whether third party designees would provide an interface service for
all tire manufacturers and independent tire dealers. We note that third
party designees could provide efficiencies of having a single contact
company that could be the interface for an independent tire dealer and
multiple tire manufacturers.
We are providing cost estimates assuming that 30 percent of
independent tire dealers would participate in such a voluntary program,
with 10 percent beginning the first year (4,600 dealers), an additional
10 percent beginning the second year, and the third 10 percent
beginning the third year. These costs can be summarized as follows:
----------------------------------------------------------------------------------------------------------------
Startup costs Annual
Year for computer maintenance Total cost
systems costs
----------------------------------------------------------------------------------------------------------------
2009 $3.45 M 0 $3.45 M
2010 3.45 M $0.92 M 4.37 M
2011 3.45 M 1.84 M 5.29 M
2012 and Beyond 0 2.76 M 2.76 M
----------------------------------------------------------------------------------------------------------------
Since the proposed rule, if made final, would establish collection
of information procedures that would be used entirely at the discretion
of the tire dealer, and the estimated paperwork burdens of tire dealers
electing to use these procedures are not expected to exceed $100
million annually, the agency does not consider this rulemaking to be
``economically significant,'' as defined by E.O. 12866. Thus, it has
not prepared a full regulatory evaluation.
B. Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601, et seq.,
as amended by the Small Business Regulatory Enforcement Fairness Act
(SBREFA) of 1996), whenever an agency is required to publish a notice
of rulemaking for any proposed or final rule, it must prepare and make
available for public comment a regulatory flexibility analysis that
describes the effect of the rule on small entities (i.e., small
businesses, small organizations, and small governmental jurisdictions).
The Small Business Administration's regulations at 13 CFR part 121
define a small business, in part, as a business entity ``which operates
primarily within the United States.'' (13 CFR 121.105(a)). No
regulatory flexibility analysis is required if the head of an agency
certifies that the rule will not have a significant economic impact on
a substantial number of small entities. The SBREFA amended the
Regulatory Flexibility Act to require Federal agencies to provide a
statement of the factual basis for certifying that a rule will not have
a significant economic impact on a substantial number of small
entities.
NHTSA has considered the effects of this rulemaking action under
the Regulatory Flexibility Act. As explained above, NHTSA is proposing
to amend Part 574 by permitting collection of the names and addresses
of first purchasers of new tires by Internet and other computerized
means. Electronic collection would be permitted in place of paper
forms. This regulatory flexibility analysis does not apply to
manufacturer-owned tire dealers, because they are not considered small
businesses under SBA's affiliation rule at 5 CFR section 121.103(a)(1)
which states in part: ``Concerns and entities are affiliates of each
other when one controls or has the power to control the other * * *''
The tire manufacturer either ``controls or has the power to control''
dealerships that it owns.
Under SBA's size standard regulations (at 5 CFR Part 121), ``tire
dealers'' are classified under North American Industry Classification
System (NAICS) Code 441320 with a size standard of average yearly sales
of $6 million. ``New car dealers'' are classified under NAICS Code
441110 with a size standard of average yearly sales of $24.5 million.
``Used car dealers'' are classified under NAICS Code 441120 with a size
standard of average yearly sales of $19.5 million.
In its February 27, 2006 comments to NHTSA, NADA stated that of its
``20,000 franchised automobile and truck dealers who sell new and used
motor vehicles,'' a ``significant number are small businesses as
defined by the SBA.'' NADA did not specify the number that would be
considered ``small businesses.'' In the Federal Register of March 21,
2007 (54 FR 133440), we estimated the number of independent tire
dealers to be 26,000. Assuming all NADA members are small businesses,
the total number of independent tire dealers that are small businesses
would be 46,000.
I hereby certify that if made final, this proposed rule would not
have a significant economic impact on a substantial number of small
entities. The factual basis for the certification is that if made
final, this proposed rule would not substantively change existing 49
CFR Part 574 requirements for small businesses that are independent
tire dealers. The electronic collection of information procedures would
be voluntary for independent tire dealers. The statement on the paper
form giving website information about online registration of new tires
(and the paper form itself) would be provided by the tire manufacturer.
If it chooses not to adopt electronic tire registration procedures, the
responsibilities of the independent dealer would remain the same, to
pass out the paper forms to first purchasers of new tires.
C. National Environmental Policy Act
NHTSA has analyzed this rulemaking action for the purposes of the
National Environmental Policy Act. The agency has determined that
implementation of this action would not have any significant impact on
the quality of the human environment.
D. Executive Order 13132 (Federalism)
NHTSA has examined today's proposal pursuant to Executive Order
13132 (64 FR 43255, August 10, 1999) and concluded that no additional
consultation with States, local governments or their representatives is
mandated beyond the rulemaking process. The agency has concluded that
the proposal does not have federalism implications because, if made
final, the rule would not have ``substantial direct effects on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government.''
If the proposed rule is made final, a State requirement would be
preempted if it conflicted with the rule.
E. Civil Justice Reform
With respect to the review of the promulgation of a new regulation,
section 3(b) of Executive Order 12988, ``Civil Justice Reform'' (61 FR
4729, February 7, 1996) requires that Executive agencies make every
reasonable effort to ensure that the regulation: (1) Clearly specifies
the preemptive effect; (2) clearly specifies the effect on existing
Federal law or regulation; (3) provides a clear legal standard for
affected conduct, while promoting simplification and burden reduction;
(4) clearly specifies the retroactive effect, if any; (5) adequately
defines key terms; and (6) addresses other important issues affecting
clarity and general draftsmanship under any guidelines issued by the
Attorney General. This document is consistent with that requirement.
Pursuant to this Order, NHTSA notes as follows. The preemptive
effect of this proposed rule is discussed above. NHTSA notes further
that there is no requirement that individuals submit a petition for
reconsideration or pursue other administrative proceeding before they
may file suit in court.
F. Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995, a person is not required
to respond to a collection of information by a Federal agency unless
the collection displays a valid Office of Management and Budget (OMB)
control number. The proposed changes to the tire registration and
recordkeeping rule, if made final, would be ``collections of
information,'' as that term is defined by OMB at 5 CFR 1320. Before an
agency submits a proposed collection of information to OMB for
approval, it must publish a document in the Federal Register providing
a 60-day comment period and otherwise consult with members of the
public and affected agencies concerning each proposed collection of
information. The OMB has promulgated regulations describing what must
be included in such a document. Under OMB's regulations (at 5 CFR
1320.8(d)), an agency must ask for public comment on the following:
(i) Whether the proposed collection of information is necessary
for the proper performance of the functions of the agency,
including whether the information will have practical utility;
(ii) The accuracy of the agency's estimate of the burden of the
proposed collection of information, including the validity of
the methodology and assumptions used;
(iii) How to enhance the quality, utility, and clarity of the
information to be collected; and
(iv) How to minimize the burden of the collection of
information on those who are to respond, including the use of
appropriate automated, electronic, mechanical, or other
technological collection techniques or other forms of
information technology, e.g., permitting electronic submission
of responses.
In compliance with the requirements of 5 CFR part 1320, NHTSA
requests comment on the collection of information that would be
revised if this NPRM were made final.
Title: 49 CFR part 574, Tire Identification and Recordkeeping.
OMB Control Number: 2127-0050.
Requested Expiration Date of Approval: Three years from date of
last approval.
Type of Request: Extension of a currently approved collection, with
changes.
Summary of the Collection of Information: 49 U.S.C. 30117(b)
requires each tire manufacturer to collect and maintain records of the
first purchasers of new tires. To carry out this mandate, 49 CFR part
574 requires tire dealers and distributors owned or controlled by a
tire manufacturer to record the names and addresses of retail
purchasers of new tires and the identification number(s) of the tires
sold. A specific form is provided to tire dealers and distributors by
tire manufacturers for recording this information. The completed forms
are returned to the tire manufacturers where they are retained for not
less than 5 years. Part 574 requires independent tire dealers and
distributors to provide a registration form to consumers with the tire
identification number already recorded and information identifying the
dealer/distributor. The consumer can then record his/her name and
address and return the form to the tire manufacturer. These forms are
also provided to tire dealers and distributors by tire manufacturers.
Additionally, motor vehicle manufacturers are required to record the
names and addresses of the first purchasers (for purposes other than
resale), together with the identification numbers of the tires on the
new vehicles, and retain this information for not less than 5 years.
Description of the Need for the Information and the Proposed Use of
the Information: The information is used by a tire manufacturer after
it or the agency determines that some of its tires either fail to
comply with an applicable safety standard or contain a safety related
defect. With the information, the tire manufacturer can notify the
first purchaser of the tires and provide them with any necessary
information or instructions or remedy.
Without this information, efforts to identify the first purchaser
of tires that have been determined to be defective or nonconforming
pursuant to Sections 30118 and 30119 of Title 49 U.S.C. would be
impeded. Further, the ability of the purchasers to take appropriate
action in the interest of motor vehicle safety may be compromised.
Description of the Likely Respondents (Including Estimated Number
and Proposed Frequency of Response to the Collection of Information):
March 21, 2007 Federal Register Notice--In the 30-day notice
announcing NHTSA's request for an extension to collect the tire
registration and recordkeeping information had been forwarded to OMB,
we estimated that the collection of information affects 10 million
respondents annually. This group consists of approximately 20 tire
manufacturers, 59,000 new tire dealers and distributors, and 10 million
consumers who choose to register their tire purchases with tire
manufacturers. A response is required by motor vehicle manufacturers
upon each sale of a new vehicle and by non-independent tire dealers
with each sale of a new tire. A consumer may elect to respond when
purchasing a new tire from an independent dealer.
Today's Estimate Resulting From the Proposed Collection of
Information Including Electronic Reporting--If made final, today's NPRM
would affect the tire registration and recordkeeping collection of
information as follows: The publication ``Modern Tire Dealer'' reports
that the tire industry's annual unit sales of new tires in the United
States for the past 3 years were as follows: 2004--319 million; 2005--
326 million; 2006--313 million. Thus, over the past 3 years, the
average sales of tires per year in the U.S. were roughly 320 million.
Estimate of the Total Annual Reporting and Recordkeeping Burden
Resulting from the Collection of Information:
March 21, 2007 Federal Register Notice--In the March 21, 2007
notice, we provided the following estimated burden:
New tire dealers and distributors........... 59,000.
Consumers................................... 10,000,000.
Total tire registrations (manually)......... 54,000,000.
Total tire registration hours (manually).... 225,000 hours.
Recordkeeping hours (manually).............. 25,000 hours.
Total annual tire registration and 250,000 hours.
recordkeeping hours.
We note that with today's proposed rule, tire registration by
purchasers would be facilitated by accommodating electronic means. We
believe that if electronic registration were accommodated, the response
rate for purchasers may increase. Moreover, some independent tire
dealers may voluntarily register tires for consumers, thereby resulting
in a higher registration rate.
Given that the various options we are proposing would be voluntary,
we do not know to what extent they would be utilized by independent
tire dealers, tire manufacturers and consumers. Therefore, based on the
information that is available, these are our estimates of burden.
The same information (name and address of the purchaser) would be
collected regardless of the format, paper form, or typing in
information on a company website. Because some people type faster and
some people write faster, NHTSA believes that the amount of time it
will take to provide information about the name and address of the
purchaser would be very roughly the same, regardless of the format. To
the extent more consumers registered their tires, actual burdens
realized could thus increase concomitantly with the higher registration
rates. On the other hand, it may be possible for tire manufacturers and
independent tire dealers to develop electronic systems, tied in with
the systems used for monitoring inventory and recording sales
information, that could automatically register the tires with the tire
manufacturer at little additional cost.
NHTSA believes that virtually all recordkeeping by tire
manufacturers is already done electronically. NHTSA estimates that it
takes roughly 25,000 hours to transfer handwritten data to an
electronic format for storage. Because, with website-based information,
there would be no change in format (i.e., going from electronic
reporting to electronic storage), NHTSA believes there would be
virtually no burden hours imposed in transferring information provided
on a tire manufacturer's website to a recordkeeping site. For these
reasons, NHTSA believes the recordkeeping burden hours would remain at
25,000 hours.
NHTSA solicits comments on the proposed changes in the collection
of information associated with part 574 and on NHTSA's analysis of how
the changes will affect the number of burden hours affecting the
public. Comments must refer to the docket and notice numbers cited at
the beginning of this NPRM and be submitted to: Docket Operations, M-
30, U.S. Department of Transportation, West Building, Ground Floor, Rm.
W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590.
G. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272)
directs NHTSA to use voluntary consensus standards in its regulatory
activities unless doing so would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, and business practices) that are developed or adopted by
voluntary consensus standards bodies, such as the Society of Automotive
Engineers (SAE). The NTTAA directs the agency to provide Congress,
through the OMB, explanations when we decide not to use available and
applicable voluntary consensus standards.
After carefully reviewing the available information, NHTSA has
determined that there are no voluntary consensus standards relevant to
this rulemaking, as the information to be collected and sent to tire
manufacturers is needed only in the event of a tire recall.
Accordingly, this proposed rule is in compliance with Section 12(d) of
NTTAA.
H. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires Federal agencies to prepare a written assessment of the costs,
benefits, and other effects of proposed or final rules that include a
Federal mandate likely to result in the expenditure by State, local or
tribal governments, in the aggregate, or by the private sector, of more
than $100 million in any 1 year (adjusted for inflation with base year
of 1995). Before promulgating a rule for which a written statement is
needed, section 205 of the UMRA generally requires NHTSA to identify
and consider a reasonable number of regulatory alternatives and adopt
the least costly, most cost-effective, or least burdensome alternative
that achieves the objectives of the rule. The provisions of section 205
do not apply when they are inconsistent with applicable law. Moreover,
section 205 allows NHTSA to adopt an alternative other than the least
costly, most cost effective or least burdensome alternative if the
agency publishes with the final rule an explanation why that
alternative was not adopted.
This proposed rule would not result in the expenditure by State,
local, or tribal governments, in the aggregate, or by the private
sector of more than $100 million annually. Accordingly, the agency has
not prepared an Unfunded Mandates assessment.
I. Plain Language
Executive Order 12866 requires each agency to write all rules in
plain language. Application of the principles of plain language
includes consideration of the following questions:
--Have we organized the material to suit the public's needs?
--Are the requirements in the rule clearly stated?
--Does the rule contain technical language or jargon that is
not clear?
--Would a different format (grouping and order of sections, use
of headings, paragraphing) make the rule easier to understand?
--Would more (but shorter) sections be better?
--Could we improve clarity by adding tables, lists, or
diagrams?
--What else could we do to make this rulemaking easier to
understand?
If you have any responses to these questions, please include them
in your comments on this NPRM.
J. Regulation Identifier Number (RIN)
The Department of Transportation assigns a regulation identifier
number (RIN) to each regulatory action listed in the Unified Agenda of
Federal Regulations. The Regulatory Information Service Center
publishes the Unified Agenda in April and October of each year. You may
use the RIN contained in the heading at the beginning of this document
to find this action in the Unified Agenda.
K. Privacy Act
Anyone is able to search the electronic form of all comments
received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review DOT's
complete Privacy Act Statement in the Federal Register published on
April 11, 2000 (65 FR 19477 at 19478) or you may visit http://
docketsinfo.dot.gov/.
V. Public Participation
How Do I Prepare and Submit Comments?
Your comments must be written and in English. To ensure that your
comments are correctly filed in the Docket, please include the docket
number of this document in your comments. Your comments must not be
more than 15 pages long.\20\ We established this limit to encourage you
to write your primary comments in a concise fashion. However, you may
attach necessary additional documents to your comments. There is no
limit on the length of the attachments.
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\20\ See 49 CFR 553.21.
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Please submit your comments by any of the following methods:
Federal eRulemaking Portal: Go to http://
www.regulations.gov. Follow the online instructions for
submitting comments.
Mail: Docket Management Facility, M-30, U.S. Department of
Transportation, West Building, Ground Floor, Rm. W12-140, 1200
New Jersey Avenue, SE., Washington, DC 20590.
Hand Delivery or Courier: West Building Ground Floor, Room
W12-140, 1200 New Jersey Avenue, SE., between 9 a.m. and 5 p.m.
Eastern Time, Monday through Friday, except Federal holidays.
Fax: (202) 493-2251.
