[Federal Register Volume 65, Number 163 (Tuesday, August 22, 2000)]
[Rules and Regulations]
[Pages 50919-50935]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-21055]


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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Part 385

[Docket No. FMCSA-99-5467 (Formerly Docket No. FHWA-99-5467)]
RIN 2126-AA42 (Formerly RIN 2125-AE56)


Safety Fitness Procedures

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Final rule.

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SUMMARY: The FMCSA is implementing section 4009 of the Transportation 
Equity Act for the 21st Century (TEA-21) by amending the safety fitness 
procedures of the Federal Motor Carrier Safety Regulations. This action 
prohibits all motor carriers found to be unfit from operating 
commercial motor vehicles (CMVs) in interstate commerce. The FMCSA will 
treat an unsatisfactory safety rating as a determination of unfitness.

EFFECTIVE DATE: This rule is effective on November 20, 2000.

FOR FURTHER INFORMATION CONTACT: Ms. Deborah M. Freund, Vehicle and 
Roadside Operations Division, Office of Policy and Program Development, 
FMCSA, or Mr. William C. Hill, Regulatory Development Division, Office 
of Policy and Program Development, FMCSA, (202) 366-4009; or Mr. 
Charles E. Medalen, Office of the Chief Counsel, (202) 366-1354, 
Federal Highway Administration, 400 Seventh Street, SW., Washington, DC 
20590-0001. Office hours are from 7:45 a.m. to 4:15 p.m., e.t., Monday 
through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access

    Internet users may access all comments received by the U.S. DOT 
Dockets, Room PL-401, by using the universal resource locator (URL): 
http://dms.dot.gov. It is available 24 hours each day, 365 days each 
year. 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 Government Printing 
Office's Electronic Bulletin Board Service at (202) 512-1661. Internet 
users may reach the Office of the Federal Register's home page at 
http://www.nara.gov/fedreg and the Government Printing Office's 
database at http://www.access.gpo.gov/nara.

Creation of New Agency

    On December 9, 1999, the President signed the Motor Carrier Safety 
Improvement Act of 1999 (MCSIA) (Public Law 106-159, 113 Stat. 1748). 
The new statute established the Federal Motor Carrier Safety 
Administration in the Department of Transportation. On January 4, 2000, 
the Secretary rescinded the authority previously delegated to the 
Office of Motor Carrier Safety (OMCS) (65 FR 220). This authority is 
now delegated to the FMCSA.
    The motor carrier functions of the OMCS' Resource Centers and 
Division (i.e., State) Offices have been transferred to FMCSA Service 
Centers and FMCSA Division Offices, respectively. Rulemaking, 
enforcement, and other activities of the Office of Motor Carrier Safety 
while part of the FHWA, and while operating independently of the FHWA, 
will be continued by the FMCSA. The redelegation will cause no changes 
in the motor carrier functions and operations previously handled by the 
FHWA or OMCS. For the time being, all phone numbers and addresses are 
unchanged.

Background

    Section 4009 of TEA-21 (Public Law 105-178, 112 Stat. 107, at 405, 
June 9, 1998) amends 49 U.S.C. 31144 which requires the Secretary of 
Transportation to maintain, by regulation, a procedure for determining 
the safety fitness of an owner or operator of commercial motor vehicles 
(CMVs). Section 31144 was originally enacted by section 215 of the 
Motor Carrier Safety Act (MCSA) of 1984 (Public Law 98-554, 98 Stat. 
2832). The FMCSA regulations at 49 CFR parts 385 and 386 already 
include most of the requirements of section 4009.
    Section 4009 transferred the prohibitions in 49 U.S.C. 5113 to 
section 31144. Section 5113 was enacted by section 15(b) of the MCSA of 
1990 (Public Law 101-500, 104 Stat. 1213, 1218, November 3, 1990) and 
prohibited motor carriers rated ``unsatisfactory'' from using CMVs to 
transport, in interstate commerce, starting on the 46th day after the 
rating was issued, more than 15 passengers (including the driver) or 
hazardous materials (HM) in quantities requiring placarding. It also 
prohibited Federal agencies from using ``unsatisfactory'' rated motor 
carriers to transport more than 15 passengers and placardable 
quantities of HM. The regulation implementing section 5113 has been in 
effect since 1991 (49 CFR 385.13).
    Section 4009 added a prohibition applicable to all owners and 
operators of CMVs not previously subject to 49 U.S.C 5113--that is, 
those not transporting HM in quantities requiring placarding or 
passengers--from using those vehicles in interstate commerce starting 
on the 61st day after being found ``unfit.'' It also prohibits Federal 
agencies from using those owners and operators to provide interstate 
transportation of non-HM freight.
    Because 49 U.S.C. 31144(b), as amended by section 4009, provides 
that ``[t]he Secretary shall maintain, by regulation, a procedure for 
determining the safety fitness of an owner or operator'' [emphasis 
added], the FMCSA concludes that Congress authorized the continued use 
of the safety fitness rating regulation in effect on June 9, 1998, the 
date of enactment of TEA-21, until a rule to implement section 4009 is 
adopted and made effective.
    The similarity between the current 49 U.S.C. 31144 and the previous 
49 U.S.C. 31144 also convinces the FMCSA that Congress intended section 
4009 to authorize the application of the principles embodied in section 
15(b) of the MCSA of 1990 to the entire range of motor carriers that 
operate CMVs in interstate commerce. The only difference mandated by 
section 4009 is that carriers of general freight would have 60 days 
after the agency makes a determination of ``unfitness,'' while

[[Page 50920]]

passenger and HM carriers have 45 days, in which to improve the safety 
of their operations or cease operating in interstate commerce. Because 
the MCSA of 1990 explicitly referred to the three-part rating scheme 
used by the FHWA (satisfactory, conditional, unsatisfactory) and 
directed the agency to prohibit unsatisfactory rated motor carriers 
from transporting passengers and HM after the 45 day period, the FMCSA 
concludes that the functionally equivalent, though not identical, 
requirements of section 4009 authorize, but do not require, the FMCSA 
to continue using its current safety fitness rating standards and 
methodology. The FMCSA will use an unsatisfactory rating assigned under 
the Safety Fitness Rating Methodology (SFRM) in part 385 as a 
determination of ``unfitness.'' This policy is congruent with that of 
section 15(b) of the MCSA of 1990. There is nothing in the legislative 
history concerning section 4009 of TEA-21 that suggests the FMCSA 
should implement a different approach.

Docket Comments to the NPRM

    On August 16, 1999 (64 FR 44460), the FHWA proposed amending 
Secs. 385.1, 385.11, 385.13, 385.15, and 385.17 of the FMCSRs to 
prohibit all motor carriers found by the Secretary to be unfit from 
operating CMVs in interstate commerce.
    Comments were received from the following:
    Five motor carrier industry associations: American Bus Association 
(ABA); American Moving and Storage Association (AMSA); American 
Trucking Associations (ATA); National Association of Small Trucking 
Companies (NASTC); National Private Truck Council (NPTC);
    Four motor carriers: Boyle Transportation (Boyle); Crete Carrier 
Corporation and its affiliates Sunflower Carriers, Shaffer Trucking, 
Inc., and HTL Truck Lines (Crete); Greyhound Lines (Greyhound); Werner 
Enterprises, Inc. (Werner);
    Two labor organizations: Amalgamated Transit Union (ATU) and 
International Brotherhood of Teamsters (IBT);
    One organization representing shippers: National Industrial 
Transportation League (NITL);
    Two safety advocacy organizations: the Insurance Institute for 
Highway Safety (IIHS) and Parents Against Tired Truckers (PATT);
    Two State departments of transportation: Oregon Department of 
Transportation and Iowa Department of Transportation.

General Comments

    The ATA supported the FMCSA's new authority to require all unsafe 
motor carriers to cease their operations in interstate commerce, saying 
``[t]he highway is our workplace and we continue to pursue ways to make 
our workplace safer.'' Nevertheless, the ATA believes the path the 
FMCSA has chosen reflects a choice for expediency. The ATA took issue 
with the agency's interpretation of congressional intent and with what 
it views as the agency's inconsistent approach towards the adoption of 
performance-based safety indicators and enforcement outcomes. These 
comments are discussed under the topic headings below.
    Werner agreed with and supported the ATA's position on the NPRM. 
However, it disagreed that an unsatisfactory safety rating should be 
considered a determination of safety fitness, and argued that there is 
little relationship between recordkeeping violations and the motor 
carrier's accident rate or overall safety. Werner also expressed 
concern with the methods currently used to perform compliance reviews 
and assign safety ratings.
    The NASTC generally supported the goal of statutes, regulations, 
and enforcement actions to ensure CMV safety. It questioned the FMCSA's 
proposal to link an unsatisfactory safety rating with a determination 
of unfitness, as well as the suitability of the time periods proposed 
between the FMCSA's notification to a motor carrier of its proposed 
unsatisfactory safety rating and the agency's final determination.
    The NPTC generally supported the FMCSA's proposal as providing a 
means to require motor carriers with documented poor safety performance 
to cease operations in interstate commerce. However, the NPTC expressed 
concern over three issues: the FMCSA's failure to propose a revised 
performance-based SFRM; the appropriateness of equating unfitness with 
an unsatisfactory safety rating without revising the SFRM; and the 
enforcement of shutdown provisions. These comments are discussed under 
the topic headings below.
    The National Industrial Transportation League (NITL) ``supports the 
proposed regulations as an appropriate exercise of the agency's 
regulatory authority in the critically important area of truck safety. 
Indeed the League commends the FHWA for its thoughtful approach in 
implementing the requirements of TEA-21.'' The NITL believed that the 
agency correctly interpreted the nexus between a motor carrier's 
unsatisfactory safety rating and the determination of ``unfitness.'' 
Although the NITL agreed with the FMCSA's assertion that TEA-21 does 
not require the agency to implement a new safety fitness standard, it 
believes that the agency should continue to evaluate and refine the 
current system. The NITL offered several recommendations related to 
public access to safety ratings, revised rating categories, and re-
rating of motor carriers currently holding unsatisfactory safety 
ratings. These comments are discussed under the topic headings below.
    Parents Against Tired Truckers supported the FMCSA's proposal and 
urged the DOT and the FMCSA to provide sufficient funding and personnel 
to successfully implement the new regulation. The Insurance Institute 
for Highway Safety also supported the proposal and hopes the regulation 
will deter violations of Federal motor carrier safety regulations.
    Other commenters, including the two States, labor organizations, 
and some of the industry associations, discussed specific provisions of 
the NPRM and issues related to motor carrier safety compliance review 
and enforcement processes. We address their comments under the 
appropriate subject headings.

Relationship Between ``Unfit'' Safety Determination and 
``Unsatisfactory'' Safety Rating

    The ATA contended that Congress' use of the term ``is not fit'' in 
section 4009 of TEA-21 was deliberate, and that the FMCSA 
``misconstrued the legislative history of [49 U.S.C.] section 31144 
when it said `First, [Congress] transferred the substance of 49 U.S.C. 
5113 to section 31144.' '' The ATA believes that Congress ``rejected 
much of the substance of Section 5113 and replaced it with Section 
31144.'' Werner also does not support the notion of an unsatisfactory 
rating as a determination of unfitness. Crete holds that the wording of 
section 4009 indicates that Congress intended the ``safety fitness 
compliance determination'' and a ``determination of fitness to 
operate'' (emphasis in original) to be two distinct processes.
    The AMSA asserted that the FMCSA has misinterpreted section 15(b) 
of the MCSA of 1990 and section 4009 of TEA-21 in drawing an 
equivalence between a declaration of unfitness and a safety rating of 
unsatisfactory. The AMSA stated that, ``[s]ince Congress did not 
explicitly direct the Secretary of Transportation to maintain the same 
safety fitness procedures for household goods carriers as for carriers 
of

[[Page 50921]]

hazardous materials,'' that the FMCSA should not do so. The AMSA also 
cited the MCSA of 1990 to support its belief that, ``Except for 
intentional bad acts (e.g., falsification of records of duty status or 
drivers' medical certificates), Congress did not intend for record 
keeping violations to require enforcement actions as severe as ceasing 
operations.'' The AMSA also provided statistics prepared by its Safety 
Management Council on 1998 fourth-quarter accidents experienced by 17 
companies, as well as industry accident statistics covering the period 
1989-1998 to support its point of view. For those years, between 15 and 
20 companies reported total miles traveled, numbers of accidents in 
several categories (total accidents, DOT recordable, preventable DOT 
recordable, total preventable, and fatal) and the corresponding 
accident rates per million vehicle miles. Their DOT recordable accident 
rates ranged from 0.921(in 1989) to 0.644 (in 1998), fatalities ranged 
from 0.082 (in 1989) to 0.031 (in 1998).

