[Federal Register Volume 67, Number 53 (Tuesday, March 19, 2002)]
[Rules and Regulations]
[Pages 12758-12774]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-5892]



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Part IV





Department of Transportation





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Federal Motor Carrier Safety Administration



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49 CFR Part 385



Safety Monitoring System and Compliance Initiative for Mexico-Domiciled 
Motor Carriers Operating in the United States; Final Rule

  Federal Register / Vol. 67, No. 53 / Tuesday, March 19, 2002 / Rules 
and Regulations  

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Part 385

[Docket No. FMCSA-98-3299]
RIN 2126-AA35


Safety Monitoring System and Compliance Initiative for Mexico-
Domiciled Motor Carriers Operating in the United States

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

ACTION: Interim final rule (IFR); request for comments.

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SUMMARY: The FMCSA implements a safety monitoring system and compliance 
initiative designed to evaluate the continuing safety fitness of all 
Mexico-domiciled motor carriers within 18 months after receiving a 
provisional Certificate of Registration or provisional authority to 
operate in the United States. This rule includes requirements that were 
not proposed in the NPRM, but which are necessary to comply with the 
Fiscal Year 2002 DOT Appropriations Act enacted into law in December 
2001. The rule also establishes suspension and revocation procedures 
for provisional Certificates of Registration and operating authority 
and incorporates criteria to be used by FMCSA in evaluating whether 
Mexico-domiciled carriers exercise basic safety management controls. 
Therefore, the FMCSA is publishing this action as an interim final rule 
and is delaying the effective date in order to consider additional 
public comments regarding the safety monitoring system for Mexico-
domiciled carriers. The revisions in this action are part of FMCSA's 
efforts to ensure the safe operation of Mexico-domiciled motor carriers 
in the United States.

DATES: This interim final rule is effective May 3, 2002. We must 
receive comments by April 18, 2002.

ADDRESSES: You can mail, fax, hand deliver or electronically submit 
written comments to the Docket Management Facility, United States 
Department of Transportation, Dockets Management Facility, Room PL-401, 
400 Seventh Street, SW., Washington, DC 20590-0001 FAX (202) 493-2251, 
on-line at http://dmses.dot.gov/submit. You must include the docket 
number that appears in the heading of this document in your comment. 
You can examine and copy all comments at the above address from 9 a.m. 
to 5 p.m., e.t., Monday through Friday, except Federal holidays. You 
can also view all comments or download an electronic copy of this 
document from the DOT Docket Management System (DMS) at http://dms.dot.gov/search.htm and typing the last four digits of the docket 
number appearing at the heading of this document. The DMS is available 
24 hours each day, 365 days each year. You can get electronic 
submission and retrieval help and guidelines under the ``help'' section 
of the web site. If you want us to notify you that we received your 
comments, please include a self-addressed, stamped envelope or postcard 
or print the acknowledgement page that appears after submitting 
comments on-line.
    Comments received after the comment closing date will be included 
in the docket and we will consider late comments to the extent 
practicable.

FOR FURTHER INFORMATION CONTACT: Mr. Michael Lamm, (202) 366-9699, 
FMCSA, 400 Seventh Street, SW., Washington, DC 20590. Office hours are 
from 7:45 a.m. to 4:15 p.m., p.t., Monday through Friday, except 
Federal holidays.

SUPPLEMENTARY INFORMATION:

Background

    FMCSA published the notice of proposed rulemaking (NPRM) for this 
action on May 3, 2001 (66 FR 22415) along with two related NPRMs 
proposing changes to the forms and procedures for Mexico-domiciled 
motor carriers to apply to operate in the United States. FMCSA is 
publishing one interim final rule and one final rule for those two 
NPRMs concurrently with this action. The preambles to those rules set 
out the background and history of the NAFTA issues and are not repeated 
here.
    On December 18, 2001, the President signed into law the Fiscal Year 
2002 DOT Appropriations Act, Public Law 107-87 (the Act). Section 350 
of the Act prohibits the expenditure of appropriated funds for 
reviewing or processing applications by Mexico-domiciled carriers to 
operate beyond the commercial zones of municipalities in the United 
States located on the Mexican border (Mexico-domiciled long-haul 
carriers) until FMCSA and DOT take several specified actions. These 
actions include conducting pre-authorization safety examinations on 
Mexico-domiciled long-haul carriers, and complying with certain 
inspection, staffing, rulemaking and reporting requirements. As 
pertinent to this rulemaking proceeding, Section 350(a)(2) of the Act 
requires that FMCSA conduct a full safety compliance review on Mexico-
domiciled long-haul carriers within 18 months after the carrier is 
granted provisional operating authority. Section 350(a)(5) requires 
mandatory inspection of Mexico-domiciled long-haul commercial vehicles 
that do not display a valid Commercial Vehicle Safety Alliance (CVSA) 
decal, unless the carrier has been granted permanent operating 
authority for three consecutive years. Accordingly, we are revising the 
proposed rule to implement the compliance review requirement. We are 
also imposing a requirement that all long-haul Mexico-domiciled 
carriers entering the United States display a valid CVSA sticker on 
their vehicles while operating under provisional status.

Summary of Parties Submitting Comments

    The agency received over 200 comments. Many comments were submitted 
to one or all three dockets for the May 3 NPRMs. The following 
discussion addresses substantive comments relevant to the safety 
monitoring and oversight system.
    The commenters may be categorized as follows:
    (1) Ten United States Senators: Senators Max Baucus, Evan Bayh, 
Jeff Bingaman, Thomas A. Daschle, Richard J. Durbin, Tom Harkin, Edward 
M. Kennedy, John F. Kerry, John Kyl, and Ron Wyden, submitted one 
unified set of comments to the President, who forwarded their comments 
to the docket.
    (2) More than 180 private citizens. One hundred sixteen of these 
citizens submitted an ``Urgent Action Alert'' form letter compiled and 
distributed by Citizens for Reliable and Safe Highways (CRASH) or 
alluded to recommendations in the form letter. The CRASH suggestions 
are discussed later in this document. Comments were also received from 
20 Tucson/Green Valley, Arizona citizens.
    (3) Four Mexican associations: the Asociacion Nacional De 
Transporte Privado (a national private motor carrier association), 
Camara Nacional Del Autotransporte De Carga A.C. (CANACAR) (a national 
trucking association), Asociacion De Agentes Aduanales De Nuevo Laredo 
(a customs broker association), and Central de Servicos de Carga de 
Nuevo Laredo (CenSeCar) (a local trucking association of Nuevo Laredo).
    (4) Four labor organizations: the American Federation of Labor and 
Congress of Industrial Organizations (AFL-CIO), the Amalgamated Transit 
Union (ATU), the International Brotherhood of Teamsters (Teamsters),

[[Page 12759]]

and the AFL-CIO's Transportation Trades Department representing 33 
unions (TTD). The TTD submitted separate comments from the AFL-CIO, its 
parent organization.
    (5) Four motor carrier associations: the American Bus Association 
(ABA), American Trucking Associations, Inc., (ATA), the California 
Trucking Associations (CTA), and the Owner-Operator Independent Drivers 
Association (OOIDA).
    (6) Three Texas transportation associations: the San Antonio Free 
Trade Alliance, Association of Laredo Freight Forwarding Agents, and 
Laredo Transportation Association.
    (7) Four safety advocacy groups: CRASH, Public Citizen, the 
American Automobile Association (AAA), and Advocates for Highway and 
Auto Safety (AHAS).
    (8) Four environmental groups that submitted one unified response: 
Friends of the Earth, the Sierra Club, the Natural Resources Defense 
Council and the Center for International Environmental Law.
    (9) Three law enforcement agencies: the California Attorney 
General, the California Highway Patrol, and the Arizona Department of 
Public Safety.
    (10) Two associations representing State enforcement and licensing 
agencies: the Commercial Vehicle Safety Alliance (CVSA) and the 
American Association of Motor Vehicle Administrators (AAMVA).
    (11) Three motor carriers: United Parcel Service (UPS), Greyhound 
Lines and Transportes Quintanilla S.A. de C.V.
    (12) The Transportation Lawyers of America, Air Courier Conference 
of America, Transportation Consumer Protection Council, the Laredo 
Chamber of Commerce, the National Association of Independent Insurers 
(NAII), and the American Insurance Association (AIA) each submitted one 
comment.

Discussion of Comments to the NPRM

    The municipalities adjacent to Mexico in Texas, New Mexico, 
Arizona, and California and the commercial zones of such municipalities 
will be referred to as ``border zones'' for the purposes of this 
document.

United States Senators

    Senators Baucus, Bayh, Bingaman, Daschle, Durbin, Harkin, Kennedy, 
Kerry, Kyl and Wyden believe that the Mexican government does not have 
a domestic truck safety system equivalent to that provided under U.S. 
law. They state that Mexico does not have hours-of-service laws and has 
only recently proposed the use of logbooks to record driving history. 
Therefore, they believe that cross-border truckers could easily enter 
U.S. highways fatigued. They note the DOT Inspector General has stated 
repeatedly that ``fatigue is a major factor in commercial vehicle 
crashes.''
    The Senators believe that a ``lack of sufficient inspection 
resources at the border and the proposed 18-month delay between the 
approval of general cross-border trucking applications and actual 
safety enforcement means that trucks may easily enter the United States 
over federal weight and size limits, a condition both inherently more 
dangerous to travelers and more stressful to our roadways.''
    The Senators urged the President to not grant operating 
certificates until the administration completes onsite compliance 
reviews and ensures the safety of the American traveler.

CRASH ``Urgent Action Alert'' Form Letter and Excerpts

    One hundred sixteen individuals submitted comments repeating one or 
more of three standard phrases suggested by CRASH's ``Urgent Action 
Alert''. These phrases are as follows:

    (1) Allowing Mexican carriers to operate for up to 18 months 
before a safety audit is done by U.S. officials is totally 
unacceptable. Safety audits must be done before Mexican carriers are 
allowed to enter the U.S.
    (2) Application forms and processes are important and necessary 
but as a member of CRASH and a concerned highway safety advocate, 
the U.S./Mexico border should remain closed to increased NAFTA 
cross-border trucking until meaningful safety standards and 
significantly increased compliance oversight are in place on both 
sides of the border.
    (3) Not one human life should be sacrificed on the alter [sic] 
of NAFTA cross-border trucking.

Individuals

    Al Feuer wrote that the border should be opened to truck traffic. 
He also believes safety inspections/audits should not be required 
before allowing Mexican trucks into the United States. Mr. Feuer 
reasoned that advance auditing would be unfair and statistically 
impractical because many Mexican drivers would be unable to read road 
signs and markings printed in English. He believes ``it would be unfair 
to make Mexican truck drivers meet the same safety standards as 
American truck drivers--who can read English.'' Mr. Feuer believes 
advance auditing would not be cost effective, but it would be more cost 
effective to allow Mexico-domiciled motor carriers onto our highways 
for 18-months and then audit the results. Mr. Feuer writes ``FMCSA 
could easily glean accident investigation data by tapping into 
computers at various local and State law enforcement agencies. Then it 
would simply be a matter of adding the number of Americans killed and 
injured by unsafe Mexican truck drivers. Those who caused more deaths 
and injuries than United States truck drivers could be banned from 
United States highways; those who caused fewer deaths and injuries than 
United States truck drivers could continue driving in the United 
States. There's your audit.''
    Mark Pizenche, a Land Line magazine reader, believes the 
requirements are good, if they can be enforced. He suggests having a 
sign in clear sight identifying Mexican trucks, such as a flag on a 
plate.

Green Valley, Arizona Residents

    Elmer Silaghi, a Green Valley resident, is concerned about the 
safety of highway conditions along Interstate 19 near Green Valley, a 
retirement community located between Nogales and Tucson, Arizona. He 
believes that implementation of the NAFTA access provisions will 
exacerbate the community's existing commercial vehicle traffic 
congestion. The docket also received 19 comments from Tucson and Green 
Valley residents referring to Mr. Silaghi's letter or stating identical 
concerns.

Mexican Associations

    Camara Nacional Del Autotransporte De Carga A.C. (CANACAR) (a 
Mexican Trucking Association representing the Mexican trucking 
industry) opposes the proposal. It believes the proposed entrance 
requirements are too difficult. It states that ``consciously or 
unconsciously, all three of FMCSA's proposals unfortunately are 
permeated with anti-Mexican sentiments * * * disguised in the form of 
concern for highway safety * * * based on false assumptions.'' CANACAR 
believes Mexican trucks are safer than those operated by the U.S. 
trucking industry. To support this position, CANACAR stated that the 
out-of-service rate for U.S. and Mexican drayage companies are not very 
different.
    Asociacion De Agentes Aduanales De Nuevo Laredo and Central de 
Servicos de Carga de Nuevo Laredo (CenSeCar) had similar comments. Each 
believes imposing inspections on short-haul carriers at the border 
would impact the efficient flow of traffic as well as be an unfair 
practice compared with the northern border. The two borders are 
different, they assert, and a single cookie cutter approach should not 
be applied. They are also concerned that all government agencies on the 
border

[[Page 12760]]

are grossly understaffed. They believe that imposing unfunded mandates 
and new procedures without regard to staffing is categorically wrong 
and shortsighted.

