[Federal Register Volume 63, Number 212 (Tuesday, November 3, 1998)]
[Proposed Rules]
[Pages 59263-59274]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29412]


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DEPARTMENT OF TRANSPORTATION

Bureau of Transportation Statistics

49 CFR Part 1420

[Docket No. BTS-98-4659]
RIN 2139-AA05


Revision to Reporting Requirements for Motor Carriers of Property

AGENCY: Bureau of Transportation Statistics, DOT.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Bureau of Transportation Statistics (BTS) proposes to 
adopt new accounting and reporting provisions that would provide data 
for current needs while significantly reducing the annual compliance 
burden. This rulemaking is being conducted to implement portions of the 
ICC Termination Act of 1995, which transferred the motor carrier 
financial and operating data collection program to the Department of 
Transportation and made several changes to the motor carrier program. 
Class I motor carriers would file much shortened quarterly reports and 
file a simplified annual report form based largely on the current Form 
M-2. Class II carriers would continue filing only annually and would 
use the same simplified form as class I carriers. In addition, the 
Bureau proposes a system for considering requests for exemptions from 
filing and from public release of data. With this document, BTS is also 
withdrawing its proposal to establish a negotiated rulemaking advisory 
committee to assist in developing the regulations. This rulemaking 
action is taken on the Bureau's initiative.

DATES: Comments must be submitted by December 3, 1998.

ADDRESSES: Please direct comments to the Docket Clerk, Docket No. BTS-
98-4659, Department of Transportation, 400 Seventh Street, SW., Room 
PL-401, Washington, D.C. 20590, from 10 a.m. to 5 p.m. ET, Monday 
through Friday, except Federal Holidays.
    Comments should identify the regulatory docket number and be 
submitted in duplicate to the address listed above. Commenters wishing 
the Department to acknowledge receipt of their comments must submit 
with those comments a self-addressed stamped postcard on which the 
following statement is made: Comments on Docket BTS-98-4659 . The 
Docket Clerk will date stamp the postcard and mail it back to the 
commenter.
    If you wish to file comments using the Internet, you may use the 
U.S. DOT Dockets Management System website at http://dms.dot.gov. 
Please follow the instructions online for more information.

FOR FURTHER INFORMATION CONTACT: David Mednick, K-2, Bureau of 
Transportation Statistics, 400 Seventh Street, SW., Washington, DC 
20590; (202) 366-8871; fax: (202) 366-3640; e-mail: 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Electronic Access

    All comments submitted will be available for examination in the 
Rules Docket both before and after the closing date for comments. 
Internet users can access all comments received by the U.S. DOT 
Dockets, Room PL401, at the address: http://dms.dot.gov. Please follow 
the instructions online for more information and help.
    An electronic copy of this document may be downloaded using a modem 
and suitable communications software from the Federal Register 
Electronic Bulletin Board Service at (202) 512-1661. If you have access 
to the Internet, you can obtain an electronic copy at http://
www.access.gpo.gov/su_2/3docs/aces/aces140.html or http://www.bts.gov/
mcs/rulemaking.html.

II. Background

Authority

    The Secretary of Transportation has authority to establish 
regulations for the collection of certain data from motor carriers of 
property and others. Section 103 of the ICC Termination Act of 1995, 
Pub. L. 104-88, 109 Stat. 803 (1995) (codified at 49 U.S.C. 14123). 
This authority has been delegated to the Director of the Bureau of 
Transportation Statistics (BTS). 49 CFR 1.71.