If you are submitting comments electronically as a PDF (Adobe)
file, we ask that the documents submitted be scanned using Optical
Character Recognition (OCR) process, thus allowing the agency to search
and copy certain portions of your submissions.\21\
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\21\ Optical character recognition (OCR) is the process of
converting an image of text, such as a scanned paper document or
electronic fax file, into computer-editable text.
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Please note that pursuant to the Data Quality Act, in order for
substantive data to be relied upon and used by the agency, it must meet
the information quality standards set forth in the OMB and DOT Data
Quality Act guidelines. Accordingly, we encourage you to consult the
guidelines in preparing your comments. OMB's guidelines may be accessed
at http://www.whitehouse.gov/omb/fedreg/reproducible.html. DOT's
guidelines may be accessed at http://dmses.dot.gov/submit/
DataQualityGuidelines.pdf.
How Can I Be Sure That My Comments Were Received?
If you submit your comments by mail and wish Docket Management to
notify you upon its receipt of your comments, enclose a self-addressed,
stamped postcard in the envelope containing your comments. Upon
receiving your comments, Docket Management will return the postcard by
mail.
How Do I Submit Confidential Business Information?
If you wish to submit any information under a claim of
confidentiality, you should submit three copies of your complete
submission, including the information you claim to be confidential
business information, to the Chief Counsel, NHTSA, at the address given
above under FOR FURTHER INFORMATION CONTACT. When you send a comment
containing information claimed to be confidential business information,
you should include a cover letter setting forth the information
specified in our confidential business information regulation.\22\
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\22\ See 49 CFR 512.
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In addition, you should submit a copy, from which you have deleted
the claimed confidential business information, to the Docket by one of
the methods set forth above.
Will the Agency Consider Late Comments?
We will consider all comments received before the close of business
on the comment closing date indicated above under DATES. To the extent
possible, we will also consider comments received after that date.
Therefore, if interested persons believe that any new information the
agency places in the docket affects their comments, they may submit
comments after the closing date concerning how the agency should
consider that information for the final rule.
If a comment is received too late for us to consider in developing
a final rule (assuming that one is issued), we will consider that
comment as an informal suggestion for future rulemaking action.
How Can I Read the Comments Submitted By Other People?
You may read the materials placed in the docket for this document
(e.g., the comments submitted in response to this document by other
interested persons) at any time by going to http://www.regulations.gov.
Follow the online instructions for accessing the dockets. You may also
read the materials at the Docket Management Facility by going to the
street address given above under ADDRESSES. The Docket Management
Facility is open between 9 a.m. and 5 p.m. Eastern Time, Monday through
Friday, except Federal holidays.
List of Subjects in 49 CFR Part 574
Labeling, Motor vehicle safety, Reporting and recordkeeping
requirements, and Tires.
In consideration of the foregoing, NHTSA proposes to amend 49 CFR
part 574 as follows:
PART 574--TIRE IDENTIFICATION AND RECORDKEEPING
1. The authority for part 574 continues to read as follows:
Authority: 49 U.S.C. 322, 30111, 30115, 30117 and 30166; delegation
of authority at 49 CFR 1.50.
2. Section 574.7 is amended by revising paragraphs (a)(2) and
(a)(3) and adding new paragraphs (e) and (f) to read as follows:
574.7 Information requirements--tire manufacturers, new tire brand
name owners.
(a)(1) * * *
(2) Each tire registration form provided to independent
distributors and dealers pursuant to paragraph (a)(1) of this section
shall contain space for recording the information specified in
paragraphs (a)(4)(i) through (a)(4)(iii) of this section. Each form
shall:
(i) Have the following physical characteristics:
(A) Be rectangular;
(B) Be not less than 3\1/2\ inches high, 5 inches long, and 0.007
inches thick;
(C) Be not more than 4\1/4\ inches high, or more than 6 inches
long, or greater than 0.016 inch thick.
(ii) On the address side of the form, be addressed with the name
and address of the manufacturer or its designee, and include, in the
upper right hand corner, the statement ``Affix a postcard stamp.''
(iii) On the other side of the form:
(A) Include the tire manufacturer's name, unless it appears on the
address side of the form;
(B) Include a statement explaining the purpose of the form and how
a consumer may register tires. The statement shall:
(1) Include the heading ``IMPORTANT''.
(2) Include the sentence: ``In case of a recall, we can reach you
only if we have your name and address.''
(3) Indicate that sending in the card will add a person to the
manufacturer's recall list.
(4) If a tire manufacturer provides a website where its tires can
be registered, it may (but is not required to) include the following
sentence: ``Instead of mailing this form, you can register online at
[insert tire manufacturer's registration website address].''
(5) Include the sentence: ``Do it today.''
(C) Include space for recording tire identification numbers for six
tires.
(D) Use shading to distinguish between areas of the form to be
filled in by sellers and customers.
(1) Include the statement: ``Shaded areas must be filled in by
seller.''
(2) The areas of the form for recording tire identification numbers
and information about the seller of the tires must be shaded.
(3) The area of the form for recording the customer name and
address must not be shaded.
(D) Include, in the top right corner, the phrase ``OMB Control No.
2127-0050''.
(3) Each tire registration form provided to distributors and
dealers that are not independent distributors or dealers pursuant to
paragraph (a)(1) of this section must contain space for recording the
information specified in paragraphs (a)(4)(i) through (a)(4)(iii) of
this section. Each form must include:
(A) A statement indicating where the form should be returned,
including the name and mailing address of the manufacturer or its
designee.
(B) The tire manufacturers' logo or other identification, if the
manufacturer is not identified as part of the statement indicating
where the form should be returned.
(C) The statement: ``IMPORTANT: FEDERAL LAW REQUIRES TIRE
IDENTIFICATION NUMBERS MUST BE REGISTERED''.
(D) In the top right corner, the phrase ``OMB Control No. 2127-
0050''.
* * * * *
(e) Tire manufacturers may voluntarily provide means for tire
registration via the Internet, by telephone or other electronic means.
(f) Each tire manufacturer shall meet the requirements of
paragraphs (b), (c) and (d) of this section with respect to tire
registration information submitted to it or its designee by any means
authorized by the manufacturer in addition to the use of registration
forms.
3. Section 574.8 is revised to read as follows:
574.8 Information requirements--tire distributors and dealers.
(a) Independent distributors and dealers.
(1) Each independent distributor and each independent dealer
selling or leasing new tires to tire purchasers or lessors (hereinafter
referred to in this section as ``tire purchasers'') shall comply with
paragraph (a)(1)(i), (a)(1)(ii) or (a)(1)(iii) of this section:
(i) At the time of sale or lease of the tire, provide each tire
purchaser with a paper tire registration form on which the distributor
or dealer has recorded the following information:
(A) The entire tire identification number of the tire(s) sold or
leased to the tire purchaser, and
(B) The distributor's or dealer's name and street address. In lieu
of the street address, and if one is available, the distributor or
dealer's e-mail address or website may be recorded. Other means of
identifying the distributor or dealer known to the manufacturer may
also be used.
(ii) Record the following information on a paper tire registration
form and return it to the tire manufacturer, or its designee, on behalf
of the tire purchaser, at no charge to the tire purchaser and within 30
days of the date of sale or lease:
(A) The purchaser's name and address,
(B) The entire tire identification number of the tire(s) sold or
leased to the tire purchaser, and
(C) The distributor's or dealer's name and street address. In lieu
of the street address, and if one is available, the distributor or
dealer's e-mail address or website may be recorded. Other means of
identifying the distributor or dealer known to the manufacturer may
also be used.
(iii) If authorized by the tire manufacturer, electronically
transmit the following information on the tire registration form to the
tire manufacturer, or its designee, using secure means (e.g., https on
the web), at no charge to the tire purchaser and within 30 days of the
date of sale or lease:
(A) The purchaser's name and address,
(B) The entire tire identification number of the tire(s) sold or
leased to the tire purchaser, and
(C) The distributor's or dealer's name and street address. In lieu
of the street address, and if one is available, the distributor or
dealer's e-mail address or website may be recorded. Other means of
identifying the distributor or dealer known to the manufacturer may
also be used.
(2) Each independent distributor or dealer that complies with
paragraph (a)(1)(i) or (ii) of this section shall use either the tire
registration forms provided by the tire manufacturers pursuant to
574.7(a) or registration forms obtained from another source. Paper
forms obtained from other sources must comply with the requirements
specified in 574.7(a) for forms provided by tire manufacturers to
independent distributors and dealers.
(3) Multiple tire sales or leases by the same tire purchaser may be
recorded on a single paper registration form or in a single website
transaction.
(4) Each independent distributor or dealer that is complying with
paragraph (a)(1)(iii) with respect to a sale or lease shall include a
statement to that effect on the invoice for that sale or lease and
provide the invoice to the tire purchaser.
(b) Other distributors and dealers.
(1) Each distributor and each dealer, other than an independent
distributor or dealer, selling new tires to tire purchasers:
(i) shall submit, using paper registration forms or, if authorized
by the tire manufacturer, secure electronic means, the information
specified in 574.7(a)(4) to the manufacturer of the tires sold, or to
the manufacturer's designee.
(ii) shall submit the information specified in 574.7(a)(4) to the
tire manufacturer or the manufacturer's designee, not less often than
every 30 days. A distributor or dealer selling fewer than 40 tires of
all makes, types and sizes during a 30 day period may wait until a
total of 40 new tires is sold. In no event may more than 6 months
elapse before the 574.7(a)(4) information is forwarded to the
respective tire manufacturers or their designees.
(c) Each distributor and each dealer selling new tires to other
tire distributors or dealers shall supply to the distributor or dealer
a means to record the information specified in 574.7(a)(4), unless
such means has been provided to that distributor or dealer by another
person or by a manufacturer.
(d) Each distributor and each dealer shall immediately stop selling
any group of tires when so directed by a notification issued pursuant
to 49 U.S.C. Section 30118.
Notification of defects and noncompliance.
4. In Part 574, Figures 3a, 3b and 4 are removed.
Issued on: January 16, 2008.
Stephen R. Kratzke,
Associate Administrator for Rulemaking.
[FR Doc. E8-1099 Filed 1-23-08; 8:45 am]
Attachment 3
Date: 02/00/83
From: Author Unavailable: Diane K. Steed; NHTSA
To: The Honorable Timothy E. Wirth, House of Representatives
Title: FMVSS Interpretation
Text:
Dear Mr. Wirth:
This responds to your letter, consigned by Mr. Matthew Rinaldo,
commenting on this agency's February 3, 1984 final rule on the
voluntary tire registration procedures for independent tire dealers.
You asked me to respond to several points in your letter.
You noted that the final rule includes a discussion which concluded
that section 158 of the National Traffic and Motor Vehicle Safety Act
(the Safety Act), as amended by the Motor Vehicle Safety and Cost
Savings Authorization Act of 1982 (the Authorization Act), requires
each independent dealer to furnish a registration form to the tire
purchaser. That discussion further stated that the section does not
allow those dealers to return forms directly to the tire manufacturer
without first furnishing the form to the purchaser with the necessary
information filled in by the dealer. You indicated your hope that this
position could be modified.
You stated further that you became aware of computerized tire
registration systems after the enactment of the Authorization Act, and
that these systems will yield 100 percent registration. You stated also
that the legislative history of the Authorization Act makes clear that
Congress wanted to increase the rate of registration for replacement
tires sold through independent dealers. You suggested that it would be
in accordance with Congressional intent in enacting the Authorization
Act for an independent dealer to furnish the first purchaser with a
registration form on which it had not filled in any of the required
information but to which it had attached a copy of the computerized
invoice bearing that and other information.
A literal interpretation of the statutory language chosen by
Congress would cause us to reaffirm the position we took in the
February 1984 final rule. Under that interpretation, the suggested
practice of using a computerized invoice in place of filling in the
required information on a registration form would violate the voluntary
registration requirements in several respects.
However, reconsideration of this issue has led us to conclude that
this is an appropriate case for applying the principles of equitable
interpretation. Under the principles of equitable interpretation, the
language of the amendments need not be applied in instances where it is
clearly contrary to the underlying Congressional intent. I agree that
the Authorization Act's legislative history shows that one aspect of
the Congressional intent underlying the tire registration amendments
was to increase the registration rated for tires sold by independent
dealers and distributors. Another aspect of that intent was to reduce
the burdens which the registration process placed on those dealers and
distributors. A literal interpretation of the amendments would either
discourage independent dealers and distributors from using computer
registration, a highly effective method of registration, or burden them
with procedural steps which are made unnecessary by computer
registration. In either event, the result appears to run counter to one
of the aspects of Congressional intent mentioned above.
Based on the principles of equitable interpretation, we believe
that an independent dealer or distributor who: (1) registers tires by
computer; (2) attaches a computer-printed invoice containing all of the
information necessary for registration to a blank standardized
registration from; and (3) furnishes the two documents to the customer
when the tires are purchased; fully satisfies the tire registration
amendments. We must emphasize, however, that the omission by a dealer
of any of these three actions would make the dealer subject to all
aspects of the voluntary tire registration requirements set forth in
the amendments. (A full discussion of the literal and equitable
interpretations of the tire registration amendments is contained in the
enclosed analysis.)
Your letter noted that in my previous letter to you on tire
registration, I indicated that if there were any tire recalls during
the period when there were not tire registration requirements
applicable to independent dealers, I would consider what steps should
be taken to inform the consumers whose tires were unregistered. You
stated that some 101,000 tires were recalled during fiscal 1983, and
you asked the agency to take three steps. First, you asked that we
determine whether any of the recalled tires were sold during the period
when there were no registration requirements applicable to tires sold
by independent dealers. Second, you urged that we initiate procedures
to ensure that purchasers of unregistered tires are informed that their
tires have been recalled. Third, you urged that we develop a program to
enable those who purchased tires from independent dealers during the
period when there were no registration requirements applicable to such
tires to register those tires with the manufacturers.
I have instructed agency staff to carefully consider each of these
requests. I will report the results of these considerations to you as
soon as they are available.
Finally, there is a possible misunderstanding which I would like to
clarify in your letter. You stated in the second full paragraph on page
2 of the letter that there were no tire registration requirements
applicable to tires sold by independent dealers between October 15,
1982 ``and the date of effectiveness of this final rule.'' The final
rule became effective on March 26, 1984. However, there was an interim
final rule in effect on June 20, 1983, until March 26, 1984, and that
interim final rule established voluntary registration procedures
applicable to independent dealers. Independent dealers and tire
manufacturers which did not comply with the requirements of the interim
final rule were subject to civil penalties of up to $1,000 per
violation, as specified in section 109 of the Safety Act. I want to be
sure that it is clear that the period during which there were no
registration requirements applicable to independent dealers lasted from
October 15, 1982, until June 20, 1983, and not beyond that date.
As with your previous correspondence on this topic, I have placed
copies of your letter and this response in the appropriate rulemaking
docket. Please let me know if you have any other concerns or comments
on the issue of voluntary tire registration, so that this agency can
work with you to ensure proper implementation of the changes mandated
by the Authorization Act.
Sincerely,
Hon. Diane K. Steed,
Administrator.
______
Computerized Registration and the Voluntary Tire Registration
Requirements
This analysis considers the effects of the changed language in
section 158 of the National Traffic and Motor Vehicle Safety Act (the
Safety Act), as amended by the Motor Vehicle Safety and Cost Savings
Authorization Act of 1982 (the Authorization Act), on independent
dealers and distributors wishing to use a computerized system for
recording tire purchases and for registering those purchases with the
tire manufacturer.
Section 158(b)(2)(B) of the Safety Act specifies that the National
Highway Traffic Safety Administration----
shall require each (independent dealer) to furnish the first
purchaser with a tire registration form (containing the tire
identification number of the tire) which the purchaser may complete and
return directly to the manufacturer of the tire. (Emphasis added.)
This statutory language seemingly forecloses the possibility of a
dealer's using a computerized registration system in place of the
dealer's performing each of the actions specified by the voluntary tire
registration requirements.
In a computerized registration system, the dealer must enter the
date of sale, number of tires sold and their tire identification
numbers, the customer's name and address, and the dealer's name and
address into a computer. If each item of this information is not
entered, the dealer will not receive credit from the sale from the
manufacturer. A further result is that the dealer will not have to
accurate inventory records, which are a by-product of this system, for
his or her own purposes. When this information has been entered into
the computer, an invoice is printed which contains that information.
Experience with computerized registration has shown registration rated
at or very near 100 percent registration of the tires sold by the
dealers using the computerized registration systems.
