[Federal Register Volume 65, Number 182 (Tuesday, September 19, 2000)]
[Proposed Rules]
[Pages 56521-56530]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-24105]


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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Parts 385 and 386

[Docket No. FMCSA-00-7332]
RIN 2126-AA54


Sanctions Against Motor Carriers, Brokers, and Freight Forwarders 
for Failure to Pay Civil Penalties

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

ACTION: Notice of proposed rulemaking (NPRM); request for comments.

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SUMMARY: The FMCSA proposes to implement section 206 of the Motor 
Carrier Safety Improvement Act of 1999 (MCSIA) by amending the penalty 
provisions of the rules of practice of the Federal Motor Carrier Safety 
Regulations (FMCSRs). This action would prohibit a motor carrier that 
does not pay civil penalties assessed by the FMCSA, or that does not 
arrange and abide by its payment agreements, from operating in 
interstate commerce. Furthermore, the registration of a broker, freight 
forwarder, or for-hire motor carrier that fails to pay a civil penalty 
would be suspended. The prohibition would begin on the 91st day after 
the payment date specified in the final agency order or on the 91st day 
after the due date of a missed payment arranged in a payment plan. 
Motor carriers that continue to operate would be subject to additional 
penalties, including revocation of their registrations. However, the 
prohibition would not apply to anyone who is unable to pay a civil 
penalty because the person is a debtor in a case under chapter 11 of 
the Bankruptcy Code.

DATES: Comments must be received on or before October 19, 2000.

ADDRESSES: Your signed, written comments must refer to the docket 
number appearing at the top of this document and you must submit the 
comments to the Docket Clerk, U.S. DOT Dockets, Room PL-401, 400 
Seventh Street, SW., Washington, DC 20590-0001.
    All comments received will be available for examination at the 
above address between 9 a.m. and 5 p.m., e.t., Monday through Friday, 
except Federal holidays. Those desiring notification of receipt of 
comments must include a self-addressed, stamped envelope or postcard.
    All comments will be available for examination using the docket 
number appearing at the top of this document in the docket room at the 
above address. The FMCSA will file comments received after the comment 
closing date in the docket and will consider late comments to the 
extent practicable. The FMCSA may, however, issue a final rule at any 
time after the close of the comment period. In addition to late 
comments, the FMCSA will also continue to file, in the docket, relevant 
information becoming available after the comment closing date, and 
interested persons should continue to examine the docket for new 
material.

FOR FURTHER INFORMATION CONTACT: Ms. Deborah M. Freund, Office of Bus 
and Truck Standards and Operations, (202) 366-4009, Federal Motor 
Carrier Safety Administration, 400 Seventh Street, SW., Washington, DC 
20590-0001; or Mr. Charles Medalen, Office of the Chief Counsel, HCC-
20, (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.

Background

    Section 206 of the Motor Carrier Safety Improvement Act of 1999 
(MCSIA)(Public Law 106-159, 113 Stat.

[[Page 56522]]

1748, at 1763) addresses two issues related to delinquent payment of 
penalties. Section 206(a) amends 49 U.S.C. 13905(c) by authorizing the 
Secretary of Transportation (Secretary) to suspend, amend, or revoke 
any part of the registration of a motor carrier, broker, or freight 
forwarder if that entity has not paid a civil penalty within 90 days of 
the time specified by official order for payment, or has not arranged 
and abided by a payment plan. However, the Secretary may not revoke the 
registration of a person unable to pay penalties because the person is 
a debtor in a case under chapter 11 of the Bankruptcy Code (11 U.S.C. 
362 et seq.)
    The term ``registration'' applies to for-hire motor carriers, 
freight forwarders, and brokers that register with the FMCSA to provide 
transportation under 49 U.S.C. chapter 139. This includes entities that 
held operating authority from the Interstate Commerce Commission as of 
the effective date of the ICC Termination Act of 1995 (ICCTA) (Public 
Law 104-88, 109 Stat. 803), as well as entities registered by the 
Federal Highway Administration (FHWA) after January 1, 1996 and by the 
Federal Motor Carrier Safety Administration on or after January 1, 
2000.
    Section 206(b) amends 49 U.S.C. 521(b) to prohibit operations in 
interstate commerce by an owner or operator of a commercial motor 
vehicle (CMV) who fails to pay a civil penalty, or to arrange and abide 
by an acceptable payment plan. A CMV owner or operator must cease its 
interstate operations if it has not paid its fine within 90 days of the 
time specified by the Secretary's order for payment, or has not 
arranged and abided by a payment plan. Similar to the exception 
contained in section 206(a), the Secretary may not apply this 
prohibition to anyone unable to pay penalties because the person is a 
debtor in a case under chapter 11 of the Bankruptcy Code.

Sections of U.S. Code and Implementing Regulations Affected

    Section 206(a) of the MCSIA authorizes the Secretary to suspend, 
amend, or revoke any part of the registration of a motor carrier, 
broker, or freight forwarder that fails to pay, or fails to abide by a 
payment plan, for civil penalties imposed under several chapters of 
title 49 of the United States Code: Chapter 5, Special Authority; 
Chapter 51, Transportation of Hazardous Materials; Chapter 149, Civil 
and Criminal Penalties; and Chapter 311, Commercial Motor Vehicle 
Safety. The subject matter included is quite broad. Chapter 149 
encompasses violations of the ICCTA and the commercial regulations. 
Chapter 311 includes a broad range of safety regulations, most of which 
are also covered in Chapter 5.

Recommendations of DOT Office of Inspector General

    Section 216 of the MCSIA requires the Secretary to implement all of 
the recommendations contained in the April 26, 1999, report of the 
Office of the DOT Inspector General (IG) (``Motor Carrier Safety 
Program,'' Report TR-1999-091, available at http://www.oig.dot.gov/hywauds.htm) assessing the effectiveness of the DOT's motor carrier 
safety programs, ``except to the extent to which such recommendations 
are specifically addressed in sections 206, 208, 217, and 222 of this 
Act.'' One of those recommendations was to ``[i]mplement a procedure 
that removes the operating authority from motor carriers that fail to 
pay civil penalties within 90 days after final orders are issued or 
settlement agreements completed,'' which is specifically addressed in 
section 206 of the MCSIA.
    The IG report provided the background for its recommendation in the 
following narrative:

    Standards for administrative collection of penalties, cited in 
Code of Federal Regulations, Title 4, Volume 1, Section 102.9, allow 
agencies to suspend or revoke licenses or operating authority for 
nonpayment of fines. However, OMC [the FHWA's former Office of Motor 
Carriers, now the FMCSA] has not exercised these sanctions. For 
example, one motor carrier has had $126,653 in outstanding fines 
since October 1995 and continues normal operations. Another motor 
carrier has a penalty in excess of $22,000, which has been 
outstanding for more than four years. OMC's records indicate a 
settlement was reached between this motor carrier and the Department 
of Justice; however, OMC has not received payment. In addition, 
OMC's records indicate the motor carrier had a more recent penalty 
assessment in excess of $17,000. The continued practice of 
permitting motor carriers with outstanding fines or repetitive 
penalties to continue normal operations limits the effectiveness of 
OMC's enforcement program.