Brief History of the Program

    The Interstate Commerce Commission (ICC) collected financial data 
from

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regulated motor carriers from the 1930's until its sunset at the end of 
1995, when data collection was transferred to the Department of 
Transportation (DOT). See 49 U.S.C. 11145 and its implementing 
regulations at 49 CFR Part 1420.\1\ Between 1978 and 1994, ICC 
significantly reduced the reporting requirements. It substantially 
shortened report forms and eased record retention requirements. These 
changes followed the shift in the ICC's focus from close economic 
regulation of the motor carrier industry to industry oversight. The 
last revision to accounting and reporting requirements, ICC's Ex Parte 
No. MC-206, 10 I.C.C.2d 329 (1994), contains additional background 
information.
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    \1\ The regulations were recently transferred from 49 CFR Part 
1249 to 49 CFR Part 1420. See Reports of Motor Carriers; 
Redesignation of Regulations Pursuant to the ICC Termination Act of 
1995, 63 FR 52192 (September 30, 1998).
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The Current Program

    The data collection program, as currently specified, has been in 
place since 1994, and is set forth in 49 CFR Part 1420. For motor 
carriers of property, the current regulations create three classes of 
carriers based on revenue. Class I carriers are those with annual 
operating revenues of $10 million or more, and they file annual report 
Form M-1 and quarterly report Form QFR. Class II carriers have annual 
operating revenues of between $3 and 10 million, file a simpler annual 
report, Form M-2, and do not file a quarterly report. Class III 
carriers have annual operating revenues of less than $3 million and are 
not required to file any periodic financial reports.
    Unless otherwise prohibited by law, individual carrier reports are 
made available to the public. BTS is aware of three federal agencies 
that use the data regularly--the Bureau of Economic Analysis (in 
developing the national accounts), the Department of Defense's Military 
Traffic Command (to help assess potential carriers for shipping 
military goods), and the General Services Administration (to help in 
evaluating its shipment rates). Other agencies have used the data for 
special studies. Private sector users include motor carriers, shippers, 
industry analysts, labor unions, segments of the insurance industry, 
investment analysts, and the consultants and data vendors that support 
these users.

The New Statutory Provisions

    This rulemaking is being conducted to implement the ICC Termination 
Act of 1995 (the Act), which abolished the ICC and transferred some 
former ICC functions to DOT. Revision is necessary because the Act made 
several changes to the program. Similar to the legislation replaced by 
the Act, then codified at 49 U.S.C. 11145, the Act requires DOT to 
collect certain data from motor carriers of property and motor carriers 
of passengers:

    The Secretary shall require Class I and Class II motor carriers 
to file with the Secretary annual financial and safety reports, the 
form and substance of which shall be prescribed by the Secretary; 
except that, at a minimum, such reports shall include balance sheets 
and income statements.

    The former 49 U.S.C. 11145 did not explicitly charge ICC to collect 
information relevant to safety and did not specify minimum data to be 
collected. The Act also allows DOT to collect certain other data as 
needed:

    The Secretary may require motor carriers, freight forwarders, 
brokers, lessors, and associations, or classes of them as the 
Secretary may prescribe, to file quarterly, periodic, or special 
reports with the Secretary and to respond to surveys concerning 
their operations.

The Act specifies the criteria to be used in designing the reporting 
program. DOT must consider: (1) safety needs; (2) the need to preserve 
confidential business information and trade secrets and prevent 
competitive harm; (3) private sector, academic, and public use of 
information in the reports; and (4) the public interest. In the Act, 
Congress has also explicitly called on DOT to ``streamline and 
simplify'' these reporting requirements to the maximum extent 
practicable.
    Unlike the former 49 U.S.C. 11145, the Act authorizes two types of 
exemptions from the reporting requirements. Each exemption is based on 
certain criteria and is granted for a three-year period. The first is 
an exemption from filing report forms. The requestor ``must 
demonstrate, at a minimum, that an exemption is required to avoid 
competitive harm and preserve confidential business information that is 
not otherwise publicly available.'' The second is an exemption from 
public release of data reported by the carrier. Similar to the other 
exemption, the requestor must demonstrate that ``the exemption 
requested is necessary to avoid competitive harm and to avoid the 
disclosure of information that qualifies as a trade secret or 
privileged or confidential information under section 552(b)(4) of title 
5.'' Further, for the latter exemption the requestor must not be a 
publicly held corporation or must not be subject to financial reporting 
requirements of the Securities and Exchange Commission.
    In addition to implementing the Act, the proposed changes are being 
made within the framework of other policies and in light of current 
conditions. The Paperwork Reduction Act of 1995 set a government-wide 
goal for the reduction of information collection burdens by at least 25 
percent by the end of fiscal year 1998 and calls on agencies to improve 
the quality and use of federal information to strengthen decision 
making, accountability, and openness in government and society. The 
President's Regulatory Reinvention Initiative asked agencies to reduce 
by half the frequency of reports that the public is required to 
provide. As the motor carrier industry continues to experience 
structural changes and with the sunset of the ICC, the data needs of 
the public and private sectors have changed. Modernization must also 
take into account recent significant improvements in technologies to 
collect, process, and disseminate data.