I agree that the Authorization Act's legislative history shows that
one aspect of the Congressional intent underlying the tire registration
amendments was to increase the registration rated for tires sold by
independent dealers. Another aspect of that intent was to reduce the
burdens which the registration process placed on independent dealers
and distributors. However, the letter of the Authorization Act does not
provide this agency with broad discretion to determine how best to
achieve those goals. The provisions enacted by Congress were quite
explicit in specifying the action to be required of each independent
dealer and distributor. The only aspects of the voluntary registration
left to this agency's discretion were the contents and format of the
registration forms to be used. Even that discretion is circumscribed by
the requirement in section 158(b)(2)(B) of the Safety Act that the
contents and format of the forms ``shall be standardized for all
tires.'' In explaining how the voluntary registration procedures would
work, the House of Representatives Committee on Energy and Commerce
said that independent dealers and distributors--are required to furnish
the first purchaser of a tire with a standardized registration form,
containing the tire identification number of the tire, which would be
recorded on the form by the dealer or distributor at or before the time
of purchase. The form should be presented to the purchaser in a manner
suitable for mailing and addressed to the tire manufacturer or his
designee. H.R. Rep. No. 97-576, 97th Cong., 2d Sess. at 8 (1982).
(Emphasis added)
Although a literal interpretation of the statutory language chosen
by Congress would cause us to reaffirm the position we took in the
February 1984 final rule, reconsideration of this issue has led us to
conclude that this is an appropriate case for applying the principles
of equitable interpretation. The tire registration amendments are
remedial legislation for which the rule of construction is----
(C)ases within the reason, though not within the letter, of a
statute shall be embraced by its provisions; and cases not within the
reason, though within the letter, shall no be taken to be within the
statute. (Sutherland, Statutory Construction, 54.04) We believe that,
in the circumstances described in the letter sent by Messrs. Wirth and
Rinaldo, the tire registration amendments can an should be given a
restrictive interpretation. In this way, the equity or intent
underlying those amendments can be best effectuated. Sutherland states
that----
When the natural or literal meaning of statutory language embraces
applications which would not serve the policy or purpose for which the
statute was enacted or help to remedy the mischief at which it was
aimed, the courts may construe it restrictively in order not to give it
an effect beyond its equity or spirit. (54.06)
It is necessary, therefore, to interpret literally the meaning of
the language adopted by Congress and then to determine the effect on
the amendment's policy or purpose of applying that interpretation to
all independent dealers or distributors. Viewed literally, that
language would be violated in three respects by an independent dealer's
attaching a computer printout (containing the required registration
information) to a blank registration form. First, the registration
materials given to the first purchaser would not be registered with a
standardized form and others would be registered with what would be in
effect be a two part form consisting of a blank standardized form and
an invoice. Second, a registration form with a computerized invoice
attached would not be presented to the purchaser ``. . . in a manner
suitable for mailing . . .,'' as specified in the House Committee
Report. We have interpreted that quoted language as meaning that the
purchaser would have to do nothing more than attach a stamp in order to
mail the form to the manufacturer. In the example described in the
Wirth/Rinaldo letter, the purchaser would have to provide his or her
own envelope in order to send the form and invoice to the tire
manufacturer. Thus, the registration materials would not be presented
``. . . in a manner suitable for mailing'' . . . Third, the language in
the House Committee Report requires dealers to fill in the tire
identification number on the registration form before furnishing the
form to the tire purchaser.
However, under the principles of equitable interpretation, the
language of the amendments need not be applied in instances where it is
clearly contrary to the underlying Congressional intent. A literal
interpretation would either discourage independent dealers and
distributors from using computer registration, a highly effective
method of registration, or burden them with procedural steps which are
made unnecessary by computer registration. In either event, the result
appears to run counter to one of the aspects of Congressional intent
mentioned near the beginning of this analysis.
The reason for requiring standardized registration forms was to
ensure that all forms used by independent dealers and distributors to
register tires would be the same in content and format, regardless of
the brand or type of tires. All independent dealers and distributors,
even those with computerized registration, can fill out and use the
standardized forms. Alternatively, those with computerized registration
can print an invoice bearing the information otherwise required to be
filled in on the form by dealer or purchaser and attach that invoice to
the form to be given the purchaser.
The purpose for requiring that the registration forms be presented
in a mailable form was to facilitate the registration of tires that
might otherwise never be registered. In the case of tires sold by a
dealer or distributor using computerized registration, the tires are
already registered with the tire manufacturer before the form is
presented to the purchaser. Thus, there is no need with respect to
those tires for the forms to be suitable for mailing. Further, there is
no indication in the amendments or their history that Congress intended
that registration forms be mailed in for tires which have already been
registered. The mailing of those forms would be redundant. Accordingly,
presenting the forms in a mailable form would be unnecessary to
achieving the purposes of the tire registration amendments and could be
inconsistent with those purposes.
We believe that the principles of equitable interpretation can be
used also to relieve the dealers and distributors using computerized
registration from being required to provide purchasers with a
registration form on which they have filled in the necessary
information. However, this relief can be provided only in instances in
which these dealers and distributors can be provided only if in
instances in which these dealers and distributors provide the
purchasers with evidence that the tires have already been registered.
Provision of that evidence is necessary because compliance with the
requirement to fill in the information becomes redundant and even
inconsistent with the tire registration amendments only if the tires
have in fact been registered. The evidence which the independent dealer
furnishes to show that the tires have already been registered is the
computer-printed invoice bearing all of the information otherwise
required to be written or stamped on the registration form by either
the dealer or the purchase. Absent that evidence, the independent
dealer would be required to comply with all statutory requirements for
voluntary registration, even if the dealer were using a computerized
registration system.
Accordingly, we conclude that an independent dealer or distributor
who attaches a computerized invoice containing all of the information
necessary for registration to a blank standardized registration form
and furnishes the two documents to the customer when the tires are
purchased fully satisfies the requirements of the voluntary tire
registration process.
______
Hon. Diane K. Steed,
Administrator,
National Highway Traffic Safety Administration,
Department of Transportation,
Washington, DC.
Dear Ms. Steed:
We are writing to comment on the final rule on tire identification
and recordkeeping (Docket No. 70-12; Notice 25) issued by the National
Highway Traffic Safety Administration on February 3, 1984. We expressed
similar concerns in a letter to Secretary Elizabeth H. Dole of June 7,
1983, commenting on the interim final rule on this matter.
We noted that the final rule includes a discussion of whether the
Motor Vehicle Safety and Cost Savings Authorization Act of 1982 (P.L.
97-331) permits an independent tire dealer to return the tire
registration form to the tire manufacturer instead of furnishing it to
the purchaser. The rule indicated that the language of the statue
prevents the agency from adopting such a procedure. We hope that this
position can be modified.
Since the enactment of this statute, we have been made aware of a
computerized system utilized by one of the tire manufacturers through
which dealers notify the manufacturer of tire sales. The information
furnished through this system includes the purchaser's name and address
and the tire identification number. Clearly, the automatic furnishing
of this information by the dealer to the manufacturer via computer
results in 100 percent tire registration. The question posed by NHTSS
in the final rule is apparently whether such a system is compatible
with the statute.
The legislative history surrounding the tire registration
provisions of P.L. 97-331 clearly states that it was Congress's purpose
in adopting the ``voluntary tire registration'' system to increase tire
registration to the maximum extent possible. Thus, it would be both
ironic and extremely unfortunate if the implementation of this law led
to decreased usage of a computer system that would ensure 100 percent
tire registration.
Therefore, we suggest that additional consideration be given to
ways in which agency procedures for compliance with the statute can
take into account such a computerized system. For example, would a tire
dealer who furnished to his customer a registration form to which was
attached a copy of the computerized invoice, including the tire
identification number, meet the statutory obligation ``to furnish the
first purchaser of a tire with a registration for (containing the tire
identification number of the tire)?'' Such a result would obviously be
in accordance with Congressional intent in enacting Section 4 of the
Motor Vehicle Safety and Cost Savings Authorization Act of 1982.
Additionally, in the same letter to Secretary Dole, we urged that NHTSA
establish procedures to inform purchasers of tires during the period in
which there were no registration requirements--between October 15, 1982
and the date of effectiveness of the final rule--that they will not
receive notification by mail in the event of a recall. On July 15,
1983, you responded that ``if there are any tire recalls involving
tires sold during (that time, you) will consider what steps should be
taken to inform the consumers whose tires are unregistered.''
We are now aware that during Fiscal Year 1983 some 101,000 tires
were recalled. We, therefore, again request that NHTSA promptly review
the matter to determine whether any of the tires recalled were sold
during the period in which no registration requirements were in effect.
We urge that you initiate procedures to ensure that the purchasers of
those tires are informed that a recall has occurred. Additionally, we
urge that the agency develop a program to enable those who purchased
tires during that period to register them with manufacturers.
We urge that NHTSA give further consideration to these issues, in
the interest of increasing tire registration. Please feel free to
discuss this with us or with our staff (Patti Shwayder, Policy Analyst.
225-9304; Cecile Srodes, Associate Minority Counsel, 226-3400).
Sincerely yours,
Matthew J. Rinaldo,
Ranking Minority Member.
Subcommittee on Telecommunications, Consumer Protection and Finance
Timothy E. Wirth,
Chairman.
Subcommittee on Telecommunications, Consumer Protection and Finance
Senator Dorgan. Ms. Gillan, thank you very much. We
appreciate your being here.
And finally, we will hear from Mr. Paul Cullen, General
Counsel, Owner Operator Independent Drivers Association.
Mr. Cullen, you may proceed.
STATEMENT OF PAUL D. CULLEN, SR., MANAGING PARTNER, THE CULLEN
LAW FIRM, PLLC; GENERAL COUNSEL, OWNER-OPERATOR INDEPENDENT
DRIVERS ASSOCIATION, INC.
Mr. Cullen. Thank you, Mr. Chairman. It is my honor today
to appear on behalf of 161,000 owner-operator drivers and small
business truckers who operate throughout the United States.
I ask that my full testimony be included in the record of
the hearing today.
I'd like to begin by addressing issues that you took up
with Mr. Gribbin, with respect to the interpretation of the
2008 Appropriations bill, particularly the word ``establish.''
Mr. Gribbin relies on a well-known principle of statutory
interpretation that you're to rely on the plain language of the
words used by Congress. There is, however, an exception to that
principle, and that principle can be abandoned if the plain
meaning leads to an absurd result.
Now, I suppose, if you were on Mars or Venus, for the last
6 months or a year, and you didn't have access to the
Washington Post or the Congressional Quarterly or Landline
Magazine or Transport Topics, you might not know what the word
``establish'' was intended to mean.
Putting that aside, everyone knows that the interpretation
urged by DOT is absurd and is a justification for abandoning
the plain language principle, and a justification for resorting
to the aids to construction that you, Mr. Chairman, presented
to us in your opening remarks today. You should proceed
diligently further, because it appears on the face of things
that the agency is simply ignoring the will of Congress, and
ought not to be allowed to do so.
Turning to the other major issues, we're dealing with
complex legal and policy issues, and there appears to be a
dense cloud of smoke generated by the Department of
Transportation regarding their responsibilities under NAFTA and
their authority to deal with trans-border trade and trucking
services.
In order to address this and to dissipate this cloud of
smoke, let's go back to basic principles. What is the
responsibility of the United States under NAFTA?
One turns to the text of NAFTA, Article 1202(1). The only
thing that the United States agreed to under NAFTA was to
accord to Mexican motor carriers the same treatment that we
accord to our own motor carriers. That principle is known as
national treatment.
Mexican motor carriers are entitled to be treated just like
an American motor carrier, no better, no worse. The only way we
can violate that principle is to deny them operating authority,
arbitrarily. But if we hold their feet to the fire, and require
them to follow the same standards as an American motor carrier,
we honor our obligation of national treatment under NAFTA.
What is the authority of the Secretary and the FMCSA to
implement our obligations under NAFTA? That authority is set
forth in Title 49 of the U.S. Code, Section 13902(a)(1) and
(4). That authority is to entertain applications for operating
authority and grant them if the applicant is willing and able
to comply with all U.S. laws. And to deny those applications if
the applicant is unwilling or unable to comply will all U.S.
laws.
How does the pilot program square against our NAFTA
obligations and the authorities of the Secretary under 13902?
The Secretary has agreed under the pilot program to permit
Mexican motor carriers to comply with 3 areas of Mexican law in
lieu of compliance with the corresponding areas of United
States law. Those areas include commercial driver's licenses,
drug testing and medical qualifications.
Under 13902, the Supreme Court, in Public Citizen v. DOT,
said unequivocally that the Secretary has only ministerial
authority, and has no authority to alter the terms and
conditions under which Mexican motor carriers may enter the
country. Simply stated, the Secretary has no legal authority to
implement the pilot program as she has done, by waiving
compliance with American statutes and regulations, and
substituting compliance with Mexican statutes and regulations
in their place.
Thank you.
[The prepared statement of Mr. Cullen follows:]
Prepared Statement of Paul D. Cullen, Sr., Managing Partner, The Cullen
Law Firm, PLLC; and General Counsel, Owner-Operator Independent
Drivers Association, Inc.
Introduction
My name is Paul D. Cullen, Sr. I am Managing Partner of The Cullen
Law Firm, PLLC of Washington, D.C. This testimony is submitted in my
capacity as General Counsel to the Owner-Operator Independent Drivers
Association, Inc. (OOIDA) of Grain Valley, Missouri. OOIDA is a trade
association representing the interests of independent drivers, owner-
operators and small-business truckers throughout the United States.
OOIDA currently has in excesses of 161,000 members. OOIDA is a
petitioner in a proceeding now pending before the United States Court
of Appeals for the Ninth Circuit in which it challenges the legal
authority of the Secretary and the FMCSA to issue Federal operating
authority to Mexico-domiciled motor carriers under its Cross-Border
Pilot Program.\1\ Specifically, OOIDA challenges the legal authority of
the Secretary and FMCSA to accept compliance with Mexican regulations
covering commercial drivers licenses, drug testing and medical
standards in lieu of compliance with corresponding U.S. statutes and
regulations.
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\1\ Owner-Operator Independent Drivers Ass'n, Inc. v. U.S.
Department of Transportation, et al., No. 07-73987 (9th Cir. filed Oct.
15, 2007). Another challenge based on separate grounds is also pending
before the Ninth Circuit. Sierra Club, et al., v. U.S. Department of
Transportation, et al., No. 07-73415, (9th Cir. filed April 23, 2007).
Both cases were consolidated for oral argument which was held on
February 12, 2008. As of this date, no decision has been reached.
---------------------------------------------------------------------------
OOIDA applauds the actions taken by Congress to withhold funding
for FMCSA's Cross-Border Pilot Program under Section 136 of the
Consolidated Appropriations Act, 2008 (Pub. L. 110-161). The Bush
Administration's continuation of the Program despite the clear
directions of Congress to the contrary is both shocking and deplorable.
However, the Administration's obvious contempt for the rule of law in
this matter goes well beyond its brazen disregard for the provisions of
Section 136. It extends as well to the disregard of legal precedent. In
prior litigation challenging the authority of the Secretary of
Transportation and the Federal Motor Carrier Safety Administration
(FMCSA) to allow Mexican trucks into the United States without
complying with the National Environmental Policy Act, the Solicitor
General of the United States specifically renounced the existence of
the authority that the Secretary and FMCSA have asserted in
promulgating the current Mexican truck program. Yet, the FMCSA has
arrogated unto itself authority to alter the terms and conditions for
entry by Mexico-domiciled motor carriers into the U.S.--the very
authority that the Solicitor General told the Supreme Court that the
agency did not have. FMCSA is authorized to issue operating authority
to Mexico-domiciled motor carriers only if they are willing and able to
obey all of our laws and regulations. Restricting operating authority
to those who satisfy these conditions is completely compatible with our
Nation's obligations under NAFTA.
In this testimony, I will show that:
1. FMCSA's Cross-Border Pilot Program is neither authorized nor
required by any obligation of the United States under the North
American Free Trade Agreement (NAFTA);
2. FMCSA has no authority to issue operating authority to motor
carriers unless they are ``willing and able'' to obey all
applicable U.S. laws and regulations; and
3. FMCSA has no authority to alter the statutory terms and
conditions under which Mexico-domiciled motor carriers may
provide trucking services within the continental United States.