    The subject matter of this NPRM is limited to the sanctions 
provided in section 206 of the MCSIA for failure to pay civil penalties 
imposed under the procedures of 49 CFR part 386.
    The following table summarizes the recent history of the FHWA and 
the FMCSA civil fines and forfeitures. The number of new cases has 
fluctuated considerably from year to year. Following the decision in 
the MST Express v. Federal Highway Administration, 108 F. 3d 401 (D.C. 
Cir. 1997) case, which held that the FHWA's safety fitness rating 
methodology was invalid because it was not published in accordance with 
the notice-and-comment requirements of the Administrative Procedure Act 
(5 U.S.C. 553), the FHWA published an interim final rule reestablishing 
the rating system for motor carriers of passengers and hazardous 
materials and later issued a final rule establishing a new safety 
rating system (62 FR 60035, November 6, 1997). Although the decision in 
MST Express did not prohibit the FHWA from bringing new civil penalty 
actions, which are independent of the rating process, it had the effect 
of reducing the number of compliance reviews, which are a primary 
generator of enforcement actions. In addition, some motor carriers that 
would have requested compliance reviews to upgrade a conditional or an 
unsatisfactory safety rating, and some unrated carriers, probably did 
not request compliance reviews during the time the decision in MST 
Express was in force, because the agency would not have been able to 
change a rating of record or to issue a new rating during this time.
    The following table provides a summary history of civil fines and 
forfeitures assessed and collected by the FMCSA and its predecessor 
agencies. The data in this table reflect fiscal records (accounts 
receivables) that cover enforcement actions that cross fiscal years.

                                   Table 1.--FMCSA Civil Fines and Forfeitures
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                                                      FY 1996         FY 1997         FY 1998         FY 1999
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New Penalties Assessed........  No. of cases....           2,339            2032            2445            2987
                                Amount..........      $8,099,961      $5,209,833      $6,835,647      $8,749,408
Collections...................  No. of cases....           2,128           1,101           2,027           3,748
                                Amount paid.....      $8,437,434      $4,438,350      $6,009,032      $7,027,544
Written Off...................  No. of cases....              86              84             112              34

[[Page 56523]]

 
                                Amount..........        $394,015        $387,021        $510,478        $114,579
Delinquent Claims with Agency.  No. of cases....           1,237           1,080             968           1,436
                                Amount due......      $3,711,317      $4,002,140      $3,665,392      $5,118,361
Outstanding Claims with DOJ...  No. of cases....              99              88              50              28
                                Amount due......        $713,898        $431,940        $406,379        $296,746
Total Outstanding Claims with   No. of cases....           1,336           1,168           1,018           1,464
 Agency and DOJ.                Amount due......      $4,425,215      $4,434,080      $4,071,771      $5,415,107
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    Cases were written off for the following reasons:

                                     Table 2.--Reasons for Writing-Off Cases
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                     Reason                           FY 1996         FY 1997         FY 1998         FY 1999
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Carrier out of business.........................        $201,773        $228,258         $74,475          $8,785
Bankruptcy......................................         100,178          58,028         369,172          75,382
Closed by Regional Counsel......................          43,554          30,848          10,373           2,400
Closed by U.S. Attorney.........................               0          25,450               0               0
Statute of limitations expired..................          10,901           7,876               0               0
Principal incarcerated..........................          11,260               0           1,555               0
Principal deceased..............................           2,665           8,548          20,286               0
Not cost effective to pursue....................          23,684          21,035             856               0
Foreign debtor (no collection means)............               0           4,678          33,761          36,797
Files destroyed in OK City bombing..............               0           2,300               0               0
                                                 ---------------------------------------------------------------
    Total.......................................        $394,015        $387,021        $510,478        $114,579
----------------------------------------------------------------------------------------------------------------

    The amounts written off varied considerably from year to year. The 
largest reductions in write-offs are due to a motor carrier's 
bankruptcy and motor carriers that had gone out of business.