Proposed Changes Regarding the Reporting Forms

    In determining the data items to be collected, BTS started with the 
income statement and balance sheet of the current Form M-2, since these 
elements are required under the new Act. From this starting point, data 
items, and the amount of detail for data items, were added or 
subtracted. In applying the four criteria, BTS received information 
from a variety of sources: comments received during the recent renewal 
process for Forms M-1, M-2, and QFR, comments received during the 
proposal to conduct negotiated rulemaking, customer feedback, and 
experience gained in administering the data collection program. Based 
on these, BTS is proposing several changes to the reporting 
requirements. As detailed below, we invite your comments on this 
proposal.
    Under the proposal, both class I and class II carriers would submit 
annually a modified version of Form M-2 to be called Form M. Quarterly 
reporting would be retained for class I carriers but would be 
drastically reduced. The Bureau believes that the information on the 
new Form M and on the modified QFR would serve the large majority of 
current information needs, while reducing the burden on industry by 45 
percent. The number of data items for Form M would be slightly less 
than the current Form M-2's and we estimate respondent burden would 
drop from ten hours to nine for class II carriers. Class I carriers 
would experience a greater decrease, from the current 25 burden hours 
for Form M-1 to nine hours for the new form. We estimate that the 
burden hours for the new Form QFR would be reduced from two hours to a

[[Page 59265]]

half hour. The change in reporting burden is summarized in the tables 
below.

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                                                                              Burden hours/report
                                                               Number of  -------------------------- Total hours
                                                                carriers      Annual     Quarterly
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                                                     Current
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Class I.....................................................          900           25            2       29,700
Class II....................................................        1,900           10  ...........       19,000
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    Total...................................................        2,800  ...........  ...........       48,700
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                                              Under proposed changes
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Class I.....................................................          900            9           .5        9,900
Class II....................................................        1,900            9  ...........       17,100
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    Total...................................................        2,800  ...........  ...........       27,000
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Proposal regarding public release of data

    Unlike the former 49 U.S.C. 11145, the Act explicitly authorizes 
two types of exemptions--an exemption from the reporting requirements 
and an exemption from public release of data. For each, the requestor 
must demonstrate, at a minimum, that the exemption is required to avoid 
competitive harm. If a carrier meets the applicable standard and is 
granted confidentiality, business information would not be publicly 
disclosed. The carrier would then no longer qualify for an exemption 
from filing. Therefore, BTS proposes to consider only requests for 
exemptions from public release, and not for exemptions from reporting 
requirements. With confidentiality protection, confidential information 
would not be released publicly, and competitive harm would no longer be 
a concern.
    Under the Act, 49 U.S.C. 14123(c), requests for confidentiality 
must go through a notice and comment period and DOT must make a 
decision within 90 days of the request. BTS proposes the following 
procedure. Petitions relating to a current year's report must be 
received by the report's due date. The petition can be made either 
before submission of the report or simultaneous with submission. 
Carriers filing a petition after a report's deadline will not be able 
to later request confidentiality for the report. The report either 
would have already been submitted, and therefore already been available 
to the public, or the report should have been submitted but was not. 
Regarding content of the petition, at a minimum it must contain 
specific evidence that the carrier is likely to suffer competitive 
harm.
    DOT will publish a Federal Register notice listing the petitions 
received for a given report and announcing a 30-day public comment 
period. DOT will make a decision on the petitions within 90 days of the 
report's due date. By waiting until all petitions for exemptions are 
received for a given report, those who wish to comment will be able to 
do so at one time rather than throughout the year. DOT will not release 
a petitioning carrier's reports to the public while its petition is 
pending.