FMCSA Response

    The FMCSA continues to differ with the ATA's reading of the 
legislative history of 49 U.S.C. 5113 and 31144. The agency's NPRM (64 
FR 44460, at 44461) addressed this issue and responded to the ATA's 
comment to the ANPRM on the same subject (at 44464).
    The agency developed the NPRM to respond to congressional direction 
contained in TEA-21 and predecessor legislation. Responding to the 
AMSA's second comment, Congress did explicitly direct the Secretary to 
prohibit the operation in interstate commerce by motor carriers 
determined to be unfit. In doing so, Congress extended the earlier 
prohibition applicable to motor carriers of HM to motor carriers of 
non-HM freight. A fair reading of section 4009 of TEA-21 supports the 
action adopted in this final rule. Given the enactment of 49 U.S.C. 
31144 in the Motor Carrier Safety Act of 1984 and the FHWA's 
implementation of that section in 49 CFR Part 385, and the enactment of 
49 U.S.C. 5113 in the Hazardous Materials Uniform Safety Act of 1990 
and the FHWA's implementation of that section in 49 CFR 385.13, the 
only substantive change made in section 4009 is the extension of the 
prohibition against operations after unsatisfactory ratings are 
received to all motor carriers of property. The 1984 Act required the 
Secretary to ``prescribe regulations'' to determine the safety fitness 
of owners and operators of commercial motor vehicles. The FHWA 
prescribed such regulations in Part 385, employing a rating system, 
consisting of satisfactory, conditional and unsatisfactory ratings.
    In 1990, the Congress recognized this process by prohibiting 
transportation by motor carriers transporting hazardous materials or 
passengers after receiving an ``unsatisfactory'' rating. In section 
4009 of TEA-21, Congress directed the Secretary to ``maintain by 
regulation a procedure for determining the safety fitness of an owner 
or operator,'' again a recognition by Congress that a procedure was 
already in place. Congress did not require a new procedure or the use 
of a new nomenclature. The former section 5113, which used the term 
``unsatisfactory'' from the regulations as the determinant for when a 
carrier is no longer fit to operate, is in substance incorporated into 
the new 49 U.S.C. 31144, which speaks only in terms of fitness to 
operate. But the new section 31144 applies the section 5113 
prohibitions to all motor carriers under a common procedure for 
determining safety fitness that it requires the Secretary to 
``maintain.''
    The agency does not read the ``maintain'' provision to mean that we 
must continue to use the same nomenclature, nor even the same factors 
in making the determination, but it certainly does not prohibit it. As 
the agency has stated publicly and throughout these notices, the 
fitness determination factors are under review, and we intend to 
address that entire issue in a subsequent rulemaking.
    The table below compares the AMSA crash rates (per 100 million 
vehicle miles traveled) to FMCSA rates for fatal and recordable 
crashes.

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                                                                 FMCSA
                                                                fatality       AMSA        FMCSA         AMSA
                                                              rate, comb.    fatility    recordable   recordable
                                                                 trucks        rate      crash rate   crash rate
----------------------------------------------------------------------------------------------------------------
1989........................................................          4.6          8.2           na         92.1
1990........................................................          4.4          4.1           na         77.2
1991........................................................          3.7          6.1           na         77.2
1992........................................................          3.4          1.8           na         79.1
1993........................................................          3.6          3.1         80.1         72.6
1994........................................................          3.5          2.5         78.6         77.7
1995........................................................          3.2          3.2         64.5         77.0
1996........................................................          3.3          4.4         76.6         83.0
1997........................................................          3.3          3.1         76.7         87.0
1998........................................................          3.2          3.1         70.2         64.4
----------------------------------------------------------------------------------------------------------------

    Both fatal and recordable accident rates provided by the AMSA for 
the moving industry fluctuated significantly from year to year. Fatal 
crash rates have been generally comparable to the FMCSA rates. AMSA's 
figures on recordable crash rates were lower than the FMCSA national 
rates in 1993, 1994, and 1998, but higher in 1995, 1996, and 1997. 
Because the AMSA crash data are drawn from a far smaller population 
than the FMCSA data, they are subject to significantly higher 
fluctuations. Taking the record as a whole, however, the FMCSA believes 
that the safety performance illustrated by these statistics does not 
support the AMSA's contention that household goods carriers are 
uniquely safe and should therefore be given regulatory relief.

Performance Basis of Rating

    The ATA argued that the approach of the NPRM is not consistent with 
the FMCSA's progress in shifting toward performance-based indicators 
and outcomes. It pointed out that the FMCSA has devoted considerable 
resources to developing two performance-based safety tools: Safestat, 
which prioritizes motor carriers for safety review based primarily upon 
performance indicators, and the Motor Carrier Safety Improvement 
Process (MCSIP) to trigger State-based CMV registration sanctions 
against unsafe motor carriers.
    The ATA claimed that the current safety rating process is 
``seriously flawed'' because it ``provides a measure of compliance, not 
safety, by its very design.'' The ATA contended that the

[[Page 50922]]

FMCSA ``has been reluctant to consider the rating as a measure of 
safety.'' The organization expressed disappointment with the FMCSA's 
failure to implement a ``more performance-based'' rating process, but 
it then took the agency to task for alleged inconsistencies in its 
treatment of motor carriers' performance and regulatory compliance. As 
an example, the ATA criticized the FMCSA's weighting of hours-of-
service violations in the SFRM: ``[FMCSA] does not make the connection 
through data or research that fatigue is the cause of driver error.'' 
Crete also criticized the agency's ``exceptional emphasis given in the 
current regulations to compliance with the FMCSA's outmoded hours of 
service regulations.''
    The ATA contended that the FMCSA's research, specifically the ``New 
Entrant Safety Research: Final Report,'' April 1998, makes the case 
that there is ``no linear relationship between compliance and safety.'' 
The ATA focused on the report's finding that a motor carrier's 
regulatory compliance improves with its experience, but that the 
relationship between experience and crashes was not directly related.
    The ATA exhorted the FMCSA: ``If the agency is permanently married 
to the shut down procedures it has proposed, we urge an immediate 
correction to the rating system.'' The ATA recommended that the FMCSA 
give additional weight to the ``accident'' factor, reduce the weight 
for hours-of-service violations, and consider only accidents deemed the 
``fault'' of the CMV driver when calculating a motor carrier's accident 
rate.
    Werner contended that there is a ``lack of uniformity between 
various regions and the method of sampling used during a compliance 
review.'' Werner also argued that the potential outcome of a proposed 
unsatisfactory rating is serious in the extreme, given the ``large 
number of motor carriers subject to review and the random aspect of 
enforcement.''
    The ABA stated that it has continued concerns with the FMCSA's 
current safety rating process, and urged the agency to move forward 
with procedures that are performance-based as opposed to recordkeeping-
oriented.
    Crete recommended that the FMCSA use the national ``average'' 
recordable accident rate as an initial baseline performance standard 
for a motor carrier's operational safety fitness. A motor carrier whose 
rate was more than double the national average might be considered to 
have demonstrated unsatisfactory compliance with the compliance review 
(CR) accident factor and could be deemed unfit to continue to operate 
in interstate commerce.
    The NPTC echoed this viewpoint. It would support a rating system 
that is based upon a motor carrier's ``crash history, driver behavior, 
vehicle condition, and safety management systems.'' The NPTC called for 
the FMCSA to develop a procedure that is ``unambiguous, not subject to 
interpretation, and have standards to assure [the process to require an 
unfit motor carrier to cease its interstate operations is] applied 
equitably.'' The organization was very concerned that the FMCSA had 
proposed to continue to use its current SFRM. The NPTC believed ``this 
action minimizes the agency's commitment to review and develop a rating 
system based more on safety performance, and less on paperwork 
compliance.''
    The NPTC recommended that the FMCSA issue an interim final rule 
``with a time certain deadline'' to implement the revisions proposed. 
The NPTC reasoned that this would allow the agency to quickly implement 
the provisions of section 4009, but would still provide an opportunity 
for the FMCSA to review its outcomes to ensure that the regulation was 
being applied properly.

FMCSA Response

    The FMCSA already places considerable reliance on the performance 
criteria in the SFRM, e.g., vehicle and driver violations and accident 
rates. The FMCSA also uses performance data to set priorities for CRs 
of motor carriers: A motor carrier that has accident and vehicle out-
of-service experience below a statistical threshold, and that has not 
generated substantive complaints concerning its operational safety, is 
not likely to face a CR. The safety rating assigned after the CR 
reflects a measure of both a motor carrier's safety performance and its 
compliance with safety regulations. Those regulations exist because of 
their nexus to safety of operations. An NPRM soon to be published will 
address the issue of what the ATA--and the FMCSA--view as a 
misinterpretation of safety ratings.
    The FMCSA has for several years been considering the feasibility of 
a more performance-based method of evaluating the safety of motor 
carriers. In a 1997 final rule amending 49 CFR part 385 (62 FR 60035, 
November 6, 1997), the agency announced that an ANPRM would be 
published to solicit advice and data on such a rating system. The ANPRM 
was published on July 20, 1998 (63 FR 38788). The agency has since 
decided to separate the short-term rulemaking implementing section 4009 
of TEA-21 from the longer-range effort to create performance-based 
rules. The SafeStat algorithm, which incorporates performance 
measures--accidents and roadside out-of-service rates--has become a 
more integral part of the FMCSA program for selecting motor carriers 
for CRs. The agency is also strengthening its focus on motor carriers 
that have demonstrated continuing unwillingness or inability to address 
safety performance problems. Under the PRISM \1\ program, these motor 
carriers may ultimately face the suspension of their CMV registration 
privileges.
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    \1\ Performance and Registration Information Systems Management, 
a program which links State commercial motor vehicle registration to 
the safety fitness of motor carriers.
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    Nevertheless, databases sufficiently reliable and populated to 
support a truly comprehensive performance-based rating system are still 
under development. Since the congressional mandate embodied in section 
4009 cannot be delayed indefinitely pending their full deployment, the 
FMCSA has concluded that the best alternative is to adopt the proposal 
set forth in the NPRM. An interim final rule incorporating changes to 
the SFRM that were not published for notice and comment, as required by 
the Administrative Procedure Act, would add a new element of legal 
uncertainty--the very thing that the NPTC wishes to avoid. The 
regulatory requirements that several commenters sought to trivialize as 
``paperwork compliance'' in fact deal with critical matters, such as 
monitoring drivers' hours of service and checking to verify that their 
CDLs have not been suspended.
    Concerning the ATA's comment that the ``[FMCSA] does not make the 
connection through data or research that fatigue is the cause of driver 
error,'' we refer the ATA to the extensive research literature the 
agency reviewed on the subject of fatigue and loss of alertness. [See 
DOT Docket FMCSA-97-2350]. Although the data are not available to 
statistically determine the incidence of fatigue, it is noteworthy that 
driver fatigue was identified by a broad spectrum of over 200 motor 
carrier and highway safety experts participating in the Department's 
1995 Truck and Bus Safety Summit as the top issue needing to be 
addressed to improve motor carrier safety. The FMCSA believes that the 
statistics of police-reported large-truck fatal crashes do not 
adequately reflect the contributing role that fatigue may play in 
crashes. Fatigue increases the likelihood that a driver will not pay

[[Page 50923]]

sufficient attention to driving or commit other mental errors. In-depth 
studies of crashes have found that inattention and other mental lapses 
contribute to as much as 50 percent of all crashes. While fatigue may 
not be involved in all these crashes, it clearly contributes to some of 
them.
    Addressing the ATA's comment on the report, ``New Entrant Safety 
Research: Final Report,'' the FMCSA agrees that the ATA's explanation 
of the relationship between regulatory compliance and crash rates may 
be one possibility. However, the study sought to separately confirm the 
existence of a safety performance (i.e., crash rate) learning curve and 
the existence of a safety regulation compliance learning curve. It did 
not involve determining the relationship between compliance and safety, 
as the ATA's comment suggests.
    As for the ATA's recommendation to count only those accidents where 
the CMV driver was determined to be at fault, the FMCSA believes it 
reflects a continued misinterpretation of the distinction between 
``contributing factor'' and legally culpable ``fault.'' Some motor 
carriers properly list in their accident register the details of 
accidents that their drivers were powerless to avoid (such as a legally 
stopped CMV that is struck in the rear by another vehicle). For other 
types of accidents where the driver of another vehicle was cited on a 
police accident report, the issue of ``preventability'' on the part of 
the CMV driver is often far more complex. The FHWA addressed this issue 
in the final rule concerning the safety fitness procedure (62 FR 60035, 
at 60037).
    The FMCSA disagrees with Crete's recommendation that a motor 
carrier's accident experience be the sole factor considered in 
determining safety fitness. In the words of Professor James Reason of 
the University of Manchester, who spoke out at the National 
Transportation Safety Board's (NTSB) April 24 and 25, 1997, symposium, 
``Corporate Culture and Transportation Safety:''

    In the absence of bad outcomes, the best way--perhaps the only 
way--to sustain a state of intelligent and respectful wariness is to 
gather the right kinds of data. This means creating a safety 
information system that collects, analyses, and disseminates 
information from incidents and near misses, as well as from regular 
proactive checks on the system's vital signs. All of these 
activities can be said to make up an informed culture--one in which 
those who manage and operate the system have current knowledge about 
the human, technical, organizational, and environmental factors that 
determine the safety of the system as a whole. In most important 
respects, an informed culture is a safety culture.