Penalty Procedure

    The rules of practice for motor carrier proceedings are contained 
in 49 CFR part 386. They were recently amended (65 FR 7753, February 
16, 2000) to include proceedings concerning violations of the 
commercial regulations that were formerly implemented and administered 
by the Interstate Commerce Commission. The purpose of the amendment was 
to ensure that all civil forfeiture and investigation proceedings 
instituted by the FMCSA are governed by uniform and consistent 
procedures.
    A Notice of Claim (NOC) is the official charging document used by 
the agency to initiate an enforcement action for violations of 
applicable provisions of the FMCSRs (49 CFR parts 350-399, including 
the commercial regulations (49 CFR parts 360-379)) and the Hazardous 
Materials Regulations (HMRs, 49 CFR parts 171-180). The NOC lays the 
foundation for the claim. Among other things, it lists the violations 
discovered during the compliance review conducted at a specified 
location on certain date(s), that the agency intends to prosecute; 
provides a statement of the provisions of the regulations or law 
alleged to have been violated; and a brief statement of facts regarding 
the violations. The NOC also specifies the amount being claimed for 
each violation and the maximum amount authorized to be claimed under 
the statute. The rules for commencement of proceedings and for 
pleadings are described at 49 CFR part 386, subpart B.
    An NOC is issued by the appropriate FMCSA State Director within 20 
business days of the completion of the compliance review or 
investigation. To establish a record of delivery, it is mailed 
certified/return receipt requested to U.S. respondents and sent 
registered/return receipt requested by commercial express courier 
service to foreign respondents.
    The NOC provides specific instructions to motor carriers on their 
response options. A motor carrier may pay its penalty in full--the 
agency advises the motor carrier to do so within 25 business days. The 
motor carrier may also request a monthly payment schedule to settle the 
claim. This request must be made within 25 days of service of the NOC. 
Finally, the motor carrier may contest the NOC and request a hearing on 
the record on any material issues of fact in dispute--the motor carrier 
must file a written request for a hearing within 15 days of service of 
the NOC. If the motor carrier does not file such a request, it waives 
its right to a hearing.
    If the motor carrier does not respond to the FMCSA, the NOC becomes 
the Final Agency Order (FAO) by default 25 days after the NOC was 
served and the carrier is so notified.
    The FAO is a notice of the outstanding debt the motor carrier owes 
the Federal government. It may be issued following a proceeding before 
the Chief Safety Officer \1\ or an Administrative Law Judge, or it may 
follow a carrier's default as discussed above. An order issued by the 
Chief Safety Officer is final on the day it is served and specifies a 
payment due date. An order issued by an Administrative Law Judge is 
final 45 days after it is served (unless it is modified by the Chief 
Safety Officer); it will also specify a payment due date.
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    \1\ The Chief Safety Officer is also the Assistant Administrator 
of the FMCSA (Title 1, Sec. 101 of the Motor Carrier Safety 
Improvement Act of 1999 (Public Law 106-159, 113 Stat. 1750, 
December 9, 1999).
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    If the motor carrier appeals the FAO to a Federal Circuit Court of 
Appeals, the terms and payment due date of the FAO are not stayed 
unless the Court so specifies.
    The FAO advises the motor carrier that, in addition to the amount 
of the penalty assessed, the motor carrier may be liable for interest 
and administrative penalties based upon the outstanding balance. The 
respondent must pay the fine within 30 days of receipt of the FAO. The 
respondent may petition the

[[Page 56524]]

FMCSA for reconsideration of the FAO within 20 days after it is served.
    If the motor carrier has not paid its fine in full, or if it has 
not executed an agreement with the appropriate FMCSA Service Center for 
a payment schedule for its fine, an accounts receivable memorandum is 
issued by the FMCSA to the FHWA Finance Division which will pursue 
collection through administrative channels. (The FHWA is providing 
certain administrative support for the FMCSA under an interagency 
agreement until the FMCSA is authorized to fully staff its 
administrative offices.) If the agency has not received payment 30 days 
after the FAO is served on a motor carrier, the FHWA will send a letter 
to the motor carrier by certified mail, return receipt requested. The 
agency sends additional letters if it has still not received payment by 
60 days and 90 days after service of the order. After 180 days, the 
FHWA refers the case to the Department of Treasury for collection of 
the fine in accordance with the Debt Collection Improvement Act of 
1996, Pub. L. 104-134, 110 Stat. 1321-358.
    This NPRM would add one additional step to the penalty procedure. 
If the FMCSA has not received payment 45 days after service of the FAO, 
the agency will send the motor carrier a letter by certified mail, 
return receipt requested. This 45-day letter would provide the motor 
carrier one additional notice that its operations in interstate 
commerce (in the case of private and for-hire motor carriers) and its 
operating authority (in the case of authorized for-hire motor carriers, 
brokers, and freight forwarders) may be suspended on the 91st day after 
service of the FAO. Section 206 of the MCSIA specifically states that 
the cessation of operations and suspension of operating authority 
provisions do not apply to motor carriers unable to pay civil penalties 
because they are debtors in bankruptcy proceedings under chapter 11 of 
the Bankruptcy Code. Therefore, those carriers must provide the 
following information: (1) The chapter of the Bankruptcy Code under 
which the bankruptcy proceeding is filed (i.e., Chapter 7 or 11); (2) 
the bankruptcy case number; (3) the court in which the bankruptcy 
proceeding was filed; and (4) any other information requested by the 
agency to determine a debtor's bankruptcy status. This written response 
by the debtor will enable the FMCSA to verify debtor status and to 
assess the debtor's ability to pay penalties.
    Motor carriers, freight forwarders, and brokers are cautioned, 
however, not to construe the 45-day letter as an opportunity to reargue 
the merits of the penalty assessment, or put into issue their ability 
to pay. They will have had several opportunities to address these 
concerns with the FMCSA at earlier stages in the penalty procedure. The 
only written response from a carrier, broker, or freight forwarder 
sufficient to prevent suspension of operations and operating authority, 
would be proof of payment, or proof of bankruptcy debtor status.
    Brokers, freight forwarders, and for-hire motor carriers that 
continue to operate in interstate commerce in violation of the 
suspension of their operating authority may have that authority revoked 
after notice and opportunity for a proceeding in accordance with 49 
U.S.C. 13905(c). Additional sanctions may be imposed under paragraph IV 
(h) of Appendix A to part 386 on all carriers, freight forwarders, and 
brokers that operate during a period of suspension.

Motor Carriers Subject to Penalties

    Part 386 defines a motor carrier as a [for-hire] motor carrier, 
motor private carrier, or motor carrier of migrant workers as defined 
in 49 U.S.C. 13102 and 31501 (65 FR 7753 at 7756, February 16, 2000). 
There are currently two categories of motor carriers of passengers 
warranting special mention: (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.
    Non-business private motor carriers of passengers are not required 
to maintain most of the records otherwise mandated by the FMCSRs and do 
not receive safety ratings from the FMCSA. However, they are still 
subject to many of the substantive regulations and to safety 
enforcement at roadside. Violations of the FMCSRs, HMRs, or the 
commercial regulations discovered during the course of a compliance 
review or at roadside could subject these motor carriers to enforcement 
action and other sanctions. In addition, if a motor carrier in this 
category were found to have such unsafe operational practices and/or to 
have committed such severe safety violations as to make it an imminent 
hazard to public health, the FMCSA may issue an imminent hazard out-of-
service order under 49 CFR 386.72.
    The second category of passenger motor carrier of interest is 
comprised of for-hire operators of limousines and vans that are 
designed to transport between 9 and 15 passengers, including the 
driver. These for-hire motor carriers were required to register and 
obtain operating authority from the former Interstate Commerce 
Commission. Since 1996, they have been required to register with the 
FHWA's former Office of Motor Carriers, now the FMCSA. They were not 
subject to most provisions of the FMCSRs because their vehicles were 
not considered ``commercial motor vehicles'' under 49 CFR 390.5--the 
definition covered only passenger vehicles designed to transport 16 or 
more passengers, including the driver.
    In 1998, section 4008 of the Transportation Equity Act for the 21st 
Century (TEA-21) (Public Law 105-178, 112 Stat. 107, at 405, June 9, 
1998) changed the statutory definition of ``commercial motor vehicle'' 
to include those designed or used to transport ``more than 8 passengers 
(including the driver) for compensation'' (49 U.S.C. 31132(1)(B)). Most 
of the FMCSRs (except parts 382, 383, and a few other requirements) 
became applicable to these smaller passenger vehicles on June 9, 1999; 
subpart B of part 387, minimum levels of financial responsibility for 
for-hire motor carriers of passengers, already was applicable to those 
carriers subject to the registration requirements.
    Section 212 of the MCSIA subsequently required the FMCSA to amend 
the FMCSRs to cover certain commercial motor vehicles designed or used 
to transport between 9 and 15 passengers (including the driver) for 
compensation. At a minimum, the Congress indicated that the rulemaking 
shall apply the FMCSRs to ``camionetas,'' commercial vans operating in 
the area of the U.S.-Mexico border, as well as those commercial vans 
operating in interstate commerce that have been determined to pose 
serious safety risks. A rulemaking on this topic is under development. 
As this class of carriers becomes subject to the FMCSRs, they will also 
be subject to the consequences proposed in today's NPRM--namely, 
revocation of operating authority and prohibition against operating in 
interstate commerce, if they fail to pay civil penalties assessed by 
the FMCSA.