The North American Free Trade Agreement
On December 17, 1992, the leaders of the United States of America,
Canada, and the United Mexican States signed the North American Free
Trade Agreement (``NAFTA''), a treaty regulating trade in goods and
services between and among the parties to that treaty.\2\ On November
20, 1993, the U.S. Senate officially ratified NAFTA.\3\ Transborder
trucking services are governed by NAFTA Article 1202(1) which provides
that ``[e]ach Party shall accord to service providers of another Party
treatment no less favorable than it accords, in like circumstances, to
its own service providers.'' The obligation described in Article
1202(1) is known as ``National Treatment.'' Simply stated, the United
States has agreed to treat Mexico-domiciled motor carriers exactly the
same as it treats U.S.-domiciled motor carriers, no better, no worse.
The United States has undertaken no obligation to provide ``special
treatment'' or ``different treatment'' to other trucks which would
include providing exemptions or waivers from the application of U.S.
trucking laws. The only thing the U.S. is obligated to do is provide
``National Treatment.''
---------------------------------------------------------------------------
\2\ North American Free Trade Agreement, U.S.-Can.-Mex., Dec. 17,
1992, 32 I.L.M. 289 (1993).
\3\ H.R. 3450, 103d Cong. (1st. Sess. 1993) (Vote No. 395, passed
61-38-1).
---------------------------------------------------------------------------
NAFTA's ``National Treatment'' provision applies to trucking
services in which a tractor and trailer provide service from a point in
Mexico to a point in the United States as well as transit of Mexican
trucks from Mexico through the United States to Canada. Those who
provide such services are called service providers. Service providers
of the United States are U.S.-domiciled trucking firms.\4\ The
treatment given to U.S. domestic trucking service providers under U.S.
laws and regulations establishes a frame of reference for determining
whether the United States is providing National Treatment to service
providers from Mexico or Canada.\5\
---------------------------------------------------------------------------
\4\ In the Matter of Cross Border Trucking Services, See File No
USA-MEX-98-2008-01 at 74-75, 253 (NAFTA Arbitration Panel Feb. 6,
2001).
\5\ Id. See also id. at 25-26, 125.
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Implementation of this commitment is really rather simple. The only
thing that FMCSA must do to fulfill the National Treatment obligation
under NAFTA is to process applications for Mexico-domiciled motor
carrier's operating authority by the same terms and conditions as it
processes similar applications by U.S.-domiciled applicants.
On February 6, 2001, an International Arbitral Panel (IAP) issued
its final decision from a challenge by the Government of Mexico
alleging that a blanket refusal by the United States to process
applications by Mexico-domiciled motor carriers violated its NAFTA
obligation to afford National Treatment to such carriers. The IAP
decision sets forth the contentions of the parties, the legal and
factual basis for those contentions and the conclusions of the IAP
itself. Of particular interest is this passage from the Government of
Mexico's brief as quoted in the IAP's final decision:
Rather, the governments contemplated that motor carriers would
have to comply fully with the standards of the country in which
they were providing service. In other words, there was a clear
expectation that a Mexican motor carrier applying for operating
authority in the United States would have to demonstrate that
it could comply with all requirements imposed on U.S. motor
carriers.\6\
---------------------------------------------------------------------------
\6\ Id. See also id. at 25-26, 125.
A unanimous five member panel found that the ``U.S. blanket refusal
to review requests for operating authority . . . is inconsistent with .
. . U.S. treatment of U.S. domestic service providers.'' \7\ Because of
this inconsistency, the IAP concluded that ``the U.S. refusal to
consider applications is not consistent with the obligation to provide
national treatment.'' \8\
---------------------------------------------------------------------------
\7\ Id. at 68, 256.
\8\ Id. at 74, 278. See also id. at 81, 259.
---------------------------------------------------------------------------
Following its findings, the IAP took pains to point out that
nothing in its decision should be interpreted as in any way inhibiting
the ability of a Party to implement its own legitimate safety
objections:
It is important to note what the Panel is not determining. It
is not making a determination that the Parties to NAFTA may not
set the level of protection that they consider appropriate in
pursuit of legitimate regulatory objectives. It is not
disagreeing that the safety of trucking services is a
legitimate regulatory objective. Nor is the panel imposing a
limitation on the application of safety standards properly
established and applied pursuant to applicable obligations of
the Parties under NAFTA.
The IAP also held that a Party may be permitted to implement
additional procedures with respect to service providers domiciled
within the territory of another Party, provided that such procedures
were imposed in good faith with respect to a legitimate safety concern
and that such requirements did not conflict with other provisions of
NAFTA.\9\
---------------------------------------------------------------------------
\9\ Id. at 82 301.
---------------------------------------------------------------------------
Two conclusions follow from the IAP's analysis. First, the United
States would bring its policies in complete harmony with its NAFTA
obligations by simply making operating authority available to Mexico-
domiciled motor carriers under precisely the same terms and conditions
as it applies to U.S.-domiciled motor carriers. Second, attempts to
harmonize U.S. and Mexican truck regulatory regimes, while advancing
potentially beneficial safety goals, has nothing to do with complying
with the obligation of the United States to provide national treatment.
The Cross-Border Pilot Program
On May 1, 2007, FMCSA announced the initiation of a demonstration
project as ``part of FMCSA's implementation of . . . [NAFTA's] cross-
border trucking provisions.'' \10\ FMCSA has called its demonstration
project ``a critical step in the process of moving forward with the
Nation's obligations under NAFTA.'' \11\ FMCSA's characterization of
its demonstration project is simply incorrect. Establishing special
treatment for Mexico-domiciled motor carriers is neither required nor
authorized by NAFTA. Moreover, as we now demonstrate, NAFTA's
requirement to afford National Treatment is also the only approach that
is compatible with FMCSA's statutory and regulatory authority under
U.S. law.
---------------------------------------------------------------------------
\10\ 72 Fed. Reg. 23883 (Col. 1) (May 1, 2007). This statement was
repeated in FMCSA's Federal Register Announcement of June 8, 2007 (72
Fed. Reg. 31877 (Col. 1)) and of August 17, 2007 (72 Fed. Reg. 46263
(Col. 3)).
\11\ Demonstration Project on NAFTA Trucking Provisions, 72 Fed.
Reg. 46263, 46266 (Col. 1) (August 17, 2007) (FMCSA Docket No. 2007-
280552396).
---------------------------------------------------------------------------
FMCSA Exceeds Its Statutory Authority When Registering Mexico-Domiciled
Motor Carriers Under the Cross-Border Pilot Program
Under 49 U.S.C. 13902(a)(1), FMCSA is authorized to issue motor
carrier operating authority only if it finds that the applicant is
willing and able to comply with any (i) safety regulations promulgated
by FMCSA, (ii) safety fitness requirements established by FMCSA under
Section 31144, (iii) minimum financial responsibility requirements
established under Sections 13906 and 31138, and (iv) the duties of
employers and employees under Section 31135.\12\ Section 13902(a)(4)
mandates that the Secretary ``shall withhold registration'' if she
determines that a registrant ``does not meet, or is not able to meet''
any of the aforementioned requirements. These statutory requirements
for issuing motor carrier operating authority are in complete harmony
with NAFTA's National Treatment requirement.
---------------------------------------------------------------------------
\12\ A motor carrier must also be willing and able to comply with
regulations referred to in Section 13902(a)(1)(A), the scope of which
was left open to further interpretation by FMCSA in Peter Pan Bus Lines
v. FMCSA, 471 F.3d 1350, 135455 (D.C. Cir. 2006).
---------------------------------------------------------------------------
In Department of Transportation v. Public Citizen,\13\ the Supreme
Court addressed FMCSA's responsibilities under Section 13902(a)(1)
holding that the Agency had ``no discretion'' under this provision \14\
to prevent entry of Mexican trucks operated by motor carriers that
satisfied the conditions in this section.\15\ By necessary implication,
FMCSA would also have no discretion under Section 13902(a)(4), but to
deny operating authority to a motor carrier who ``does not meet, or is
unable to meet the requirements in Section 13902(a)(1).'' This would be
true whether the motor carrier was domiciled in Canada, Mexico, or the
United States.
---------------------------------------------------------------------------
\13\ U.S. Department of Transportation v. Public Citizen, 541 U.S.
752, 766 (2004).
\14\ Id. at 770.
\15\ Id. at 767.
---------------------------------------------------------------------------
FMCSA's demonstration project completely ignored the statutory
mandate imposed under Sections 13902(a)(1) & (4). Rather than
addressing the question of whether Mexico-domiciled motor carriers are
willing and able to comply with U.S. safety regulations as it is
required to do under its governing authority, FMCSA is acting outside
the scope of its authority by implementing a policy of issuing
operating authority on the basis of compliance with Mexican laws and
regulations governing commercial drivers licenses, physical
qualifications of drivers and drug testing.\16\ Under Public Citizen,
FMCSA has no authority to depart from the mandate of Section 13902(a)
requiring that all motor carriers demonstrate that they are willing and
able to comply with U.S. laws and regulations.\17\ FMCSA's decision to
issue operating authority based upon compliance with Mexico's laws and
regulations is, very simply, not in accordance with law and exceeds the
statutory limits on the agency's authority to grant operating
authority.
---------------------------------------------------------------------------
\16\ Demonstration Project on NAFTA Trucking Provisions, 72 Fed.
Reg. 31,877, 31,884 (June 8, 2007) (FMCSA Docket No. 2007-28055-1547).
\17\ 541 U.S. at 766-767.
---------------------------------------------------------------------------
In Public Citizen, petitioners (Sierra Club, Public Citizen and
International Brotherhood of Teamsters) argued that FMCSA should not
authorize the entry of Mexican trucks into the United States unless it
prepared an environmental impact statement as required by the National
Environmental Policy Act \18\ (NEPA). NEPA requires various Federal
departments and agencies to file environmental impact statements in
connection with major Federal action.\19\ The U.S. Court of Appeals for
the Ninth Circuit agreed with the petitioners and held that FMCSA
violated NEPA by not filing an environmental impact statement in
connection with its proposed approval for the operation of Mexican
trucks within the continental United States.\20\ The U.S. Supreme Court
reversed, holding that FMCSA had only ministerial authority to approve
or disapprove applications for operating authority under 49 U.S.C.
13902(a) and that the narrow range of discretion available to it in
approving applications for operating authority could not be the cause
of any adverse impact on the environment.\21\ Under the Supreme Court's
reasoning, the only one capable of undertaking major Federal action was
the President who had the authority to lift the embargo on Mexican
trucks.\22\ Since the President is exempt from the filing requirements
under NEPA, Public Citizen presented the Court with no cognizable
claim. The Supreme Court's holding in Public Citizen is the controlling
word on this subject. Because FMCSA's responsibilities under Section
13902(a) have been found to be ministerial, providing it with no
discretion to alter the terms or circumstances under which Mexican
motor carriers may provide services within this country, it simply has
no authority to accept compliance with Mexican regulations in lieu of
compliance with its own regulations.
---------------------------------------------------------------------------
\18\ Public Citizen v. U.S. Department of Transportation, 316 F.3d
1002 (9th Cir. 2003).
\19\ 42 U.S.C. 4332(2)(C).
\20\ Public Citizen, 316 F.3d 1002 at 1032.
\21\ Public Citizen, 541 U.S. at 766, 770, 772.
\22\ Id. at 770.
---------------------------------------------------------------------------
FMCSA welcomed the Supreme Court's ruling that it had only
ministerial, non-discretionary functions with respect to the approval
of operating authority for Mexican motor carriers. That ruling allowed
it to defeat the petitioners in Public Citizen and sidestep
responsibilities under NEPA. That court's holding, however, is
incompatible with the authority it now asserts in implementing its
Cross-Border Pilot Program. By accepting compliance with Mexican laws
and regulations covering commercial drivers licenses, drug testing and
standards of medical qualifications in lieu of compliance with its own
regulations, FMCSA has completely rewritten the conditions for entry
into the U.S. market for trucking services.
The following statements by Solicitor General Olson in briefs to
the Supreme Court in Public Citizen set forth the official position of
the United States with respect to the authority of the Secretary and
FMCSA in this area. The authority claimed by the Secretary and FMCSA in
Public Citizen is significantly more narrow than the breadth of
authority claimed in connection with FMCSA's ongoing Cross-Border Pilot
Program:
1. ``FMCSA's relevant authority involves granting or refusing
operating authority to particular Mexican motor carriers, based
solely on whether they are `willing and able to comply' with
United States safety and financial-responsibility standards. 49
U.S.C. 13902(a)(1).'' Brief for Petitioners on Writ of
Certiorari at 22.
2. ``FMCSA's role in this context is the essentially
ministerial one. . . . FMCSA's authorizing statute does not
make it responsible . . . for opening or closing the border.''
Reply Brief for the Petitioners on Petition for a Writ of
Certiorari at 10.
3. ``Consistent with the legislative limitations on its powers,
FMCSA has not claimed any power to determine whether or under
what conditions Mexican carriers should be allowed to operate
in the United States.'' Reply Brief for the Petitioners on Writ
of Certiorari at 3.
4. ``While Congress left FMCSA with a narrow range of
discretion in fashioning the final registration procedures,
Congress did not empower FMCSA to change the fundamental
condition for entry.'' Reply Brief for the Petitioners on Writ
of Certiorari at 5.
FMCSA's Cross-Border Pilot Program alters the fundamental
conditions for entry of Mexico-domiciled motor carriers. It is contrary
to its narrow authority to act under Section 13902(a) and is neither
authorized nor required by NAFTA. The legal gamesmanship exhibited by
the agency--claiming only narrow ministerial authority in Public
Citizen and broad authority to rewrite the conditions for issuing
operating authority in the Cross-Border Pilot Program--is regrettable,
and shows once again a rather incomplete appreciation for the rule of
law.
Conclusion
OOIDA commends this Committee for its diligence in pursuing this
matter. It is important to note that the legal defects identified here
with respect to the Cross-Border Pilot Program would also apply to any
permanent program implemented by the Secretary and FMCSA if such
programs included accepting compliance with Mexican laws and
regulations in place of compliance with U.S. laws and regulations.
OOIDA looks forward to working with the Committee in the months ahead
to help restore respect for the rule of law in this matter.
Senator Dorgan. Mr. Cullen, thank you very much. I think
both of you have presented important and interesting
information.
I said at the start of this hearing, that for me, this is a
safety issue. If there were no safety issues, and if we had an
equivalency of standards between the U.S. and Mexico, I
wouldn't hold a hearing, I wouldn't offer an amendment, I'd
say, ``That's fine, homogenize trucking rules between our three
countries--the U.S., Canada, Mexico, that's fine with me,'' if
you had equivalency. But there isn't anyone who is thinking
clearly that will make the case that there is equivalency
between our country and Mexico with respect to standards--
driver's records, vehicle inspections, and so on.
Ms. Gillan, you have covered some of that in your written
statement, and your oral statement, as well, but you heard the
Secretary today--she continues to make the case that they are
inspecting every truck, every time, do you understand the
loophole in that every truck, every time? I think the Inspector
General sitting beside her said, ``She can't make that claim,
she doesn't know.''
Ms. Gillan. Absolutely, Senator. In fact, the safety
community looks at these slogans as giving us a false sense of
security and feeling that everything's safe. And ``every truck,
every time'' is really just that they're checking on the
license, and the English proficiency--which you already
discussed today, really isn't English proficiency--I think that
DOT Secretary Peters is trying to give everybody a sense that
these trucks are undergoing some complete Level I inspection
when, in fact, they're not.
And I also think that when she talked about the pilot
program, there was going to be 1,000 trucks, and these were
going to be the safest of the safe trucking companies, and then
we find out that Trinity actually, through the research that
was done by OOIDA, had an abysmal safety record. And the
problem is, that as we go forward, this is the program that
they're going to use, we're convinced, to justify opening the
border, and we cannot let that happen.
Senator Dorgan. Mr. Cullen, some would say, ``Well, Mr.
Cullen is here representing the Owner-Operator Independent
Drivers.'' I know a lot of them, I mean, I see a lot of them,
and they're running a small business, and you know, they have a
small trucking company, they're out there working for a living,
trying to make a go of it. They'd say, ``Well, you come here,
and you're just--you don't want any competition, that's why you
want to keep Mexican drivers and vehicles out.'' Respond to
that.