    The FMCSA, like the FHWA and the ICC for the last 60 years, rejects 
the assertion that there exists no relationship between a motor 
carrier's safety of operations and the completeness and accuracy of 
records that document compliance with the FMCSRs and, if applicable, 
the hazardous materials regulations (HMRs).
    The FMCSA disputes the ATA's view that motor carriers continue to 
suffer consequences of what it views as an unjust method of assigning 
safety fitness determinations. The FMCSA's statistics presented in the 
August 16, 1999, NPRM indicate that in the years 1994 through 1998, 
between 80 and 95 percent of motor carriers of non-HM property starting 
a calendar year with an unsatisfactory safety rating were able to 
improve that rating before the end of that year--and they were not 
constrained from continuing their interstate operations.
    In reference to Werner's and Crete's comments concerning review of 
motor carriers' records, the FMCSA's method of selecting records during 
the course of a compliance review has withstood a judicial challenge, 
American Trucking Associations v. Department of Transportation, 166 
F.3d 374 (D.C. Cir. 1999). The fact is that there is a very large 
population of motor carriers in interstate commerce--nearly 500,000--
and the agency is responsible for their safety and compliance with the 
FMCSRs, and, if applicable, the HMRs. Werner did not provide details 
concerning what it terms a lack of uniformity in the FMCSA's compliance 
reviews. As for Crete's comments concerning the hours-of-service 
regulations, the FMCSA recently published a proposed revision to those 
regulations. However, this does not excuse motor carriers from 
complying with, and the FMCSA from enforcing, the current regulations.

Records and Ratings

    The ATA contended that the FMCSA's procedures proposed in the NPRM 
are ``illogical and contrary to Congress' intent * * * [because] the 
safety rating provides a measure of compliance, not safety.'' In 
support of its argument, the ATA described two hypothetical examples. 
In the first, a motor carrier had a low recordable accident rate of 
0.35 crashes per million vehicle miles traveled and has been cited 
during an FMCSA compliance review for four critical violations: failing 
to preserve supporting documents for records of duty status, failing to 
maintain required proof of financial responsibility, failing to 
maintain inquiries into a driver's driving record, and failure to 
require drivers to prepare driver vehicle inspection reports. The motor 
carrier was rated ``unsatisfactory.'' In the second, a motor carrier 
has experienced 1.8 accidents per million [vehicle] miles, ``more than 
twice the national average.'' The ATA maintained that this motor 
carrier could receive a satisfactory safety rating ``if its operation 
were otherwise in complete compliance.'' The ATA said that a ``recent, 
high profile magazine article'' cited an example of a California motor 
carrier involved in a fatal crash had received a satisfactory safety 
rating from the FMCSA five months before, despite having a vehicle out-
of-service rate ``nearly twice the national average.'' Werner echoed 
the ATA's view on this issue. Crete's objection was similar. It argued 
that the proposal ``confuses an assessment of the ability of a motor 
carrier to achieve compliance with a series of regulatory requirements 
with how safely the carrier's vehicles are actually being operated on 
the nation's highways'' and that the proposal ``would continue to 
elevate form over substance.''
    The AMSA contended that the NPRM ``accomplishes nothing 
substantively to minimize accidents and fatalities.'' It characterized 
the proposal as one that would shut down motor carriers for poor 
recordkeeping practices but would potentially allow those with poor 
safety performance to continue to operate. The AMSA suggested a 
weighted assessment method that would base a safety fitness rating on 
roadside inspections, DOT accident ratio, driver qualifications record 
compliance, random drug and alcohol tests, a vehicle inspection and 
maintenance program, and hours-of-service compliance. The association 
would recommend that a motor carrier that did not have a ``passing 
grade'' of 60 percent or higher in any of these categories be declared 
unfit and unsatisfactory. However, the AMSA went on to state that the 
seasonal nature of the household goods moving industry would cause them 
to benefit less than other motor carrier industry segments when it 
comes to correcting safety deficiencies within a 60-day period. The 
association also contended the focus of these motor carriers' during 
the moving season ``is almost exclusively on safe transportation of 
shipments, not necessarily safety compliance record keeping.''
    The NPTC asserted that, by drawing an equivalence between a 
determination of unfitness and an unsatisfactory safety rating, the 
FMCSA is attaching the consequences set forth in TEA-21 to

[[Page 50924]]

what it considers a flawed method of determining a safety fitness 
rating. The NPTC noted that it has supported the FMCSA's plans to amend 
the SFRM. It believed the current methodology ``places too much 
reliance on paperwork compliance and that greater reliance should be 
placed on performance measurement to determine safety fitness.''
    The NASTC was concerned that the proposed rule would generate 
particularly severe outcomes for small motor carriers that do not have 
the safety-department resources common to larger motor carriers. Even 
though they do not encourage or condone unsafe operations, they may 
experience regulatory violations that could place them in danger of 
receiving an unsatisfactory safety rating, and may not be able to cure 
the underlying conditions in 60 days.

FMCSA Response

    The FMCSA is concerned that Crete and the ATA appear to believe 
there is a complete disconnection between a motor carrier's compliance 
with the FMCSRs and the safety of its operations. As demonstrated by 
the NTSB's April 1997 symposium, adverse events, such as crashes and HM 
incidents, do not occur without warning. Rather, they are the final 
outcome of a chain of events made up of weak and inadequate safety 
links. For this reason, the FMCSA reads with grave concern Crete's and 
the ATA's comments expressing their belief that recordkeeping 
violations do not reflect gaps and deficiencies in safety of 
operations. The ATA's first hypothetical example did not go into 
details concerning the patterns or extent of the missing records. More 
important, the ATA did not explain how a motor carrier can demonstrate 
that it has complied with safety regulations concerning drivers' hours-
of-service, financial responsibility, driver qualifications, or proper 
CMV operation and maintenance in the absence of these records. The 
ATA's second hypothetical was simply incorrect. As indicated in the 
final rule adopting Appendix B to Part 385, ``[a]n urban carrier (a 
carrier operating entirely within the 100 air mile radius) with a 
recordable accident rate over 1.7 (approximately twice the 1994-96 
average of 0.839) will receive an unsatisfactory safety rating. All 
other carriers with a recordable accident rate greater than 1.5 
(approximately double the 1994-96 average of 0.747) will receive an 
unsatisfactory safety rating'' (62 FR 60037, November 6, 1997). 
Therefore, a carrier with an accident rate of 1.8 per million vehicle 
miles would receive an unsatisfactory rating for Factor 6 (Accident 
Factor = Recordable Rate) of the Safety Fitness Rating Methodology. 
Even if this hypothetical motor carrier were otherwise in compliance 
with the FMCSRs, its factor rating for accidents would make the overall 
safety rating conditional (see ``Motor Carrier Safety Rating Table'' in 
Section III.A of Appendix B to 49 CFR 385).
    The FMCSA notes that, according to Crete, the ```recordable 
accident' rate (as defined in 49 CFR 390.5) of Crete and its three 
affiliates is significantly less than one-half of the national average 
and reflects their commitment to highway safety.'' This is an admirable 
outcome reflecting good safety management practices, of which good 
recordkeeping practices and use of the information contained in the 
records kept are probably key features.
    All of the items in the assessment method suggested by the NPTC and 
the AMSA depend upon the motor carrier maintaining records in order to 
establish compliance with the applicable safety regulations. The AMSA's 
suggestion that recordkeeping is completely disconnected from safety 
compliance is disingenuous. The agency reminds commenters that the NPRM 
included a provision to extend the initial 60-day period for up to an 
additional 60 days if the agency believes the motor carrier is making a 
concerted effort to improve the safety of its operations. Finally, the 
peak moving season requires household goods movers to use drivers and 
vehicles that are not part of their regular fleets. They might well 
give these temporary resources more scrutiny in order to ensure that 
the safety and quality of their operations are maintained.
    Addressing the NASTC's concern, the agency has worked, and will 
continue to work, closely with motor carriers with proposed 
unsatisfactory ratings to help them improve the safety of their 
operations. Section 4009 states that the Secretary of Transportation 
may allow unfit motor carriers making good-faith efforts to improve 
their safety of operations to operate a grace period of up to 120 days 
(by law, this extended period is not available to motor carriers that 
transport passengers or HM freight in quantities requiring placarding.) 
The FMCSA's statistics on motor carriers' follow-up safety ratings 
indicate that the vast majority do improve their ratings and can 
continue or recommence their operations. Tables 2 and 3 of the NPRM 
provided calendar year summaries of the number of motor carriers of 
property initially rated unsatisfactory, and motor carriers holding an 
unsatisfactory rating at the beginning and the end of the year. The 
figures were broken down by the number of drivers used by the motor 
carrier. Small (under 20 drivers) motor carriers' figures are 
comparable to the national averages of those motor carriers improving 
their ratings (Table 3), and some subsets of them actually have 
slightly better outcomes than motor carriers in the 50-99 driver 
category.

Review of Proposed Safety Ratings

    The NASTC requested the FMCSA to begin the 60-day period on the 
date the agency officially notifies the motor carrier of the proposed 
rating, rather than the day the CR is completed. The FMCSA proposed to 
do exactly that, and to provide official information no later than 30 
days after the completion of the review in a letter issued from the 
agency's headquarters. These procedures are being adopted in 
Sec. 385.11 of the final rule.
    The NASTC indicated that some of its members have been subjected to 
out-of-date controlled substance and alcohol testing regulations during 
the course of their reviews. The FMCSA is very concerned about this and 
requests the NASTC or the motor carriers involved to contact the FMCSA 
with specifics of this situation so we can correct it.
    The ATA supported the FMCSA's proposal to review a motor carrier's 
proposed unsatisfactory safety rating within a specific time frame, and 
the proposal to offer a motor carrier of non-HM freight up to an 
additional 60 days to demonstrate improvements in the safety of its 
operations. The ATA maintained that this longer time gives motor 
carriers an extra incentive and allows them to make positive changes to 
their operations and to improve their compliance with safety 
regulations. The ATA also asked the FMCSA to consider re-reviewing all 
motor carriers with proposed conditional safety ratings.

FMCSA Response

    The FMCSA is pleased that the ATA recognizes the agency's desire to 
assist motor carriers in improving the safety of their operations, and 
to avoid issuing a final unsatisfactory safety rating if the motor 
carrier is able to successfully demonstrate its safety fitness. 
However, we must clarify two issues that might have arisen from a 
misreading of the NPRM. First, the motor carrier must request the FMCSA 
to perform an administrative review or a review based upon its 
corrective actions. Second, the FMCSA must perform those reviews within 
30 days of a request from a passenger or HM motor carrier, and within 
45 days of a request from any other motor carrier. With respect to 
reviewing proposed conditional safety

[[Page 50925]]

ratings, the FMCSA must deploy its resources where the safety needs are 
greatest, and where the potential threats to a motor carrier's 
continued operations are the most severe. Because the new rule applies 
prospectively, motor carriers of non-HM freight receiving a proposed 
unsatisfactory safety rating on or after the effective date of this 
rule are subject to new and serious operational consequences if their 
proposed ratings become final. The FMCSA believes it must, therefore, 
give priority to these motor carriers' requests for administrative 
reviews.

Exemption for Small Passenger Vehicles

    Greyhound Lines, Inc. (Greyhound) supported the FMCSA's overall 
proposal, but strongly objected to the proposed exemption for for-hire 
passenger CMVs designed to transport fewer than 16 passengers, 
including the driver. Greyhound asserted that Sec. 385.1(b) of the 
FMCSA's NPRM provides a ``permanent exemption'' to operators of these 
smaller vehicles, notwithstanding the FMCSA's interim final rule on 
this subject (Docket FHWA-97-2858, 64 FR 48510, September 3, 1999). 
``Greyhound urges [the FMCSA] to remove the proposed exemption for 
commercial van operators and to start actively reviewing the operations 
of commercial van operators in order to remove from the road those that 
are unfit to operate.''
    Greyhound provided to this docket a copy of the cover letter from 
its comment to Docket FHWA-97-2858, dealing with the definition of 
CMVs. Greyhound had compiled a list of nationwide media reports of 
commercial van accidents and estimated that over 250 deaths per year 
occurred among the 74,000 commercial vans in operation. The latter 
number was based on information from the International Taxicab and 
Livery Association and included minivans with a passenger capacity of 
less than 9. Greyhound calculated a fatality rate of 1 per 296 
commercial vans operated (74,000/250). Greyhound then compared NHTSA 
fatality data and a DOT Bureau of Transportation Statistics estimate of 
the number of intercity buses (4 occupant deaths for 25,700 buses) to 
compute a rate of 1 fatality per 6425 intercity buses operated. It 
provided a caveat to the comparison, stating that ``the estimated van 
population is inflated by minivan numbers and because data is not 
available on the number of non-bus occupants killed in bus accidents.''
    The Amalgamated Transit Union (ATU) also supports the FMCSA's 
proposal and states that it agrees with Greyhound on this subject. The 
ATU also provided what it termed a ``selected summary of van accidents, 
injuries, and fatalities.''
    The comments of the American Bus Association (ABA) on this subject 
were similar to those of Greyhound. The Association stated that the 
FMCSA's lack of action to amend the FMCSRs to include smaller for-hire 
passenger vehicles after the passage of the ICC Termination Act of 1995 
(Public Law 104-88, 109 Stat. 803) led the ABA to request Congress to 
again direct the FMCSA to regulate operators of these vehicles in 
section 4008 of TEA-21. The ABA also took the FMCSA to task for 
proposing to exempt these operators in Sec. 385.1(b) of the August 16, 
1999, NPRM.