Motor Carriers With Penalties Outstanding

    This rulemaking will not be retroactive. The provisions of this 
proposed action would apply only to penalties included in FAOs issued 
on or after the effective date of a final rule issued in this matter. 
There is nothing in the language of section 206 of the MCSIA that 
suggests that the Congress intended it to apply retroactively. As the 
FMCSA noted in the preamble to the final rule concerning the 
application of

[[Page 56525]]

the provisions of section 4009 of the TEA-21 (Safety Fitness), the 
Supreme Court's discussion of retroactive and prospective application 
of laws in Landgraf v. USI Film Products, 511 U.S. 244 (1994), was 
carefully nuanced. It said, among other things:

    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.
    We find that section 206 of the MCSIA includes no ``express 
command'' to shut down motor carriers based on non-payment of penalties 
assessed before the provision was enacted. Therefore, the presumption 
against retroactive application of laws applies.

Exclusion of Chapter 11 Debtors

    The final paragraphs of MCSIA sections 206(a) and (b) note that the 
suspension or revocation of registration and the prohibition on 
operation in interstate commerce after nonpayment of penalties ``shall 
not apply to any person who is unable to pay a civil penalty because 
such person is a debtor in a case under Chapter 11 of title 11, United 
States Code.''
    The FMCSA believes that the Congress, in creating the bankruptcy 
exemption, did not intend to exempt all Chapter 11 debtors from the 
license suspension/revocation provision and the requirement to cease 
operations in interstate commerce. The express language of the 
statutory exemption applies not to all Chapter 11 debtors, but to any 
person who is unable to pay a civil penalty by reason of being in 
Chapter 11. Congress recognized that the determination of whether a 
Chapter 11 debtor is able to pay certain debts is within the 
jurisdiction of the bankruptcy court. The FMCSA interprets the 
statutory language as requiring the agency to seek a determination from 
the bankruptcy court that a motor carrier is able to pay a civil 
penalty claim prior to imposing a suspension of its operating authority 
or ordering it to cease its interstate operations.
    Under the automatic stay provisions of the Bankruptcy Code, a 
petition filed in bankruptcy ``operates as a stay, applicable to all 
entities of--(1) the commencement or continuation * * * of a judicial, 
administrative, or other action or proceeding against the debtor that 
was or could have been commenced before the commencement of the 
bankruptcy case. * * *'' 11 U.S.C. 362(a). However, ``the filing of a 
petition * * * does not operate as a stay--(4) * * * of the 
commencement or continuation of an action or proceeding by a 
governmental unit to enforce such governmental unit's police or 
regulatory power * * * and (5) * * * Of the enforcement of a judgment, 
other than a monetary judgment, obtained in an action or proceeding by 
a governmental unit to enforce such unit's police or regulatory 
power.'' 11 U.S.C 362(b).
    In determining whether an agency action fits within the exemption 
of section 362(b)(4), the courts have developed the ``public policy'' 
test which distinguishes between governmental proceedings aimed at 
effectuating public policy and those aimed at protecting the 
government's pecuniary interest in the debtor's property. See Eddleman 
v. U.S. Department of Labor, 923 F. 2d 782 (10th Cir. 1991); and NLRB 
v. Edward Cooper Painting, Inc., 804 F. 2d 934 (6th Cir. 1986). Agency 
proceedings under section 206 of the MCSIA are clearly designed to 
bring about the public policy of encouraging compliance with the 
FMCSRs, HMRs, and commercial regulations. As a result, filing for 
bankruptcy protection under Chapter 11 or any other chapter does not 
automatically relieve a motor carrier, broker, or freight forwarder 
from its regulatory obligations.

Relationship of Penalty Provision to Safety Rating

    As a result of section 15(b) of the Motor Carrier Safety Act of 
1990 (Public Law 101-500, 104 Stat. 1218), motor carriers receiving an 
unsatisfactory safety rating from the FHWA/FMCSA have been prohibited 
from using CMVs to transport more than 15 passengers, including the 
driver, or placardable quantities of hazardous materials, in interstate 
commerce. Furthermore, those motor carriers could not be used by 
Federal agencies. These prohibitions and the procedures for applying 
them are contained in 49 CFR 385.13. Section 4009 of the TEA-21 
extended a similar prohibition 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. Regulations 
have been issued to implement this provision (65 FR 50919, August 22, 
2000).
    There are circumstances when the FMCSA assesses penalties against a 
motor carrier but does not assign that motor carrier an unsatisfactory 
safety rating. However, under the rules proposed today, the impact of 
an unpaid fine on a motor carrier's operations would be the same--the 
motor carrier would be prohibited from operating CMVs in interstate 
commerce. Those motor carriers that do not pay civil penalties or abide 
by payment plans as required will be in violation of the law.