Mr. Cullen. Our concerns are primarily safety-driven. But
there is a relationship between competition and safety. If a
Mexican driver comes into this country, and is willing to drive
for 32 cents a mile, or 25 cents a mile, that drives down the
compensation available to American drivers. A poorly
compensated driver tends to be an unsafe driver, or is driven
toward circumstances that lead to lack of safety. He doesn't
maintain his truck as diligently as he can, doesn't replace the
tires as often as he should and is forced to work long hours,
because he earns so little per hour.
So that the notion that there's a big difference between
safety and economics really should be examined closely by this
Committee and others. There is a direct-line relationship
between profitability and adequate compensation and safety.
Senator Dorgan. I did not raise the question of cost and
wages, and fair competition--that is another issue that I think
is of concern. But, I think safety is such a paramount issue
here, that there's no need to have a lengthy discussion about
the issue of driving down costs and prices and wages here in
the United States. But, I do think that there is a
relationship, as you suggest, Mr. Cullen, to that issue and
safety, so----
Mr. Cullen. Speaking directly to safety, the issue that I
raise in my testimony is, against what standard do we measure
safety and under 13902(a), safety is measured by the
willingness and ability of drivers to obey U.S. laws, and we
have the toughest and best safety laws in the world, certainly
in North America.
And you can not substitute compliance with Mexican safety
standards, at their state of development and their state of
development of these regulations, and compare it fairly to
America's. We are so far ahead of them in safety standards, and
the safety standards applicable in this country should not be
the lowest common denominator--Federal law requires safety
standards of the United States to apply to anyone who wants to
drive in our market, including Mexican trucks.
Senator Dorgan. In most of the trade agreements that we
have, including NAFTA and including this issue of cross-border
trucking, we have seen diminished standards. You're quite
correct, that in our country we have generally lifted
standards, and lifted wages, and done the things that have
created a stronger economy, expanded the middle class, and so
on.
In doing that, with respect to regulations and standards,
we've been very stringent and pretty particular about what we
do, and then we engage with other countries, and we discover
that the way you engage is to diminish standards in our
country. And I think that is a disservice to what we have built
here. But, that is for, perhaps, another discussion.
I don't want to mention that we indicated to the Secretary
of Transportation that she was welcome to invite one of the
American trucking companies, she continued to refer today to
American trucking companies who would have opportunities in
Mexico and we encouraged her to invite one of those companies
to testify here, and they either could not find one, or did not
invite one. But we did encourage them to do that.
Mr. Cullen. I'm sure if we polled 161,000 members of OOIDA,
I'd be hard-pressed, and OOIDA would be hard-pressed, to find
anyone who's trying to knock on the door and risk their bodily
safety, the safety of their equipment and livelihoods, by
driving deeply into Mexico. We would do Mexico a great service
by pulling them up to our standards, by encouraging them, if
they do come to this country, to follow U.S. standards, and
that would be a great benefit to them. But I don't think
anyone--at least the drivers that we're familiar with, has the
stomach to try and go down to Mexico and navigate through
safety standards that probably are decades out of date to what
we do here.
Senator Dorgan. I want to adjourn in just a moment, because
I have another duty I hope that attend to.
But Sheryl Jennings McGurk is here, Sheryl Jennings McGurk,
where are you? All right.
Why don't you take a seat at the table, Sheryl Jennings
McGurk had prepared a statement that I had put in the record
here in the U.S. Senate during this debate, and when she came
up to me before the hearing, I indicated if we had a couple of
minutes at the end of the hearing, and you wished to make a
very brief statement, I'd be happy to recognize you.
As I understand it, your parents and your nephew were
killed in an automobile accident, and that accident occurred
with respect to cross-border trucking.
I will recognize you, if you can summarize for me in just
three or 4 minutes, I would appreciate that. But, I appreciate
the fact that you have great passion about this issue, and are
very concerned about it.
And why don't you go ahead and make your statement?
Ms. Jennings McGurk. Thank you, sir.
As you mentioned, my name is Sheryl McGurk, and our family
paid the ultimate price for allowing unsafe Mexican trucks into
the United States. And my mom, my dad and my nephew were killed
by a Mexican truck that was actually operating outside of the
commercial zone when its drive shaft fell off the truck,
severed its brakes, and the truck was moving backward down the
freeway.
My mom and dad were on their way for a vacation to see my
oldest brother, and they never had a chance, never saw the
truck. And to lose three members of your family, is
indescribable. And the hole it leaves in your life can never be
filled. And my family will do all we can to prevent this from
happening to another family.
And I sat here today listening to all of the talk about the
legislation, and it just breaks my heart, because the right
thing to do is to inspect trucks, so that this doesn't happen
to another family.
You know, I urge Congress to shut down this unsafe and
illegal program, because I don't want other families to have to
go through this. And you have my full story, I don't want to
take up any more time. It's just too hard for me to talk about
it right now.
[The prepared statement of Ms. McGurk follows:]
Prepared Statement of Sheryl Jennings McGurk in Support of Dorgan-
Specter Amendment, September 11, 2007
On behalf of all members of my family, including my parents and
nephew lost in 2005 in a horrendous and unnecessary crash with a large
truck that should never have been where it was, I strongly support the
Dorgan/Specter amendment that will prevent any spending to carry out
the Mexican truck pilot program begun by the Federal Government last
week. We hope that telling the story of what happened to my family will
help prevent others from going through what we have and what we will
continue to go through for the rest of our lives.
My husband Sean and I were married on June 6, 2004. This was an
extraordinarily special day for us because it was also my parent's 45th
wedding anniversary. They were married following my father's graduation
from the first class of the United States Air Force Academy in 1959. I
had a very close relationship with my mom and dad, they were not just
my parents but they were also my best friends! They asked us to share
this date with them forever and of course we accepted, hoping to be
blessed with a long and happy marriage. It was a special day shared by
our family.
My mom, Marie Jennings, was a beautiful, stylish, lady and her
bouncy and adventurous personality was the perfect compliment to my
dads more serious and quiet demeanor. My mom served our country first
as the wife of an Air Force officer, and next as a mom, raising myself
and my two older brothers, David and Bob; swim team, soccer, boy
scouts, girl scouts, you name it, we kept her quite busy! We moved
across the country and around the world. As we grew up, she decided to
use her talents by working for the Federal Government as a civil
servant and she did so, for 25 years.
My dad was an officer and gentleman! He retired as a colonel after
27.5 years. He served first as a fighter pilot in Vietnam where he was
awarded the Distinguished Flying Cross. He later became a test pilot
and an instructor pilot. During his career he flew almost all the
planes the AF had at the time. He loved to fly and had recently been
recertified so he could fly with his friend to attend an air show in
Oshkosh, WI. During his career, he still made time to be my dad as a
soccer coach, a ski buddy, and a private tutor. Later on he decided to
continue to serve his country by teaching high risk youth at Hollywood
High School in Los Angeles, young adults at the University of Phoenix
and he also volunteered teaching for free at private schools.
My nephew, David Michael Jennings, was a great kid! He was my
brother David's only son and the first grandchild. He was born in
Beavercreek, Ohio. He was active in high school. He played football,
the French horn in the marching band, ran track, and was active in the
Spanish and math clubs. David was an Eagle Scout, quite an honor for
any young man. He was active in his community and his church. He
volunteered as team captain for Relay for Life and the Special
Olympics. Upon graduating high school, he left home to live with my
parents and attend junior college. He was completing his sophomore year
at Mira Costa College where he was a Student Ambassador and active in
student government. He sponsored a 5K run for charity and beach clean-
ups in Carlsbad, CA. He was transferring to UCSD in the fall.
On February 15, 2005, just 8 months after we were married, my mom
and dad started out on exciting journey to visit my oldest brother,
Bob, his wife Sandy, and their youngest grandson, Jack. David
volunteered to take my parents to the airport. Unfortunately, their
journey was cut short only 30 miles from their home in Carlsbad, CA.
It was around 5 a.m. A truck from Mexico was headed north on I-5
when the driver thought he was having mechanical issues. He pulled his
truck off the freeway to check it out. At that time he decided he would
not be able to get his truck from where he now was to Los Angeles where
he needed to deliver his goods. He decided to take his truck back onto
the freeway and headed south. It was a bad decision. His truck
proceeded to break down in the middle of the freeway. My parents and
nephew never had a chance.
This accident was 100 percent avoidable. The truck had numerous
safety issues and should not have been operating in the United States.
For this, our lives are forever changed and we lost three of the most
incredible people. This loss has left a hole in our lives that cannot
be filled. To lose your mom, your dad, and your nephew; all at once; is
indescribable. Your world changes in an instant.
Please help ensure this doesn't happen again. Vote for the Dorgan/
Specter amendment. Safe roads are everyone's responsibility.
Senator Dorgan. Well, I appreciate your being here, and as
I indicated, I put your statement in the Senate record when we
had this discussion and this debate. I understand these
passions, my mother was killed driving down a city street at 30
miles per hour after visiting a friend in the hospital, and she
was hit by a drunk driver, fleeing at 80 to 100 miles per hour
on a city street, and I have been passionate about these issues
for a long, long, long time. And I understand the carnage on
America's highways, I understand about losing a parent, and I
understand the passion that you have about that, because I have
been through some of that.
This issue, to me, is about protecting what we have in this
country--a set of standards that we can be reasonably proud
of--insisting that we try to maintain safety standards that
give the American people some security and some sense of safety
when driving on the roads in this country, and you know, I'm
very interested in allowing open borders, to the extent we can,
but I'm not very interested in any case, of diminishing
standards.
If other countries meet our standards, God bless them, good
for them. But, if we are going to succumb to those who say, you
know, it's a global economy, let's get with it, let's
understand that not everybody meets our standards, we still
have to participate--that means the diminishment of American
standards, including safety standards. I'm not willing to do
that on American roads, and there isn't any way in my judgment
that the Secretary of Transportation, or the White House, with
whom I believed they consulted, and I now understand they did--
I don't think that there's any way that they can honestly tell
the American people that allowing long-haul Mexican trucking
can be done without diminishing safety standards in this
country for the rest of the American drivers on American roads.
And I, you know, the fact is, we're going to continue this
discussion and debate, as I indicated to the Secretary. There
will be consequences for a Federal agency that ignores the law.
So, let me thank all three of you for being here, I wish I
had more time to ask questions of you--we took a long time in
the first panel today, but your contribution to this hearing is
very, very important to us, and this issue will continue.
One final point--my hope is that the Administration will
decide that it can't ignore the law in 8 or 10 areas, maybe
they should pick one where the law is pretty obvious--that
would be this one--and decide to obey the law. But, in any
event, we will be coming very quickly up to Appropriations
again, and I'm an appropriator, and I will have an opportunity
to dig some spurs into this issue, it's a reference to my
upbringing in North Dakota, but as I indicated, this issue is
not over, by any means. Our Secretary and her legal counsel
will not have the last word on this issue, the U.S. Congress
will have the last word.
This hearing is adjourned.
[Whereupon, at 4:26 p.m., the hearing was adjourned.]
A P P E N D I X
Prepared Statement of the U.S. Chamber of Commerce
The U.S. Chamber of Commerce is pleased to present this written
testimony on the remarkable success of the U.S.-Mexico trade
partnership and the costs imposed by the long delay in implementation
of the cross-border trucking provisions of the North American Free
Trade Agreement (NAFTA). The Chamber strongly supports the Department
of Transportation's Cross-Border Truck Pilot Program. This pilot
program, administered by the Federal Motor Carrier Safety
Administration (FMCSA), provides temporary operating authority to a
limited number of motor carriers domiciled in Mexico and the United
States for cross-border commercial operation.
In the Chamber's view, implementing the cross-border trucking
provisions of NAFTA is long overdue. The pilot program is an important
step to enhance North America's competitiveness, reduce congestion and
pollution at the border, and promote economic growth. Questions about
safety have been fully answered, and every truck entering the U.S. must
meet every U.S. safety requirement.
Free and fair trade has played a key role in our Nation's economic
growth and development since it was founded, and NAFTA played an
important role in the accelerated economic growth our Nation has
enjoyed since it entered into force in 1994. Trade between the United
States and Mexico has more than quadrupled in real terms, rising from
$81 billion in 1993 to $347 billion in 2006. The trucking industry is
critical to this trade partnership since trucks transport over 80
percent of the value of our trade with Mexico.
However, beginning in 1995, the United States has failed to abide
by its commitment under NAFTA to open the U.S.-Mexico border to cross-
border trucking. The difficulties that stem from this barrier to trade
should not be underestimated. Current rules maintain a cumbersome,
environmentally damaging, and costly system that represents a brake on
further growth in mutually beneficial commerce. The time has come for
our countries to open our borders to a modern cargo transportation
system that will allow our economic partnership to reach the next level
of success.
The Story So Far
NAFTA gave U.S. and Mexican carriers the right to pick up and
deliver international freight into the neighboring country's border
states beginning in December 1995. This market access was scheduled to
expand to the entire territory of the United States and Mexico by
January 2000. The United States failed to comply with its commitments
on both of these occasions.
NAFTA also included measures to permit U.S. and Mexican carriers to
invest across the Rio Grande. Starting in December 1995, U.S. and
Canadian investors were supposed to be allowed to invest in Mexican
trucking companies or terminals providing exclusively international
freight services up to a 49 percent ownership cap. NAFTA laid out a
schedule to raise this cap to 51 percent in 2001 and 100 percent in
2004.
By the same token, Mexican carriers were to be allowed to invest
and fully own U.S. trucking companies for the purpose of transporting
international cargo within the United States beginning in 1995. The
United States finally moved toward implementation of these provisions
on June 5, 2001, when President George W. Bush issued a memorandum
instructing the U.S. Department of Transportation to begin accepting
and processing applications by Mexican nationals for the purpose of
establishing U.S. trucking companies.
A NAFTA dispute settlement panel in February 2001 determined that
the United States had violated its obligations on cross-border
trucking. At the time, analysts calculated that the United States could
be slapped with retaliatory duties totaling between $1 billion and $2
billion for every year Washington refuses to allow cross-border
trucking. Mexico refrained from retaliation out of respect for the U.S.
administration's efforts to comply with its obligations.
In 2004, the Attorneys General for California, Arizona, Oklahoma,
Massachusetts, Illinois, New Mexico, Oregon, Washington and Wisconsin
filed briefs with the Supreme Court, opposing the administration's
effort to open U.S. roads to Mexican trucks and asserting that air-
quality reviews must precede any such move under the Clean Air Act.
Noting that Mexican trucks would be subject to all U.S. environmental
and safety regulations in any event, the administration argued that
extensive delays and higher costs could result if such additional
reviews were required. The Supreme Court agreed with the
administration.
Cross-Border Trucking
In the Chamber's view, the dispute over cross-border trucking has
threatened our relationship with Mexico, our second-largest export
market. Cross-border trucking today was described in a coalition letter
signed by the U.S. Chamber of Commerce and other business organizations
as ``archaic and convoluted. . . . Currently, a shipment traveling from
the United States to Mexico, or vice versa, requires no less than three
drivers and three tractors to perform a single international freight
movement. Through interline partnerships, a U.S. motor carrier handles
freight on the U.S. side, and a Mexican carrier handles the freight on
the Mexican side, with a `middleman' or drayage hauler in the middle.
The drayage driver ferries loads back and forth across the border to
warehouses or freight yards for pickup or subsequent final delivery
within the designated border commercial zone.''
The upshot is congestion, air pollution, and higher prices for both
consumers and business. The fraught logistics of the existing system
often compel trucks to return home with empty trailers or with no
trailer at all. Our border infrastructure is seriously overburdened,
and the entire system is quickly becoming a real brake on further
growth in trade.
These problems are particularly severe for U.S. companies that
operate ``just-in-time'' manufacturing facilities in Mexico. These
operations were established with a clear expectation that
transportation services would be able to deliver inputs from the United
States or elsewhere to facilities in Mexico according to schedule. Our
mutually beneficial trading relationship with Mexico will plainly
suffer--with costly effects for U.S. workers, farmers, consumers, and
companies--if we fail to ensure the expeditious delivery of materials
to these manufacturing facilities by modernizing the cumbersome
transportation system upon which our trade with Mexico depends.
Safety: A Vital Issue
Safety is plainly one of the most important issues at play in this
dispute. Ensuring the safety of all trucks on American roads was a top
priority of the U.S. trade officials who negotiated NAFTA. The Congress
approved NAFTA because it was broadly satisfied with the fruits of
their labors.