Labor Organizations

    The AFL-CIO, ATU, TTD, and the Teamsters argued that opening the 
border is premature because of deficiencies in Mexico's internal safety 
standards for motor vehicles, and that a stronger implementation plan 
approved by the DOT Office of Inspector General is needed. The ATU 
fully supports and agrees with comments submitted by the AFL-CIO. It 
also concurs in Greyhound's comments, with one minor exception: ATU 
opposes the proposal to allow up to 18 months before a safety audit is 
conducted on a Mexico-domiciled carrier. The common viewpoints of ATU 
and Greyhound are outlined as follows:
    (1) Mexican buses should not be authorized to operate in the United 
States absent reciprocal treatment of U.S. buses by Mexico.
    (2) Mexican buses must be certified as safe before the first day 
they are authorized to operate in the United States.
    (3) FMCSA must develop and implement an effective enforcement plan 
before opening the border.
    (4) U.S. subsidiaries of Mexican companies must be subject to the 
same standards and reviews as their Mexican parent companies.
    (5) Application and oversight rules must be applied to small 
passenger carrying vehicle operations (9 to 15 passengers), as well as 
cross-border bus operations.
    (6) Application forms must require detailed explanations of 
compliance measures to ensure a full understanding of the applicable 
laws.

Motor Carrier Associations

American Bus Association (ABA)
    The American Bus Association believes there is too little 
inspection of buses at the border and that FMCSA should do more border 
inspections. It believes FMCSA should enforce compliance with the 
Federal Motor Vehicle Safety Standards (FMVSS) maintained and enforced 
by the National Highway Traffic Safety Administration.
    The ABA believes a final rule imposing the Federal Motor Carrier 
Safety Regulations (FMCSR) on 9-to 15-passenger vans is necessary, 
alleging that the poor safety record of these small passenger carrying 
vehicle operations must be a part of FMCSA's enforcement plan.
    ABA argues that the proposed safety monitoring system is inadequate 
to protect passengers because the rule would only apply to operators 
providing cross border services. It believes FMCSA should provide the 
same scrutiny to Mexican-owned, U.S.-domiciled carriers as it does to 
Mexican-owned, Mexico-domiciled carriers. ABA contends that these 
Mexican-owned companies providing domestic service in the United States 
will probably have a greater impact in the United States than any other 
type of service. ABA believes that it is critical for these operations 
to be included in the safety evaluation process. Although such 
operations are subject to the FMCSRs, they are not subject to the 
safety monitoring system described in this action or the two NAFTA-
related rulemakings published elsewhere in today's Federal Register. 
ABA believes that the NAFTA Arbitral Panel provided FMCSA with the 
discretion to apply a heightened level of scrutiny and enforcement 
measures toward Mexican companies operating within the United States--
regardless of whether they are based in Mexico or in the United States. 
According to ABA, ``the rules and oversight for Mexican-owned companies 
providing domestic U.S. service should be at least as stringent as the 
rules for Mexican companies providing international service.'' 
Accordingly, ABA believes that FMCSA must expedite a rulemaking that 
would put into place a procedure that ensures the safety of new 
entrants to the U.S. market, regardless of whether they are based in 
the United States or Mexico, and whether or not they are Mexico-or 
U.S.-owned.
    ABA believes that conducting an onsite review of a motorcoach 
company before the issuance of operating authority would be beneficial, 
notwithstanding the lack of complete U.S. compliance data. ABA suggests 
there are several items that could be checked during an initial review, 
including the Mexican driver's compliance with licensing and medical 
certification procedures. Vehicles could also be checked to ensure that 
they comply with the FMVSS. ABA believes that, given the lack of safety 
data and history for Mexican carriers, FMCSA should consider 
establishing procedures that include an expeditious and comprehensive 
onsite review of each applicant's safety program. ABA argues that an 
expedited safety review procedure conducted by Federal or State 
enforcement personnel would do far more to ensure safety than a simple 
review of submitted information and the monitoring of data generated by 
roadside inspections that may or may not occur. ABA suggests that the 
educational ``Safety Review'' procedure established during the late 
1980s could be used as a template for trucking operations, as it 
afforded an opportunity for motor carrier personnel to interact 
directly with enforcement personnel to explain regulatory requirements, 
and answer questions. However, ABA does not believe that this procedure 
will adequately ensure the safety of passengers.
    ABA contends that our rulemaking will do nothing to ensure that the 
cross-border provisions of NAFTA are implemented in a reciprocal 
manner. It argues the proposed rule outlined how Mexican operators and 
drivers will be treated while in the United States, but gave no 
assurance that the Mexican government would implement identical 
policies. For example, ABA argues the Mexican government has taken the 
position that it will grant cross-border service authority for U.S. 
carriers to serve only one point in Mexico, and that it will not allow 
U.S. carriers to own or operate bus terminals in Mexico. ABA also 
states that the Mexican government has indicated that it will not 
authorize U.S. carriers to provide incidental package service as part 
of their cross-border trips. ABA believes that finalizing the cross-
border access proposal without assurances of reciprocal treatment of 
U.S. companies by Mexico would result in unequal treatment in clear 
violation of both the letter and spirit of NAFTA.
American Trucking Associations, Inc. (ATA)
    The ATA recommended that FMCSA provide specific guidelines for 
establishing safety monitoring systems, including defining a ``poorly 
performing driver''. The ATA recommends that FMCSA investigate the 
possibility that Mexico may consider the proposed safety review program 
an ``extraterritorial application of United States law.'' In light of 
that possibility, the ATA recommends that FMCSA work jointly with the 
Secretaria de Comunicacianos y Transportes (SCT) to establish a joint 
safety review program for Mexico-domiciled motor carriers.
Owner Operator Independent Drivers Association (OOIDA)
    OOIDA believes there is a lack of Mexican infrastructure, 
resources, and the will to promulgate and enforce compatible safety 
regulations in Mexico. It contends there is no true equivalent to the 
49 CFR Part 383 commercial drivers licensing regulations in Mexico.

[[Page 12761]]

    OOIDA cites the DOT OIG report that there is a link between Mexican 
truck condition and the level of inspection resources. OOIDA believes 
FMCSA must have a minimum of 80 new safety inspectors to do border 
crossing inspections and 40 safety investigators to conduct compliance 
reviews before granting authority. OOIDA believes the FMCSA goal of 
more inspectors is correct, but the plans do not include enough 
personnel.
    OOIDA believes FMCSA's proposal to review Mexico-domiciled carriers 
within 18 months after granting them authority is unrealistic and 
dangerous. It recommends that FMCSA conduct onsite reviews in Mexico 
and verify whether a Mexico-domiciled motor carrier has been placed 
out-of-service in Mexico, has had hazardous material incidents in 
Mexico, has a drug and alcohol testing program, and maintains valid 
proof of financial responsibility.
California Trucking Association (CTA)
    CTA supports the rules as ``well-thought [out] applications and 
safety entry standards for Mexico-domiciled motor carriers,'' but sees 
a need for more resources to accomplish FMCSA goals. CTA believes the 
safety monitoring period should be shorter than 18 months and the 
program should include State and local law enforcement agencies in the 
review teams. It recommends involving FMCSA field offices in safety 
reviews because it believes the field offices know their local 
carriers. It also recommends promulgating review standards before the 
initial review period. CTA predicates its support of the three NAFTA 
rulemakings upon four conditions, including establishing ``a level 
playing field for all motor carriers through the application of the 
same laws and regulations.''

Safety Advocacy Groups

    The safety advocacy groups believe FMCSA should conduct a safety 
audit before it allows a Mexico-domiciled motor carrier to operate in 
the United States and that FMCSA must have more U.S. inspection sites 
and more safety inspectors.

American Automobile Association (AAA)

    The AAA's comments are generally representative of the safety 
groups. The AAA believes FMCSA must:
    (1) Conduct safety audits before Mexico-domiciled trucks cross the 
border.
    (2) Follow California's incentive to Mexico-domiciled motor 
carriers to display a valid CVSA decal on their trucks entering the 
United States. If one is not apparent, FMCSA should, like California, 
conduct the most rigorous CVSA, or equivalent, inspection at the 
border.
    (3) Work closely with AAMVA to see that proper licensing procedures 
are in place and enforceable.
    (4) Weigh trucks at the border.
    (5) Demand proof of financial responsibility for every vehicle in 
every fleet at the border. Drivers should have to carry an insurance 
document unique to their particular vehicle.
    (6) Ensure that every one of the 27 U.S.-Mexico border crossing 
points has resources to monitor compliance with the FMCSRs.

Public Citizen

    Public Citizen contends the proposed rule fails to acknowledge the 
inadequacy of the existing enforcement structure and will not protect 
the public from unsafe trucks crossing into the United States. It 
believes unsafe trucks will inevitably escape detection and travel 
freely throughout the United States, endangering motorists and risking 
a trade-related debacle.
    Public Citizen contends the penalties for Mexico-domiciled carriers 
under the safety monitoring program would be weaker than those 
currently applicable to U.S.-domiciled carriers. It argues that the 
serious infractions listed in proposed Sec. 385.23 would only result in 
a carrier receiving a safety review--a review to which it would have to 
submit anyway--or a deficiency letter instructing the carrier to notify 
FMCSA that the problem has been corrected.
    Public Citizen argues that the consequences of such violations for 
U.S. carriers are considerably more severe, including civil and 
criminal fines or even jail time. It believes allowing Mexican carriers 
to receive weak penalties for serious violations fails to communicate 
the seriousness of these violations to carriers and will not prepare 
them to comply with these regulations at the end of the safety 
oversight program.
    Public Citizen also believes FMCSA omitted some serious violations 
from the list of violations that would trigger an expedited safety 
review or deficiency letter. Under the proposal, an accident resulting 
in a hazardous materials incident prompts the expedited safety review 
or deficiency letter process, but an accident resulting in death, or a 
violation of the hours-of-service limit, does not. Public Citizen 
believes potential hours-of-service violations are of particular 
concern because Mexican carriers require their workers to drive for 
much longer periods than the U.S. hours-of-service limit, and Mexican 
laws do not include hours-of-service rules. It believes we should add 
hours-of-service infractions to the list in proposed Sec. 385.23 and 
publish a plan for enforcing hours-of-service limits for drivers 
crossing the border who are not subject to any time controls while in 
Mexico.
    Public Citizen notes the NPRM does not specify a time limit for 
carriers to respond to deficiency letters before their provisional 
registration is suspended. Public Citizen believes it is also unclear 
how soon an expedited safety review would take place after a serious 
violation is discovered and how long a carrier can be suspended without 
taking corrective action before its registration is revoked. It 
contends that without time limits, an unsafe carrier could operate 
indefinitely before any limitations are placed on it. It believes we 
must revise the NPRM to provide definite time restrictions to ensure 
that non-compliant carriers do not slip through the cracks.
    Public Citizen also believes that FMCSA suspension or revocation of 
provisional registration will not change a carrier's ability to send 
trucks across the border. It cites a November 1999 DOT Inspector 
General report finding that carriers were able to retain their 
certificates of registration in their vehicles and continue operating 
across the border even after these certificates were revoked. It 
believes no information would be available to inspectors to verify that 
a certificate of registration is valid, or to verify that a driver has 
a certificate of registration if he or she is not able to present it 
upon request.

Environmental Groups

    Friends of the Earth, the Natural Resources Defense Council, the 
Sierra Club and The Center for International Law commented that FMCSA 
is required to perform additional analysis to meet the requirements of 
the National Environmental Policy Act (NEPA) and Executive Order 13045, 
concerning the protection of children.
    The Attorney General for the State of California submitted a 
comment in which he asserted that the FMCSA would be required to 
perform a ``conformity determination'' pursuant to the Clean Air Act 
(CAA), before finalizing these rulemakings. Under the CAA, Federal 
agencies are prohibited from supporting in any way, any activity that 
does not conform to an approved State Implementation Plan (SIP), (42 
U.S.C. 7006). EPA regulations implementing this provision require 
Federal agencies to determine whether an action would conform with the 
SIP

[[Page 12762]]

(a ``conformity determination''), before taking the action (40 CFR 
93.150). The Attorney General asserts that the FMCSA must make a 
conformity determination before taking final action to implement 
regulations that would allow Mexican trucks to operate beyond the 
border. The Attorney General provided technical information to support 
his assertion that allowing Mexican trucks to operate beyond the border 
would likely not be in conformity with California's SIP.