FMCSA Response

    Concerning the assertion by Greyhound and the ABA, that 
Sec. 385.1(b) ignored the provisions of the FMCSA's other rulemakings 
on the applicability of the FMCSRs to for-hire operators of small 
passenger vehicles, the apparent inconsistency arises from the 
publication dates. The FHWA's NPRM on safety fitness procedures could 
not cite the provisions of those other rulemakings because they were 
not published in the Federal Register until 18 days later. On September 
3, 1999 (64 FR 48510) the FHWA published an interim final rule 
exempting for six months the operation of these small passenger-
carrying vehicles from all of the FMCSRs. This was done to allow time 
for the completion of a rulemaking proposal published the same day (64 
FR 48518) that would require motor carriers operating these vehicles to 
file a motor carrier identification report, mark their CMVs with a 
USDOT identification number and certain other information (i.e., name 
or trade name and address of the principal place of business), and 
maintain an accident register. Because the September 3 NPRM is still in 
progress, this final rule continues to exempt non-business private 
motor carriers of passengers and motor carriers conducting for-hire 
operations of passenger CMVs with a capacity of fewer than 16 persons, 
including the driver.
    The FMCSA believes that there are two basic reasons that it cannot 
make a realistic comparison of fatality rates of small van and 
intercity bus operations. First, the number of minivans included in the 
``commercial van'' total is not known. Greyhound provided this caveat 
to its own submitted statistical summary. Second, there appear to be no 
readily-available data to compare accident involvement on a true 
exposure basis (vehicle miles traveled, or VMT). The ATU's summary of 
accidents certainly points to the personal tragedies of the people 
involved and their families, but it does not provide a statistically 
representative assessment of the operations of these vehicles. After 
considering various rulemaking options, the FMCSA proposed three 
requirements in its September 3, 1999, NPRM (64 FR 48518). These motor 
carriers would be required to complete a motor carrier identification 
report, to mark their vehicles with a USDOT number and certain other 
identifying information, and to maintain an accident register. The 
agency believes that these proposed changes would enable it to monitor 
the safety performance of these passenger carriers. The agency will be 
responding in a separate rulemaking to the congressional direction 
contained in section 212 of the Motor Carrier Safety Improvement Act of 
1999, concerning rulemaking on the application of the FMCSRs to small 
passenger van operations.

Public Availability of Proposed Ratings

    The International Brotherhood of Teamsters (IBT) supported the 
substance of the FMCSA's proposal. However, it disagreed with the 
FMCSA's proposal not to release proposed unsatisfactory safety ratings. 
The IBT took issue with the FMCSA's statement that the proposed 
unsatisfactory and conditional safety ratings are not releasable under 
the Freedom of Information Act (FOIA) because they do not constitute 
the agency's final decision. The IBT asserted that ``FOIA is not the 
statute governing public availability of safety fitness ratings. 
Rather, 49 U.S.C. Sec. 31144(a)(3) expressly provides that the 
`Secretary shall * * * make such final safety fitness determinations 
readily available to the public; * * *''' The IBT questioned how the 
FMCSA could reconcile the determination of unfitness that is ``at once 
final enough to trigger the beginning of the grace period but not 
sufficiently final to trigger public disclosure.'' The IBT also 
questioned why the FMCSA would wish to withhold the proposed ratings of 
a small number of motor carriers. It quoted the NPRM as indicating 
``only a relatively small percentage (2 percent) of all general freight 
carriers receive an ``unsatisfactory'' rating.'' Finally, the IBT 
suggested that ``the possibility of public disclosure of their 
condition will encourage improvement before, rather than after, the 
Secretary determines their level of fitness.''

[[Page 50926]]

    The NITL also believed the FMCSA should immediately make available 
a motor carrier's proposed unsatisfactory safety rating and should take 
steps to more widely publicize the SAFER Internet address and the toll-
free 800 number for public inquiries about safety ratings. The NITL 
maintained that `` * * * the actual occurrences [commenter's emphasis] 
of such directly safety-related violations justifies the public's 
access to the proposed ``unsatisfactory'' rating immediately,'' and 
that the shipping public should be provided the most current 
information so they can make their own decisions on whether or not to 
continue a relationship with such a motor carrier. The NITL echoed the 
IBT's view that this approach would have a strong deterrent effect. In 
contrast, the NITL believed the FMCSA should not make a proposed 
``conditional'' safety rating publicly available because the less 
severe nature of the safety deficiencies that caused that proposed 
rating to be issued.
    The ABA supported the FMCSA's proposal to continue its practice of 
not making public proposed unsatisfactory safety ratings. The ABA 
agreed that posting a proposed rating before a motor carrier has the 
opportunity to assess its operations, provide the FMCSA additional 
information, and request a reconsideration of the proposed rating 
``could in fact deal a death blow to a company without full benefit of 
due process.''
    The NITL argued that if a motor carrier had not taken effective 
corrective action during the 45 to 60 day period after it received a 
proposed unsatisfactory safety rating, it must be required to cease its 
operations at the end of that period. No extensions should be 
permitted.
    The AMSA was concerned that motor carriers of household goods would 
suffer irreparable harm if proposed unsatisfactory safety ratings were 
made publicly available. The AMSA stated that the unique and close 
relationship that movers have with end-user consumers is largely based 
upon the public's confidence that the mover will transport their 
household goods in a safe and sound manner. ``Thus, even public 
disclosure of a `proposed' unsatisfactory rating of a household goods 
carrier would have a most chilling effect on [its] personal and 
professional reputation. Such an effect could not be repaired easily, 
notwithstanding either possible error by [a FMCSA] safety specialist or 
in the instances where there are safety compliance violations, 
immediate remedial corrective action by the household goods carrier.''
    The ATA interpreted the FMCSA's question about publication of a 
proposed safety rating as a request for comment on whether the FMCSA 
should require a motor carrier to cease interstate operations at the 
time the proposed rating is issued, or when the final rating is issued. 
The ATA requested the FMCSA set this date at 45 or 60 days ``after the 
final rating is issued.'' The ATA reasoned that motor carriers need 
this additional period to dispute the FMCSA's assessment of the 
situation or situations that led it to make its determination of 
unfitness, especially if accident preventability was at issue. The ATA 
went on to say:

    We suspect that the agency believes carriers should begin 
preparing for a shut down order immediately upon notice of a 
proposed rating of ``unsatisfactory.'' However, it is unrealistic to 
expect a for-hire carrier to notify its shippers of an impending 
``unsatisfactory'' safety rating if that rating may not ultimately 
be assigned. A carrier who were to do that would be subjecting 
itself to harsh consequences both to its business and its image that 
may not be deserved.

FMCSA Response

    The FMCSA proposed to retain the concept of the ``proposed'' safety 
rating, which it adopted in 1997. The time frames for motor carriers to 
cease operations after receiving an unsatisfactory rating or a 
determination of unfitness were set forth in both the Motor Carrier 
Safety Act of 1990 and in TEA-21. As the agency explained in the NPRM 
(64 FR 44460, at 44462), the goal of the proposal was basic fairness 
toward motor carriers. The agency is still of that same mind.
    The FMCSA wants to clarify for the IBT that the proposed safety 
rating does not constitute a ``final safety fitness determination.'' 
The 60-day (or 45-day) grace period that begins with the FMCSA's 
issuance of a letter to the motor carrier is expressly designed to 
provide motor carriers the opportunity to take (or at least to begin to 
take) the corrective actions needed to improve the safety of their 
operations, or to question the FMCSA's assessment of their operations.
    Concerning the estimated number of affected motor carriers, the IBT 
appears to have misunderstood the agency's statement from the 
regulatory analysis section of the preamble to the NPRM. Although the 
agency did state that, as of December 31, 1998, 2 percent of all motor 
carriers of non-HM property listed in the Motor Carrier Management 
Information System (MCMIS) had an unsatisfactory safety rating, the 
beginning of the sentence stated that the 8,999 motor carriers with 
unsatisfactory ratings represented 8.8 percent of the rated motor 
carriers (64 FR 44460, at 44465) in that category.
    Although publicly available adverse information may indeed serve as 
a deterrent, the FMCSA agrees with the statements of the ABA, the NITL, 
and the AMSA. The agency does not believe that the benefits of this 
deterrent effect outweigh the requirements for the agency to provide 
these motor carriers the opportunity (1) to challenge the FMCSA's 
findings and allow the agency to address and correct errors it may have 
made in assigning the proposed ratings and (2) to improve the safety of 
their operations. The NITL incorrectly characterized the conditional 
safety rating, however, because it cited only the definitions in 49 CFR 
385.3. The safety fitness rating methodology itself, in appendix B to 
part 385, describes the degree of regulatory noncompliance and negative 
performance (vehicle out-of-service and accidents) considered in the 
assignment of a conditional or an unsatisfactory rating. A motor 
carrier assigned a conditional safety rating is very likely to have 
demonstrated regulatory noncompliance, but not to such an extent as to 
warrant an unsatisfactory safety rating.
    Although the NITL opposed the notion of an extension to the 45-to 
60-day period during which a motor carrier may operate with a proposed 
unsatisfactory safety rating, the FMCSA is authorized by statute to 
provide additional time to motor carriers (that do not transport 
passengers or HM) making good faith efforts to improve their safety 
fitness (proposed Sec. 385.13(a)(2)). The agency appreciates the NITL's 
plan to publish the SAFER Internet address and the FMCSA's toll-free 
phone number in its newsletter.
    The ATA seems to have misunderstood the process and the time frames 
the agency uses in assessing a motor carrier's safety of operations and 
issuing a proposed and final safety rating. In the August NPRM (64 FR 
44460, at 44462), the agency set forth this process under the heading 
``Proposed Ratings; Effective Date of Final Rating.''
    To reiterate, if the FMCSA is performing an initial CR in response 
to a safety complaint, a SAFESTAT listing, or a motor carrier's 
request, the FMCSA will advise a motor carrier of its proposed safety 
rating at the conclusion of the CR that generates the rating. (If the 
CR is a follow-up, the FMCSA will advise a motor carrier of its 
proposed safety rating at the conclusion of that CR only if the rating 
is other than

[[Page 50927]]

unsatisfactory.) The FMCSA will officially notify the motor carrier of 
its proposed safety rating by letter from FMCSA headquarters. The 
information provided a motor carrier is relatively detailed as to the 
agency's assessment of specific non-compliance with safety regulations. 
The motor carrier is, thus, made aware of the circumstances leading to 
a proposed rating before the FMCSA officially issues the proposed 
rating via a letter from its headquarters office in Washington, DC. The 
45- or 60-day period begins on the date the FMCSA issues the official 
notice. If a motor carrier wishes to contest facts, such as accident 
circumstances and contributing factors, it can and should do so as 
early as possible, even before the proposed rating is issued. In any 
event, a motor carrier that requests an administrative review should 
make its request quickly because even an expedited proceeding takes 
time. During such a review, the adjudicator (the Chief Safety Officer 
of the Federal Motor Carrier Safety Administration) may grant relief 
while the proceeding is pending. A motor carrier may request a rating 
change based upon its corrective actions at any time. The FMCSA must 
respond to motor carriers' requests for administrative and corrective-
action reviews within time frames specified in this rulemaking.
    Contrary to the ATA's comment, the FMCSA does not view a proposed 
unsatisfactory safety rating as directing a motor carrier to prepare to 
cease its operations. The agency's mission is to promote safe, 
efficient, and effective transportation of people and goods. However, 
if a motor carrier has demonstrated that it is unwilling or unable to 
accomplish its transportation mission safely, it must not be allowed to 
place the safety of its drivers or of other highway users in jeopardy.

Retroactive Application of New Regulation

    The IBT stated that it opposes the FMCSA's proposal to apply the 
revised regulation prospectively, i.e., to impose the prohibition only 
upon motor carriers receiving an unsatisfactory safety rating on or 
after the effective date of the final rule. Citing Landgraf v. USI Film 
Products (114 S. Ct. 1483, 1499), the IBT argued that:

    A statute does not operate ``retroactively'' merely because it 
is applied in a case arising from conduct antedating the statute's 
enactment, or upsets expectations based in prior law. Rather the 
court must ask whether the new provision attached new legal 
consequences to events completed before its enactment * * * Statutes 
generally considered to have unlawful retroactive effect are those 
which take away or impair vested rights acquired under existing 
laws, create new obligation, impose new duties, or attach new 
disabilities with respect to transactions or considerations already 
past.

The IBT went on to argue there is no rationale for the FMCSA to permit 
motor carriers ``known to be unsafe'' to operate indefinitely, and that 
this would be clearly against congressional intent. The IBT asked the 
FMCSA to consider inserting a provision in the final rule that would 
require non-HM freight carriers currently holding unsatisfactory 
ratings to request the FMCSA to reevaluate them within 60 days of the 
effective date of the rule. If the motor carrier did not request such a 
review, it would be prohibited from operating in interstate commerce on 
the 61st day after the final rule is effective. However, if the motor 
carrier did make the request, the FMCSA would be required to conduct 
the review within 60 days.
    The NITL did not oppose the FMCSA's proposal to apply the rule 
prospectively, but it wanted the agency to commit enough resources to 
re-rate all motor carriers with a current unsatisfactory rating 
``within a short and defined period.'' The NITL contended that this 
effort would serve two purposes: it would remove from the highways 
motor carriers that continue to operate in an unsafe manner, and it 
would ensure that previously-unsatisfactory motor carriers would not 
continue to be ``wrongly ``tarred'' with the consequences of their past 
rating.''