And why shouldn't we be? Under NAFTA, every truck entering the
United States is required to meet each and every U.S. safety
requirement. In fact, Mexican motor carriers applying for U.S. permits
will be required to provide far more detailed information regarding
their ability to meet U.S. safety requirements than their American or
Canadian counterparts. Any lingering concerns over the safety of these
carriers from Mexico and their trucks and drivers can surely be
addressed in the proposed rules for implementing NAFTA.
While safety is an overriding concern, the United States can
certainly address this issue while keeping its international
obligations and expanding upon the mutually beneficial trading
relationship with Mexico. Failure to try would send a troubling message
about the difference in our treatment of Canada and Mexico, our two
closest neighbors and largest export markets.
Finally, it is imperative that Congress make available the required
funds to ensure that safety enforcement inspections of trucks on the
U.S.-Mexico border are carried out with all due seriousness. The U.S.
Chamber strongly supports providing necessary funding to hire
additional safety inspectors to be stationed at the border and to build
and maintain adequate border inspection facilities.
Conclusion
Because NAFTA has already eliminated most tariffs and other
barriers to trade with Mexico, improving our transportation
infrastructure is one of the best things we can do to keep this
partnership on track. Implementing NAFTA's trucking provisions offers
the opportunity to fix the cumbersome, environmentally damaging, and
costly transportation system upon which our trade with Mexico depends.
Growing inspection capabilities at the U.S.-Mexico border will ensure
that trucks will be able to operate on both sides of the U.S.-Mexico
border with safety and efficiency.
In the final analysis, this issue revolves around whether the
United States will keep its word. We should be mindful that the United
States made a commitment under NAFTA to work with Mexico to modernize
our cross-border transportation system. The U.S. Chamber urges the
Congress to work with the administration to assist in implementing
NAFTA's cross-border trucking provisions and show the world that
America keeps its commitments.
______
Prepared Statement of James P. Hoffa, General President,
International Brotherhood of Teamsters
My name is Jim Hoffa, General President of the International
Brotherhood of Teamsters. I represent 1.4 million Teamsters and their
families. They drive America's highways every day.
More than 600,000 of our members earn their living behind the
steering wheel of a delivery truck, semi-tractor trailer, school bus,
police car, taxicab or other vehicle. They have a right to a safe
workplace. Their families have a right to safe roads.
In Mexico, twice as many people die in highway accidents per
vehicle miles traveled as in the United States. In Mexico, trucks and
Mexican drivers don't have to meet the same safety standards as they do
here. In Mexico, enforcement is notoriously lax.
For those reasons, I have long thought that allowing Mexican trucks
on our roads would place American drivers in danger.
Congress is also concerned about the risk of letting hazardous
Mexican trucks drive our highways. That is why laws were passed
requiring the Federal Motor Carrier Safety Administration (FMCSA) to
meet specific safety standards before starting a cross-border trucking
pilot program.
Under U.S. law (Section 350 of the 2002 Transportation
Appropriations Act), FMCSA could not let a Mexican truck travel beyond
the border zone if it did not satisfy the statutory safety
requirements.
The 2002 law, otherwise known as the Murray-Shelby amendment, was
reinforced in 2007 by Section 6901 of Public Law 110-28. That law set
additional standards. It also required the Inspector General to verify
that FMCSA met those standards before opening the border.
A promise by FMCSA to meet those standards was not sufficient to
satisfy the legal requirement for allowing Mexican trucks onto our
highways.
Unfortunately, the Bush Administration couldn't wait to open the
border to Mexican trucks. It couldn't wait to make sure safety
standards were met, and it couldn't wait to obey the law.
On Aug. 6, 2007, and on Sept. 6, 2007, the Transportation
Department's Office of Inspector General issued reports establishing
that the Bush administration had not met the statutory requirements for
starting the pilot program.
On Aug. 6, the Inspector General reported that certain standards
hadn't been met:
Databases on Mexican drivers' records in both Mexico and in
the U.S. were incomplete.
FMCSA didn't have the capacity to inspect every truck at
high-volume crossings.
FMCSA could not verify that drug and alcohol testing in
Mexico met U.S. Department of Transportation (USDOT)
regulations.
On Sept. 6, the Inspector General issued a report describing
additional legal standards for the pilot program that hadn't been met:
FMCSA can't check trucks and drivers from Mexico at every
border crossing.
State police didn't know how to test English language
proficiency among drivers.
FMCSA said it would only inspect trucks that were available
at the time inspectors were onsite.
It is of no small consequence that the Inspector General reported
on Sept. 6 that FMCSA has not developed sufficient plans for checking
every truck every time.
In other words, no one was watching the trucks that crossed the
border to check if they were allowed beyond the border zone.
When the Inspector General's staff visited three border crossings--
one at Otay Mesa, Calif., and two in El Paso, Texas--they found no
state or Federal officials posted in places where they could identify
trucks in the pilot program. The Inspector General's staff found no
evidence that Federal officials could be posted in position to monitor
trucks once the program started.
One month earlier, the Inspector General reported that traffic was
too heavy at the Laredo crossing for FMCSA to monitor all trucks. Once
an FMCSA inspector picked a truck out of the hundreds in line for
inspection, no other FMCSA officials remained to watch the vehicles
pouring over the border.
If every truck in the pilot program isn't checked, then every truck
driver isn't questioned for his ability to speak English. The Inspector
General in September reported that state officials responsible for
truck safety were very concerned about the English-speaking skills of
Mexican drivers.
English language proficiency is a serious safety issue. A good
example was provided by the National Transportation Safety Board, which
investigated a 2005 highway tragedy that was compounded by a bus
driver's inability to speak English. A bus evacuating Texas nursing
home patients from Hurricane Rita caught fire, and emergency response
was delayed because the driver couldn't communicate with first
responders. Twenty-three people died.
Unfortunately, FMCSA has a cavalier attitude about the need for
truck drivers to speak English. The Inspector General cited a USDOT
memo that says a driver who can identify the meaning of four highway
signs--in any language--is deemed to be proficient in English if the
inspector understands what he is saying. In other words, if a driver
says in Spanish that a stop sign means stop, he is considered
proficient in English if the inspector understands him.
FMCSA has also paid little attention to the problem of drug and
alcohol testing for Mexican truck drivers. Mexico is an underdeveloped
country that lacks an infrastructure for testing drug and alcohol use.
Well documented is the epidemic of illegal stimulant abuse among
Mexico's drivers, who are forced to work long hours for low pay.
The Inspector General reported that drug and alcohol testing in
Mexico needs further attention. That is probably an understatement.
Congress ordered FMCSA to verify that Mexican motor carriers can
comply with USDOT drug testing regulations before starting the pilot
program.
Monitoring drug collection facilities is a necessary prerequisite
for verifying Mexican carriers' ability to operate a drug and alcohol
testing program consistent with USDOT's regulations (Part 40 of Title
46 CFR). In other words, FMCSA could not legally open the border to
Mexican trucks until drug collection facilities in Mexico were
monitored. But this is not even something that FMCSA has promised to
do.
USDOT does not monitor collection facilities in Mexico, according
to the Inspector General's most recent (March 10, 2008) report. Without
monitoring of Mexican drug collection facilities, chain of custody
could easily be compromised, testing may not be scientifically valid,
collection facilities may not meet USDOT requirements and their
collectors may not be trained.
Nor is FMCSA educating Mexican employers about their
responsibilities and U.S. standards for drug testing. The agency has a
website that lists all the rules with which Mexican motor carriers must
be familiar, but the site has no mention of the 106 pages of USDOT drug
and alcohol regulations. Those regulations govern employers'
responsibilities, such as standing down employees, making unannounced
follow-up tests or respecting an employees' procedural and privacy
rights.
I can only conclude that FMCSA ignores the problem of adequate drug
and alcohol testing because it is too hard to solve.
Another enormous problem that FMCSA can't solve is the inadequacy
of Mexico's database of commercial drivers licenses. U.S. law requires
state and Federal inspectors to ``verify electronically the status and
validity of the license of each driver of a Mexican motor carrier
commercial vehicle crossing the border'' for at least half of such
vehicles.
The Inspector General reported on Aug. 6, 2007, that state and
Federal officials had checked the status of Mexican commercial drivers
licenses over 19,000 times. In 18 percent of the queries, the result
was ``driver not found.'' If the driver is not found, the status and
validity of his license cannot be verified. Since FMCSA has produced no
evidence that the Mexican commercial drivers license database can
verify the status of every driver, the database must still be
incomplete and inaccurate.
Clearly there are gaping holes in the pilot program's safety net.
If a state trooper pulls over a Mexican driver, chances are one in six
that a record of his license can't be found. FMCSA failed to make sure
the driver can speak English or that he's free of drugs and alcohol or
that the truck was checked at the border.
There is one law that should have been fairly easy for FMCSA to
follow--to inspect half of the Mexican carriers' trucks on-site before
letting them onto U.S. highways.
There are only 55 trucks in the pilot program now. But FMCSA could
not even inspect half of those trucks on-site. FMCSA only inspected the
trucks that happened to be onsite during its pre-authority safety
audit.
I am astonished that FMCSA couldn't make sure even a handful of
Mexican trucks are safe. Not because I think FMCSA is interested in
safety, but because I think FMCSA needs to avoid the criticism that
it's letting dangerous trucks on our highways. There are many, many
opponents of this program who would seize on any evidence that FMCSA
can't even monitor a small sample of Mexican trucks when it's trying to
prove that it can. After all, the pilot program is wildly unpopular
with the public and with Congress. It is under intense scrutiny by the
Inspector General. It is under review in Federal court.
Given all that, I would think FMCSA would take some pains to make
sure that the small number of trucks it admitted into the pilot program
is safe.
FMCSA could not even do that.
Somehow FMCSA managed to allow Trinity Industries de Mexico--a
company with an abysmal safety record--onto our highways.
Opponents of the pilot program obtained Trinity's horrible safety
record from FMCSA's own database, which is easy to find on the
Internet. Opponents submitted that safety record to the 9th Circuit
Court of Appeals as part of the lawsuit against the pilot program. Only
after the public declaration was made did Trinity withdraw from the
program on Feb. 1.
The decision to allow Trinity's dangerous trucks onto our highways
strongly suggests that FMCSA is completely incapable of enforcing
safety standards for even a few motor carriers.
FMCSA Administrator John Hill told reporters on March 11 that
Trinity's safety violations were minor. That is not true.
With 10 trucks that operate in the border zone, Trinity amassed 75
out-of-service orders and should have received another 476 in the year
before the pilot program, according to Commercial Vehicle Safety
Alliance standards.
Under Federal law, trucks are placed out-of-service when an
``imminent hazard'' is present. The law defines ``imminent hazard'' as
``any condition of vehicle, employee, or commercial motor vehicle
operations which substantially increases the likelihood of serious
injury or death if not discontinued immediately.''
All of those failures to meet safety standards were documented by
the Inspector General. Because the Inspector General did not verify
that safety standards were met, it was therefore illegal to open the
border to Mexican trucks under the pilot program.
Nevertheless, Transportation Secretary Mary Peters defied the law.
She gave the green light to the program just hours after the Inspector
General's Sept. 6 report was issued.
My union has challenged the legality of the pilot program before
the 9th Circuit Court of Appeals in San Francisco. Public Citizen,
Sierra Club and the Owner-Operator Independent Drivers Association
joined us in the case. Oral arguments were heard in the case on Feb.
12. We are awaiting a decision from the court.
Our case was strengthened in December, when a law was passed
cutting off funding for the cross-border trucking demonstration
project.
A few days after the pilot program started, a truck accident in
Mexico killed more than 30 people. The Senate, concerned about safety,
passed an amendment on Sept. 12 that cut off funding for the pilot
program. The vote was overwhelming: 75-23.
No one questioned that the intent of the amendment was to stop the
pilot program. Sen. John McCain, R-AZ, ardently supports cross-border
trucking. He said the amendment would stop the program.
FMCSA's Hill acknowledged the program's defeat. When the amendment
passed, Hill said it was a ``sad victory for the forces of fear and
protectionism.''
That should have been the end. The U.S. Supreme Court ruled in 1984
that ``If the intent of Congress is clear, that is the end of the
matter.''
But then the Bush Administration decided to create its own reality
by ignoring the clear intent of Congress.
The amendment said: ``None of the funds made available under this
Act may be used to establish a cross-border motor carrier demonstration
program to allow Mexico-domiciled motor carriers to operate beyond the
commercial zones along the international border between the United
States and Mexico.''
That amendment became law on Dec. 26, when President Bush signed
the Consolidated Appropriations Act of 2008.
Shortly afterward, Secretary Peters announced through a
spokesperson that she would ignore the law and keep the border open.
Her rationale was a novel interpretation of the law. She said
Congress only meant to cut off funds for a program that had already
been established.
Secretary Peters has been told by the Senate's legal counsel and by
a half dozen Members of Congress that she is in violation of the law.
If Secretary Peters were right about the amendment--and she is
not--the pilot program would be in violation of the laws listed above.
It would also be in violation of several other laws that were not
identified by the Inspector General before the program started.
The law (49 U.S.C. 31315(c)) says that FMCSA pilot programs can't
go forward unless certain criteria are met. Those include:
``A specific data collection and safety analysis plan that
identifies a method for comparison.'' There is none.
``A reasonable number of participants necessary to yield
statistically valid findings.'' After 6 months, the Inspector
General reported there are only 16 Mexican trucking companies
with 55 trucks participating. The Inspector General on March 10
reported that ``no reliable statistical projections regarding
safety attributes can be made at this point.''
``An oversight plan to ensure that participants comply with
the terms and conditions of participation.'' The Inspector
General, again on March 10, reported that FMCSA had no such
plan. The agency failed to implement a key quality control
measure--a monthly analysis of a random 10 percent sample of
Customs and Border Protection data to document that drivers and
vehicles are being checked every time they cross the border.
The Inspector General reported ``FMCSA does not have assurance
that it has checked every Mexican truck and driver that is
participating in the project when they cross the border into
the United States.''
``The safety measures in the project are designed to achieve
a level of safety that is equivalent to, or greater than, the
level of safety that would otherwise be achieved.''
It is well established that the safety measures for Mexican trucks
and drivers are lower than the level of safety that U.S. trucks
and drivers must achieve. FMCSA has even acknowledged that
there are differences between U.S. and Mexican safety laws,
including commercial drivers' license requirements, medical
requirements, hours-of-service requirements and drug-testing
procedures. (72 Federal Register notice 46263, Aug. 17, 2007).
Mexican drivers don't lose their commercial drivers licenses if
they're convicted for crimes in their own vehicles, as are U.S.
drivers.
Mexican drivers do not have mandatory safety training, as do U.S.
drivers.
Mexican drivers are not required to comply with U.S. hours-of-
service laws while operating in Mexico, so a Mexican driver
could drive 10 hours in Mexico and then another 11 hours in the
U.S.
Mexican drivers do not have to meet U.S. standards for pre-
employment drug testing as do U.S. drivers.
The Transportation Department under Secretary Peters' leadership
has repeatedly broken the law in its pursuit of the cross-border pilot
program.
It has also shown a pattern of secrecy and deception.
No announcement was made about the department's intention to open
the border on Sept. 6, 2007 until after the Teamsters found out and
made it public. The FMCSA then stonewalled journalists for several days
until it finally admitted its intentions.
Requests for information about how USDOT developed plans for the
pilot program have been denied. Information about the participating
companies has not been made public, nor have copies of equivalent
Mexican motor carrier and motor vehicle laws.
What is perhaps more disturbing than the DOT's secrecy is its
dishonesty. Secretary Peters has told Congress ``There are no
exceptions to safety regulations for trucks or drivers from Mexico.''
But that is demonstrably not true.
She has claimed, ``Every truck and every driver are checked every
time they cross the border.'' But as the Inspector General pointed out,
the Secretary has no way of knowing that.
She has claimed, ``The current safety record of the participating
trucks in the demonstration program is better than that of the U.S.
trucking fleet.'' But there are not enough participants in the program
to determine whether that is true.
She has claimed that safety is at the heart of all that is done at
USDOT, and that it is foremost in their minds as the cross-border
trucking program is developed. But that is clearly false.
She has claimed that opening the borders to Mexico will benefit the
U.S. consumer by lowering the cost of goods. But that is sheer
casuistry.