Commercial Vehicle Safety Alliance (CVSA)

    CVSA believes the rules will not sufficiently reassure the public. 
It makes eight recommendations for strengthening the monitoring program 
as key to its support of this rulemaking. CVSA's recommendations 
include:
    (1) Perform ``case studies'' on Mexico-domiciled motor carriers. 
Case studies would facilitate a collaborative safety culture and 
provide objective, uniform and quantitative data upon which to base 
policy decisions. They would be similar to the proposed safety review, 
except case studies would: (a) Be completed before granting operating 
authority; (b) be conducted at the motor carrier's place of business; 
(c) include both regulatory evaluation and educational components; (d) 
include a representative sample of CVSA Level V inspections; and (e) 
adopt a collaborative approach that includes U.S., Canadian and Mexican 
officials. CVSA believes these case studies should initially be 
conducted on all carriers applying for authority to operate beyond the 
border zones, then on a sampling of carriers who wish to operate solely 
within the border zones.
    (2) Require all motor carriers and drivers to renew their valid 
Licencia Federal de Conductor and be entered into the Mexican 
commercial drivers' licensing database before being granted operating 
authority in the United States.
    (3) Work with CVSA and the States to develop the necessary 
legislative and policy changes for providing States the ability to 
enforce operating authority requirements.
    (4) Investigate the equipment manufacturing standards in Mexico and 
report how they differ from those required in the United States, 
specifically with respect to compliance with the FMVSS. CVSA thinks 
this is particularly important to the roadside inspection program and 
weight enforcement.
    (5) Provide clear policy direction on how to address the language 
issue in the field. CVSA wants us to apply a reasonable standard to 
determine whether a driver ``can read and speak the English language 
sufficiently to converse with the general public, understand highway 
traffic signs and signals in the English language, to respond to 
official inquiries and to make entries on reports and records.''
    (6) Coordinate outreach and training programs that are delivered to 
Mexican motor carriers, drivers, and enforcement personnel. CVSA 
believes a clear and consistent message is important to the education 
and learning process.
    (7) Make sure appropriate modifications are made to software and 
information systems in a timely manner and adequate time and resources 
are provided for training enforcement officials for all changes that 
are promulgated in the final rule.
    (8) Explore multiple technology options (hardware, software, and 
communications), conduct the necessary due diligence and pilot test 
potential solutions for facilitating throughput at the borders and 
performing safety assessments on motor carriers. CVSA wants us to 
consider various types of incentives for safe operators and to 
encourage technology adoption.

American Association of Motor Vehicle Administrators (AAMVA)

    AAMVA believes that Mexico-domiciled motor vehicles should be 
inspected for conformance to Federal motor carrier safety regulations 
before they are allowed to operate in the United States. Specifically, 
it supports periodic motor vehicle safety inspections similar to the 
CVSA inspections.
    It also suggests conducting complete safety audits of carriers in 
Mexico before approving applications for operating authority. It 
believes a safety audit and inspection of vehicles before approval of 
operating authority will ensure that any vehicle entering the United 
States from Mexico comports with applicable safety standards and does 
not pose undue risk to citizens on the nation's roadways.

Transportation Consumer Protection Council

    The Transportation Consumer Protection Council, representing 500 
shippers and receivers of freight, believes FMCSA should require truck 
inspections before carriers are allowed into the United States.

National Association of Independent Insurers (NAII)

    The NAII believes DOT was unable to do much to prepare for the 
beginning of true cross-border trucking during the previous 
administration. It believes that preparations must be our top priority 
and that we need more people and resources to handle the workload than 
were requested for fiscal year 2002. It believes the most pressing need 
to keep American roads safe when the border opens is for us to have a 
detailed plan showing who will do what and where.

American Insurance Association (AIA)

    The AIA alleges that the proposed rules fail to provide for safety 
and are inconsistent with law, citing 49 U.S.C. 113(a) as providing for 
safety as the ``highest priority.'' It believes follow-up inspections 
should be done earlier than 18 months. The AIA also believes conducting 
compliance reviews under Sec. 385.13(a) that apply the criteria for 
evaluating safety management controls described in Sec. 385.7 would not 
be sufficient. It recommends requiring safety reviews to occur on the 
Mexico-domiciled motor carrier's premises.
    The AIA states that different procedures are expressly permissible 
under NAFTA and believes FMCSA could have proposed more stringent motor 
carrier safety procedures on Mexican carriers.

FMCSA Response to Comments

The DOT Appropriations Act

    The most common recommendation made in the comments was that 
Mexico-domiciled carriers undergo a safety review by FMCSA before being 
allowed to operate in the United States. This concern was addressed in 
Sec. 350(a)(1) of the DOT Appropriations Act. The FMCSA's companion 
rule amending our part 365 application procedures will require that 
Mexico-domiciled long-haul carriers receive a safety audit before 
receiving provisional operating authority. This pre-authorization 
safety audit will include verification of performance data, safety 
management programs (including hours-of-service compliance, vehicle 
inspection and maintenance and drug and alcohol testing programs) and 
financial responsibility. The audit will also entail vehicle 
inspections, verification of driver qualifications and an interview 
with carrier officials to review safety management controls and 
evaluate written safety oversight policies and practices.
    FMCSA intends to provide all Mexico-domiciled carriers educational 
and technical assistance when they apply for provisional operating 
authority or a provisional Certificate of Registration. The education 
and technical assistance package will consist of material designed to 
assist the Mexico-domiciled applicant in

[[Page 12763]]

complying with the FMCSRs and Hazardous Materials Regulations (HMRs) 
and establishing good safety management practices. It will include 
information on driver qualifications; controlled substances and alcohol 
use testing; commercial drivers licenses; minimum levels of financial 
responsibility; accident reports; requirements applicable to the 
driving of motor vehicles; vehicle inspection, repair and maintenance; 
hours of service and records of duty status of drivers; and 
requirements applicable to the transportation of hazardous materials. 
These materials will help long-haul carriers prepare for the pre-
authorization safety audit.
    We are not extending the pre-authorization audit requirement to 
carriers seeking to operate solely within the border zones under 
Certificates of Registration. Border zone operations have been 
permitted for nearly 20 years without a pre-authorization audit 
requirement. The most serious safety concerns, as evidenced by the 
provisions of Sec. 350 of the Act and reflected in the comments to the 
NPRM, involve Mexico-domiciled carriers who will be operating vehicles 
beyond the border zones in long-haul service. We believe that the 
informational and certification requirements added to the revised OP-2 
form in our companion rule and the post-operational audit required by 
this rule will be sufficient to protect public safety in the border 
zones.
    Section 350(a)(2) of the Act requires FMCSA to conduct a full 
compliance review of Mexico-domiciled long-haul carriers within 18 
months after issuance of provisional operating authority. This review 
will be consistent with our existing safety fitness evaluation 
procedures set forth in subpart A of part 385 and will result in the 
assignment of a safety rating. As required by section 350(a)(2), the 
compliance review must result in a ``Satisfactory'' safety rating 
before the carrier is granted permanent operating authority to operate 
beyond the border zones. We have incorporated these requirements into 
this interim final rule. In accordance with section 350(a)(2), at least 
50 percent of these compliance reviews will be conducted onsite, 
including any compliance review conducted on a Mexico-domiciled carrier 
with four or more commercial vehicles that did not undergo an on-site 
safety audit before receiving provisional authority.
    This rule also addresses the section 350(a)(5) requirement that any 
Mexico-domiciled vehicle operated in the United States beyond the 
border zones receive a Level 1 inspection if it does not display a 
valid CVSA inspection decal, unless the carrier has held permanent 
authority for at least three consecutive years. In order to reduce the 
burden on State and Federal inspection officials, at least during the 
18-month provisional operating period covered by this rule, we will 
require all commercial vehicles operated by Mexico-domiciled long-haul 
carriers to display a valid CVSA inspection decal when entering the 
United States.

Vehicle Size and Weight Issues

    In response to the Senators' concern about oversize and overweight 
vehicles, section 350(a)(7)(A) of the DOT Appropriations Act requires 
FMCSA to:
    (1) Equip all United States-Mexico commercial border crossings with 
scales suitable for enforcement action;
    (2) Equip five of the ten highest volume commercial vehicle traffic 
crossings with weigh-in-motion systems before reviewing or processing 
applications by Mexico-domiciled carriers to operate beyond the border 
zones;
    (3) Equip the remaining five of the ten highest volume crossings 
with weigh-in-motion systems within 12 months; and
    (4) Require inspectors to verify the weight of each Mexico-
domiciled carrier's commercial vehicle entering the United States at 
each weigh-in-motion equipped high volume border crossing.
    The FMCSA will comply with these requirements and work with the 
Federal Highway Administration and States to assure the effective use 
of the weigh-in-motion equipment as part of an effective enforcement 
program. Enforcement of size and weight requirements is a State 
function, under the oversight of the Federal Highway Administration.

Driver Hours-of-Service

    In response to the Senators' comments regarding Mexican hours-of-
service laws (also discussed by Public Citizen), we note that the use 
of the record of duty status, commonly known as a logbook, is the tool 
the FMCSA uses for enforcing compliance with U.S. hours-of-service 
requirements. Upon entering the United States, each driver must either: 
(a) Have in his/her possession a record of duty status current on the 
day of the examination showing the total hours worked for the prior 
seven consecutive days, including time spent outside the United States; 
or, (b) demonstrate that he/she is operating as a ``100 air-mile (161 
air-kilometer) radius driver'' under Sec. 395.1(e).
    In addition, section 350(a)(9) of the DOT Appropriations Act 
requires Mexico-domiciled carriers to only enter the United States at 
commercial border crossings: (1) Where and when a certified motor 
carrier safety inspector is on duty; and (2) where adequate capacity 
exists to conduct a sufficient number of meaningful vehicle safety 
inspections and to accommodate vehicles placed out-of-service as a 
result of these meaningful safety inspections. The examination of 
drivers resulting from the section 350(a)(9) vehicle inspection 
requirements would allow inspection of each Mexico-domiciled carrier's 
drivers upon entry and would allow certified motor carrier safety 
inspectors to review the driver's logbooks and discover whether hours-
of-service violations have occurred.

Similarity of Regulatory Treatment

    In response to the comments of the Mexican trade associations, 
FMCSA believes the regulatory requirements imposed in this rule are 
within the standards set out in the NAFTA Arbitral Panel Report, a copy 
of which is in the docket. The Panel noted that:
    (1) The United States is not required to treat applications from 
Mexico-domiciled trucking firms in exactly the same manner as 
applications from U.S. or Canadian firms, as long as they are reviewed 
on a case by case basis; and
    (2) Given the different enforcement mechanisms in place in the 
United States and Mexico, it may not be unreasonable for the United 
States to address legitimate safety concerns. Similarly, the Panel 
found it might be reasonable for the United States to implement 
different procedures with respect to service providers from another 
NAFTA country if necessary to ensure compliance with its own local 
standards by these service providers. Although CANACAR believes Mexican 
trucks are safer based on out-of-service rates for U.S. and Mexican 
drayage companies, the fact remains that Mexico's motor carrier safety 
regulatory system lacks several of the components that are central to 
the U.S. system. As the Panel found, the United States is responsible 
for the safe operation of motor carriers within U.S. territory, 
regardless of the carriers' country of origin, and FMCSA believes we 
must ensure each carrier is safe to protect U.S. highway users. This 
rule, in conjunction with the other rules pertaining to Mexican motor 
carriers published elsewhere in today's Federal Register, will provide 
FMCSA with the necessary level of assurance, in a manner consistent 
with the Panel's findings, that Mexican motor carriers seeking U.S. 
operating authority are capable of complying with the U.S. safety 
regulatory regime.

[[Page 12764]]

    ABA, AHAS, and other commenters cite language from the NAFTA 
Arbitral Panel's Final Report to support their comments favoring more 
stringent safety measures with regard to Mexico-domiciled carriers. The 
Panel stated, among other things, that to the extent that Mexican 
licensing and inspection requirements may differ from U.S. 
requirements, the United States might be justified in using methods to 
ensure Mexico-domiciled carrier compliance with the U.S. regulatory 
regime that differ from those used for U.S. and Canadian carriers, 
provided that those methods are used in good faith to address 
legitimate safety concerns and fully conform with all relevant NAFTA 
provisions. FMCSA believes that the more stringent measures in the 
rules published today fulfill its statutory obligation to ensure the 
safe operation of motor carriers in the United States in a manner that 
is consistent with the Panel's construction of NAFTA.

Reciprocal Treatment

    ABA urged us not to publish final rules permitting Mexico-domiciled 
carriers to operate beyond the border zones until the government of 
Mexico guarantees that U.S. carriers operating in Mexico will receive 
the same regulatory treatment afforded to Mexican carriers operating in 
that country. These regulations are intended to establish procedures to 
ensure that Mexico-domiciled carriers operate safely while traveling in 
the United States, not to police compliance with the terms of NAFTA. 
The NAFTA contains specific procedures designed to resolve disputes 
over whether the parties are fulfilling their obligations under the 
agreement.