FMCSA Response

    The IBT's assertion that the FMCSA would contravene congressional 
intent if it failed to apply the shut-down requirements of section 4009 
to non-HM freight carriers rated unsatisfactory before that statute was 
enacted, is patently incorrect. The discussion of retroactive and 
prospective application of laws in Landgraf v. USI Film Products, 511 
U.S. 244 (1994), is carefully nuanced. Although the Supreme Court 
acknowledged that retroactive application of laws is sometimes 
required, especially in ``'procedural'' and ``prospective-relief'' 
cases,'' it also noted that ``the presumption against retroactive 
legislation is deeply rooted in our jurisprudence, and embodies a legal 
doctrine centuries older than our Republic. Elementary considerations 
of fairness dictate that individuals should have an opportunity to know 
what the law is and to conform their conduct accordingly * * *'' Id., 
at 265, 276. The court's description of the proper analytical method 
upon judicial review leaves no doubt that unsatisfactory safety ratings 
cannot be applied retroactively. The court said:

    When a case implicates a federal statute enacted after the 
events in suit, the court's first task is to determine whether 
Congress has expressly prescribed the statute's proper reach. If 
Congress has done so, of course, there is no need to resort to 
judicial default rules. When, however, the statute contains no such 
express command, the court must determine whether the new statute 
would have retroactive effect, i.e., whether it would * * * increase 
a party's liability for past conduct * * * If the statute would 
operate retroactively, our traditional presumption teaches that it 
does not govern absent clear congressional intent favoring such a 
result. Id., at 280.

    Using this method, we find that section 4009 includes no ``express 
command'' to shut down non-HM freight carriers based on unsatisfactory 
ratings issued before the provision was enacted. The presumption 
against retroactive application of laws therefore applies.
    The FMCSA agrees with the IBT and the NITL that a motor carrier 
with an unsatisfactory safety rating has demonstrated an unacceptably 
low level of operational safety. However, the FMCSA has not made a 
practice of re-rating motor carriers unless new information on their 
safety performance became available. Some of these motor carriers have 
held these ratings for substantial periods of time, but have not come 
to the FMCSA's attention because their accident involvement and/or out-
of-service rates have been below national averages. The agency's 
resources must be allocated over a very large, expanding and diverse 
group of motor carriers operating in interstate commerce. With nearly 
9,000 motor carriers of non-HM freight holding unsatisfactory ratings 
as of December 31, 1998, the task of re-rating this group over a short 
period of time would be substantial. As the agency stated in the NPRM 
(64 FR 44460, at 44463):

the [FMCSA] will give priority to reviews of motor carriers with 
proposed or final unsatisfactory safety ratings because of the 
prohibition against operating in interstate commerce with such 
safety ratings * * * if a motor carrier of non-HM freight that held 
an unsatisfactory safety rating issued prior to the effective date 
of a final rule were to receive a follow-up proposed unsatisfactory 
rating after the effective date of a final rule, the [FMCSA] would 
provide those motor carriers the same priority handling as motor 
carriers receiving a proposed unsatisfactory safety rating for the 
first time.

    The issue of performing assessments of the safety and regulatory 
compliance of the large number of motor carriers operating in 
interstate commerce is a daunting one. This rulemaking

[[Page 50928]]

addresses vigorously the operation of those motor carriers whose safety 
fitness is determined to be unsatisfactory, and who must either improve 
their operations or face being prohibited from operating in interstate 
commerce. Other rulemakings will follow, dealing with the rating 
methodology itself, certification of safety auditors (required by 
section 211 of the MCSIA of 1999), and other matters.
    Addressing the NITL's second comment, the FMCSA has, and will 
continue to have, a process in place under Sec. 385.17 for motor 
carriers to request a change in their safety rating based upon 
corrective action.

Rating Categories

    The NITL suggested that the FMCSA develop an ``excellent'' safety 
rating category. The NITL stated that ``An ``excellent'' safety rating 
would provide a quality benchmark to both shippers and carriers, and 
provide information to shippers on the carriers who take their 
responsibility for safe operation most seriously * * * [it] would 
assist shippers in making a choice among competing carriers, thus 
encouraging excellence in safe operation, and will ensure that the 
carriers with the best safety record reap the benefits in the market.''
    Boyle Transportation (Boyle) believes that motor carriers that 
transport placardable quantities of high-risk hazardous materials, such 
as explosives and radioactive materials, should be held to a higher 
safety standard than motor carriers that transport other types of 
freight. Boyle provided a list of 23 motor carriers that it stated were 
approved by the Department of Defense (DOD) to transport Division 1.1, 
1.2, and 1.3 explosives; it included three other motor carriers with 
large nationwide fleets for comparative purposes. The list included the 
motor carriers' name; USDOT or MC number; out-of-service rates for 
driver, vehicle, and hazardous materials roadside inspections; and 
fatal, injury, and ``tow'' accidents. Boyle pointed out that some of 
these motor carriers hold satisfactory safety ratings from the FMCSA, 
even though they have substantial proportions of violations resulting 
in the driver or vehicle being placed out-of-service. ``If a motor 
carrier that transports high risk hazardous materials and receives `out 
of service' violations on 20-67 percent of their roadside inspections 
can maintain the same safety rating as carriers with fewer than 10 
percent, there is no incentive for that carrier to more safely operate 
its commercial motor vehicles. The `satisfactory' safety rating confers 
the same right to do business with the DOD as other shippers.'' Boyle 
concluded its comments by noting that ICC operating authority to 
transport explosives was effective only for five years and that the 
motor carrier had to obtain ``satisfactory results of a DOT compliance 
review'' in order to renew it. Boyle recommended that the DOT consider 
suspending the operating authority of motor carriers transporting 
explosives if the motor carrier did not lower its vehicle out-of-
service rate below 15 percent.

FMCSA Response

    The FMCSA's system of assigning safety ratings does not 
differentiate among specific classes of commodities, other than whether 
or not they include placardable quantities of hazardous materials. 
Although the vehicle out-of-service rates for some of the motor 
carriers listed in Boyle's submission do exceed the national average, 
the chart did not include information on fleet size: a small fleet 
might accumulate a high vehicle out-of-service rate over a short period 
of time with a small number of violations. The rate could dip equally 
quickly if a few problem areas were corrected.
    The FMCSA believes that it must devote its limited resources to 
addressing critical concerns in motor carrier and highway safety. A 
rating category such as the NITL envisions could be awarded by an 
independent organization that develops its criteria in accordance with 
best industry safety practices to meet the needs of its clients and 
partners. We encourage NITL, and other motor carrier industry 
organizations, to move forward with such an effort.

Federal Government Agency Use of Unsatisfactory Rated Motor 
Carriers

    The AMSA believes that the FMCSA's proposal would have severe 
adverse impacts upon household goods motor carriers that provide 
contract transportation services to the U.S. government through the 
Department of Defense (DOD), the General Services Administration (GSA), 
and other agencies. According to the AMSA, approximately 1,200 
household goods carriers, their agents, and their owner operators 
transport DOD domestic personal property shipments, and that 
approximately 120 household goods carriers and their agents participate 
in the GSA's Household Goods Traffic Management Program. The AMSA 
contends that ``several household goods carriers would be devastated, 
if not completely put out of business'' based upon the proposal.

FMCSA Response

    Some household goods movers that are heavily dependent upon U.S. 
government contracts would suffer adverse effects from a final safety 
rating of unsatisfactory. That, of course, must be understood as 
Congress' purpose in adding this provision. Moreover, the AMSA had 
noted in another part of its docket comment that there is a unique 
relationship between a household goods mover and its clients. 
Therefore, it would seem to be particularly important that household 
goods movers avoid such serious deficiencies in the safety of their 
operations that the FMCSA would declare them to be unfit. The safety of 
the operations of a household goods mover--or any other motor carrier--
should not be held to a lower standard for some clients than for 
others. Indeed, this is not the case. The Program for Qualifying DOD 
Freight Motor Carriers, Exempt Surface Freight Forwarders, and Shipper 
Agents, at 32 CFR part 619, addresses safety ratings for motor carriers 
of non-hazardous and non-sensitive types of shipments as follows:

    Sec. 619.2(a) Carrier will not have an ``unsatisfactory'' rating 
with the Federal Highway Administration, Department of 
Transportation and if it is an Intrastate Motor Carrier, with the 
appropriate State agency. Sec. 619.2(b) Carriers with 
``conditional'' or ``insufficient information'' ratings may be used 
to transport DOD general commodities provided that such carriers 
certify in writing that they are now in full compliance with 
Department of Transportation safety requirements.

    In any case, the AMSA's concern that a large number of household 
goods movers would be affected by the regulation seems overstated. As 
of September 1, 1999, the MCMIS showed 15,781 active interstate motor 
carriers transporting household goods. These motor carriers operate a 
total of 142,794 power units (trucks and truck tractors). As of that 
date, 209 motor carriers (1.3 percent) held unsatisfactory safety 
ratings; these motor carriers operated 1,083 (0.76 percent) of the 
power units.

Enforcement of New Regulations

    The NPTC was concerned that the NPRM did not describe how the FMCSA 
planned to enforce its proposal--that motor carriers determined to be 
unfit actually cease their interstate operations. The NPTC acknowledged 
that the FMCSA has stated that it is planning to expand the PRISM 
program, but questioned how many States are currently capable of 
enforcing the proposed regulation. The organization also urged the 
FMCSA to develop and publicize its plans to monitor the operations of 
motor carriers that it has

[[Page 50929]]

directed to cease interstate operations, including prohibiting those 
motor carriers from operating their CMVs, and to announce penalties it 
would assess against motor carrier officials and employees found to be 
violating these orders.
    The Motor Carrier Transportation Division of the Oregon Department 
of Transportation (Oregon), a participant in the FMCSA's Performance 
and Registration Information Systems Management (PRISM) program, 
supported the proposal, but encouraged the FMCSA to improve its 
compliance assessment and enforcement tools. Specifically, Oregon 
recommended that the FMCSA implement the SafeStat algorithm ``to 
determine the safety fitness of all motor carriers in the United 
States.'' Oregon also asked the FMCSA to consider alternatives that 
would provide effective enforcement tools to States, such as 
prohibiting unfit motor carriers from registering their vehicles.
    The Iowa Department of Transportation, another participant in the 
PRISM program, stated its support for a performance-based system to 
determine the safety fitness of motor carriers. Both Iowa and Oregon 
referred to their earlier comments to the agency's July 20, 1998, 
ANPRM.

FMCSA Response

    The FMCSA will continue to issue an out-of-service order to each 
motor carrier that receives a final unsatisfactory safety rating. The 
FMCSA has procedures for its own personnel, and that of its MCSAP 
partners, to ensure that motor carriers prohibited from operating CMVs 
in interstate commerce do not do so.
    Concerning the safety fitness of ``all motor carriers,'' the FMCSA 
is constrained by law to provide safety oversight of motor carriers 
operating in interstate commerce. States may develop their own methods 
for assessing the safety fitness of their intrastate motor carriers. 
They may base their methods upon 49 CFR part 385, but they are not 
required to do so as a condition for receiving Motor Carrier Safety 
Assistance Program (MCSAP) grants.

Proposed Revision to the Rating Criteria

    In the preamble of the 1997 final rule amending 49 CFR part 385 (62 
FR 60035), the agency announced that it intended to review the entire 
rating system. On July 20, 1998, the agency published an advance notice 
of proposed rulemaking (ANPRM) which, among other things, began the 
process of creating a more performance-based means of determining the 
safety fitness of motor carriers (63 FR 38788). The FMCSA anticipates 
publishing an NPRM in the near future that proposes a more performance-
based safety fitness methodology. For the present, however, the FMCSA 
will continue using the current SFRM included in appendix B to part 
385.