Part of the cost of trucking goods goes to safety. Consumers pay
more because trucking companies have to pay for truck inspections;
drivers' physical exams, safety training, drug tests, living wages;
anti-lock brakes, adequate lighting, safe tires.
What Secretary Peters is proposing is lowering the cost of goods by
lowering safety standards--by opening our borders to Mexican trucks and
Mexican drivers that don't meet our safety standards. If she succeeds,
and I hope and pray she does not, the result will be a lowering of
safety standards for all U.S. trucks, all U.S. drivers and all U.S.
motorists.
Of all the specious claims that Secretary Peters has made, the one
I find most galling is her statement that opening the border to
dangerous trucks from Mexico is ``working significantly in favor of
U.S. truckers.''
I represent hundreds of thousands of U.S. truckers. The Teamsters'
allies represent hundreds of thousands more. I assure you not one of
them thinks this program works in favor of them.
______
Response to Written Questions Submitted by Hon. Byron L. Dorgan to
Hon. Calvin L. Scovel III
Question 1. Please investigate the circumstances surrounding the
withdrawal of Trinity Industries of Mexico from the cross-border
program. Specifically, please report on the following:
a. Why was Trinity preapproved for participation in the cross-
border pilot program when the company had a prior record of
over 100 safety violations per truck, per year, for vehicles
involved in traffic within the buffer zone?
b. When did the Department of Transportation first become aware
of Trinity's record of safety violations?
c. Did the Department of Transportation request that Trinity
withdraw from the pilot program?
i. If not, why not?
ii. If so, did DOT also revoke Trinity's operating
authority within the buffer zone?
d. How does the withdrawal of one of the largest carriers in
the pilot program, after being cited for numerous safety
violations, affect the sampling validity of the pilot program?
i. Does DOT plan to factor Trinity's record of safety
violations into the results of the pilot program?
ii. If not, is it not true that the withdrawal of a
large carrier with a record of safety violations would
inflate the perceived safety record of the remaining
pilot program participants?
Question 2. Please review the information complied by the Owner-
Operator Independent Drivers Association regarding the safety records
of Mexican carriers approved for the pilot program, and determine
whether there were carriers other than Trinity with a poor safety
record that were nonetheless approved.
Answer. In response to the concern raised at the hearing over the
safety of Mexico-domiciled carrier, Trinity Industries, Inc., we have
revised our current audit work to include a more detailed review of
that specific carrier. As Inspector General Scovel stated at the March
11, 2008 hearing we will address the questions posed by the Committee
in our upcoming final report on demonstration project that is due 60
days after the project completion, as required under Section 6901 of
the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq
Accountability Appropriations Act of 2007.
Specifically, we will review and comment on: (1) Trinity's safety
history, (2) Trinity's withdrawal from the demonstration program, and
(3) the impact of Trinity's withdrawal on the demonstration project. We
will accomplish this work by reviewing safety performance data, such as
inspection records, crash data, and safety ratings, as well as
soliciting interviews from the appropriate sources to better understand
the carrier's withdrawal from the program. We will consult with our
statistician to understand what impact the carrier's withdrawal might
have had on data sufficiency and the ability to yield statistically
valid results.
______
Response to Written Questions Submitted by Hon. Byron L. Dorgan to
Hon. Mary E. Peters
Question 1. Please explain in detail the FMCSA's standards and
procedures for determining whether Mexican drivers involved in the
cross-border pilot program are proficient in English. As part of your
explanation, provide answers to the following:
a. Provide copies of any and all written guidelines or
instructions given to FMCSA inspectors regarding English
proficiency tests for Mexican drivers in the cross-border pilot
program.
b. Provide a monthly tally of the numbers of drivers tested for
English proficiency since the pilot program began, and the
pass/fail ratio for each month.
c. Explain in detail why FMCSA provided guidance to its
inspectors that in the test involving recognition of road
signs, it would be acceptable for drivers to respond in a
language other than English.
d. Identify any other aspect of the English proficiency test
wherein it is acceptable for drivers to respond in a language
other than English.
Answer. 49 CFR 391.11(b)(2) provides a person shall not drive a
commercial motor vehicle in the United States unless that person can
read and speak the English language sufficiently to converse with the
general public, to understand highway traffic signs and signals in the
English language, to respond to official inquiries, and to make entries
on reports and records.
On July 20, 2007, FMCSA issued a policy memorandum providing
guidance to FMCSA and state and local level enforcement personnel
conducting North American Standard Driver/Vehicle Inspections to
determine whether drivers are able to communicate sufficiently to
understand and respond to official inquiries and directions in English.
The policy guidance required a determination of a driver's ability
to communicate in English sufficiently to understand and respond to
official inquiries and directions made by the commercial motor vehicle
(CMV) inspector on the basis of a driver interview conducted by the
inspector during the driver/vehicle inspection. The interview must be
conducted in English.
On February 1, 2008, FMCSA issued a supplement to the English
language proficiency policy incorporating an assessment of the driver's
ability to understand common United States highway traffic signs. Under
this policy, an enforcement officer will conduct an assessment by
randomly selecting four signs from a list of signs and asking the
driver to explain the meaning of three of the four signs. The driver is
allowed to explain the meaning in any language provided the enforcement
officer can understand the language. This assessment, and indeed the
remainder of the inspection, may be conducted in a language other than
English because: (1) the driver's English proficiency has already been
sufficiently demonstrated; and (2) it allows the remainder of the
inspection to be conducted in the most efficient manner possible.
In summary, the English language proficiency policy contains two
distinct assessments; the ability to speak English, and the ability to
understand highway traffic signs. The assessment of the driver's
ability to speak English is conducted first. If the driver
participating in the border demonstration project is unable to
demonstrate an ability to speak English, the driver is placed out-of-
service and not allowed to operate in the U.S. In this case, no
assessment of the driver's ability to understand common highway traffic
signs is conducted. The assessment of the driver's ability to
understand common highway traffic signs is only conducted if the driver
has successfully demonstrated an ability to speak English.
Attachments:
1. Policy memorandum dated July 20, 2007.
2. Policy attachment dated February 1, 2008.
3. Table showing monthly totals of drivers tested for English
language proficiency and the number of violations (fail) of 49
CFR 391.11(b)(2).
Question 2. You testified at an oversight hearing of the Commerce
Committee on February 28. In answer to a question about the cross-
border program, you stated that ``we are not implementing a program. We
are not establishing a program. We are continuing a program that was
established prior.''
a. Does that mean that DOT is claiming that the cross-border
pilot program was both ``established'' and ``implemented''
prior to the passage of the Omnibus Appropriations Act?
b. If so, does that mean that it was DOT's intention all along
to continue with the pilot program even if the omnibus language
had contained the words ``establish'' and ``implement''?
Answer. The Department does not claim that it both ``established''
and fully ``implemented'' the cross-border demonstration program prior
to the enactment of the 2008 Omnibus Appropriations Act. The cross-
border demonstration program was established in September 2007--well
before enactment of the current Appropriations Act on December 26,
2007. The Department's implementation of the cross-border demonstration
program is ongoing and our implementation actions and activities are
not prohibited by the appropriations provision that precludes the use
of funds ``to establish'' a cross-border demonstration program.
Consistent with the Appropriations Act prohibition in section 136, the
Department's Federal Motor Carrier Safety Administration (FMCSA) has
not established any new cross-border demonstration programs with Mexico
and, in compliance with section 136, will not do so.
In answer to the particular question whether it was the
Department's intention to continue with the demonstration project even
if the appropriations language had contained the words ``establish''
and ``implement,'' as did section 410 of H.R. 3074, as passed by the
House of Representatives on July 24, 2007, the Department would have
abided by the plain meaning of the legislative language and would not
have continued to implement the previously established cross-border
demonstration project. It is our position that we are fully complying
with sections 135 and 136 of the 2008 Omnibus Appropriations Act.
Question 3. You have indicated that the Department of
Transportation may extend the current cross-border pilot program into
FY 2009. If Congress were to once again move to cut off funds for the
ongoing pilot program, is there any statutory language that the
Department of Transportation would be willing to honor?
a. If so, please suggest specific language that the Department
would feel bound to respect.
b. If not, please explain whether you believe that the U.S.
Congress does not have the Constitutional authority to cut off
funds for a specific program of the Department of
Transportation.
Answer. The Department certainly recognizes the Constitutional
power of the Congress to appropriate funds and prescribe the conditions
governing the use of Federal funds. As I acknowledge in my response to
the previous question, the future enactment of an appropriations
provision barring the Department's use of appropriated funds to
``establish or implement'' or ``implement'' the cross-border
demonstration project would preclude the Agency from obligating funds
for the project. We also note that Congressional appropriations
language frequently bars agencies from expending funds for particular
programs and activities. For example, a provision in the same title of
the 2008 Omnibus Appropriations Act in which the section limiting the
use of funds ``to establish'' a cross-border demonstration project
appears prohibits the use of funds to either ``establish or implement a
program under which Essential Air Service communities are required to
assume subsidy costs commonly referred to as the EAS local
participation program.'' (section 103, division K, title I, Pub. L.
110-61). Clearly, when Congress seeks to prohibit the use of funds to
either establish or implement a program or project, it has enacted
appropriate legislative language to accomplish this result.
______
Response to Written Questions Submitted by Hon. Mark Pryor to
Hon. Mary E. Peters
Question 1. What steps has Department of Transportation taken to
develop programs to meet the requirements of Section 703 of the Port
Security Act (Public Law 109-347) signed into law in October 2006? Will
the Department meet these safety requirements by the end of April?
Answer. Section 703, Trucking Security, of the Security and
Accountability For Every Port Act of 2006 (SAFE Port Act), requires the
Federal Motor Carrier Safety Administration (FMCSA) to implement
requirements from two U.S. Department of Transportation, Office of
Inspector General (OIG) reports:
1. June 4, 2004 Memorandum: Need to Establish a Legal Presence
Requirement for Obtaining a Commercial Driver's License (Control No.
2004-054).
The report recommended that FMCSA establish a ``legal
presence'' requirement for obtaining a CDL.
The report provides that all CDL applicants should
demonstrate either citizenship or lawful permanent residence in
the U.S. before a State may issue a CDL.
2. February 7, 2006 Memorandum: Report on Federal Motor Carrier
Safety Administration Oversight of Commercial Driver's License Program
(Report Number MH-2006-037).
The report contains three broad recommendations to detect
and prevent fraudulent testing and licensing activity in the
CDL program:
a. Direct the States to report on the final disposition
of all suspect drivers identified by the States. These
disposition reports should emphasize, but not
necessarily be limited to, instances where there is
specific or direct evidence that the driver
participated in a fraudulent activity to obtain the
CDL.
b. Determine that State CDL programs are out of
compliance, under Federal regulations, if the State
fails to impose adequate internal controls to prevent
fraud or fails to take or propose necessary corrective
action.
c. Impose sanctions, under Federal regulations, against those
States that fail to establish adequate fraud control measures
for their CDL programs.
The FMCSA is addressing the OIG and Port Security Act requirements
in an ongoing Notice of Proposed Rulemaking (NPRM) titled, ``The
Commercial Driver's License Testing and Commercial Learner's Permit
Standards.'' The NPRM was published on April 9, 2008.
Question 2. Are Mexican carriers required to register with the IRP
and pay apportioned registration fees to the states as our U.S.
carriers pay?
Answer. Mexican carriers are required to comply with all U.S.
vehicle registration requirements. They have the option to purchase
State trip permits or pay full registration fees in each U.S. and
Canadian jurisdiction just as U.S. and Canada-domiciled motor carriers
do. If they operate in more than one State, they will be able to pay
the registration fees through the International Registration Plan (IRP)
in one of the four southern Border States. These States are acting as
``host'' States for all Mexico-domiciled motor carriers for IRP
purposes and are prepared to register them as they receive operating
authority. If they operate in only one State, they will be required to
register their vehicles with and pay the vehicle registration fee to
the State in which they operate.
FMCSA has provided funding to the four southern Border States to
assist them in preparing to register Mexico-domiciled motor carriers.
FMCSA routinely provides information on Mexico-domiciled motor
carriers participating in the demonstration project to the four
southern Border States and to IRP, Inc.
Fees collected by the host States will be distributed, in
accordance with IRP by-laws, to all other IRP member States, including
Arkansas, in which the motor carrier operates.
Question 3. How should Arkansas or other states for that matter,
collect taxes that are unique to their state? Will the USDOT provide to
the states the names of all Mexican carriers, their mileage through
each state, their addresses, and will non-payment of a state tax
constitute a reason to expel a Mexican carrier from U.S. markets?
Answer. States collect taxes from Mexico-domiciled motor carriers
in the same manner as are taxes collected from U.S. or Canadian motor
carriers operating in the State. Arkansas imposes an ad valorem tax on
motor carriers with authority to operate in the State. Enforcement is
done at the roadside. If a motor carrier does not pay the tax, any of
its vehicles stopped for routine inspection and weighing are not
allowed to continue until the tax is paid.
The U.S. Department of Transportation routinely provides
information on the Mexico-domiciled motor carriers participating in the
border demonstration project to Arkansas and other States through IRP,
Inc. Additionally, the information is published in the Federal Register
and available on the Internet at http://www.fmcsa.dot.gov/cross-border/
cross-border-carriers.htm. IRP, Inc. will provide States information
regarding carriers registered to travel in each State in accordance
with the IRP, Inc by-laws.
Question 4. In October 2006, a national safety organization filed a
Freedom of Information Act (FOIA) request for all records relevant to
DOT preparing a pilot program or demonstration project to allow long-
haul Mexican truck operations. The DOT granted the request. Yet, the
DOT has made no records available for inspection after an entire year
and a half. Where is DOT in providing the documents requested?
Answer. In October 2006, the Advocates for Highway and Auto Safety
(AHAS) requested pursuant to the Freedom of Information Act (FOIA) the
following:
All records regarding any and all FMCSA activities to
formulate, develop, evaluate, implement, or otherwise consider
any effort, plan, initiative, pilot program or other program
intended to evaluate any Mexican-domiciled motor carriers that
would be permitted by FMCSA to operate beyond the current U.S.
municipalities and commercial zones on the U.S.-Mexico border.
All records that discuss, evaluate, consider or refer to how
such an effort, plan, initiative, pilot program or other
program for evaluating any Mexico-domiciled motor carriers
operating beyond the current U.S. municipalities and commercial
zones on the U.S.-Mexico border complies with the funding
restriction of Section 350(a) of the Fiscal Year 2002 U.S.
Department of Transportation and Related Agencies
Appropriations Act, Pub. L. 107-87 (Dec. 18, 2001).
All records that consider, discuss, evaluate, or refer to
the specific policy considerations, decisions, and actions by
the FMCSA and the U.S. Department of Transportation for how any
such pilot program or other program, plan, or initiative for
evaluating some Mexico-domiciled motor carriers operating
beyond the current U.S. municipalities and commercial zones on
the U.S.-Mexico border complies with each specific requirement
set forth in sections 350(a) and (b) of the Fiscal Year 2002
U.S. Department of Transportation and Related Agencies
Appropriations Act cited above.
In responding to this complex FOIA request, FMCSA coordinated with
over 20 offices and divisions, including offices located in the field,
that produced over 300,000 pages as potentially responsive for
consideration and processing by the FOIA office. This FOIA response set
a new precedent for FMCSA since the average FOIA response generally
consists of a few dozen to a few hundred documents.
Due to the small size of the FOIA Office and the large number of
documents involved with this request, the FMCSA FOIA Office procured a
contractor to develop a system to assist FMCSA in organizing the
materials in order to methodically review each document. As a result of
the system developed, currently, FMCSA has determined that of the
initially identified 300,000 pages, over 80,000 pages appear to be
responsive to the AHAS FOIA request. FMCSA continues to process these
pages and plans to begin releasing responsive records as quickly as
possible.
Since October 2006, in addition to the AHAS FOIA request, FMCSA has
received 21 FOIA requests for information or pages that relate to
Mexico-domiciled motor carriers operating beyond U.S. commercial zones.
FMCSA has answered, released pages or provided information for 20 of
the 21 requests; however, none of these requests have involved a
significant number of pages, as with the AHAS request.