Mexican-Owned, U.S.-Domiciled Motor Carriers

    In response to comments by ABA, ATU, and Greyhound urging us to 
subject Mexican-owned, U.S.-domiciled passenger carriers to the same 
procedures applicable to Mexican-owned, Mexico-domiciled passenger 
carriers, we note that President Bush, in June 2001, issued a 
Memorandum that, among other things, allows a Mexican citizen to 
establish a U.S.-based passenger carrier to provide point-to-point 
transportation within the United States under the same procedures 
applicable to U.S.-owned, U.S.-domiciled passenger carriers. Mexican 
nationals may establish a passenger carrier operation in the United 
States by either purchasing an existing motor carrier or establishing a 
new motor carrier. Such carriers, as Greyhound itself points out, must 
use U.S. citizens or resident aliens to provide passenger service in 
the United States. The drivers they employ must possess a Commercial 
Drivers License issued in the United States. In addition, these 
carriers are subject to the same safety requirements, inspection 
procedures, enforcement mechanisms, and fines and out-of-service orders 
that apply to any other U.S. carrier. Thus, there is no basis to treat 
these carriers any differently from U.S.-owned, U.S.-domiciled carriers 
based solely on the owner's nationality. All U.S.-domiciled carriers, 
regardless of the owner's nationality, will be subject to an interim 
final rule establishing application procedures and safety monitoring 
requirements for new entrant carriers, which we expect to publish in 
the near future.

Small Passenger Carrying Vehicle Operations

    With respect to the small passenger carrying vehicle issues raised 
by the ABA, the FMCSA published a Notice of Proposed Rulemaking on 
January 11, 2001 (66 FR 2767) that proposed to apply most of the FMCSRs 
(except for CDL and drug and alcohol testing requirements) to certain 
passenger carriers operating vehicles designed or used to transport 
between 9 and 15 passengers. The FMCSA's final small passenger carrying 
vehicle rule, which will be published in the near future, will address 
the safety issues regarding this type of operation.

Environmental Issues

    Friends of the Earth, the Natural Resources Defense Council, the 
Sierra Club and The Center for International Law commented that FMCSA 
is required to perform additional analysis to meet the requirements of 
the National Environmental Policy Act (NEPA) and Executive Order 13045, 
concerning the protection of children from environmental health and 
safety risks. FMCSA is preparing an agency order to meet the 
requirements of DOT Order 5610.1C (that establishes the Department of 
Transportation's policy for compliance with NEPA by the Department's 
administrations). FMCSA has conducted a programmatic environmental 
assessment (PEA) of the three NAFTA-related rulemakings in accordance 
with the DOT Order and the regulations of the Council on Environmental 
Quality. A discussion of the PEA and its findings is presented later in 
the preamble under ``Regulatory Analyses and Notices.'' A copy of the 
PEA is in the docket to this rulemaking. Executive Order 13045 is 
addressed in the Regulatory Analyses and Notices section of this 
preamble.
    We have reviewed our obligations under the CAA, and believe that we 
are in compliance with the general conformity requirements as 
implemented by the U.S. Environmental Protection Agency (EPA). EPA's 
implementing regulations exempt certain actions from the general 
conformity determination requirements. Actions which would result in no 
increase in emissions or clearly a de minimis increase, such as 
rulemaking (40 CFR 93.153(c)(iii)), are exempt from requiring a 
conformity determination. In addition, actions which do not exceed 
certain threshold emissions rates set forth in 40 CFR 93.153(b) are 
also exempt from the conformity determination requirements. The FMCSA 
rulemakings meet both of these exemption standards. First, as noted 
elsewhere in this preamble to this rule, the actions being taken by the 
FMCSA are rulemaking actions to improve FMCSA's regulatory oversight, 
not an action to modify the moratorium and allow Mexican trucks to 
operate beyond the border. Second, the air quality impacts from each of 
the FMCSA's rules neither individually nor collectively exceed the 
threshold emissions rates established by EPA (see Appendix C of the 
Environmental Assessment accompanying these rulemakings for a more 
detailed discussion of air quality impacts). As a result, we believe 
that FMCSA's rulemaking actions comply with the CAA requirements, and 
that no conformity determination is required.

Penalties

    We believe Public Citizen did not understand the full range of 
penalties available to FMCSA when it made its comments that the 
penalties for Mexico-domiciled carriers under the safety monitoring 
program would be weaker than those that currently apply to U.S.-
domiciled carriers. In addition to the procedures established by this 
rule, Mexico-domiciled carriers are fully subject to the full range of 
enforcement actions and sanctions faced by U.S. and Canadian carriers, 
including civil and criminal fines and jail time.

Expedited Action Criteria

    Although violations of the hours-of-service limits are not 
specifically included in the list of violations prompting an expedited 
safety or compliance review or demand for corrective action, hours-of-
service violations will be taken into account as part of a carrier's 
out-of-service rate, which is a triggering factor for expedited action 
under Sec. 385.105(a)(7).
    Although a fatal accident is not included on the list of violations 
that

[[Page 12765]]

would trigger an expedited safety audit or compliance review or a 
demand for corrective action, Mexico-domiciled motor carriers will be 
subject to existing FMCSA policy regarding crashes. Under this policy, 
FMCSA conducts a basic Crash Inquiry on any motor carrier having a 
crash involving two or more fatalities, two or more injuries, or a 
combination of fatalities and injuries. This review policy also 
includes any crash that may result in the agency acquiring detailed 
knowledge that would be beneficial for any unusual post-crash public 
interest. The Crash Inquiry would include crashes involving motor 
coaches, unqualified drivers, explosions, and substantial fire.
    FMCSA policy automatically expands the basic Crash Inquiry into a 
full compliance review as soon as practicable when the motor carrier is 
not in good standing with FMCSA. A motor carrier is not in good 
standing with FMCSA when it is does not have a safety rating (which 
would generally be the case for new entrant Mexico-domiciled carriers 
prior to the performance of a compliance review), the safety rating is 
less than satisfactory, or the carrier is on FMCSA's Safety Status 
Measurement System (SafeStat) with a SafeStat category of A, B, C, or 
D. For more information about SafeStat, see the FMCSA web page at: 
http://www.fmcsa.dot.gov/factsfigs/safetstat.htm.
    The Mexico-domiciled motor carrier's application will create a new 
record attached to its new USDOT identification number without any 
safety rating attached to it. The lack of a safety rating for a Mexico-
domiciled motor carrier coupled with a multiple fatality or injury 
crash will result in the Mexico-domiciled motor carrier being subject 
to a full compliance review as soon as practicable. This procedure is 
identical to the current treatment of new entrant U.S.-or Canada-
domiciled motor carriers lacking a safety rating.

Procedural Time Limits

    In response to Public Citizen's concern that the rule did not 
propose specific time limits for carriers to address identified 
problems and respond to letters demanding corrective action, we have 
added a provision that failure to respond within 30 days will result in 
the suspension of the carrier's provisional registration. Public 
Citizen also raised a question concerning the status of an uninsured 
carrier operating while the agency performs a safety review or 
processes a demand for corrective action. FMCSA has authority, under 49 
CFR 387.31(g), to deny entry to any Mexico-domiciled carrier not 
carrying the required evidence of financial responsibility in its 
vehicles. The agency also has authority, under 49 U.S.C. 14702, to 
obtain a court order enjoining a carrier from operating without 
insurance independent of the safety monitoring process. Finally, 
Mexico-domiciled carriers operating beyond the border zones will be 
required to file evidence of insurance with FMCSA as a condition for 
retaining their provisional operating authority. As is the case for 
U.S. and Canada-domiciled carriers, failure to have a current insurance 
filing will result in revocation of authority under existing FMCSA 
procedures.
    Public Citizen's concerns about the timeliness of an expedited 
safety review are valid. The agency will strive to conduct the review 
as soon as possible and will give priority in assigning resources to 
conduct these reviews. We believe Sec. 385.111 of the final rule 
adequately addresses Public Citizen's concerns about the length of time 
a carrier can be suspended without taking corrective action before its 
registration is revoked. An agency suspension of any carrier's 
authority to operate means the carrier cannot operate legally until it 
corrects its deficiencies and has received written notice from FMCSA 
allowing it to resume operating. The suspension order will provide for 
revocation of the provisional registration if necessary corrective 
action is not taken within 30 days.
    The violations requiring expedited action are warning signs that a 
carrier may not have the necessary basic safety management controls in 
place, thus generating an immediate response in the form of a 
corrective action demand letter, safety audit or compliance review. 
FMCSA will take these violations seriously, but they do not necessarily 
establish that the carrier is unfit to operate. If the carrier 
demonstrates that it has taken steps to correct the identified problems 
and that it is otherwise exercising the necessary basic safety 
management controls, it does not present a danger to public safety and 
should be allowed to continue to operate.
    FMCSA is developing a database that will indicate whether a carrier 
has had its authority suspended or revoked. Unregistered carriers and 
carriers whose registration has been suspended or revoked will be 
denied entry into the United States. Use of this data will also help to 
ensure that enforcement personnel can place out-of-service at the 
roadside those carriers that continue to operate commercial motor 
vehicles within the United States after registration has been suspended 
or revoked.

Compliance With Federal Motor Vehicle Safety Standards (FMVSS)

    FMCSA and its State partners will continue to enforce the FMVSS 
through roadside inspections, including inspections at the border. 
Roadside inspections provide a means of ensuring that vehicles meet the 
applicable FMVSS in effect on the date the vehicle was manufactured.
    Part 393 of the FMCSRs currently includes cross-references to most 
of the FMVSS applicable to heavy trucks and buses. The rules require 
that motor carriers operating in the United States, including Mexico-
domiciled carriers, must maintain the specified safety equipment and 
features that the National Highway Traffic Safety Administration 
(NHTSA) requires vehicle manufacturers to install. Failure to maintain 
these safety devices or features is a violation of the FMCSRs. If the 
violations are discovered during a roadside inspection, and they are 
serious enough to meet the current out-of-service criteria used in 
roadside inspections (i.e., the condition of the vehicle is likely to 
cause an accident or a mechanical breakdown), the vehicle would be 
placed out of service until the necessary repairs are made. Any FMVSS 
violations that involve noncompliance with the standards presently 
incorporated into part 393 could subject motor carriers to a maximum 
civil penalty of $10,000 per violation. If FMCSA determines that 
Mexico-domiciled carriers are operating vehicles that do not comply 
with the applicable FMVSS, we could also take appropriate enforcement 
action for making a false certification on Form OP-1(MX) or OP-2.
    To further strengthen FMVSS enforcement, FMCSA and NHTSA are 
initiating several regulatory actions in today's Federal Register to 
ensure that all commercial vehicles operated in the United States, 
including those operated by Mexican and Canadian carriers, display a 
NHTSA-required label certifying compliance with the FMVSS. FMCSA is 
publishing a Notice of Proposed Rulemaking proposing to incorporate the 
labeling requirement into part 393 and NHTSA is publishing two NPRMs 
and one policy statement relating to the certification label.
    Many commercial motor vehicles owned by Mexican and Canadian 
carriers may comply with the FMVSSs in effect at the time of their 
manufacture. However, because these vehicles were not originally 
manufactured for use in the United

[[Page 12766]]

States, they are not likely to have FMVSS certification labels. The 
NHTSA policy statement permits a vehicle manufacturer to retroactively 
apply a label to a commercial motor vehicle certifying, if it has 
sufficient basis for doing so, that the vehicle complied with all 
applicable FMVSS in effect at the time it was originally manufactured. 
In connection with this policy statement, NHTSA is proposing 
recordkeeping requirements for foreign manufacturers that choose to 
retroactively certify vehicles.
    In the third NHTSA document published in today's Federal Register, 
NHTSA is proposing to codify, in 49 CFR part 591, its longstanding 
interpretation of the term ``import'' as including bringing commercial 
vehicles into the United States for the purpose of transporting cargo 
or passengers.

Staffing Issues

    Several parties expressed concern about whether there are adequate 
resources available to conduct the necessary inspections and safety 
reviews. Section 350(a)(9) of the Act prohibits Mexico-domiciled motor 
carriers from entering the United States at any border crossing where a 
certified motor carrier inspector is not on duty or where there is not 
adequate capacity to conduct either a sufficient number of meaningful 
vehicle safety inspections or accommodate vehicles placed out-of-
service as a result of safety inspections. Congress has appropriated 
$57.8 million for FMCSA to handle its responsibilities in connection 
with implementing the NAFTA access provisions for Mexico-domiciled 
carriers. FMCSA intends to hire over 200 people for this purpose, most 
of whom will be conducting vehicle inspections, pre-authorization 
safety audits and 18-month safety audits. We believe this significant 
augmentation of our existing staff at the southern border will enable 
us to fully comply with our safety monitoring responsibilities.