Copies of the Forms

    You can request copies of current or proposed forms from the 
contact listed in this notice. If you have access to the Internet, you 
can also obtain copies at http://www.bts.gov/mcs/rulemaking.htm.

Proposal To Establish a Negotiated Rulemaking Advisory Committee

    BTS had earlier proposed establishing a negotiated rulemaking 
advisory committee in 61 FR 64849 (Dec. 9, 1996). The committee was to 
consider relevant issues and attempt to reach a consensus in developing 
regulations to implement the ICC Termination Act of 1995 regarding 
motor carriers of property. After receiving comments on this proposal 
and holding a public meeting on the subject, BTS determined that this 
process would not provide a significant advantage over conventional 
informal rulemaking. One of the factors to consider before choosing 
negotiated rulemaking is whether there is a reasonable likelihood that 
a committee will reach consensus on the proposed rule within a fixed 
period of time. BTS believes that consensus would not be reached in 
these circumstances on several of the issues, primarily on public 
release of the reports.

III. Request for Comments

    The goal of this proposed rulemaking is to reach an equitable and 
practical balance, within the context of the ICC Termination Act of 
1995, between the need for information and the goal of reducing 
reporting burden. BTS examined the accounting and reporting 
requirements in an effort to continue collecting meaningful data on the 
motor carrier industry while streamlining these requirements where 
possible. This proposal would create a simplified report for those 
carriers earning over $10 million in annual operating revenues while 
continuing to provide data helpful to understanding the industry. It 
would also implement a process for companies to seek confidentiality 
protection to avoid competitive harm. BTS requests comments concerning 
the above revisions to the information collection. You may wish to 
address one or more of the following topics: (1) Whether particular 
data items should be included or deleted from the annual and quarterly 
reporting requirements and why; (2) whether the instructions for the 
data items should be carried over from the current forms or whether 
they should be modified; (3) whether BTS should continue quarterly 
reporting; (4) how your comments to the proposal relate to the four 
areas of consideration listed in 49 U.S.C. 14123(b); (5) whether BTS 
accurately estimated the reporting burden and costs; (6) how BTS can 
minimize reporting burden, including the use of automated collection 
techniques or other forms of information technology; (7) the proposed 
process for handling requests for exemptions; (8) ways to reduce the 
burden on any segments of the industry that may be disproportionately 
affected, such as small entities; (9) how BTS can enhance the quality, 
utility, or clarity of the information collected; and (10) whether the 
regulations are clearly written.

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IV. Rulemaking Analyses and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

    This proposed rule is not considered a significant regulatory 
action under section 3(f) of Executive Order 12866 and, therefore, is 
not subject to review by the Office of Management and Budget.
    This proposed rule is not considered significant under the 
regulatory policies and procedures of the Department of Transportation 
(44 FR 11034). The proposal would reduce industry reporting burden by 
21,700 hours or 45 percent. BTS estimates that the annual cost of 
reporting to be just over $1 million for the industry. This breaks down 
to $418 per year for class I carriers and $342 per year for class II 
carriers. The estimate is based on reporting costs of $38 per hour 
including overhead.
    The major beneficiaries of the data collection are the federal 
government, the motor carrier industry, industry associations, 
transportation investment analysts, transportation research analysts, 
and motor carrier safety analysts. The program provides data that are 
used in developing the national accounts, data for monitoring industry 
trends, and data useful to the public and private sectors regarding the 
operation and health of the trucking industry and individual carriers.