Attachment 1
Memorandum
U.S. Department Of Transportation
Federal Motor Carrier Safety Administration
July 12, 2007
MC-ECE-0026-06
Subject: Action: Requirements for Inspection of Mexico-domiciled
Carriers Operating under the Cross-Border Demonstration
Project
From: William Quade
Acting Associate Administrator for Enforcement and Program Delivery
To: Assistant Administrator and Chief Safety Officer
Associate Administrator for Field Operations
MC-E Office Directors/Division Chiefs
Office of Chief Counsel, Enforcement and Litigation
Field Administrators/Service Center Directors
Division Administrators/State Director
National Enforcement Team
National Training Center
Reply to Attn. of: MC-ECE
Purpose
This memorandum provides guidance to the Federal Motor Carrier
Safety Administration (FMCSA) and State enforcement personnel to: (1)
Ensure that every commercial motor vehicle (CMV) operated by Mexico-
domiciled motor carriers granted provisional operating authority for
transportation beyond United States municipalities and commercial zones
on the United States-Mexico border \1\ is inspected upon each entry
into the United States; and (2) Enforce the regulatory requirement that
every Mexico-domiciled long-haul CMV display a current Commercial
Vehicle Safety Alliance (CVSA) inspection decal while operating in the
United States.
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\1\ These motor carriers are commonly known as ``long-haul''
carriers.
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Background
Section 350(a)(5) of the Fiscal Year 2002 U.S. Department of
Transportation (DOT) Appropriations Act directs FMCSA to require all
long-haul Mexico-domiciled CMVs to display a current CVSA inspection
decal when operating in the United States until the motor carrier
operating the CMV has held permanent operating authority from FMCSA for
at least 3 consecutive years.
On March 19, 2002, FMCSA published two interim final rules
necessary for implementation of the North American Free Trade
Agreement: 49 CFR Part 365--Application by Certain Mexico-Domiciled
Motor Carriers to Operate Beyond United States Municipalities and
Commercial Zones on the United States-Mexico Border; and 49 CFR Part
385--Safety Monitoring System and Compliance Initiative for Mexico-
Domiciled Motor Carriers Operating in the United States. Both rules
impose inspection and CVSA decal requirements on Mexico-domiciled,
long-haul motor carriers.
Under 49 CFR section 385.103(a), each Mexico-domiciled, long-haul
motor carrier operating in the United States will be subject to an
oversight program to monitor its compliance with applicable Federal
Motor Carrier Safety Regulations (FMCSRs), Federal Motor Vehicle Safety
Standards, and Hazardous Materials Regulations. It requires that each
Mexico-domiciled carrier granted provisional operating authority under
part 365 have on every CMV it operates in the United States a current
decal attesting to a satisfactory inspection by a certified inspector.
Section 350(a)(5) of the FY 2002 Appropriations Act requires all
Mexico-domiciled commercial vehicles seeking authority to operate
beyond the border commercial zones to pass a CVSA Level I inspection
and be issued a decal to that effect, and 49 CFR 385.103(c) requires
such vehicles to display a currently-valid CVSA decal while operating
in the United States. Taken together, these provisions implicitly
authorize FMCSA and its State partners to place a Mexico-domiciled
vehicle out-of-service (OOS) for failure to display the required CVSA
decal. Any other conclusion would prevent Federal and State inspectors
from ensuring that Mexico-domiciled vehicles remain continuously in
compliance with all applicable safety standards. A number of inspection
and OOS scenarios are described below.
Operating Authority
There are two types of Mexico-domiciled motor carrier authority.
For operations within the United States municipalities and
commercial zones, a Mexico-domiciled motor carrier may obtain a
Certificate of Registration.
For operations beyond the United States municipalities and
commercial zones, a Mexico-domiciled motor carrier may obtain
Operating Authority.
A Mexico-domiciled motor carrier may not hold both types of
authority concurrently. Therefore, when a Mexico-domiciled motor
carrier is issued operating authority to operate beyond the United
States municipalities and commercial zones, each CMV operated in the
United States must display a current CVSA inspection decal (including
those that continue to operate exclusively in the commercial zones).
USDOT Number Identification
When FMCSA grants operating authority to a Mexico-domiciled motor
carrier, it is assigned a distinctive USDOT number. This USDOT number
includes a suffix to identify the type of authority the motor carrier
has been issued.
X--Motor carriers authorized to operate beyond the United
States municipalities and commercial zones will be assigned a
USDOT number that ends with the letter X.
Z--Motor carriers authorized to operate within the United
States municipalities and commercial zones will be assigned a
USDOT number that ends with the letter Z.
These motor carriers are subject to the marking requirements in 49
CFR section 390.21, and should be cited accordingly if the suffix is
not included in the vehicle markings. Enforcement actions for
violations of section 390.21 are recommended.
Commercial Driver's License Requirement
Every Mexico-domiciled CMV (as defined in 49 CFR section 383.5)
driver who is subject to commercial driver's license requirements in 49
CFR Part 383 will undergo a license verification check upon entry into
the United States, in accordance with procedures outlined within the
Licencia Federal enforcement policy.\2\
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\2\ See Mexican Licencia Federal Enforcement Policy dated October
24, 2001 and Mexican Licencia Federal de Conductor Enforcement Policy
Clarification dated November 25, 2006.
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English Language Proficiency Requirement
Every Mexico-domiciled CMV (as defined in 49 CFR section 390.5)
driver will undergo an assessment to determine whether the driver meets
the requirements of 49 CFR section 391.11(b)(2). Guidance for
performing the English language proficiency assessment will be outlined
in the forthcoming policy memorandum titled: Action: Placing Drivers
Out of Service for Violating 49 CFR Section 391.11(b)(2)--English
Language Proficiency (MC-ECE-0005-07).
Policy
1. Inspection Upon Entering the United States
The FMCSA Division Administrators (DAs) are responsible for
ensuring every Mexico-domiciled CMV entering the United States required
to display a USDOT number ending in ``X'' is subject to a CVSA
Inspection Decal Compliance Check. During this compliance check, the
inspector must verify that the power unit and trailer (if applicable)
display a current CVSA inspection decal. In addition, the inspector
will ensure the driver possesses a valid Licencia Federal de Conductor
and meets the requirements of section 391.11(b)(2).
This effort will require coordination between the DAs, State
agencies and Customs and Border Protection \3\ performing operations at
the same ports of entry. Any of these agencies may perform the
screening of a vehicle to identify CMVs required to display a USDOT
number ending in ``X.'' However, the DAs are ultimately responsible for
ensuring every vehicle required to display a USDOT number ending in
``X'' entering the United States is subject to a CVSA Inspection Decal
Compliance Check, and its driver is subject to a driver license
verification check and an English language proficiency assessment.
Those vehicles not displaying a current CVSA inspection decal must be
inspected and a CVSA inspection decal issued to those that pass before
they are allowed to proceed.
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\3\ Customs and Border Protection and FMCSA have committed to
coordination of screening and inspection of Mexico-domiciled CMV and
drivers entering the United States as part of the Demonstration
Project.
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The inspector (Federal or State) must obtain and record the
information on the CVSA Inspection Decal Compliance Check record (see
attachment), which will be used for reporting purposes. Each week, the
inspector must submit the compliance check records via e-mail as a
Microsoft Word or scanned document, to the DA of their State, or his/
her designee. The DAs, or their designees, will transfer the
information from the compliance check records into the Excel
spreadsheet template provided. The Excel spreadsheet must be sent
weekly via e-mail to the North American Borders Division Chief, or his
or her designee.
Discovery of an ``X'' motor vehicle without a CVSA inspection decal at
the Southern Border or in the United States beyond the Southern
Border Ports of Entry.
The following guidance and procedures will ensure that all Mexico-
domiciled, long-haul CMVs are inspected and display a current CVSA
inspection decal. If a CMV does not display a current CVSA inspection
decal the inspector should follow the inspection and enforcement
guidance below:
Scenario 1
Inspection of a CMV Not Displaying a Current CVSA Inspection
Decal at a Southern Border Port of Entry.
Conduct a Level I inspection and refer to the
enforcement guidance below.
Scenario 2
Inspection of a CMV Not Displaying a Current CVSA Inspection
Decal operating in the United States beyond the Southern Border
Ports of Entry.
Conduct a Level I inspection and place the vehicle
out-of-service (OOS) for failing to display a current CVSA
inspection decal as required.\4\
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\4\ The CVSA Executive Committee has approved this out-of-service
requirement for inclusion in the North American Standard Administrative
Out-of-Service Criteria.
If one or more critical vehicle inspection items \5\
are discovered, record the violation of failing to display
a current CVSA decal as required. also record the critical
vehicle inspection item(s) and any other vehicle defect
discovered. Affix an OOS sticker on the appropriate
vehicle(s), inform the driver of the OOS defect(s).
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\5\ Critical Vehicle Inspection Items are defined within the North
American Standard Truck Inspection Procedures.
If no critical vehicle inspection items are
discovered, record the OOS violation of failing to display
a current CVSA inspection decal as required on the ASPEN
inspection report using the violation citation and
description below. Remove the OOS sticker, issue a CVSA
inspection decal and annotate in the ASPEN software the
---------------------------------------------------------------------------
verification of the OOS violation repair.
Refer to the enforcement guidance below.
Violation Cites for Not Displaying a Current CVSA Inspection
Decal
49 CFR section 390.3(e)(1)/385.103(c)--Failing to
comply with all applicable regulations contained in 49 CFR
Parts 350-399/Failing to display a current CVSA decal as
required.
2. Enforcement guidance for vehicles not displaying a current CVSA
Inspection Decal
Record the violation of failing to display a current
CVSA decal as required and any other vehicle defect(s)
discovered. Affix an OOS sticker on the appropriate
vehicle(s).
If the inspector who performed the initial inspection
is available for re-inspection of the vehicle(s), verify
that the defect(s) have been repaired, annotate in the
ASPEN software the verification of the repairs and issue a
CVSA inspection decal. The vehicle(s) may now be allowed to
proceed out of the inspection area.
If the same inspector is not available, the subsequent
inspector must complete a Level I inspection, note that the
previous OOS item(s) was corrected, annotate in the ASPEN
software verification of the repair and issued a CVSA
inspection decal. The vehicle(s) may now be allowed to
proceed out of the inspection area.
Note: The Secretariat of Communications and Transportation Mexico
and the U.S. Department of Transportation committed to the prompt
correction of readily repairable OOS defects on otherwise properly
functioning and compliant vehicles. Therefore, it is the obligation of
the DAs to ensure timely re-inspection of Mexico-domiciled CMVs placed
OOS, whether the re-inspection is performed by a State or Federal
inspector.
Enforcement Actions for Not Displaying a Current CVSA
Inspection Decal
Enforcement actions should be initiated when a CMV is
discovered to be operating in the United States beyond the
Southern Border Ports of Entry with the following
exception:
Trailers picked up within the United States
and transported to Mexico.
State enforcement personnel should pursue appropriate State
enforcement action for the OOS violation. If the jurisdiction does not
have the authority then initiate Federal enforcement action by
obtaining the proper documents and forward them to the FMCSA Division
office for processing.
Implementation Date
This memorandum is effective immediately.
If you have any questions or need additional information, please
contact the Enforcement and Compliance Division at (202) 366-9699.
______
Attachment
______
Attachment 2
Memorandum
U.S. Department of Transportation
Federal Motor Carrier Safety Administration
February 1, 2008
Subject: Action: 49 CFR Section 391.11(b)(2) English Language
Proficiency
Reply to Attn. of: MC-ESB
From: William A. Quade
Associate Administrator for Enforcement and Program Delivery
To: Assistant Administrator and Chief Safety Officer
Associate Administrator for Field Operations
MC-E Office Directors/Division Chiefs
Office of Chief Counsel, Enforcement and Litigation
Field Administrators/Service Center Directors
Division Administrators/State Director
National Enforcement Team
National Training Center
Purpose
This policy memorandum supplements the previously issued policy
concerning enforcement of Section 391.11(b)(2) regarding English
language proficiency. This policy incorporates an assessment of a
driver's ability to understand common United States (U.S.) highway
traffic signs.
Background
On July 20, 2007, the Acting Associate Administrator for
Enforcement and Program Delivery issued a policy memorandum titled,
``Placing Drivers Out of Service for Violating 49 CFR Section
391.11(b)(2) English Language Proficiency,'' Policy Number MC-ECE-0005-
007. The policy provided guidance and an assessment tool to confirm a
driver's ability to communicate in English sufficiently to understand
and respond to official inquiries and directions. It did not confirm a
driver's understanding of U.S. highway signs.
Policy
A driver's ability to understand U.S. highway traffic signs will be
confirmed following the driver interview.
Determining a Driver's Ability to Understand Highway Traffic Signs
Inspectors should take the following steps to assess the driver's
ability to understand U.S. highway traffic signs:
1. Explain to the driver that he or she must be able to
understand the meaning of U.S. highway signs.
2. The inspector will randomly select four signs from the
attached list of signs.
3. The inspector will ask the driver to explain the meaning of
the four selected highway signs. (Note: The driver's
explanation may be in any language, provided the inspector is
able to understand the driver's explanation.)
4. Failure to satisfactorily explain the meaning of at least
three of the four signs will result in a violation of section
391.11(b)(2).
When an inspector determines a driver is not able to understand
U.S. highway traffic signs:
The inspector will be required to cite the violation of
391.11(b)(2), and manually amend the violation description as follows:
Select the base violation 391.11(b)(2);
Amend the violation description to read: ``Driver must be
able to understand highway traffic signs and signals in English
language''; and
DO NOT activate the Out-of-Service designation.
The ASPEN inspection software will be modified in March 2008 and
updated with the following citation: 391.11(b)(2)S--Driver must be able
to understand highway traffic signs and signals in the English
language. Until this violation is programmed in ASPEN, inspectors
should follow the guidance above.
Applicability
This policy applies to all interstate drivers operating in the U.S.
Effective Date
All Federal inspectors will begin implementing this policy
immediately for all commercial vehicle drivers entering the U.S. from
Mexico. Additionally, the policy will be implemented for all other
commercial vehicle drivers operating in the U.S. when the inspector
determines the driver's ability to understand U.S. highway traffic
signs may be limited.
State inspectors should also be encouraged to implement this
policy. However, the decision to implement by State inspectors will be
at the discretion of the State agency.
The Federal Motor Carrier Safety Administration is working with the
Commercial Vehicle Safety Alliance to develop a comprehensive policy on
49 CFR 391.11(b)(2). Once developed, the policy will provide uniform
enforcement by Federal and State inspectors.
If you have any questions or comments regarding this document,
please contact the Enforcement and Compliance Division at 202-366-9699.
Attachment
______
Attachment 3
Comparison Report, Total and Commercial Zone Inspections, Violations
Number of inspections conducted in the border commercial zone by
month from September 2007 to present.
------------------------------------------------------------------------
Total
Total inspections inspections in Month Year
commercial zone
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292,165 33,957 Sep. 2007
300,614 35,762 Oct. 2007
262,365 34,942 Nov. 2007
237,867 31,472 Dec. 2007
279,611 35,634 Jan. 2008
260,748 35,851 Feb. 2008
197,026 23,367 Mar. 2008
--------------------------------------------------------
1,830,396 230,985
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Number of violations noted on the above inspection reports for
391.11(b)(2) by month. Distinguish between all inspections total and
commercial zone.
------------------------------------------------------------------------
Total violations
Total violations in commercial Month Year
zone
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4,187 3,587 Sep. 2007
5,325 4,693 Oct. 2007
4,855 4,352 Nov. 2007
4,130 3,712 Dec. 2007
5,205 4,755 Jan. 2008
6,188 5,791 Feb. 2008
4,413 4,134 Mar. 2008
--------------------------------------------------------
34,303 31,024
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Number of Out-of-Service (OOS) violations noted on above inspection
reports for 391.11(b)(2) by month. Distinguish between all inspections
total and commercial zone inspections total.
------------------------------------------------------------------------
Total OOS
Total OOS Violations violations in Month Year
commercial zone
------------------------------------------------------------------------
452 188 Sep. 2007
526 217 Oct. 2007
431 178 Nov. 2007
330 145 Dec. 2007
331 130 Jan. 2008
409 187 Feb. 2008
237 84 Mar. 2008
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2,716 1,129
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______
Response to Written Question Submitted by Hon. Byron L. Dorgan to
Paul D. Cullen, Sr.
Question. Please submit for the record the results of the research
conducted by compiled by the Owner-Operator Independent Drivers
Association on Mexican carriers that were approved for the pilot
program despite a poor safety record.
Answer. [Mr. Cullen's response is a series of three documents which
are retained in Committee files.]