Responses to Other Comments

    The individuals who submitted form comments provided by CRASH did 
not elaborate on what they considered to be ``meaningful safety 
standards and significantly increased compliance oversight.'' We have 
addressed those concerns in this and the companion rulemakings 
published elsewhere in today's Federal Register.
    We recognize the concerns of the Green Valley, Arizona residents 
along Interstate 19, but any increase in traffic along this route will 
not result from the implementation of this rule and its two companion 
rules. These rules do not open the border to Mexico-domiciled trucks, 
they impose safety certification and monitoring requirements on Mexico-
domiciled motor carriers operating in the United States under the 
provisions of NAFTA.
    In response to Mr. Pizenche's comments, 49 CFR 390.21 currently 
requires that all motor vehicles, including foreign vehicles, must have 
the carrier's name and USDOT number on each side of the power unit, and 
must be readable from 50 feet. In addition, our companion rule 
establishing application requirements for Mexico-domiciled long-haul 
carriers published elsewhere in today's Federal Register, requires that 
FMCSA issue a new USDOT identification number to each Mexico-domiciled 
motor carrier applicant intending to operate beyond the United States-
Mexico border zones. This new USDOT identification number will have a 
suffix that will denote the type of authority held by the Mexico-
domiciled motor carrier and allow FMCSA to monitor the carrier's 
performance by inspecting crash and roadside inspection reports.

Section-by-Section Summary

    We have changed the section numbers as they appeared in the NPRM. 
The sections are now numbered 385.101 through 385.119.

Section 385.101

    This section contains the definitions of terms used in new subpart 
B. These include:
    (1) Provisional certificate of registration, the registration 
issued to Mexico-domiciled border zone carriers;
    (2) Provisional operating authority, the registration issued to 
Mexico-domiciled long-haul carriers; and
    (3) Safety audit, the review conducted by FMCSA on a border zone 
carrier during the 18-month provisional period to determine whether the 
carrier exercises basic safety management controls. Because we will be 
conducting compliance reviews on Mexico-domiciled long-haul carriers 
during the 18-month provisional period, we have also added a reference 
to the existing definition of compliance review in Sec. 385.3.

Section 385.103

    This section describes the elements of the safety monitoring 
system, which include roadside monitoring, safety audits for border 
zone carriers and compliance reviews for long-haul carriers. FMCSA has 
added a requirement that all Mexico-domiciled motor vehicles operating 
beyond the border zones display a valid CVSA inspection decal 
throughout the 18-month provisional operating authority period. A CVSA 
inspection is only valid for three months from the date of inspection. 
Consequently, Mexico-domiciled long-haul carriers will need to get a 
CVSA inspection for their vehicles every three months. FMCSA will work 
with CVSA to ensure that this requirement is operational when the 
President lifts the moratorium on granting operating authority to 
Mexico-domiciled motor carriers.

Section 385.105

    Section 385.105(a) lists the serious violations or infractions that 
will result in an expedited safety audit or compliance review or, in 
the alternative, a demand that the carrier demonstrate in writing that 
it has taken immediate corrective action. The infractions listed are 
essentially identical to those proposed in the NPRM. We have added 
clarifying language regarding what constitutes a valid Licencia 
Federal. The type of action taken by FMCSA in response to the 
violations will depend upon the specific circumstances of the 
violations.
    Sections 385.105(b) provides that failure to respond to a request 
for a written response demonstrating corrective action within 30 days 
will result in suspension of provisional registration until the 
required showing of corrective action is made.
    Section 385.105(c) clarifies that a carrier that successfully 
responds to a demand for corrective action still must undergo a safety 
audit or compliance review during the provisional period if it has not 
already done so.

Section 385.107

    This section describes the safety audit and what follow-up action 
will be taken by the agency. Safety audits on Mexico-domiciled carriers 
operating only in the border zones under provisional Certificates of 
Registration will be conducted by an FMCSA safety specialist, usually 
onsite, although FMCSA reserves the right to conduct the audit at an 
alternate site. The safety audit will assess the adequacy of the 
carrier's basic safety management controls in accordance with the 
criteria established in new Appendix A. Appendix A does not 
specifically reference Mexico-domiciled motor carriers because we are 
considering adopting it eventually for all new entrants, except for 
Mexico-domiciled long-haul carriers, who must undergo compliance 
reviews.
    The audit will consist of a review of the Mexico-domiciled 
carrier's safety data, a review of requested motor carrier

[[Page 12767]]

documents, and an interview session with the Mexico-domiciled carrier 
by the FMCSA safety specialist. The objective of the safety audit is 
both to educate the carrier on compliance with the FMCSRs and HMRs and 
to determine areas where the carrier might be deficient in terms of 
compliance. Areas covered include: financial responsibility; commercial 
driver's license standards; qualification of drivers; controlled 
substances and alcohol use and testing; transporting and marking 
hazardous materials; requirements applicable to driving a motor 
vehicle; hours of service; and vehicle inspection, repair, and 
maintenance. A safety audit is different than a compliance review in 
that it focuses on providing safety management and technical assistance 
and is not intended to result in a safety fitness determination. 
However, if the audit demonstrates that the carrier fails to establish 
and/or exercise basic safety management controls, FMCSA will ensure 
that the necessary corrective action is taken or else the carrier will 
not be allowed to continue operating in the United States.
    FMCSA Division Administrators or State Directors will make the 
initial determination about the adequacy of a Mexico-domiciled 
carrier's basic safety management controls and whether necessary 
corrective action has been taken.
    If the safety audit demonstrates that the carrier is exercising the 
necessary basic safety management controls, the carrier will retain its 
provisional status and will continue to be closely monitored until the 
expiration of the 18-month safety monitoring period. At that time, the 
provisional designation will be removed from its registration, provided 
its safety record remains in good standing.
    FMCSA anticipates that the basic safety management practices of the 
large majority of Mexico-domiciled carriers will prove to be adequate 
based on the combined effect of:
    (1) Providing educational material to the carrier in the 
application process;
    (2) Requiring the carrier to certify how it will comply with the 
FMCSRs;
    (3) Requiring long-haul carriers to successfully complete a pre-
authority safety audit; and
    (4) Providing notice to the carrier of what items will be covered 
in the safety audit or compliance review conducted during the 
provisional registration period.
    If the safety audit reveals that the Mexico-domiciled carrier's 
basic safety management practices are inadequate, FMCSA will initiate a 
suspension and revocation proceeding. The carrier will be required to 
remedy the deficiencies or else its provisional Certificate of 
Registration will be revoked.

Section 385.109

    Section 350(a)(2) of the Act requires the compliance review of 
Mexico-domiciled long-haul operations to be conducted consistent with 
our existing safety fitness evaluation procedures in part 385 and that 
the carrier receive a Satisfactory safety rating before receiving 
permanent operating authority. Therefore, an FMCSA safety specialist 
will conduct compliance reviews of Mexico-domiciled long-haul carriers 
applying the evaluation criteria in Appendix B to part 385, the same 
criteria now in use for U.S and Canadian carriers. These criteria 
provide for the assignment of one of three proposed safety ratings upon 
completion of a compliance review: Satisfactory, Conditional, or 
Unsatisfactory.
    A carrier receiving a Satisfactory rating will continue to operate 
under provisional status until the expiration of the 18-month safety 
monitoring period. At that time, the provisional designation will be 
removed from its registration, provided its safety record remains in 
good standing.
    The consequences of an Unsatisfactory rating are similar to those 
attached to a safety audit in which it is determined that a carrier 
does not have adequate safety management controls. The carrier's 
provisional operating authority will be suspended and the FMCSA will 
notify the carrier that it is required to take action to improve its 
practices. Failure to make the necessary changes to remedy inadequate 
basic safety management controls will result in revocation of a 
carrier's provisional operating authority.
    A Conditional rating is indicative of deficiencies in a carrier's 
safety management controls which raise concerns about its ability to 
operate safely but are not of sufficient magnitude to declare the 
carrier unfit. Because the Act requires Mexico-domiciled long-haul 
carriers to achieve a Satisfactory rating in order to retain their 
provisional operating authority, a revocation proceeding will be 
initiated following the assignment of a Conditional rating. However, 
because our existing safety rating procedures do not equate a 
conditional rating with unfitness and permit conditional-rated carriers 
to continue operating, provisional operating authority will not be 
suspended at the time a revocation proceeding is initiated.

Section 385.111

    In response to comments, we have added procedures incorporating 
specific time frames for suspension and revocation of provisional 
operating authority and Certificates of Registration. These procedures 
are designed to balance the need to protect the public from potentially 
unsafe carriers while preserving the carrier's due process rights.
    Mexico-domiciled carriers will have 10 days following notification 
of an Unsatisfactory rating or an unsuccessful safety audit to 
demonstrate that the FMCSA committed material error. If they fail to do 
so, the FMCSA will suspend the carrier's provisional operating 
authority or provisional Certificate of Registration on the 15th day, 
thus placing it out of service. If the carrier fails to demonstrate 
that it has taken necessary corrective action within 30 days from the 
date of suspension, FMCSA will revoke the carrier's provisional 
operating authority or provisional Certificate of Registration.
    Carriers assigned a Conditional rating will not have their 
provisional operating authority suspended, but will still need to 
demonstrate that necessary corrective action has been taken to prevent 
their authority from being revoked.
    Section 385.111(e) provides for suspension of provisional 
registration when the carrier does not provide documents necessary for 
the completion of a safety audit or compliance review or does not 
submit sufficient evidence of corrective action in response to a 
written demand under Sec. 385.105. The suspension will remain in effect 
until the necessary documents are produced and the carrier:
    (1) Successfully completes the safety audit;
    (2) Receives a Satisfactory or Conditional safety rating; or
    (3) Demonstrates that it has taken the necessary corrective action 
in response to a Sec. 385.105 demand. Although the assignment of a 
Conditional rating will be sufficient to lift the suspension, the 
carrier will still need to upgrade its rating to Satisfactory in order 
to keep its provisional operating authority.
    Section 385.111(f) is intended to address the problem of 
recidivism, i.e., carriers who, after taking corrective action 
resulting in the lifting of a suspension during the provisional 
operating or registration period, commit one of the serious safety 
infractions listed in Sec. 385.105(a). In these circumstances, the 
suspension will be automatically reinstated and the carrier's 
provisional operating authority or Certificate of Registration will be

[[Page 12768]]

revoked unless it demonstrates it did not commit the infraction.
    In a similar vein, Sec. 385.111(g) provides for the initiation of a 
revocation proceeding upon receipt of credible evidence that a carrier 
operated in violation of a suspension order, even if that suspension 
order was eventually lifted. A Mexico-domiciled motor carrier that 
operates a commercial motor vehicle in violation of a suspension or 
out-of-service order will also be subject to the penalties provided in 
49 U.S.C. 521(b)(2)(A), not to exceed $10,000 for each offense.

Section 385.113

    Under this section, a Mexico-domiciled carrier may request FMCSA to 
conduct an administrative review if it believes the agency has 
committed an error in assigning a safety rating or determining that its 
basic safety management controls are inadequate. The carrier's request 
must explain the error it believes FMCSA committed and include a list 
of all factual and procedural issues in dispute. In addition, the 
carrier must include any information or documents that support its 
argument. Following the administrative review, which will be conducted 
by the FMCSA's Associate Administrator for Enforcement, the agency will 
notify the carrier of its decision, which will constitute the final 
action of the agency. Administrative review under this section will be 
completed in no more than 10 days after the request is received.

Section 385.115

    This section prohibits a Mexico-domiciled carrier whose 
registration has been revoked from reapplying for provisional operating 
authority or a Certificate of Registration for at least 30 days after 
the date of revocation. A Mexico-domiciled carrier reapplying for 
provisional registration will have to demonstrate to FMCSA's 
satisfaction that it has corrected the deficiencies that resulted in 
revocation of its registration and that it otherwise has effectively 
functioning basic safety management systems in place. Long-haul 
carriers will again be required to undergo a pre-authorization safety 
audit. FMCSA is obtaining information regarding revocations by 
inserting appropriate questions on the application forms developed in 
the companion rules amending parts 365 and 368 published elsewhere in 
today's Federal Register.

Section 385.117

    This section provides that at the end of the 18-month period, the 
Mexico-domiciled carrier will receive permanent DOT operating authority 
or a Certificate of Registration if it has successfully met the 
requirements of the most recent safety audit or has received a 
Satisfactory rating, and is not currently under a notice from FMCSA to 
remedy its basic safety management practices. Thereafter, it will be 
treated like any other non-new-entrant motor carrier. If the Mexico-
domiciled carrier is under a notice to remedy its basic safety 
management practices, its provisional designation will continue until 
FMCSA determines the carrier is complying with the Federal safety 
regulations or revokes its registration under Sec. 385.111.
    If a compliance review or safety audit has not been conducted on a 
Mexico-domiciled carrier within the 18-month oversight period, the 
provisional designation will continue until such time as FMCSA 
completes and evaluates a review or audit.
    Compliance reviews and safety audits will normally begin within 90 
to 120 days after the grant of provisional operating authority or a 
provisional Certificate of Registration, so that sufficient records 
will be available to review. FMCSA will work to ensure that all Mexico-
domiciled carriers will be scheduled for an audit or compliance review 
within the 18-month period.