Related Rating Issues

    The FMCSA does not currently issue safety ratings to two categories 
of motor carriers of passengers: (1) Non-business private motor 
carriers of passengers, such as, churches or social groups, and (2) 
owners and operators of vehicles designed to transport fewer than 16 
passengers, including the driver, for compensation. As to the first 
category, the FMCSA does not believe that Congress intended the agency 
to include this group, because the occasional nature of the 
transportation these motor carriers provide does not readily lend 
itself to safety fitness evaluation. These motor carriers are not 
required to maintain most of the records otherwise mandated by the 
FMCSRs. However, they are still subject to many of the substantive 
regulations and to safety enforcement at roadside. No comments to the 
NPRM docket addressed this issue. The FMCSA will continue its practice 
of not issuing a safety fitness determination to this type of motor 
carrier.
    The second category of passenger motor carrier is comprised mainly 
of limousine and van owners and operators. These entities are currently 
required to obtain operating authority from the FMCSA, but have not 
been subject to most provisions of the FMCSRs because their vehicles 
did not qualify as ``commercial motor vehicles'' under 49 CFR 390.5. 
Section 4008 of TEA-21 changed the statutory definition of ``commercial 
motor vehicle'' to include those vehicles designed or used to transport 
``more than 8 passengers (including the driver) for compensation'' (49 
U.S.C. 31132(1)(B)). However, it also authorized the agency to exempt 
some or all of these vehicles from some or all of the FMCSRs.
    On September 3, 1999, the agency published (1) an interim final 
rule that amends its regulatory definition of a CMV to include vehicles 
designed or used to transport between 9 and 15 passengers (including 
the driver) for compensation, but temporarily exempts the operators of 
such vehicles from the FMCSRs; and (2) an NPRM that proposes to learn 
more about the operational safety of small passenger-carrying CMVs by 
requiring operators of these vehicles to file a motor carrier 
identification report, mark their CMVs with a USDOT identification 
number, and maintain an accident register. The temporary exemption from 
the FMCSRs of small passenger-carrying vehicles also temporarily 
precludes the application of the safety fitness procedures to for-hire 
motor carriers operating these vehicles.
    Several commenters to this docket disagreed with this provision of 
the FMCSA's proposal. The fact remains that, until the FMCSA completes 
its rulemaking concerning the applicability of the various parts of the 
FMCSRs to these passenger motor carriers, there is little upon which 
the agency could base a safety rating. The FMCSA will first clarify 
which operations must be included in the newly regulated class, and 
then determine which regulations should apply. The agency will also be 
responding in a separate rulemaking to the congressional direction 
contained in section 212 of the MCSIA, concerning rulemaking on the 
application of the FMCSRs to small passenger van operations.

Is The Rule Applicable to Railroads and Steamship Lines?

    On February 17, 1999, in response to a petition from the ATA, the 
FHWA published an ANPRM dealing with the inspection, repair and 
maintenance of intermodal chassis and trailers (64 FR 7849). The 
petition asked for rulemaking that would require parties providing 
intermodal chassis and trailers to motor carriers (mainly railroads and 
steamship lines) to share with truckers the responsibility for 
maintaining that equipment at a level that complies with the FMCSRs. 
The FHWA discussed its jurisdiction over railroads and steamship lines 
as follows:

    The FHWA [now the FMCSA] has jurisdiction over ``commercial 
motor vehicles'' (CMVs), ``employees'' and ``employers,'' as defined 
in 49 U.S.C. 31132(1), (2) and (3), respectively. The vast majority 
of intermodal trailers and chassis-and-container combinations meet 
the definition of a CMV--a towed vehicle used on the highways in 
interstate commerce to transport * * * property [which] has a gross 
vehicle weight rating or gross vehicle weight of at least 10,001 
pounds * * *'' An employer is ``a person engaged in a business 
affecting interstate commerce that owns or leases a commercial motor 
vehicle in connection with that business, or assigns an employee to 
operate it.'' An employee is ``an operator of a commercial motor 
vehicle (including an independent contractor when operating a 
commercial motor vehicle), a mechanic, a freight handler, or an 
individual not an employer, who (A) directly affects commercial 
motor vehicle safety in the course of employment * * *''

[[Page 50930]]

    Railroads, steamship lines, pier operators, or other parties 
that own or lease intermodal CMVs are thus ``employers'' subject to 
the jurisdiction of the FHWA. Any employee of such a business who is 
responsible for intermodal CMVs ``directly affects commercial motor 
vehicle safety'' through the inspection and maintenance program he 
or she manages and is thus an ``employee'' subject to the 
jurisdiction of the FHWA [FMCSA].

64 FR 7850, February 17, 1999.

    In the course of public listening sessions held by the Department 
to explore the issues raised by the intermodal equipment ANPRM, the 
question arose whether the FMCSA could find railroads and steamship 
lines, as owners or operators of commercial motor vehicles, to be 
``unsatisfactory,'' thus forcing them to stop tendering or accepting 
intermodal trailers and container-chassis combinations, nearly all of 
which are in interstate commerce.
    The FMCSRs treat the terms ``employer'' and ``employee'' in 49 
U.S.C. 31132 as essentially equivalent to ``motor carrier'' and 
``driver,'' respectively. While the statutory definitions can be 
applied more broadly to railroads and steamship lines that own or 
operate intermodal equipment, as outlined in the February 17 ANPRM, 
neither the FHWA nor the FMCSA has done so. The FMCSA does not issue 
safety ratings to railroads or steamship lines simply because they own 
or operate (i.e., interchange with truckers) intermodal containers, 
chassis or trailers. This rule does not expand the reach of the 
previous safety rating rule to railroads, steamship lines or other 
intermodal entities merely because some of the equipment they operate 
meets the definition of a ``commercial motor vehicle.'' Although 
ratings may be issued to motor carrier divisions or branches of, or 
subsidiaries owned by, such companies, railroads and steamship lines as 
such will not be rated by the FMCSA under this rule, and in the absence 
of a rating, will not be subject to the requirement to cease operations 
in interstate commerce.

Discussion of Final Rule

    The regulatory language published in the NPRM is being adopted 
today, with minor revisions:
    (1) The authority citation for part 385 has been revised to 
incorporate the legislative citations of the Motor Carrier Safety 
Improvement Act of 1999.
    (2) All references to the FHWA have been replaced with references 
to the FMCSA and the appropriate officials of that agency.
    (3) The effective date of the final rule is now 90 (instead of 30) 
day after the date of publication.
    (4) The last phrase of paragraph (b) of Sec. 385.1 has been revised 
to read ``capacity of fewer than 16 persons, including the driver'' 
from the previous ``capacity of 8-15 persons, including the driver''--
this revised language is consistent with the interim final rule of 
September 3, 1999 (64 FR 48510).
    (5) The text of the first sentence of paragraph (a) of Sec. 385.11 
has been revised to add the word ``safety'' before the first use of the 
word `` rating'' and to revise the phrase ``safety fitness review'' to 
read ``compliance review.'' This revised language is consistent with 
the useage in the remainder of the rule.
    (6) The text of Sec. 385.13, describing the time period when motor 
carriers are required to cease their operations, is now consistent with 
the text of Sec. 385.11: the prohibition begins on the 46th day (for 
passenger and HM carriers) and on the 61st day (for all other motor 
carriers) after the date of the FMCSA's notice of proposed 
``unsatisfactory'' safety rating. In Sec. 385.13 of the NPRM, the time 
period was described as commencing after the motor carrier had received 
the agency's notice. There is likely to be more time between the 
completion of a CR and the issuance of the notice, than the time 
between issuance of the notice in Washington, DC, and its delivery to 
the motor carrier. This change makes it clear that all motor carriers 
will have at least 45 or 60 days (as appropriate, depending upon 
whether the motor carrier transports passengers, HM, or non-HM freight) 
between the time they are advised of a proposed rating and the time the 
rating becomes final (assuming the motor carrier does not contest it 
and does not take action to improve its safety performance and request 
a stay of the proposed rating). A corresponding revision has been made 
to the text of the last sentence of Sec. 385.17(g).
    (7) In Sec. 385.13(a), the word ``Generally'' has been added to the 
beginning of the sentence. This revision is necessary to clearly 
differentiate those motor carriers of non-HM freight that had received 
their ratings prior to the effective date of this rule. Those motor 
carriers may still operate in interstate commerce because this rule is 
not retroactive. An error in the text of Sec. 385.13(a)(2) has been 
corrected: the section now reads ``rated on or after * * * '' An error 
in the text of Sec. 385.13(c) has been corrected: The date that the 
rating would become effective would be on or after the effective date 
of the rule, plus 61 days, resulting in a date 151 days after the date 
of publication in the Federal Register.
    (8) A paragraph, Penalties, has been inserted at Sec. 385.13(d) to 
address the FMCSA's issuance of an operations out-of-service order to 
motor carriers rated unsatisfactory; it corresponds to Sec. 385.13(c) 
of the current regulation. The NPRM erroneously omitted this paragraph.
    (9) A typographical error was corrected at Sec. 385.17(c): It now 
reads ``safety standard and factors.''
    (10) The listing of FMCSA Service Centers was published on June 2, 
2000 as part of the final rule concerning CMV marking (65 FR 35287, at 
35297) and therefore will not be repeated here.
    The final rule is a straightforward implementation of the 
amendments to 49 U.S.C. 31144 made by section 4009 of TEA-21. The 
regulatory changes, like the statutory amendments, simply expand a 
prohibition on interstate operations, which had previously applied only 
to HM and passenger carriers, to all other motor carriers.
    As mentioned above, the FMCSA is undertaking a separate rulemaking 
action (see RIN 2125-AE37) to make the safety fitness determination 
process more performance-based.

Effective Date of Final Rule

    The FMCSA has determined it is appropriate for the effective date 
of this final rule to be November 20, 2000, or 90 days from today. 
First, the new consequences attached to an unsatisfactory safety rating 
are particularly severe for motor carriers of non-HM freight. Unless 
these motor carriers are able to demonstrate to the FMCSA that they 
have addressed deficiencies in the safety of their operations, they 
will be prohibited from operating in interstate commerce beginning on 
the 61st day after the FMCSA notifies them of a proposed unsatisfactory 
rating. The FMCSA wants to allow motor carriers a period of time to 
assess their situations, and begin to correct safety problems that they 
may have. Second, the agency requires the additional time to make 
necessary changes to its information systems and correspondence 
procedures so the communications between the agency and motor carriers 
are handled in a timely and efficient manner.

Prospective Application

    The prohibition on the operation of CMVs by unfit motor carriers 
will not be applied retroactively. Passenger and HM carriers rated 
unsatisfactory have either improved their ratings since 1991 or ceased 
operating in interstate commerce. However, there were significant 
numbers of general freight carriers that held unsatisfactory ratings

[[Page 50931]]

at the time TEA-21 was enacted; their operations were not illegal. In 
the absence of statutory direction to the contrary, the prohibition on 
unfit/unsatisfactory general freight carriers in section 4009 must be 
understood as applying only to those rated unsatisfactory by the FMCSA 
after the effective date of this final rule. However, if a motor 
carrier that was rated unsatisfactory prior to the effective date of 
the final rule receives another unsatisfactory rating after the 
effective date of this rule as a result of another CR, the new 
provisions will apply--the motor carrier will be required to cease its 
operations in interstate commerce beginning on the 61st day after the 
date of the FMCSA's notice.

Effect of Rating

    Since 1991, motor carriers receiving an unsatisfactory safety 
rating have been prohibited from using CMVs to transport more than 15 
passengers, including the driver, or placardable quantities of HM, in 
interstate commerce. Furthermore, those motor carriers cannot be used 
by Federal agencies for those purposes. These prohibitions and the 
procedures for applying them are contained in 49 CFR 385.13, which 
implemented section 15(b) of the Motor Carrier Safety Act of 1990. The 
TEA-21 provision expands the same prohibition, under virtually 
identical conditions, to all other motor carriers, irrespective of 
their cargo, which are found by the FMCSA to be unfit. These owners and 
operators may not operate CMVs in interstate commerce beginning on the 
61st day after such fitness determination.

Proposed Ratings; Effective Date of Final Rating

    One of the changes to 49 CFR part 385 made in the November 6, 1997, 
final rule was the adoption of a ``proposed'' safety rating. Upon 
completion of a CR, each HM and passenger motor carriers is now given a 
written description of the deficiencies found, along with a verbal (and 
sometimes written) notification of its proposed safety rating. Written 
confirmation of the proposed rating is issued by the Washington, DC 
office as soon as possible thereafter, but in any case within 30 days 
after completion of the CR. If the proposed rating is unsatisfactory, 
the 45-day period in which to make improvements begins on the day after 
the verbal (and/or written) notice is given by the FMCSA safety 
investigator at the end of the CR [see 49 CFR 386.32(a)]. If no 
improvements are forthcoming, the carrier must halt transportation of 
passengers or HM on the 46th day.
    This final rule retains ``proposed ratings,'' but it changes the 
event that starts the 45-day, or the new 60-day, period in which 
unsatisfactory-rated carriers must make improvements. Although FMCSA 
safety investigators will continue to give verbal (and/or written) 
notice of the motor carrier's proposed safety rating at the end of each 
CR, that will not start the statutory grace period. The 45- or 60-day 
period in which to make improvements will begin on the date the formal 
written notice of the proposed safety rating is issued by the 
Washington, DC office. This notice will be issued as soon as 
practicable, but not later than 30 days after the end of the CR. In 
other words, the grace period starts as soon as the agency issues the 
written notice and delivers it to the Postal Service. While the transit 
time between Washington and the recipient means that motor carriers 
will have less than 45 or 60 days after delivery of the notice to 
improve their operations, they will already have received actual notice 
of the proposed rating at the end of the CR. Because a number of days 
will be required after completion of the CR to electronically upload 
the safety investigator's report to Washington, prior to issuing the 
formal notification of the proposed safety rating, motor carriers will 
routinely have somewhat more than the statutory 45- or 60-day grace 
period in which to improve their operations.
    If an unsatisfactory-rated motor carrier has not made the necessary 
improvements by the end of the grace period, it must cease operations 
on the 46th or 61st day; at the same time, the carrier's final rating 
will be posted on the agency's Safety and Fitness Electronic Records 
System (SAFER) website [http://www.safersys.org] and made available 
through telephone inquiries at (800) 832-5660.
    While section 4009 requires motor carries to cease interstate 
operations 45 or 60 days (depending upon the type of operation) after 
receiving an unsatisfactory rating or determination of unfitness, the 
FMCSA believes the ``proposed'' safety rating followed by a 45- or 60-
day grace period achieves the same purpose as, and is entirely 
consistent with, section 4009. As explained earlier in the preamble, 
the agency has concluded that basic fairness to motor carriers requires 
this procedure.