Discussion of Proposal

    The proposed changes to 49 CFR part 386 are a straightforward 
implementation of the amendments to 49 U.S.C. 521(b) and 13905(c) made 
by section 206 of the MCSIA. The regulatory changes prohibit interstate 
operations by motor carriers delinquent in payment of penalties 
assessed by the FMCSA, unless the motor carrier is unable to pay 
because it is a debtor in a case under Chapter 11, title 11, United 
States Code. Brokers, freight forwarders, and for-hire motor carriers 
may also have their registrations suspended, amended, or revoked for 
failure to pay civil penalties in a timely manner.
    The proposed rule would apply prospectively. It would only apply to 
FAOs issued on or after the effective date of the final rule. FAOs 
issued before that date would not be subject to the provisions of the 
rule.
    The FMCSA is providing a comment period of 30 days on this proposed 
rule. While E.O. 12866 and DOT policy generally favor at least a 60-day 
period, FMCSA is setting an earlier deadline in order to meet the 
statutory deadline for issuing the final rule.

Rulemaking Analyses and Notices

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

    The FMCSA has determined that this proposed regulatory action is 
not significant within the meaning of Executive Order 12866 nor under 
the regulatory policies and procedures of the DOT. This proposed rule 
would require any motor carrier in interstate commerce that had not 
paid a penalty assessed by the FMCSA within 90 days of the final agency 
order, or had not abided by a payment plan that it had arranged with 
the FMCSA, from providing interstate transportation.
    As of May 25, 2000, the FMCSA's MCMIS and Enforcement Tracking 
Systems and the FHWA's DAFIS fiscal accounting system contained the

[[Page 56526]]

following information concerning motor carrier enforcement cases that 
resulted in fines being assessed:

                                            Table 3.--Enforcement Cases Involving Fines, U.S. Motor Carriers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      1-6          7-20        21-100      101-400      401-1000      1001+        Total       Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 1998 Total cases.............................          255          269          167           36            6            3          736        100.0
    Paid immediately............................          154          177          128           31            6            3          499         67.8
    Billings current............................           21           17            9            2            0            0           49          6.7
    Billings outstanding \1\....................           80           75           30            3            0            0          188         25.5
FY 1999 Total cases.............................          799          760          419           66           11            7         2062        100.0
    Paid immediately............................          487          538          336           54           11            7         1433         69.5
    Billings current............................          106           82           52            9            0            0          249         12.1
    Billings outstanding \1\....................          206          140           31            3            0            0          380         18.4
FY 2000 \1\ Total cases.........................          295          300          160           18            2            1          776        100.0
    Paid immediately \1\........................          112          153           85           12            1            1          364         46.9
    Billings current \1\........................           66           69           38            1            0            0          174         22.4
    Billings outstanding \1\....................          117           78           37            5            1            0          238        30.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Year-to-date.
Note: ``Billings Outstanding'' in this and the following two tables (tables No. 4 and 5) refers to motor carriers that are more than 30 days delinquent
  in their payments.


                                                  Table 4.--Fines Against U.S. Motor Carriers, Dollars
--------------------------------------------------------------------------------------------------------------------------------------------------------
                            Fines                                  1-6          7-20        21-100      101-400      401-1000      1001+        Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 1998 Total fine...........................................     $637,446   $1,071,130   $1,220,525     $425,220      $52,030      $72,500   $3,478,851
    Paid immediately.........................................      307,464      646,025      882,435      348,460       51,670       72,500    2,308,554
    Billings current.........................................       13,076       56,814       65,246       16,296            0            0      151,432
    Billings outstanding.....................................      235,955      338,937      201,035       49,310            0            0      825,237
FY 1999 Total fine...........................................    1,934,845    3,241,918    3,257,668      768,359       70,290       88,000    9,361,080
    Paid immediately.........................................    1,078,740    1,939,570    2,271,852      561,684       64,790       88,000    6,004,636
    Billings current.........................................      201,975      235,982      342,877       90,372            0            0      871,206
    Billings outstanding.....................................      614,914      939,860      405,880      126,630            0            0    2,087,284
FY 2000 \1\ Total fine.......................................      587,477    1,197,055    1,260,461      144,340       18,670       43,510    3,251,513
    Paid immediately.........................................      270,204      613,232      526,369      141,040        4,800       43,510    1,599,155
    Billings current.........................................       68,813      156,473       68,813      156,473      187,424       13,800      651,796
    Billings outstanding.....................................      302,946      429,825      455,043       74,550       13,870            0   1,276,234
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Year-to-date.


                                          Table 5.--Average Fines per Case Against U.S. Motor Carriers, Dollars
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   1-6          7-20        21-100      101-400      401-1000      1001+        Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 1998 Total fine...........................................       $2,500       $3,982       $7,309      $11,812       $8,672      $24,167       $4,727
    Paid immediately.........................................        1,997        3,650        6,894       11,241        8,612       24,167        4,626
    Billings current.........................................          623        3,342        7,250        8,148          n/a          n/a        3,090
    Billings outstanding.....................................        2,949        4,519        6,701       16,437            0            0        4,390
FY 1999 Total fine...........................................        2,422        4,266        7,775       11,642        6,390       12,571        4,540
    Paid immediately.........................................        2,215        3,605        6,761       10,402        5,890       12,571        4,190
    Billings current.........................................        1,905        2,878        6,594       10,041          n/a          n/a        3,499
    Billings outstanding.....................................        2,985        6,713       13,093       42,210            0            0        5,493
FY 2000 \1\ Total fine.......................................        1,991        3,990        7,878        8,019        9,335       43,510        4,190
    Paid immediately.........................................        2,413        4,008        6,193       11,753        4,800       43,510        4,393
    Billings current.........................................        1,043        2,268        1,811      156,473            0            0        3,746
    Billings outstanding.....................................        2,589        5,511       12,298       14,910       13,870            0       5,362
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Year-to-date.

    The number of motor carriers with fines outstanding is a minute 
fraction of the motor carriers in the FMCSA's MCMIS. For example, in 
fiscal year 1999, 380 motor carriers had not paid their fines, or were 
more than 30 days overdue in their payment plans. In that year, there 
were approximately 500,000 motor carriers listed as active. However, 
the dollar value of the outstanding claims is substantial (see Tables 1 
and 4), and has remained relatively constant over time.
    Table 6 expands upon the information contained in Table 2 and 
illustrates the payment records from motor carriers of different size 
categories for Federal fiscal year 1999, the most recent year for which 
a full year's worth of data is available.