Section 385.119

    This section clarifies that although FMCSA's NAFTA implementation 
rules will include a pre-authorization safety audit for long-haul 
Mexico-domiciled carriers and at least one post-operational compliance 
review or safety audit, this is not the exclusive safety oversight that 
FMCSA will apply to Mexico-domiciled carriers. FMCSA will also apply 
the full range of oversight and enforcement actions currently 
applicable to all non-new-entrant motor carriers, including civil 
penalties and the suspension and revocation of registration or 
operating authority due to persistent violations of DOT regulations 
governing motor carrier operations in interstate commerce.

Appendix A to Part 385

    Appendix A is being added to inform Mexico-domiciled motor carriers 
what the evaluation criteria will be that FMCSA will use during a 
safety audit to rate a carrier's compliance with the FMCSRs and 
applicable HMRs, assess its operational safety, and assess its basic 
management safety management controls. The safety audit evaluation 
criteria are similar to the current safety rating methodology. The 
safety audit evaluation criteria looks at the same list of critical and 
acute violations as in the safety rating methodology and both use the 
same six factors: (1) General: Parts 387 and 390; (2) Driver: Parts 
382, 383, and 391; (3) Operational: Parts 392 and 395; (4) Vehicle: 
Parts 393, 396, and inspection data for the last 12 months; (5) 
Hazardous Materials: Parts 171, 177, 180 and 397; and (6) Recordable 
Accident Rate per Million Miles. All Mexico-domiciled motor carriers 
who have a provisional Certificate of Registration will receive a 
safety audit. These carrier's safety audits will be subject to the 
safety audit evaluation criteria in Appendix A to part 385. All Mexico-
domiciled motor carriers who receive a compliance review will be 
subject to the safety rating methodology detailed in Appendix B to part 
385.
    The safety audit evaluation criteria are based on 49 CFR 385.5 
(Safety fitness standard) and Sec. 385.7 (Factors to be considered in 
determining a safety rating). The FMCSA will use the evaluation process 
to ensure that Mexico-domiciled motor carriers have basic safety 
management controls in place. The evaluation process will also enable 
the FMCSA to focus its limited resources on examining the operations of 
carriers needing improvement in their compliance with the FMCSRs and 
the applicable HMRs.

Rulemaking Analyses and Notices

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

    The FMCSA has determined that this action is a significant 
regulatory action within the meaning of Executive Order 12866, and is 
significant within the meaning of Department of Transportation 
regulatory policies and procedures (44 FR 11034, February 26, 1979) 
because of public interest. It has been reviewed by the Office of 
Management and Budget. However, it is anticipated that the economic 
impact of the revisions in this rulemaking will be minimal.
    Nevertheless, the subject of safe operations by Mexico-domiciled 
carriers in the United States will likely generate considerable public 
interest within the meaning of Executive Order 12866. The manner in 
which FMCSA carries out its safety oversight responsibilities with 
respect to this cross-border motor carrier transportation may be of 
substantial interest to the domestic motor carrier industry, the 
Congress, and the public at large.
    The Regulatory Evaluation analyzes the costs and benefits of this 
rule and the two companion NAFTA-related rules published elsewhere in 
today's Federal Register. Because these rules are so closely 
interrelated, we did not

[[Page 12769]]

attempt to prepare separate analyses for each rule.
    The evaluation estimated costs and benefits based on three 
different scenarios, with a high, low and medium number of Mexico-
domiciled carriers assumed covered by the rules. The costs of these 
rules are minimal under all three scenarios. Over 10 years, the costs 
range from $53 million for the low scenario to approximately $76 
million for the high scenario. Forty percent of these costs are borne 
by the FMCSA, while the remaining costs are paid by Mexico-domiciled 
carriers. The largest costs are those associated with conducting pre-
authorization safety audits, safety audits within 18 months of a 
carrier's receiving provisional Certificate of Registration, compliance 
reviews within 18 months of a carrier's receiving provisional operating 
authority, and the loss of a carrier's ability to operate in the United 
States.
    The FMCSA used the cost effectiveness approach to determine the 
benefits of these rules. This approach involves estimating the number 
of crashes that would have to be deterred in order for the proposals to 
be cost effective. Over ten years, the low scenario would have to deter 
640 forecast crashes to be cost beneficial, the medium scenario would 
have to deter 838, and the high scenario would have to deter 929. While 
the overall number of crashes to be avoided under the medium and high 
scenario is fairly high, the number falls rapidly over the 10-year 
analysis period and beyond. The tenth year deterrence rate is one-
quarter to one-sixth the size of the first year's rate.
    A copy of the Regulatory Evaluation is in the docket for this 
rulemaking.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA)(Pub. L. 96-354, 5 U.S.C. 601-
612), as amended by the Small Business Regulatory Enforcement and 
Fairness Act (Pub. L. 104-121), requires Federal agencies to analyze 
the impact of rulemakings on small entities, unless the Agency 
certifies that the rule will not have a significant economic impact on 
a substantial number of small entities.
    The United States did not have in place a special system to ensure 
the safety of Mexico-domiciled carriers operating in the United States. 
Mexico-domiciled carriers will be subject to all the same safety 
regulations as domestic carriers. However, FMCSA's enforcement of the 
FMCSRs has become increasingly data dependent in the last several 
years. Several programs have been put in place to continually analyze 
crash rates, out-of-service (OOS) rates, compliance review records, and 
other data sources to allow the agency to focus on high-risk carriers. 
This strategy is only effective if FMCSA has adequate data on carriers' 
size, operations, and history. Thus, a key component of FMCSA's three 
companion NAFTA-related rules is the requirement that Mexico-domiciled 
carriers operating in the United States complete a Form MCS-150 -Motor 
Carrier Identification Report, and update the information submitted in 
the appropriate application form (OP-1(MX) or OP-2) when key 
information changes. This will allow FMCSA to better monitor these 
carriers and to quickly determine whether their safety or OOS record 
changes.
    The more stringent oversight procedures will also allow FMCSA to 
respond more quickly when safety problems emerge. The safety audits, 
compliance reviews and CVSA inspections will provide FMCSA with more 
detailed information about Mexico-domiciled carriers, and allow FMCSA 
to act appropriately upon discovering safety problems.
    The objective of these rules is to enhance the safety of Mexico-
domiciled carriers operating in the United States. The rules describe 
what additional information Mexico-domiciled carriers will have to 
submit, and outline the procedure for dealing with possible safety 
problems.
    The safety monitoring system, combined with the safety 
certifications and other information to be submitted in the OP-1(MX) 
and OP-2 applications and the pre-authorization safety audit of Mexico-
domiciled carriers seeking to operate beyond the border zones, are a 
means of ensuring that:
    (1) Mexico-domiciled applicants are sufficiently knowledgeable 
about safety requirements before commencing operations (a prerequisite 
to being able to comply);
    (2) Mexico-domiciled applicants conduct operations in the United 
States in accordance with their application certifications and the 
conditions of their registrations; and
    (3) The safety performance of Mexico-domiciled applicants is at 
least equal to that of United States and Canadian carriers operating in 
the United States.
    These rules will primarily affect Mexico-domiciled small motor 
carriers who wish to operate in the United States. The amount of 
information these carriers will have to supply to FMCSA has been 
increased, and we estimate that they will spend two additional hours 
gathering data for the OP-1(MX) and OP-2 application forms. Mexico-
domiciled carriers will also have to undergo safety audits, an 
increased number of CVSA roadside inspections and compliance reviews, 
if they operate beyond the border zones. We presented three growth 
scenarios in the regulatory evaluation: a high option, with 11,787 
Mexico-domiciled carriers in the baseline; a medium scenario, with 
9,500 Mexico-domiciled carriers in the baseline; and a low scenario, 
with 4,500 Mexico-domiciled carriers in the baseline. Under all three 
options, the FMCSA believes that the number of applicants will match 
approximately that observed in the last few years before this 
publication date, approximately 1,365 applicants per year.
    A review of the Motor Carrier Management Information System (MCMIS) 
census file reveals that the vast majority of Mexico-domiciled carriers 
are small, with 75 percent having three or fewer vehicles. Carriers at 
the 95th percentile carrier had only 15 trucks or buses.
    These rules should not have any impact on small United States based 
motor carriers.
    FMCSA did not establish any different requirements or timetables 
for small entities. As noted above, we do not believe these 
requirements are onerous. Most covered carriers will be required to 
spend two extra hours to complete the relevant forms, undergo at least 
one safety audit at four hours each, have their trucks inspected more 
frequently and, if they obtain long-haul authority, undergo a 
compliance review taking six hours. This part 385 interim final rule 
would not achieve its purposes if small entities were exempt. In order 
to ensure the safety of Mexico-domiciled carriers, the rule must have a 
consistent procedure for addressing safety problems. Exempting small 
motor carriers (which, as was noted above, are the vast majority or 
Mexico-domiciled carriers who would operate in the United States) would 
defeat the purpose of these rules.
    FMCSA did not consolidate or simplify the compliance and reporting 
requirements for small carriers. Small United States carriers already 
have to comply with the paperwork requirements in part 365. There is no 
evidence that domestic carriers find these provisions confusing or 
particularly burdensome. Apropos the part 385 provisions, FMCSA 
believes the requirements are fairly straightforward, and it would not 
be possible to simplify them. A simplification of any substance would 
make the rule ineffectual. Given the compelling interest in assuring 
the safety of Mexico-domiciled carriers

[[Page 12770]]

operating in the United States, and the fact that the majority of these 
carriers are small entities, no special changes were made.
    The part 385 requirements include performance standards. A Mexico-
domiciled carrier will need to complete a safety improvement plan if 
its performance demonstrates that it is not operating safely, either 
through a high OOS rate or other problems.
    Therefore, FMCSA certifies that this rule will not have a 
significant impact on a substantial number of small entities.

Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4; 2 U.S.C. 
1532) requires each agency to assess the effects of its regulatory 
actions on State, local, and tribal governments and the private sector. 
Any agency promulgating a final rule likely to result in a Federal 
mandate requiring expenditures by a State, local, or tribal government 
or by the private sector of $100 million or more in any one year must 
prepare a written statement incorporating various assessments, 
estimates, and descriptions that are delineated in the Act. FMCSA has 
determined that the changes proposed in this rulemaking would not have 
an impact of $100 million or more in any one year.

Executive Order 12988 (Civil Justice Reform)

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

Executive Order 13045 (Protection of Children)

    Executive Order 13045, ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (April 23, 1997, 62 FR 19885), requires 
that agencies issuing ``economically significant'' rules that also 
concern an environmental health or safety risk that an agency has 
reason to believe may disproportionately affect children must include 
an evaluation of the environmental health and safety effects of the 
regulation on children. Section 5 of Executive Order 13045 directs an 
agency to submit for a ``covered regulatory action'' an evaluation of 
its environmental health or safety effects on children. The agency has 
determined that this rule is not a ``covered regulatory action'' as 
defined under Executive Order 13045.
    This rule is not economically significant under Executive Order 
12866 because the FMCSA has determined that the changes in this 
rulemaking would not have an impact of $100 million or more in any one 
year. The costs range from $53 to $76 million over 10 years. This rule 
also does not concern an environmental health risk or safety risk that 
would disproportionately affect children. Mexico-domiciled motor 
carriers who intend to operate commercial motor vehicles anywhere in 
the United States must comply with current U.S. Environmental 
Protection Agency regulations and other United States environmental 
laws under this rule and others being published elsewhere in today's 
Federal Register. Nonetheless, the agency has conducted a programmatic 
environmental assessment as discussed later in this preamble.

Executive Order 12630 (Taking of Private Property)

    This final rule would 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 Assessment)

    This action has been analyzed in accordance with the principles and 
criteria contained in Executive Order 13132, dated August 4, 1999 (64 
FR 43255, August 10, 1999). FMCSA has determined that this action would 
not have significant Federalism implications or limit the policymaking 
discretion of the States.

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

    Under the Paperwork Reduction Act of 1995 (PRA) [44 U.S.C. 3501-
3520], Federal agencies must determine whether requirements contained 
in rulemakings are subject to information collection provisions of the 
PRA and, if they are, obtain approval from the Office of Management and 
Budget for each collection of information they conduct, sponsor or 
require through regulations. FMCSA has determined that this regulation 
does not constitute an information collection with the scope or meaning 
of the PRA.
    FMCSA performs safety compliance assessments and enforcement 
activities as required by statutes and the FMCSRs. Implementation of 
this proposal would create no additional paperwork burden on Mexico-
domiciled carriers that comply with the FMCSRs. Any safety data that 
FMCSA solicits from individual motor carriers regarding deficiency and/
or non-compliance is not considered a collection of information because 
this type of response is required of such carriers as part of the usual 
and customary compliance and enforcement practice under the FMCSRs. 
Accordingly, FMCSA has determined that this action would not affect any 
requirements under the PRA.