Time Periods for FMCSA To Perform Follow-Up Compliance Reviews

    Section 4009 also requires specific time periods for the FMCSA to 
perform a CR requested by an unfit (i.e., unsatisfactory) rated motor 
carrier. Section 31144(d) specifies the time limits for the FMCSA to 
review motor carriers' compliance with regulatory provisions that 
contributed to the fitness determination. For unsatisfactory carriers 
of passengers and HM, the follow-up compliance review must be completed 
within 30 days of the carrier's request; for all other carriers rated 
unsatisfactory, the follow-up review must be completed within 45 days 
after the carrier's request.
    In the preamble to the August 16, 1991, interim final rule that 
implemented the provisions of the MCSA of 1990 (56 FR 40801, at 40802), 
the FHWA said it would ``make its determination expeditiously because 
the `unsatisfactory' safety rating may well affect a motor carrier's 
ability to continue in business. In the event the FHWA is unable to 
make its determination within the 45-day period, the agency may 
conditionally suspend any `unsatisfactory' safety rating and rescind 
any related administrative order for a period of up to 10 additional 
calendar days.'' The current regulation, at 49 CFR 385.17(d), continues 
to allow for this additional time: ``If the motor carrier has submitted 
evidence that corrective actions have been taken pursuant to this 
section and a final determination cannot be made within the 45-day 
period, the period before the proposed safety rating becomes effective 
may be extended for up to 10 days at the discretion of the Regional 
Director.'' The final rule retains this provision (as Sec. 385.17(f)) 
because there may be circumstances under which competing demands for 
FMCSA staff time would make it impossible to complete a review within 
the time limit specified by the statute. The agency does not expect 
that to happen often, but it does not wish to penalize motor carriers 
for delays not of their own making. The extension will be allowed at 
the discretion of the FMCSA Service Center for the appropriate 
geographic area. The list of Service Centers appears in Sec. 390.27.

Time Periods for FMCSA To Perform Administrative Reviews

    Under this rule, the FMCSA will continue to perform administrative 
reviews under Sec. 385.15 and corrective-action reviews under 
Sec. 385.17 for motor carriers with a proposed conditional or 
unsatisfactory safety rating, but will give priority to those with 
proposed unsatisfactory ratings. The current Sec. 385.15(d) states that 
the FHWA (now FMCSA) will notify a petitioning motor carrier of the 
agency's decision on administrative review within 30 days after the 
agency receives a petition. The current Sec. 385.17 does not specify a 
time

[[Page 50932]]

limit for the agency to perform a review based upon a motor carrier's 
request to change a safety rating because of its corrective actions, 
but it does allow the agency to extend for up to 10 days the period 
before a proposed safety rating becomes effective (Sec. 385.17(d)). The 
agency is revising its regulations and procedures, now codified at 
Secs. 385.15(c) and 385.17(e), to give priority to reviews of motor 
carriers with a proposed or final unsatisfactory safety rating because 
of the prohibition against operating in interstate commerce with such a 
safety rating.
    Because the regulation is not retroactive, this priority handling 
will not extend to non-passenger and non-HM motor carriers with 
unsatisfactory safety ratings that became final before the effective 
date of the final rule. Although the FMCSA will continue to review 
proposed and final conditional safety ratings, the agency needs to 
place a higher priority on the proposed and final unsatisfactory safety 
ratings because of the severe operational consequences for the affected 
motor carriers. However, as explained above, if a motor carrier of non-
HM freight that held an unsatisfactory safety rating issued prior to 
the effective date of a final rule receives a follow-up proposed 
unsatisfactory rating after the effective date of a final rule, the 
FMCSA will provide those motor carriers the same priority handling as 
motor carriers receiving a proposed unsatisfactory safety rating for 
the first time.
    While preparing the final rule, the FMCSA discovered a discrepancy 
between Secs. 385.15 and .17, as published in the NPRM, in the time 
period allowed for requesting an administrative review. In the former 
section, the time period for requesting an administrative review was 90 
days, while the latter reference was to 45 days. No comments were 
received on the issue. The FMCSA has adopted the 90 day period for both 
sections in the final rule. Additional editorial changes were made as 
well to clarify the operation of the administrative review process.

Potential Extension of Initial 60-Day Grace Period for Motor Carriers 
That Do Not Transport Passengers or HM

    Subsection (c) of 49 U.S.C. 31144 also provides discretionary power 
to the agency to allow unsatisfactory-rated motor carriers that do not 
transport passengers or HM to operate for an additional 60 days, if the 
agency determines the motor carrier is making a good faith effort to 
improve its safety fitness. As noted above, the FMCSA will not make a 
final determination of unfitness in its initial notification--the final 
determination will occur at the end of the 60-day period or any 
extensions of that period, up to a maximum of 120 days.

Federal Government Agency Use of Unsatisfactory Rated Motor Carriers

    Since 1991, any department, agency, or instrumentality of the 
United States Government has been prohibited from using a motor carrier 
with an unsatisfactory safety rating to transport passengers or HM. 
Section 4009 of TEA-21 extends this prohibition to cover all motor 
carriers found to be unfit. As written, the prohibition applies to the 
Federal agency and not to the motor carrier.
    The FMCSA will continue to advise a motor carrier of its proposed 
safety rating as soon as possible after the FMCSA's compliance review, 
but not later than 30 days afterwards. At the end of the 45- or 60-day 
period (or longer, if extended), the proposed rating will become the 
motor carrier's final safety rating if the FMCSA has no basis to change 
it. On the effective date of a final unsatisfactory safety rating, 
Federal government agencies will be precluded from using, or continuing 
to use, these motor carriers' transportation services.
    One commenter, the AMSA, disagreed with this element of the 
proposal. The AMSA contends that ``several household goods carriers 
would be devastated, if not completely put out of business,'' if they 
were prohibited from doing business with the Federal government. No 
other commenters addressed this issue. Since the requirement is 
statutory, the agency adopts the provision as proposed in the NPRM.

FMCSA Organizational Structure

    Decisions regarding safety fitness are made by the Chief Safety 
Officer of the FMCSA. The NPRM had referred to the Program Manager, 
Office of Motor Carrier Safety, FHWA. The title used in the final rule 
reflects the agency's reorganization. No commenters addressed this 
element of the NPRM.
    We have revised the appropriate sections of part 385 to reflect 
changes in organizational structure and titles.

Rulemaking Analyses and Notices

Executive Order 12866 (Regulatory Planning and Review) and DOT 
Regulatory Policies and Procedures

    We have determined that this document contains a significant 
regulatory action under Executive Order 12866 and under the DOT's 
policies and procedures because this action has substantial public 
interest. This action was reviewed by the Office of Management and 
Budget.
    This rule requires any motor carrier in interstate commerce that 
the FMCSA rates unsatisfactory to cease providing CMV transportation 
after a grace period of 45 days (for HM and passenger operations) or 60 
days (for all other motor carriers). A motor carrier will be allowed to 
commence those operations again only if the FMCSA determines its safety 
rating is no longer unsatisfactory. Although these requirements have 
been in place since 1991 for passenger and HM motor carriers, this is 
the first time they are being applied to other motor carriers.
    Motor carriers of passengers and of placardable quantities of HM 
are not subject to new sanctions for noncompliance as a result of this 
regulatory action. Under the new regulations, the FMCSA must respond to 
any requests for a follow-up review of an unsatisfactory safety rating 
within 30 days--the prior regulation had required this to be 
accomplished within 45 days. This revision is required by 49 U.S.C. 
31144(d)(2) and (3).
    As of December 31, 1998, the agency's MCMIS listed 477,486 motor 
carriers as active. The FMCSA has provided safety ratings to 
approximately 25 percent of these motor carriers. The number of motor 
carriers with unsatisfactory safety ratings was a small fraction of all 
the rated motor carriers in MCMIS, and a minute fraction of the motor 
carriers of passengers and of HM. The summary in the NPRM, and the 
detailed statistics in Supplemental Item of the docket, provided a 
recent history of follow-up CRs the agency had performed. No commenters 
addressed these statistics. In fiscal year 1998, the large majority of 
re-rated motor carriers of property that had received an initial 
unsatisfactory safety rating received a conditional or satisfactory 
safety rating after follow-up reviews performed during the year.
    To the extent there are any costs associated with this rule, they 
are a result of noncompliance with an existing rule; it is assumed that 
those costs are less than the cost of complying with the existing rule 
or the entities involved would take steps to achieve compliance with 
the lower cost alternative. With respect to the costs of complying with 
the existing rule, it should be noted that, generally, when DOT 
agencies analyze the costs of a new rule, they assume 100 percent 
compliance. Since 1979, DOT Policies and Procedures have required the 
analysis of costs and benefits of all rules issued by the Department. 
This rule merely rates carriers based on their compliance with existing 
safety

[[Page 50933]]

standards and requires more unfit carriers to cease operations. Any 
costs and benefits associated with complying with underlying safety 
rules adopted since that date would have been considered when those 
rules were adopted.
    The FMCSA anticipates that this rulemaking will have minimal 
economic impact on the interstate motor carrier industry. Based upon 
the statistics on follow-up CRs conducted during calendar years 1994 
through 1998, the FMCSA expects that between 50 and 100 motor carriers 
might not improve an initial proposed unsatisfactory safety rating 
during the grace period allowed. These motor carriers would be required 
to cease their operations in interstate commerce until they could 
demonstrate to the FMCSA that they had improved the safety and 
regulatory compliance of their operations.
    Based upon its analysis of statistical information concerning motor 
carriers' improvement in their safety ratings, the FMCSA believes that 
the vast majority of motor carriers interested in continuing their 
operations would be able to do so. Any adverse economic impact to the 
relatively few motor carriers who are unwilling or unable to 
demonstrate an improvement in the safety of their operations within the 
45 to 120 day period specified in TEA-21 is entirely consistent with 
the intent of the statute. Obviously, requiring an unfit motor carrier 
to cease its interstate operations would have an economic impact on 
that motor carrier and its employees. However, motor carriers have the 
responsibility of conducting their operations in a safe manner, and in 
compliance with the FMCSRs. Therefore, the cessation of a motor 
carrier's interstate operations, as a result of its receiving an 
unsatisfactory safety rating, should not be attributed as a cost of 
this rulemaking.
    The FMCSA believes the traveling public will derive a safety 
benefit from the removal from the Nation's highways of CMVs operated by 
those few motor carriers found to be unfit to operate them safely. In 
addition, shippers of non-HM freight will derive direct and indirect 
economic gains through the improved safety and corresponding efficiency 
of their commercial motor freight transportation.
    This rule will only affect the operations of the small number of 
motor carriers determined to be unfit to operate CMVs based on the 
frequency and severity of their regulatory violations, poor outcomes of 
roadside inspections, and accident experience. The number of motor 
carriers of non-HM freight that do not improve their safety rating from 
unsatisfactory is expected to continue to be small-- fewer than 100 per 
year. This is much smaller than the number of motor carriers that 
ceases operations as a result of normal economic fluctuations. There 
are no new costs associated with this rulemaking and the overall 
adverse economic effects will be minimal.
    This rulemaking will provide the FMCSA the authority to require 
that unsatisfactory-rated motor carriers cease their operations in 
interstate commerce. Removing these motor carriers from the public 
highways will provide a very important, although unquantifiable, safety 
benefit. These motor carriers pose a significant safety risk to the 
traveling public because of their demonstrated refusal, or inability, 
to comply with the FMCSRs. This rule provides the FMCSA with an 
essential tool to take prompt and effective action against these motor 
carriers.
    This rulemaking will not result in inconsistency or interference 
with another agency's actions or plans. It will, however, implement 
several specific congressional directives, including one prohibiting 
Federal agencies from using any motor carrier with an unsatisfactory 
safety rating to provide ``any transportation service.'' Therefore, all 
Federal agencies that contract for motor carrier passenger or freight 
transportation in CMVs must review the safety ratings of these 
contractors.
    The rights and obligations of recipients of Federal grants will not 
be materially affected by this regulatory action.

Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-
612) the FMCSA has evaluated the effects of this rulemaking on small 
entities. Economically impacted by this rulemaking will be motor 
carriers of non-HM freight that receive an unsatisfactory safety rating 
on or after the effective date of this rule, and fail to take 
appropriate actions to improve their rating. As of March 1999, some 79 
percent of the 483,385 active motor carriers in MCMIS were in the 
``very small'' or ``small'' category (less than 21 power units). The 
FMCSA's statistical information contained in MCMIS indicates that 
relatively few small motor carriers of passengers or HM have received 
unsatisfactory safety ratings since 1994, the earliest date for which 
information is readily available, and fewer still did not improve their 
safety ratings based upon the FMCSA's follow-up CRs.
    Tables 2 and 3 in the NPRM provided statistics on follow-up CRs of 
motor carriers of property (non-HM) for calendar years 1994 through 
1998. As before, the large majority of these motor carriers that began 
a calendar year with an unsatisfactory safety rating had improved it by 
the end of the calendar year. As long as a motor carrier holds, or is 
able to improve to, a conditional or satisfactory rating, Sec. 385.13 
of this rule will not affect its ability to operate in interstate 
commerce. This rule does not impose new costs on motor carriers, 
however, it increases penalties for those that fail to take appropriate 
actions to improve the safety of their operations and their resulting 
safety rating. The FMCSA notes that no commenters to the NPRM addressed 
the data in the Regulatory Flexibility Act section. That data presented 
statistics on motor carriers of property initially rated unsatisfactory 
(NPRM Table 2) and the number of motor carriers starting and ending a 
calendar year with an unsatisfactory safety rating (NPRM Table 3).
    Accordingly, the FMCSA certifies that this regulatory action will 
not have a significant economic impact on a substantial number of small 
entities.