[[Page 56527]]



                               Table 6.--Fiscal Year 1999 Payment Patterns of U.S. Motor Carriers, by Power Units Operated
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   1-6          7-20        21-100      101-400      401-1000      1001+        Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rated carriers...............................................       88,825       25,617       11,824        2,135          360          178      128,939
Unrated carriers.............................................      298,350       17,381        4,149          490           80           37      320,487
Total carriers...............................................      387,175       42,998       15,973        2,625          440          215      449,426
Total cases..................................................          799          760          419           66           11            7        2,062
Paid immediately.............................................          487          538          336           54           11            7         1433
(Percent cases)..............................................        61.0%        70.8%        80.2%        81.8%       100.0%       100.0%        69.5%
Billings current.............................................          106           82           52            9            0            0          249
(Percent cases)..............................................        13.3%        10.8%        12.4%        13.6%         0.0%         0.0%        12.1%
Billings outstanding.........................................          206          140           31            3            0            0          380
(Percent cases)..............................................        25.8%        18.4%         7.4%         4.5%         0.0%         0.0%        18.4%
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Finally, the data from a recent FHWA report of accounts receivable 
(as of April 30, 2000, and covering accounts for the prior 12 month 
period) provides a snapshot of motor carriers' progress in adhering to 
their payment plans. Because of the particular reporting period, the 
data in Table 7 is not directly comparable to the other tables. 
However, the average principal per account is comparable to the 
``Billings outstanding'' figures in Table 5.

                              Table 7.--Payment Plans Accounts, May 1999-April 2000
----------------------------------------------------------------------------------------------------------------
                             Status                                   Number         Principal       Avg/acct
----------------------------------------------------------------------------------------------------------------
Current.........................................................             177        $947,313          $5,352
1-30 days.......................................................             155         887,981           5,729
31-60 days......................................................             196         795,232           4,057
61-90 days......................................................             142         507,839           3,576
91-180 days.....................................................             226         998,224           4,417
                                                                             896       4,136,589           4,617
----------------------------------------------------------------------------------------------------------------

    Out of the 896 cases, 670 (75 percent) of the motor carriers would 
be able to continue operating in interstate commerce under the 
provisions of the NPRM, provided that no other sanctions (such as a 
determination of unfitness) had been issued. (Because of the accounting 
case coding method used, there is no readily available breakdown by the 
size categories of motor carriers, nor could we determine readily how 
these cases were divided among U.S., Canadian, or Mexican motor 
carriers.) Not shown in the table are an additional 1,539 cases that 
were delinquent over 181 days--these had been referred to the 
Department of Treasury for collection, and include cases referred prior 
to May 1999.
    Based upon the data presented here, the FMCSA anticipates that this 
rulemaking will have minimal economic impact on the interstate motor 
carrier industry. Statistics on enforcement actions taken during each 
of Federal fiscal years 1996 through 1999 indicate that approximately 
300 to 500 motor carriers per year did not pay their assessed penalties 
within 90 days after receiving a final agency order. Under the proposed 
regulations, these motor carriers would be required to cease their 
operations in interstate commerce until they paid their penalties. That 
sanction may induce most such motor carriers to pay the civil penalty 
within 90 days or to abide by their agreed-upon payment plans. It is 
assumed that the costs of paying the fines, which have historically 
averaged between 3,500 and 5,500, would be less than the potential 
significantly higher cost of not paying, and facing the shutdown of 
interstate operations. Thus, the entities involved would take steps to 
achieve compliance with the lower cost alternative. For the purpose of 
this analysis, the FMCSA estimates that between 50 and 75 percent of 
these motor carriers would pay their fines within 90 days rather than 
face additional sanctions. Therefore, approximately 75 to 250 motor 
carriers annually might not pay their assessed fines and would face the 
penalties attached to this proposed rule. This estimate is conservative 
because it does not account for those motor carriers in Chapter 11 
bankruptcy proceedings that would not be subject to this proposed rule.
    As noted above, the data presented also show that the average fines 
assessed on the motor carriers range between 3,500 and 5,500. The 
majority of fines that are paid under payment plans arranged with the 
FMCSA --75 percent--are not more than 90 days in arrears. However, this 
analysis is limited to the subject of this NPRM, namely, timely payment 
of fines. It does not take into consideration the final rule concerning 
``unfit'' motor carriers that the agency published in the Federal 
Register on August 22, 2000 (65 FR 50919). That rulemaking implements 
the provisions of section 4009 of TEA-21 (Pub. L. 105-178, Title, IV, 
section 4009(a), 112 Stat. 405, (June 9, 1998)). Some carriers may be 
forced to halt operations both because they have an unsatisfactory 
safety rating and because they have not paid outstanding penalties. 
Although this number may be small, it complicates the task of 
separately determining the impact of this rule. The agency is 
interested in any information that will help to determine the economic 
impact of this proposed rule on motor carrier transportation and any 
additional impacts on industry customers.
    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. The adverse impact that this rule 
would have on those few motor carriers not involved in bankruptcy 
proceedings which fail to pay their penalties in a timely manner, is 
exactly the effect intended by Congress.
    This proposed rule would only affect the operations of the small 
number of motor carriers that do not pay civil penalties assessed as 
part of enforcement actions. The number of motor carriers involved is 
expected to continue to be extremely small--fewer than one-tenth of one 
percent of motor

[[Page 56528]]

carriers per year listed as active in the MCMIS. The FMCSA believes the 
number of motor carriers potentially subject to this level of impact is 
much smaller than the number of motor carriers that cease operations as 
a result of normal economic fluctuations. This rulemaking reinforces 
the importance of complying with the safety regulations by putting into 
place a mechanism to require motor carriers to pay penalties assessed, 
unless they are unable to pay because they are debtors in Chapter 11 
bankruptcy proceedings.
    This rulemaking imposes no requirements that would generate new 
costs for motor carriers, brokers, and freight forwarders. Those 
entities would see no change to their operations, provided they pay 
assessed monetary penalties within the time frames that they arrange 
with the FMCSA. Based upon the extremely small number of motor carriers 
projected to be affected, the agency believes that the overall adverse 
economic effects of this rulemaking would be minimal. This rulemaking, 
if adopted, would allow the FMCSA to require those very few motor 
carriers that do not pay civil penalties, or abide by payment 
agreements, to cease their operations in interstate commerce. Brokers, 
freight forwarders, and for-hire motor carriers operating in interstate 
commerce would also lose their operating authority until they paid 
their overdue civil penalties. This proposed rule would provide the 
FMCSA with an essential tool to take prompt and effective action 
against these motor carriers.
    This rulemaking would not result in inconsistency or interference 
with another agency's actions or plans. The FMCSA believes that 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 proposed rulemaking on 
small entities. The motor carriers that would be economically impacted 
by this rulemaking would be those who do not pay their civil penalties 
by the 90th day after the FMCSA's final agency order or that have 
failed to arrange and abide by a payment plan.
    Motor carriers can avoid the consequences of this proposed rule 
simply by paying their civil penalties. The FMCSA does not assess fines 
at a level that would cause a motor carrier to shortchange its safety 
and soundness of operations in order to pay its fine. In determining 
the level of penalties, the FMCSA takes into account, among other 
things, a motor carrier's ability to pay. The FMCSA also allows motor 
carriers to arrange a payment plan with the agency. Both of these 
considerations are tailored to the financial needs of small motor 
carriers and are part of the agency's current procedures. Therefore, 
the FMCSA hereby certifies that this regulatory action would not have a 
significant economic impact on a substantial number of small entities. 
The FMCSA invites public comment on this determination.