National Environmental Policy Act

    FMCSA is a new administration within the Department of 
Transportation (DOT). FMCSA is currently developing an agency order 
that will comply with all statutory and regulatory policies under the 
National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). 
FMCSA expects the draft Order to appear in the Federal Register for 
public comment in the near future. The framework of the FMCSA Order 
will be consistent with and reflect the procedures for considering 
environmental impacts under DOT Order 5610.1C. FMCSA has analyzed this 
rule under the NEPA and DOT Order 5610.1C, and has issued a Finding Of 
No Significant Impact (FONSI). The FONSI and the environmental 
assessment are in the docket to this rule.
    FMCSA invites comments on the programmatic environmental 
assessment.

Executive Order 13211 (Energy Supply, Distribution, or Use)

    We have analyzed this action under Executive Order 13211, Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. This action is not a significant energy action 
within the meaning of section 4(b) of the Executive Order because as a 
procedural action it is not economically significant and will not have 
a significant adverse effect on the supply, distribution, or use of 
energy.

List of Subjects in 49 CFR Part 385

    Administrative practice and procedure, Highway safety, Motor 
carriers, Motor vehicle safety, Reporting and recordkeeping 
requirements.

    For the reasons stated in the preamble, the FMCSA amends 49 CFR 
part 385 as set forth below:

[[Page 12771]]

PART 385--SAFETY FITNESS PROCEDURES

    1. The authority citation for part 385 is revised to read as 
follows:

    Authority: 49 U.S.C. 113, 504, 521(b), 5113, 13901-13905, 31136, 
31144, 31148, and 31502; Section 350 of Public Law 107-87; and 49 
CFR 1.73.


    2. Sections 385.1 through 385.19 are designated as Subpart A-
General, and a new Subpart B is added consisting of new Secs. 385.101 
through 385.119 to read as follows:
Subpart B--Safety Monitoring System for Mexico-Domiciled Carriers
Sec.
385.101  Definitons.
385.103  Safety monitoring system.
385.105  Expedited action.
385.107  The safety audit.
385.109  The compliance review.
385.111  Suspension and revocation of Mexico-domiciled carrier 
registration.
385.113  Administrative review.
385.115  Reapplying for provisional registration.
385.117  Duration of safety monitoring system.
385.119  Applicability of safety fitness and enforcement procedures.

Subpart B--Safety Monitoring System for Mexico-Domiciled Carriers


Sec. 385.101  Definitions

    Compliance Review means a compliance review as defined in 
Sec. 385.3 of this part.
    Provisional certificate of registration means the registration 
under Sec. 368.6 of this subchapter that the FMCSA grants to a Mexico-
domiciled motor carrier to provide interstate transportation of 
property within the United States solely within the municipalities 
along the United States-Mexico border and the commercial zones of such 
municipalities. It is provisional because it will be revoked if the 
registrant does not demonstrate that it is exercising basic safety 
management controls during the safety monitoring period established in 
this subpart.
    Provisional operating authority means the registration under 
Sec. 365.507 of this subchapter that the FMCSA grants to a Mexico-
domiciled motor carrier to provide interstate transportation within the 
United States beyond the municipalities along the United States-Mexico 
border and the commercial zones of such municipalities. It is 
provisional because it will be revoked if the registrant is not 
assigned a Satisfactory safety rating following a compliance review 
conducted during the safety monitoring period established in this 
subpart.
    Safety audit means an examination of a motor carrier's operations 
to provide educational and technical assistance on safety and the 
operational requirements of the FMCSRs and applicable HMRs and to 
gather critical safety data needed to make an assessment of the 
carrier's safety performance and basic safety management controls. 
Safety audits do not result in safety ratings.


Sec. 385.103  Safety monitoring system.

    (a) General. Each Mexico-domiciled carrier operating in the United 
States will be subject to an oversight program to monitor its 
compliance with applicable Federal Motor Carrier Safety Regulations 
(FMCSRs), Federal Motor Vehicle Safety Standards (FMVSSs), and 
Hazardous Materials Regulations (HMRs).
    (b) Roadside monitoring. Each Mexico-domiciled carrier that 
receives provisional operating authority or a provisional Certificate 
of Registration will be subject to intensified monitoring through 
frequent roadside inspections.
    (c) CVSA decal. Each Mexico-domiciled carrier granted provisional 
operating authority under part 365 of this subchapter must have on 
every commercial motor vehicle it operates in the United States a 
current decal attesting to a satisfactory inspection by a Commercial 
Vehicle Safety Alliance (CVSA) inspector.
    (d) Safety audit. The FMCSA will conduct a safety audit on a 
Mexico-domiciled carrier within 18 months after the FMCSA issues the 
carrier a provisional Certificate of Registration under part 368 of 
this subchapter.
    (e) Compliance review. The FMCSA will conduct a compliance review 
on a Mexico-domiciled carrier within 18 months after the FMCSA issues 
the carrier provisional operating authority under part 365 of this 
subchapter.


Sec. 385.105  Expedited action.

    (a) A Mexico-domiciled motor carrier committing any of the 
following violations identified through roadside inspections, or by any 
other means, may be subjected to an expedited safety audit or 
compliance review, or may be required to submit a written response 
demonstrating corrective action:
    (1) Using drivers not possessing, or operating without, a valid 
Licencia Federal de Conductor. An invalid Licencia Federal de Conductor 
includes one that is falsified, revoked, expired, or missing a required 
endorsement.
    (2) Operating vehicles that have been placed out of service for 
violations of the Commercial Vehicle Safety Alliance (CVSA) North 
American Standard Out-of-Service Criteria, without making the required 
repairs.
    (3) Involvement in, due to carrier act or omission, a hazardous 
materials incident within the United States involving:
    (i) A highway route controlled quantity of a Class 7 (radioactive) 
material as defined in Sec. 173.403 of this title;
    (ii) Any quantity of a Class 1, Division 1.1, 1.2, or 1.3 explosive 
as defined in Sec. 173.50 of this title; or
    (iii) Any quantity of a poison inhalation hazard Zone A or B 
material as defined in Secs. 173.115, 173.132, or 173.133 of this 
title.
    (4) Involvement in, due to carrier act or omission, two or more 
hazardous material incidents occurring within the United States and 
involving any hazardous material not listed in paragraph (a)(3) of this 
section and defined in chapter I of this title.
    (5) Using a driver who tests positive for controlled substances or 
alcohol or who refuses to submit to required controlled substances or 
alcohol tests.
    (6) Operating within the United States a motor vehicle that is not 
insured as required by part 387 of this chapter.
    (7) Having a driver or vehicle out-of-service rate of 50 percent or 
more based upon at least three inspections occurring within a 
consecutive 90-day period.
    (b) Failure to respond to an agency demand for a written response 
demonstrating corrective action within 30 days will result in the 
suspension of the carrier's provisional operating authority or 
provisional Certificate of Registration until the required showing of 
corrective action is submitted to the FMCSA.
    (c) A satisfactory response to a written demand for corrective 
action does not excuse a carrier from the requirement that it undergo a 
safety audit or compliance review, as appropriate, during the 
provisional registration period.


Sec. 385.107  The safety audit.

    (a) The criteria used in a safety audit to determine whether a 
Mexico-domiciled carrier exercises the necessary basic safety 
management controls are specified in Appendix A to this part.
    (b) If the FMCSA determines, based on the safety audit, that the 
Mexico-domiciled carrier has adequate basic safety management controls, 
the FMCSA will provide the carrier written notice of this finding as 
soon as practicable, but not later than 45 days after the completion of 
the safety audit. The carrier's Certificate of Registration will

[[Page 12772]]

remain provisional and the carrier's on-highway performance will 
continue to be closely monitored for the remainder of the 18-month 
provisional registration period.
    (c) If the FMCSA determines, based on the safety audit, that the 
Mexico-domiciled carrier's basic safety management controls are 
inadequate, it will initiate a suspension and revocation proceeding in 
accordance with Sec. 385.111 of this subpart.
    (d) The safety audit is also used to assess the basic safety 
management controls of Mexico-domiciled applicants for provisional 
operating authority to operate beyond United States municipalities and 
commercial zones on the United States-Mexico border under Sec. 365.507 
of this subchapter.


Sec. 385.109  The compliance review.

    (a) The criteria used in a compliance review to determine whether a 
Mexico-domiciled carrier granted provisional operating authority under 
Sec. 365.507 of this subchapter exercises the necessary basic safety 
management controls are specified in Appendix B to this part.
    (b) Satisfactory Rating. If the FMCSA assigns a Mexico-domiciled 
carrier a Satisfactory rating following a compliance review conducted 
under this subpart, the FMCSA will provide the carrier written notice 
as soon as practicable, but not later than 45 days after the completion 
of the compliance review. The carrier's operating authority will remain 
in provisional status and its on-highway performance will continue to 
be closely monitored for the remainder of the 18-month provisional 
registration period.
    (c) Conditional Rating. If the FMCSA assigns a Mexico-domiciled 
carrier a Conditional rating following a compliance review conducted 
under this subpart, it will initiate a revocation proceeding in 
accordance with Sec. 385.111 of this subpart. The carrier's provisional 
operating authority will not be suspended prior to the conclusion of 
the revocation proceeding.
    (d) Unsatisfactory Rating. If the FMCSA assigns a Mexico-domiciled 
carrier an Unsatisfactory rating following a compliance review 
conducted under this subpart, it will initiate a suspension and 
revocation proceeding in accordance with Sec. 385.111 of this subpart.


Sec. 385.111  Suspension and revocation of Mexico-domiciled carrier 
registration.

    (a) If a carrier is assigned an ``Unsatisfactory'' safety rating 
following a compliance review conducted under this subpart, or a safety 
audit conducted under this subpart determines that a carrier does not 
exercise the basic safety management controls necessary to ensure safe 
operations, the FMCSA will provide the carrier written notice, as soon 
as practicable, that its registration will be suspended effective 15 
days from the service date of the notice unless the carrier 
demonstrates, within 10 days of the service date of the notice, that 
the compliance review or safety audit contains material error.
    (b) For purposes of this section, material error is a mistake or 
series of mistakes that resulted in an erroneous safety rating or an 
erroneous determination that the carrier does not exercise the 
necessary basic safety management controls.
    (c) If the carrier demonstrates that the compliance review or 
safety audit contained material error, its registration will not be 
suspended. If the carrier fails to show a material error in the safety 
audit, the FMCSA will issue an Order:
    (1) Suspending the carrier's provisional operating authority or 
provisional Certificate of Registration and requiring it to immediately 
cease all further operations in the United States; and
    (2) Notifying the carrier that its provisional operating authority 
or provisional Certificate of Registration will be revoked unless it 
presents evidence of necessary corrective action within 30 days from 
the service date of the Order.
    (d) If a carrier is assigned a ``Conditional'' rating following a 
compliance review conducted under this subpart, the provisions of 
subparagraphs (a) through (c) of this section will apply, except that 
its provisional registration will not be suspended under paragraph 
(c)(1) of this section.
    (e) If a carrier subject to this subpart fails to provide the 
necessary documents for a safety audit or compliance review upon 
reasonable request, or fails to submit evidence of the necessary 
corrective action as required by Sec. 385.105 of this subpart, the 
FMCSA will provide the carrier with written notice, as soon as 
practicable, that its registration will be suspended 15 days from the 
service date of the notice unless it provides all necessary documents 
or information. This suspension will remain in effect until the 
necessary documents or information are produced and:
    (1) A safety audit determines that the carrier exercises basic 
safety management controls necessary for safe operations;
    (2) The carrier is rated Satisfactory or Conditional after a 
compliance review; or
    (3) The FMCSA determines, following review of the carrier's 
response to a demand for corrective action under Sec. 385.105, that the 
carrier has taken the necessary corrective action.
    (f) If a carrier commits any of the violations specified in 
Sec. 385.105(a) of this subpart after the removal of a suspension 
issued under this section, the suspension will be automatically 
reinstated. The FMCSA will issue an Order requiring the carrier to 
cease further operations in the United States and demonstrate, within 
15 days from the service date of the Order, that it did not commit the 
alleged violation(s). If the carrier fails to demonstrate that it did 
not commit the violation(s), the FMCSA will issue an Order revoking its 
provisional operating authority or provisional Certificate of 
Registration.
    (g) If the FMCSA receives credible evidence that a carrier has 
operated in violation of a suspension order issued under this section, 
it will issue an Order requiring the carrier to show cause, within 10 
days of the service date of the Order, why its provisional operating 
authority or provisional Certificate of Registration should not be 
revoked. If the carrier fails to make the necessary showing, the FMCSA 
will revoke its registration.
    (h) If a Mexico-domiciled motor carrier operates a commercial motor 
vehicle in violation of a suspension or out-of-service order, it is 
subject to the penalty provisions in 49 U.S.C. 521(b)(2)(A), not to 
exceed $10,000 for each offense.
    (i) Notwithstanding any provision of this subpart, a carrier 
subject to this subpart is also subject to the suspension and 
revocation provisions of 49 U.S.C. 13905 for repeated violations of DOT 
regulations governing its motor carrier operations.


