[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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \2\ Section 6901 of the U.S. Troop Readiness, Veterans' Care, 
Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 
(Public Law 110-28).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \4\ Consolidated Appropriations Act, 2008, Public Law 110-161, 
Division K, Title I, Section 136, (2007).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \5\ Enclosure 4 of the Department's September 6, 2007, letter 
report to Congress.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \7\ Enclosure 4 of the Department's September 6, 2007, letter 
report to Congress.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \15\ Sec. 350(a)(10)(A)-(E).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    \20\ See 49 CFR  553.21.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \22\ See 49 CFR 512.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \1\ These motor carriers are commonly known as ``long-haul'' 
carriers.
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
    \2\ See Mexican Licencia Federal Enforcement Policy dated October 
24, 2001 and Mexican Licencia Federal de Conductor Enforcement Policy 
Clarification dated November 25, 2006.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    \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
------------------------------------------------------------------------
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
------------------------------------------------------------------------

    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
------------------------------------------------------------------------
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
------------------------------------------------------------------------

    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
--------------------------------------------------------
2,716                                         1,129
------------------------------------------------------------------------

                                 ______
                                 
   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.]

                                  