Executive Order 12612

    This proposed rule has been analyzed in accordance with the 
principles and criteria contained in Executive Order 12612 
(``Federalism'') and DOT has determined the rule does not have 
sufficient federalism implications to warrant the preparation of a 
Federalism Assessment.

Initial Regulatory Flexibility Analysis

    I certify this proposed rule will not have a significant economic 
impact on a substantial number of small entities. The definition of 
``small business'' is contained in the Small Business Administration's 
small business size standard regulations. For motor carriers of 
property, small businesses are those with annual receipts of up to 
$18.5 million. Under the current classification, there are about 2,800 
reporting carriers of which an estimated 2,180 (or 78 percent) are 
small businesses (all class II carriers and 31 percent of class I 
carriers are classified as small businesses). The proposed amendments 
would decrease reporting burden for all reporting carriers. Class I 
carriers would realize a 67 percent reduction in burden hours while 
class II would realize a 10 percent reduction.

Environmental Assessment

    The Bureau of Transportation Statistics has analyzed the proposed 
amendments for the purposes of the National Environmental Protection 
Act. The proposed amendments will not have any impact on the quality of 
the human environment. Accordingly, an Environmental Impact Statement 
is not required.

Initial Paperwork Reduction Act Analysis

    The reporting and record keeping requirements associated with this 
rule are being sent to the Office of Management and Budget in 
accordance with 44 U.S.C. Chapter 35 under OMB Numbers 2139-0002, 2139-
0004, and 2139-0005. Administration: Bureau of Transportation 
Statistics. Titles: Quarterly Report of Class I Motor Carriers of 
Property, Annual Report of Class I Motor Carriers of Property, and 
Annual Report of Class II Motor Carriers of Property. Need for 
Information: information on the health of the motor carrier of property 
industry, its impact on the economy, and industry changes that may 
affect national transportation policy. Frequency: Annually. Burden 
Estimate: 27,000 annual hours. Average Annual Burden Hours per 
Respondent: class I carriers--11 annual hours, class II carriers--9 
annual hours. For further information contact: Office of Information 
and Regulatory Affairs, Office of Management and Budget, Room 10235, 
New Executive Office Building, Washington, DC 20503; Attention Desk 
Officer for the Bureau of Transportation Statistics or David Mednick at 
the address listed above under For Further Information Contact.

Regulation Identifier Number

    A regulation identifier number (RIN) is assigned 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. The RIN number 2139-AA05 contained in 
the heading of this document can be used to cross reference this action 
with the Unified Agenda.

List of Subjects in 49 CFR Part 1420

    Motor carriers, Reporting and classification.

Proposed Rule

    Accordingly, the Bureau of Transportation Statistics proposes to 
amend 49 CFR Part 1420 Reports of Motor Carriers, as follows:

PART 1420--REPORTS OF MOTOR CARRIERS

    The authority citation for Part 1420 is revised to read as follows:

    Authority: 49 U.S.C. 14123.

    2. Section 1420.1 is revised to read as follows:


Sec. 1420.1  Annual reports of motor carriers of property, motor 
carriers of household goods, and dual authority carriers.

    (a) Annual Report Form M. All class I and class II common and 
contract carriers of property, including household goods and dual 
authority motor carriers, must file Motor Carrier Annual Report Form M. 
Carriers must file the annual report on or before March 31 of the year 
following the year to which it relates. For classification criteria, 
see Sec. 1420.2.
    (b) Quarterly Report Form QFR. All class I common motor carriers of 
property and class I household goods motor carriers must complete and 
file motor carrier Quarterly Report Form QFR (Form QFR). The quarterly 
accounting periods end on March 31, June 30, September 30, and December 
31. The quarterly reports must be filed within 30 calendar days after 
the end of the reporting quarter.
    (c) Carriers must file the quarterly and annual reports in 
duplicate with the Bureau of Transportation Statistics, K-27, U.S. 
Department of Transportation, 400 Seventh Street, SW., Washington, DC 
20590. You can obtain copies of the report forms from the Bureau of 
Transportation Statistics.
    3. In section 1420.2, paragraph (b)(4) is revised to read as 
follows:


Sec. 1420.2  Classification of carriers--motor carriers of property, 
household goods carriers, and dual property carriers.