Sec. 385.113  Administrative review.

    (a) A Mexico-domiciled motor carrier may request the FMCSA to 
conduct an administrative review if it believes the FMCSA has committed 
an error in assigning a safety rating or suspending or revoking the 
carrier's provisional operating authority or provisional Certificate of 
Registration under this subpart.
    (b) The carrier must submit its request in writing, in English, to 
the Associate Administrator for Enforcement, Federal Motor Carrier 
Safety Administration, 400 Seventh Street, SW., Washington DC 20590.
    (c) The carrier's request must explain the error it believes the 
FMCSA committed in assigning the safety rating or suspending or 
revoking the carrier's provisional operating authority or

[[Page 12773]]

provisional Certificate of Registration and include any information or 
documents that support its argument.
    (d) The FMCSA will complete its administrative review no later than 
10 days after the carrier submits its request for review. The Associate 
Administrator's decision will constitute the final agency action.


Sec. 385.115  Reapplying for provisional registration.

    (a) A Mexico-domiciled motor carrier whose provisional operating 
authority or provisional Certificate of Registration has been revoked 
may reapply under part 365 or 368 of this subchapter, as appropriate, 
no sooner than 30 days after the date of revocation.
    (b) The Mexico-domiciled motor carrier will be required to initiate 
the application process from the beginning. The carrier will be 
required to demonstrate how it has corrected the deficiencies that 
resulted in revocation of its registration and how it will ensure that 
it will have adequate basic safety management controls. It will also 
have to undergo a pre-authorization safety audit if it applies for 
provisional operating authority under part 365 of this subchapter.


Sec. 385.117  Duration of safety monitoring system.

    (a) Each Mexico-domiciled carrier subject to this subpart will 
remain in the safety monitoring system for at least 18 months from the 
date FMCSA issues its provisional Certificate of Registration or 
provisional operating authority, except as provided in paragraphs (c) 
and (d) of this section.
    (b) If, at the end of this 18-month period, the carrier's most 
recent safety audit or safety rating was Satisfactory and no additional 
enforcement or safety improvement actions are pending under this 
subpart, the Mexico-domiciled carrier's provisional operating authority 
or provisional Certificate of Registration will become permanent.
    (c) If, at the end of this 18-month period, the FMCSA has not been 
able to conduct a safety audit or compliance review, the carrier will 
remain in the safety monitoring system until a safety audit or 
compliance review is conducted. If the results of the safety audit or 
compliance review are satisfactory, the carrier's provisional operating 
authority or provisional Certificate of Registration will become 
permanent.
    (d) If, at the end of this 18-month period, the carrier's 
provisional operating authority or provisional Certificate of 
Registration is suspended under Sec. 385.111(a) of this subpart, the 
carrier will remain in the safety monitoring system until the FMCSA 
either:
    (1) Determines that the carrier has taken corrective action; or
    (2) Completes measures to revoke the carrier's provisional 
operating authority or provisional Certificate of Registration under 
Sec. 385.111(c) of this subpart.


Sec. 385.119  Applicability of safety fitness and enforcement 
procedures.

    At all times during which a Mexico-domiciled motor carrier is 
subject to the safety monitoring system in this subpart, it is also 
subject to the general safety fitness procedures established in subpart 
A of this part and to compliance and enforcement procedures applicable 
to all carriers regulated by the FMCSA.

    3. Part 385 is amended by adding a new Appendix A to read as 
follows:

Appendix A to Part 385--Explanation of Safety Audit Evaluation Criteria

I. General

    (a) Section 210 of the Motor Carrier Safety Improvement Act (49 
U.S.C. 31144) directed the Secretary to establish a procedure 
whereby each owner and each operator granted new authority must 
undergo a safety review within 18 months after the owner or operator 
begins operations. The Secretary was also required to establish the 
elements of this safety review, including basic safety management 
controls. The Secretary, in turn, delegated this to the FMCSA.
    (b) To meet the safety standard, a motor carrier must 
demonstrate to the FMCSA that it has basic safety management 
controls in place which function adequately to ensure minimum 
acceptable compliance with the applicable safety requirements. A 
``safety audit evaluation criteria'' was developed by the FMCSA, 
which uses data from the safety audit and roadside inspections to 
determine that each owner and each operator applicant for a 
provisional operating authority or provisional Certificate of 
Registration has basic safety management controls in place. The term 
``safety audit'' is the equivalent to the ``safety review'' required 
by Sec. 210. Using ``safety audit'' avoids any possible confusion 
with the safety reviews previously conducted by the agency that were 
discontinued on September 30, 1994.
    (c) The safety audit evaluation process developed by the FMCSA 
is used to:
    1. Evaluate basic safety management controls and determine if 
each owner and each operator is able to operate safely in interstate 
commerce; and
    2. Identify owners and operators who are having safety problems 
and need improvement in their compliance with the FMCSRs and the 
HMRs, before they are granted permanent registration.

II. Source of the Data for the Safety Audit Evaluation Criteria

    (a) The FMCSA's evaluation criteria are built upon the 
operational tool known as the safety audit. This tool was developed 
to assist auditors and investigators in assessing the adequacy of a 
new entrant's basic safety management controls.
    (b) The safety audit is a review of a Mexico-domiciled motor 
carrier's operation and is used to:
    1. Determine if a carrier has the basic safety management 
controls required by 49 U.S.C. 31144;
    2. Meet the requirements of Section 350 of the DOT 
Appropriations Act; and
    3. In the event that a carrier is found not to be in compliance 
with applicable FMCSRs and HMRs, the safety audit can be used to 
educate the carrier on how to comply with U.S. safety rules.
    (c) Documents such as those contained in the driver 
qualification files, records of duty status, vehicle maintenance 
records, and other records are reviewed for compliance with the 
FMCSRs and HMRs. Violations are cited on the safety audit. 
Performance-based information, when available, is utilized to 
evaluate the carrier's compliance with the vehicle regulations. 
Recordable accident information is also collected.

III. Determining if the Carrier Has Basic Safety Management Controls

    (a) During the safety audit, the FMCSA gathers information by 
reviewing a motor carrier's compliance with ``acute'' and 
``critical'' regulations of the FMCSRs and HMRs.
    (b) Acute regulations are those where noncompliance is so severe 
as to require immediate corrective actions by a motor carrier 
regardless of the overall basic safety management controls of the 
motor carrier.
    (c) Critical regulations are those where noncompliance relates 
to management and/or operational controls. These are indicative of 
breakdowns in a carrier's management controls.
    (d) The list of the acute and critical regulations, which are 
used in determining if a carrier has basic safety management 
controls in place, is included in Appendix B, VII. List of Acute and 
Critical Regulations.
    (e) Noncompliance with acute and critical regulations are 
indicators of inadequate safety management controls and usually 
higher than average accident rates.
    (f) Parts of the FMCSRs and the HMRs having similar 
characteristics are combined together into six regulatory areas 
called ``factors.'' The regulatory factors, evaluated on the basis 
of the adequacy of the carrier's safety management controls, are:
    1. Factor 1--General: Parts 387 and 390;
    2. Factor 2--Driver: Parts 382, 383 and 391;
    3. Factor 3--Operational: Parts 392 and 395;
    4. Factor 4--Vehicle: Part 393, 396 and inspection data for the 
last 12 months;
    5. Factor 5--Hazardous Materials: Parts 171, 177, 180 and 397; 
and
    6. Factor 6--Accident: Recordable Accident Rate per Million 
Miles.
    (g) For each instance of noncompliance with an acute regulation, 
1.5 points will be assessed.
    (h) For each instance of noncompliance with a critical 
regulation, 1 point will be assessed.

[[Page 12774]]

A. Vehicle Factor

    (a) When at least three vehicle inspections are recorded in the 
Motor Carrier Management Information System (MCMIS) during the 
twelve months before the safety audit or performed at the time of 
the review, the Vehicle Factor (Part 396) will be evaluated on the 
basis of the Out-of-Service (OOS) rates and noncompliance with acute 
and critical regulations. The results of the review of the OOS rate 
will affect the Vehicle Factor as follows:
    1. If the motor carrier has had at least three roadside 
inspections in the twelve months before the safety audit, and the 
vehicle OOS rate is 34 percent or higher, one point will be assessed 
against the carrier. That point will be added to any other points 
assessed for discovered noncompliance with acute and critical 
regulations of part 396 to determine the carrier's level of safety 
management control for that factor; and
    2. If the motor carrier's vehicle OOS rate is less than 34 
percent, or if there are less than three inspections, the 
determination of the carrier's level of safety management controls 
will only be based on discovered noncompliance with the acute and 
critical regulations of part 396.
    (b) Over two million inspections occur on the roadside each 
year. This vehicle inspection information is retained in the MCMIS 
and is integral to evaluating motor carriers' ability to 
successfully maintain their vehicles, thus preventing them from 
being placed OOS during roadside inspections. Each safety audit will 
continue to have the requirements of part 396, Inspection, Repair, 
and Maintenance, reviewed as indicated by the above explanation.

B. The Accident Factor

    (a) In addition to the five regulatory factors, a sixth factor 
is included in the process to address the accident history of the 
motor carrier. This factor is the recordable accident rate, which 
the carrier has experienced during the past 12 months. Recordable 
accident, as defined in 49 CFR 390.5, means an accident involving a 
commercial motor vehicle operating on a public road in interstate or 
intrastate commerce which results in a fatality; a bodily injury to 
a person who, as a result of the injury, immediately receives 
medical treatment away from the scene of the accident; or one or 
more motor vehicles incurring disabling damage as a result of the 
accident requiring the motor vehicle to be transported away from the 
scene by a tow truck or other motor vehicle.
    (b) Experience has shown that urban carriers, those motor 
carriers operating entirely within a radius of less than 100 air 
miles (normally urban areas), have a higher exposure to accident 
situations because of their environment and normally have higher 
accident rates.
    (c) The recordable accident rate will be used in determining the 
carrier's basic safety management controls in Factor 6, Accident. It 
will be used only when a carrier incurs two or more recordable 
accidents within the 12 months before the safety audit. An urban 
carrier (a carrier operating entirely within a radius of 100 air 
miles) with a recordable rate per million miles greater than 1.7 
will be deemed to have inadequate basic safety management controls 
for the accident factor. All other carriers with a recordable 
accident rate per million miles greater than 1.5 will be deemed to 
have inadequate basic safety management controls for the accident 
factor. The rates are the result of roughly doubling the national 
average accident rate in Fiscal Years 1994, 1995, and 1996.
    (d) The FMCSA will continue to consider preventability when a 
new entrant contests the evaluation of the accident factor by 
presenting compelling evidence that the recordable rate is not a 
fair means of evaluating its accident factor. Preventability will be 
determined according to the following standard: ``If a driver, who 
exercises normal judgment and foresight, could have foreseen the 
possibility of the accident that in fact occurred, and avoided it by 
taking steps within his/her control which would not have risked 
causing another kind of mishap, the accident was preventable.''

C. Factor Ratings

    For Factors 1 through 5, if the combined violations of acute and 
or critical regulations for each factor is equal to three or more 
points, the carrier is determined not to have basic safety 
management controls for that individual factor.
    If the recordable accident rate is greater than 1.7 recordable 
accidents per million miles for an urban carrier (1.5 for all other 
carriers), the carrier is determined to have inadequate basic safety 
management controls.

IV. Overall Determination of the Carrier's Basic Safety Management 
Controls

    If the carrier is evaluated as having inadequate basic safety 
management controls in at least three separate factors, the carrier 
will be considered to have inadequate safety management controls in 
place and corrective action will be necessary in order to avoid 
having its provisional operating authority or provisional 
Certificate of Registration revoked.
    For example, FMCSA evaluates a carrier finding:
    (1) One instance of noncompliance with a critical regulation in 
part 387 scoring one point for Factor 1;
    (2) Two instances of noncompliance with acute regulations in 
part 382 scoring three points for Factor 2;
    (3) Three instances of noncompliance with critical regulations 
in part 396 scoring three points for Factor 4; and
    (4) Three instances of noncompliance with acute regulations in 
parts 171 and 397 scoring four and one-half (4.5) points for Factor 
5.
    In this example, the carrier scored three or more points for 
Factors 2, 4, and 5 and FMCSA determined the carrier had inadequate 
basic safety management controls in at least three separate factors. 
FMCSA will require corrective action in order to avoid having the 
carrier's provisional operating authority or provisional Certificate 
of Registration suspended and possibly revoked.

    Issued on: March 7, 2002.
Joseph M. Clapp,
Administrator.
[FR Doc. 02-5892 Filed 3-14-02; 8:45 am]
BILLING CODE 4910-EX-P