Unfunded Mandates Reform Act of 1995

    This rule does not impose a Federal mandate resulting in the 
expenditure by State, local, and tribal governments, in the aggregate, 
or by the private sector, of $100 million or more in any one year. (2 
U.S.C. 1531 et seq.).

Executive Order 12988 (Civil Justice Reform)

    This action meets applicable standards in sections 3(a) and 3(b)(2) 
of Executive Order 12988, Civil Justice Reform, to minimize litigation, 
eliminate ambiguity, and reduce burden.

Executive Order 13045 (Protection of Children)

    We have analyzed this rule under E.O. 13045, ``Protection of 
Children from Environmental Health Risks and Safety Risks.'' This rule 
is not economically significant and does not concern an environmental 
risk to health or safety that would disproportionately affect children.

Executive Order 12630 (Taking of Private Property)

    This rule implements a statutory mandate to prohibit interstate 
motor carrier operations found to be unsafe and therefore unfit. Motor 
carriers can avoid all of the implications of an unsatisfactory safety 
rating simply by

[[Page 50934]]

complying with the FMCSRs. Furthermore, motor carriers with a proposed 
unsatisfactory safety rating will have at least 45 or 60 days, 
depending on the type of operation, to correct deficiencies identified 
by the FMCSA before halting operations in interstate commerce. Finally, 
even if a motor carrier were to suspend its operations, it can resume 
operations by correcting its deficiencies, coming into compliance with 
the FMCSRs, and demonstrating these improvements to the FMCSA.
    This rule will not effect a taking of private property or otherwise 
have taking implications under Executive Order 12630, Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights.

Executive Order 13132 (Federalism)

    This action has been analyzed in accordance with the principles and 
criteria contained in Executive Order 13132 dated August 4, 1999, and 
it has been determined this action does not have a substantial direct 
effect or sufficient federalism implications on States that would limit 
the policymaking discretion of the States. Nothing in this document 
directly preempts any State law or regulation. It will not impose 
additional costs or burdens on the States. Although section 4009 of 
TEA-21 requires the FMCSA to revise part 385 of the FMCSRs, States are 
not required to adopt part 385 as a condition for receiving Motor 
Carrier Safety Assistance Program (MCSAP) grants. Also, this action 
will not have a significant effect on the States' ability to execute 
traditional State governmental functions.

Executive Order 12372 (Intergovernmental Review)

    Catalog of Federal Domestic Assistance Program Number 20.217, Motor 
Carrier Safety. The regulations implementing Executive Order 12372 
regarding intergovernmental consultation on Federal programs and 
activities do not apply to this program.

Paperwork Reduction Act

    This action does not involve an information collection that is 
subject to the requirements of the Paperwork Reduction Act of 1995, 44 
U.S.C. 3501-3520.

National Environmental Policy Act

    The agency has analyzed this rulemaking for the purpose of the 
National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and 
has determined that this action will not have any effect on the quality 
of the environment.

Regulatory Identification Number

    A regulation identification 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 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 385

    Highway safety, Motor carriers.

    Issued on: August 11, 2000.
Clyde J. Hart, Jr.,
Acting Deputy Administrator.
    In consideration of the foregoing, the FMCSA is amending title 49, 
Code of Federal Regulations, chapter III, part 385 as follows:

PART 385--SAFETY FITNESS PROCEDURES

    1. Revise the authority citation for part 385 to read as follows:

    Authority: 49 U.S.C. 113, 504, 521(b), 5113, 31136, 31144, and 
31502; and 49 CFR 1.73.

    2. Revise Sec. 385.1 to read as follows:


Sec. 385.1  Purpose and scope.

    (a) This part establishes the FMCSA's procedures to determine the 
safety fitness of motor carriers, to assign safety ratings, to direct 
motor carriers to take remedial action when required, and to prohibit 
motor carriers receiving a safety rating of ``unsatisfactory'' from 
operating a CMV.
    (b) The provisions of this part apply to all motor carriers subject 
to the requirements of this subchapter, except non-business private 
motor carriers of passengers and motor carriers conducting for-hire 
operations of passenger CMVs with a capacity of fewer than 16 persons, 
including the driver.
    3. Revise Sec. 385.11 to read as follows:


Sec. 385.11  Notification of safety fitness determination.

    (a) The FMCSA will provide a motor carrier written notice of any 
safety rating resulting from a compliance review as soon as 
practicable, but not later than 30 days after the review. The notice 
will take the form of a letter issued from the FMCSA's headquarters 
office and will include a list of FMCSR and HMR compliance deficiencies 
which the motor carrier must correct.
    (b) If the safety rating is ``satisfactory'' or improves a previous 
``unsatisfactory'' safety rating, it is final and becomes effective on 
the date of the notice.
    (c) In all other cases, a notice of a proposed safety rating will 
be issued. It becomes the final safety rating after the following time 
periods:
    (1) For motor carriers transporting hazardous materials in 
quantities requiring placarding or transporting passengers by CMV--45 
days after the date of the notice.
    (2) For all other motor carriers operating CMVs--60 days after the 
date of the notice.
    (d) A proposed safety rating of ``unsatisfactory'' is a notice to 
the motor carrier that the FMCSA has made a preliminary determination 
that the motor carrier is ``unfit'' to continue operating in interstate 
commerce, and that the prohibitions in Sec. 385.13 will be imposed 
after 45 or 60 days if necessary safety improvements are not made.
    (e) A motor carrier may request the FMCSA to perform an 
administrative review of a proposed or final safety rating. The process 
and the time limits are described in Sec. 385.15.
    (f) A motor carrier may request a change to a proposed or final 
safety rating based upon its corrective actions. The process and the 
time limits are described in Sec. 385.17.

    4. Revise Sec. 385.13 to read as follows:


Sec. 385.13  Unsatisfactory rated motor carriers; prohibition on 
transportation; ineligibility for Federal contracts.

    (a) Generally, a motor carrier rated ``unsatisfactory'' is 
prohibited from operating a CMV. Information on motor carriers, 
including their most current safety rating, is available from the FMCSA 
on the Internet at http://www.safersys.org, or by telephone at (800) 
832-5660.
    (1) Motor carriers transporting hazardous materials in quantities 
requiring placarding, and motor carriers transporting passengers in a 
CMV, are prohibited from operating a CMV beginning on the 46th day 
after the date of the FMCSA's notice of proposed ``unsatisfactory'' 
rating.
    (2) All other motor carriers rated from reviews completed on or 
after November 20, 2000 are prohibited from operating a CMV beginning 
on the 61st day after the date of the FMCSA's notice of proposed 
``unsatisfactory'' rating. If the FMCSA determines the motor carrier is 
making a good-faith effort to improve its safety fitness, the FMCSA may 
allow the motor carrier to operate for up to 60 additional days.
    (b) A Federal agency must not use a motor carrier that holds an 
``unsatisfactory'' rating to transport passengers in a CMV or to 
transport

[[Page 50935]]

hazardous materials in quantities requiring placarding.
    (c) A Federal agency must not use a motor carrier for other CMV 
transportation if that carrier holds an ``unsatisfactory'' rating which 
became effective on or after January 22, 2001.
    (d) Penalties. If a proposed ``unsatisfactory'' safety rating 
becomes final, the FMCSA will issue an order placing its interstate 
operations out of service. Any motor carrier that operates CMVs in 
violation of this section will be subject to the penalty provisions 
listed in 49 U.S.C. 521(b).

    5. Revise Sec. 385.15 to read as follows:


Sec. 385.15  Administrative review.

    (a) A motor carrier may request the FMCSA to conduct an 
administrative review if it believes the FMCSA has committed an error 
in assigning its proposed l safety rating in accordance with 
Sec. 385.15(c) or its final safety rating in accordance with 
Sec. 385.11(b).
    (b) The motor carrier's request must explain the error it believes 
the FMCSA committed in issuing the safety rating. The motor carrier 
must include a list of all factual and procedural issues in dispute, 
and any information or documents that support its argument.
    (c) The motor carrier must submit its request in writing to the 
Chief Safety Officer, Federal Motor Carrier Safety Administration, 400 
Seventh Street, SW., Washington DC 20590.
    (1) If a motor carrier has received a notice of a proposed 
``unsatisfactory'' safety rating, it should submit its request within 
15 days from the date of the notice. This time frame will allow the 
FMCSA to issue a written decision before the prohibitions outlined in 
Sec. 385.13 (a)(1) and (2) take effect. Failure to petition within this 
15-day period may prevent the FMCSA from issuing a final decision 
before such prohibitions take effect.
    (2) A motor carrier must make a request for an administrative 
review within 90 days of the date of the proposed safety rating issued 
under Sec. 385.11 (c) or a final safety rating issued under Sec. 385.11 
(b), or within 90 days after denial of a request for a change in rating 
under Sec. 385.17(i).
    (d) The FMCSA may ask the motor carrier to submit additional data 
and attend a conference to discuss the safety rating. If the motor 
carrier does not provide the information requested, or does not attend 
the conference, the FMCSA may dismiss its request for review.
    (e) The FMCSA will notify the motor carrier in writing of its 
decision following the administrative review. The FMCSA will complete 
its review:
    (1) Within 30 days after receiving a request from a hazardous 
materials or passenger motor carrier that has received a proposed or 
final ``unsatisfactory'' safety rating.
    (2) Within 45 days after receiving a request from any other motor 
carrier that has received a proposed or final ``unsatisfactory'' safety 
rating.
    (f) The decision constitutes final agency action.
    (g) Any motor carrier may request a rating change under the 
provisions of Sec. 385.17.

    6. Revise Sec. 385.17 to read as follows:


Sec. 385.17  Change to safety rating based upon corrective actions.

    (a) A motor carrier that has taken action to correct the 
deficiencies that resulted in a proposed or final rating of 
``conditional'' or ``unsatisfactory'' may request a rating change at 
any time.
    (b) A motor carrier must make this request in writing to the FMCSA 
Service Center for the geographic area where the carrier maintains its 
principal place of business. The addresses and geographical boundaries 
of the Service Centers are listed in Sec. 390.27 of this chapter.
    (c) The motor carrier must base its request upon evidence that it 
has taken corrective actions and that its operations currently meet the 
safety standard and factors specified in Secs. 385.5 and 385.7. The 
request must include a written description of corrective actions taken, 
and other documentation the carrier wishes the FMCSA to consider.
    (d) The FMCSA will make a final determination on the request for 
change based upon the documentation the motor carrier submits, and any 
additional relevant information.
    (e) The FMCSA will perform reviews of requests made by motor 
carriers with a proposed or final ``unsatisfactory'' safety rating in 
the following time periods after the motor carrier's request:
    (1) Within 30 days for motor carriers transporting passengers in 
CMVs or placardable quantities of hazardous materials.
    (2) Within 45 days for all other motor carriers.
    (f) The filing of a request for change to a proposed or final 
safety rating under this section does not stay the 45-day period 
specified in Sec. 385.13(a)(1) for motor carriers transporting 
passengers or hazardous materials. If the motor carrier has submitted 
evidence that corrective actions have been taken pursuant to this 
section and the FMCSA cannot make a final determination within the 45-
day period, the period before the proposed safety rating becomes final 
may be extended for up to 10 days at the discretion of the FMCSA.
    (g) The FMCSA may allow a motor carrier with a proposed rating of 
``unsatisfactory'' (except those transporting passengers in CMVs or 
placardable quantities of hazardous materials) to continue to operate 
in interstate commerce for up to 60 days beyond the 60 days specified 
in the proposed rating, if the FMCSA determines that the motor carrier 
is making a good faith effort to improve its safety status. This 
additional period would begin on the 61st day after the date of the 
notice of the proposed ``unsatisfactory'' rating.
    (h) If the FMCSA determines that the motor carrier has taken the 
corrective actions required and that its operations currently meet the 
safety standard and factors specified in Secs. 385.5 and 385.7, the 
agency will notify the motor carrier in writing of its upgraded safety 
rating.
    (i) If the FMCSA determines that the motor carrier has not taken 
all the corrective actions required, or that its operations still fail 
to meet the safety standard and factors specified in Secs. 385.5 and 
385.7, the agency will notify the motor carrier in writing.
    (j) Any motor carrier whose request for change is denied in 
accordance with paragraph (i) of this section may request 
administrative review under the procedures of Sec. 385.15. The motor 
carrier must make the request within 90 days of the denial of the 
request for a rating change. If the proposed rating has become final, 
it shall remain in effect during the period of any administrative 
review.

[FR Doc. 00-21055 Filed 8-21-00; 8:45 am]
BILLING CODE 4910-22-P