* * * * *
    (b) * * *
    (4) Carriers must notify the Bureau of Transportation Statistics 
(BTS) of any change in classification or any change in annual operating 
revenues that would cause a change in classification. The carrier may 
request a waiver or an exception from the regulations in this part in 
unusual or extenuating circumstances, where the classification process 
will unduly burden the carrier, such as partial liquidation or 
curtailment or elimination of contracted services. The request must be 
in writing, specifying the conditions justifying the waiver or 
exception. BTS will notify the carriers of any change in 
classification.
* * * * *
    4. In section 1420.2(b)(5), remove the term ``an Annual Report 
(Form M-1 or

[[Page 59267]]

Form M-2)'' and add ``Annual Report Form M'' in its place.
    5. In section 1420.2, paragraph (c) is removed (Note A is 
unchanged).
    6. Section 1420.6 is added to read as follows:


Sec. 1420.6  Requests for exemptions from public release.

    (a) In general. This section governs requests for exemptions from 
public release of reports filed under Sec. 1420.1.
    (b) Criteria. The Bureau of Transportation Statistics (BTS) will 
grant a request upon a proper showing that:
    (1) The filer is not a publicly held corporation or the filer is 
not subject to financial reporting requirements of the Securities and 
Exchange Commission; and
    (2) The exemption is necessary to avoid competitive harm and to 
avoid the disclosure of information that qualifies as trade secret or 
privileged or confidential information under 5 U.S.C. 552(b)(4).
    (c) Valid requests. For a request to be valid, it must contain, at 
a minimum, assertions that the request meets the criteria in paragraph 
(b) of this section, including specific evidence that the carrier is 
likely to suffer competitive harm.
    (d) Procedure. Requests for an exemption under this section may be 
made at any time during the year. However, a request will be deemed 
applicable to only those reports due on or after the date the request 
is received. Petitions received after a report's due date will only be 
considered for the following year's or quarter's report. Except as 
provided in this paragraph, requests must be made separately for report 
Forms M and QFR. After each due date of reports specified in 
Sec. 1420.1, DOT will publish a notice in the Federal Register listing 
all of the valid pending requests for an exemption from public release 
and giving a 30-day public comment period. DOT will grant or deny each 
request no later than 90 days after the due date of the report for 
which the request applies. DOT will either publish a notice in the 
Federal Register specifying whether the request was granted or denied, 
or will give notice directly to the carrier, or will do both. A carrier 
submitting a petition regarding Form M can also request that it cover 
Form QFR, in which case DOT will decide both requests at the same time. 
Assuming the carrier's fiscal year coincides with the calendar year, 
the following table summarizes report and petition deadlines:

------------------------------------------------------------------------
                               Report and petition
           Report                      due              Decision due
------------------------------------------------------------------------
Annual Form M...............  March 31............  June 30.
First Quarter Form QFR......  April 30............  July 31.
Second Quarter Form QFR.....  July 31.............  October 31.
Third Quarter Form QFR......  October 31..........  January 31.
Fourth Quarter Form QFR.....  January 31..........  April 30.
------------------------------------------------------------------------

    (e) Pendency. A request is deemed pending from the date it is 
received by BTS until it is granted or denied by BTS. BTS will not 
release publicly, unless otherwise required by law, any report for 
which a valid request for an exemption from public release is pending.
    (f) Period of exemptions. If a request for an exemption under this 
section is granted, BTS will not publicly release any reports covered 
by the granted exemption, unless otherwise required by law. Exemptions 
granted under this section will cover a period of three reporting 
years.

    Note: The following forms will not appear in the Code of Federal 
Regulations.
Robert A. Knisely,
Deputy Director.

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[FR Doc. 98-29412 Filed 11-2-98; 8:45 am]
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