Unfunded Mandates Reform Act of 1995

    This proposed rule would not impose a Federal mandate resulting in 
the expenditure by State, local, or 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 proposal under Executive Order 13045, 
``Protection of Children from Environmental Health Risks and Safety 
Risks.'' This proposed 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 proposed rule would implement a statutory mandate to prohibit 
motor carriers that do not pay assessed penalties from operating in 
interstate commerce. Motor carriers can avoid all of the implications 
of this mandate by complying with the FMCSRs, thereby avoiding adverse 
enforcement actions. Failing that, the motor carrier can avoid the new 
sanctions this NPRM would attach by paying penalties assessed within 90 
days of the final agency order. If the motor carrier arranges a payment 
plan with the FMCSA, it can avoid the new sanctions by abiding by its 
payment plans. The FMCSA therefore certifies that this rule has no 
takings implications under the Fifth Amendment or 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. The 
FMCSA has determined this proposed rule does not have a substantial 
direct effect on, or sufficient federalism implications for, the 
States, nor would it limit the policymaking discretion of the States.
    These proposed changes to the FMCSRs would not directly preempt any 
State law or regulation. They would not impose additional costs or 
burdens on the States. Although the FMCSA is revising part 386 of the 
FMCSRs, States are not required to adopt part 386 as a condition for 
receiving Motor Carrier Safety Assistance Program grants. Also, this 
action would not have a significant effect on the States' ability to 
execute traditional State governmental functions.

Executive Order 12372 (Intergovernmental Review)

    Catalog of 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 proposed action would 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 proposal for the purpose of the 
National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and 
has determined that this action would not have an adverse effect on the 
quality of the environment.

Regulatory Identification Number

    A regulatory 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

49 CFR Part 385

    Highway safety, Motor carriers.

[[Page 56529]]

49 CFR Part 386

    Highway safety, Motor carriers, Rules of practice.

    Issued on: September 14, 2000.
Clyde J. Hart, Jr.,
Acting Deputy Administrator.

    In consideration of the foregoing, the FMCSA proposes to amend 
title 49, Code of Federal Regulations, Chapter III, parts 385 and 386 
as set forth below:

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)(5)(A) and (b)(8), 5113, 
31136, 31144, 31502; and 49 CFR 1.73.

    2. Add Sec. 385.14 to read as follows:


Sec. 385.14  Motor carriers, brokers, and freight forwarders delinquent 
in paying civil penalties: prohibition on transportation.

    (a) A motor carrier that has failed to pay civil penalties imposed 
by the FMCSA, or has failed to abide by a payment plan, may be 
prohibited from operating CMVs in interstate commerce under 49 CFR 
386.83.
    (b) A broker, freight forwarder, or for-hire motor carrier that has 
failed to pay civil penalties imposed by the FMCSA, or has failed to 
abide by a payment plan, may be prohibited from operating in interstate 
commerce, and its registration may be suspended under the provisions of 
49 CFR 386.84.

PART 386--RULES OF PRACTICE FOR MOTOR CARRIER PROCEEDINGS

    3. Revise the authority citation for part 386 to read as follows:

    Authority: 49 U.S.C. 113, Chapters 5, 51, 59, 131-141, 145-149, 
311, 313, and 315; sec. 206, Pub. L. 106-159; and 49 CFR 1.45 and 
1.73.

    4. Revise Sec. 386.1 to read as follows:


Sec. 386.1  Scope of rules in this part.

    The rules in this part govern proceedings before the Assistant 
Administrator, who also acts as the Chief Safety Officer of the Federal 
Motor Carrier Safety Administration (FMCSA), under applicable 
provisions of the Federal Motor Carrier Safety Regulations (49 CFR 
parts 350-399), including the commercial regulations (49 CFR parts 360-
379)) and the Hazardous Materials Regulations (49 CFR parts 171-180). 
The purpose of the proceedings is to enable the Assistant Administrator 
to determine whether motor carriers, property brokers, freight 
forwarders, or their agents, employees, or any other person subject to 
the jurisdiction of the FMCSA, have failed to comply with the 
provisions or requirements of applicable statutes and the corresponding 
regulations and, if such violations are found, to issue an appropriate 
order to compel compliance with the statute or regulation, assess a 
civil penalty, or both.
    5. In Sec. 386.2, remove ``Federal Highway Administration'' and add 
``Federal Motor Carrier Safety Administration'' each place it appears; 
and add the new definitions of Assistant Administrator, Broker, Final 
agency order, and Freight forwarder, in alphabetical order, to read as 
follows:


Sec. 386.2  Definitions.

* * * * *
    Assistant Administrator means the Assistant Administrator of the 
Federal Motor Carrier Safety Administration. The Assistant 
Administrator is the Chief Safety Officer of the agency pursuant to 49 
U.S.C.113(d), and the final agency decisionmaker in motor carrier 
safety and hazardous materials proceedings under this part.
* * * * *
    Broker means a person who, for compensation, arranges or offers to 
arrange the transportation of property by an authorized motor carrier. 
Motor carriers, or persons who are employees or bona fide agents of 
carriers, are not brokers within the meaning of this section when they 
arrange or offer to arrange the transportation of shipments which they 
are authorized to transport and which they themselves have accepted and 
legally bound themselves to transport.
* * * * *
    Final agency order means a notice of final agency action issued 
pursuant to this part by either the appropriate FMCSA Field 
Administrator (for default judgements under Sec. 386.14(e)), the FMCSA 
Chief Safety Officer, or an Administrative Law Judge (ALJ), typically 
requiring payment of a civil penalty by a broker, freight forwarder, or 
motor carrier.
    Freight forwarder means a person holding itself out to the general 
public (other than as an express, pipeline, rail, sleeping car, motor, 
or water carrier) to provide transportation of property for 
compensation in interstate commerce, and in the ordinary course of its 
business:
    (1) Performs or provides for assembling, consolidating, break-bulk, 
and distribution of shipments;
    (2) Assumes responsibility for transportation from place of receipt 
to destination; and
    (3) Uses for any part of the transportation a carrier subject to 
FMCSA jurisdiction.
* * * * *
    6. Add Secs. 386.83 and 386.84 to read as follows:


Sec. 386.83  Sanction for failure to pay civil penalties or abide by 
payment plan; operation in interstate commerce prohibited.

    (a)(1) General rule. A motor carrier that fails to pay a civil 
penalty in full within 90 days after the date specified for payment by 
the FMCSA's Final Agency Order is prohibited from operating in 
interstate commerce starting on the next (i.e., the 91st) day. The 
prohibition continues until the FMCSA has received full payment of the 
penalty.
    (2) Civil penalties paid in installments. The FMCSA Service Center 
may allow a motor carrier to pay a civil penalty in installments. If 
the motor carrier fails to make an installment payment on schedule, the 
payment plan is void and the entire debt is payable immediately. A 
motor carrier that fails to pay the full outstanding balance of its 
civil penalty within 90 days after the date of the missed installment 
payment, is prohibited from operating in interstate commerce on the 
next (i.e., the 91st) day. The prohibition continues until the FMCSA 
has received full payment of the entire penalty.
    (3) Appeals to Federal Court. If the motor carrier appeals the 
final agency order to a Federal Circuit Court of Appeals, the terms and 
payment due date of the final agency order are not stayed unless the 
Court so specifies.
    (b)(1) Notification of delinquent payment. The FMCSA will notify 
the motor carrier in writing if it has not received payment within 45 
days after the date specified for payment by the final agency order or 
the date of a missed installment payment. The notice will include a 
warning that failure to pay the entire penalty within 90 days after 
payment was due, will result in the motor carrier being prohibited from 
operating in interstate commerce.
    (2) The notice will be delivered by certified mail or commercial 
express service. If a motor carrier's principal place of business is in 
a foreign country, it will be delivered to the motor carrier's 
designated agent.
    (c) Motor carriers that continue to operate in interstate commerce 
in violation of this section may be subject to additional sanctions 
under paragraph IV (h) of Appendix A to part 386.
    (d) This section does not apply to any person who is unable to pay 
a civil penalty because the person is a debtor

[[Page 56530]]

in a case under chapter 11, title 11, United States Code. Motor 
carriers in bankruptcy proceedings under chapter 11 must provide the 
following information in their response to the FMCSA:
    (1) The chapter of the Bankruptcy Code under which the bankruptcy 
proceeding is filed (i.e., Chapter 7 or 11);
    (2) The bankruptcy case number;
    (3) The court in which the bankruptcy proceeding was filed; and
    (4) Any other information requested by the agency to determine a 
debtor's bankruptcy status.


Sec. 386.84  Sanction for failure to pay civil penalties or abide by 
payment plan; suspension or revocation of registration.

    (a)(1) General rule. The registration of a broker, freight 
forwarder, or for-hire motor carrier that fails to pay a civil penalty 
in full within 90 days after the date specified for payment by the 
FMCSA's final agency order, will be suspended starting on the next 
(i.e., the 91st) day. The suspension continues until the FMCSA has 
received full payment of the penalty.
    (2) Civil penalties paid in installments. TheFMCSA Service Center 
may allow a respondent broker, freight forwarder, or for-hire motor 
carrier to pay a civil penalty in installments. If the respondent fails 
to make an installment payment on schedule, the payment plan is void 
and the entire debt is payable immediately. The registration of a 
respondent that fails to pay the remainder of its civil penalty in full 
within 90 days after the date of the missed installment payment, is 
suspended on the next (i.e., the 91st) day. The suspension continues 
until the FMCSA has received full payment of entire penalty.
    (3) Appeals to Federal Court. If the motor carrier appeals the 
final agency order to a Federal Circuit Court of Appeals, the terms and 
payment due date of the final agency order are not stayed unless the 
Court so specifies.
    (b)(1) Notification of delinquent payment. The FMCSA will notify a 
respondent broker, freight forwarder, or for-hire motor carrier in 
writing if it has not received payment within 45 days after the date 
specified for payment by the final agency order or the date of a missed 
installment payment. The notice will include a warning that failure to 
pay the entire penalty within 90 days after payment was due, will 
result in the suspension of the respondent's registration.
    (2) The notice will be delivered by certified mail or commercial 
express service. If a respondent's principal place of business is in a 
foreign country, it will be delivered to the respondent's designated 
agent.
    (c) The registration of a broker, freight forwarder or for-hire 
motor carrier that continues to operate in interstate commerce in 
violation of this section may be revoked after notice and opportunity 
for a proceeding in accordance with 49 U.S.C. 13905(c). Additional 
sanctions may be imposed under paragraph IV (h) of Appendix A to part 
386.
    (d) This section does not apply to any person who is unable to pay 
a civil penalty because the person is a debtor in a case under chapter 
11, title 11, United States Code. Brokers, freight forwarders, or for-
hire motor carriers in bankruptcy proceedings under chapter 11 must 
provide the following information in their response to the FMCSA:
    (1) The chapter of the Bankruptcy Code under which the bankruptcy 
proceeding is filed (i.e., Chapter 7 or 11);
    (2) The bankruptcy case number;
    (3) The court in which the bankruptcy proceeding was filed; and
    (4) Any other information requested by the agency to determine a 
debtor's bankruptcy status.
* * * * *

Appendix A to Part 386  [Amended]

    7. Add paragraph h to part IV of Appendix A to part 386 to read as 
follows:
* * * * *
    h. Violation--conducting operations during a period of suspension 
under Sec. 386.83 or Sec. 386.84 for failure to pay penalties.
    Penalty--Up to $10,000 for each day that operations are conducted 
during the suspension period.

[FR Doc. 00-24105 Filed 9-18-00; 8:45 am]
BILLING CODE 4910-22-P