[Federal Register Volume 67, Number 92 (Monday, May 13, 2002)]
[Rules and Regulations]
[Pages 31978-31986]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-11730]


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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Part 385

[Docket No. FMCSA-2001-11061]
RIN 2126-AA59


New Entrant Safety Assurance Process

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

ACTION: Interim Final Rule (IFR); request for comments.

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SUMMARY: The FMCSA establishes minimum requirements for new entrant 
motor carriers to ensure that they are knowledgeable about applicable 
Federal motor carrier safety standards. After ensuring that they are 
knowledgeable through the application process, the new entrants will 
operate for 18 months in which time they must pass a safety audit in 
order to receive permanent DOT registration.

DATES: This rule is effective January 1, 2003. Comments must be 
received on or before July 12, 2002.

ADDRESSES: You can submit comments by mail or by delivery service to 
the U.S. DOT Docket Management Facility (DMS), Room PL-401, 400 Seventh 
Street, SW., Washington, DC 20590-0001, and your signed written 
comments must refer to the docket number appearing at the top of this 
document. Comments received from the public will become part of this 
docket and will be available for inspection and copying at the DMS 
between 9 a.m. and 5 p.m., Monday through Friday, except Federal 
holidays. Those desiring acknowledgement of receipt of your comments 
should include a self-addressed stamped envelope or postcard, or after 
submitting comments electronically, print the acknowledgment page.

[[Page 31979]]

    Comments may also be submitted on the Internet by using the 
universal resource locator (URL) at: http://dmses.dot.gov/submit, or by 
fax to (202) 493-2251. Internet users may view all comments received by 
the DMS on the Internet at: http://dms.dot.gov. Please follow the 
instructions online for more information and help. In addition, an 
electronic copy of this document may be downloaded by accessing Federal 
Register publications through the Government Printing Office (GPO) 
Access service (http://www.access.gpo.gov/nara).
    All comments received before the close of business on the comment 
closing date indicated above will be considered and will be available 
for examination using the docket number appearing at the top of this 
document in the docket room at the above address. The FMCSA will file 
comments received after the comment closing date in the docket and will 
consider late comments to the extent practicable. The FMCSA may, 
however, issue a final rule at any time after the close of the comment 
period.

FOR FURTHER INFORMATION CONTACT: Mr. Larry Minor, 202-366-4009, Acting 
Chief, Driver and Carrier Operations Division, Federal Motor Carrier 
Safety Administration (MC-PSD), 400 Seventh Street, SW., Washington, DC 
20590-0001. Office hours are from 7:45 a.m. to 4:15 p.m., e.t., Monday 
through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Regulatory Information

    This rule is being published as an interim final rule and is being 
made effective on January 1, 2003. A notice of proposed rulemaking does 
not precede this rule.
    In the fiscal year 2002 Department of Transportation Appropriations 
Act (Public Law 107-87; December 18, 2001), Congress directed that as a 
condition of processing applications of Mexico-domiciled motor carriers 
for authority to operate beyond the commercial zones and municipalities 
located along the U.S.-Mexico border, the FMCSA must issue an interim 
final rule to ensure that new entrant carriers are knowledgeable about 
Federal safety standards. The FMCSA is making the effective date of the 
rule January 1, 2003 in order to allow the agency sufficient time to 
put in place the necessary resources to conduct the safety audits 
prescribed by the rule. Additionally, the FMCSA will need the funds 
generated by its final fee structure under the Motor Carrier 
Replacement Information/Registration System to run the program. It 
expects to complete that rulemaking by the January 2003 effective date.
    Because of Congress' direction, the FMCSA finds that there is good 
cause that notice and comment are contrary to the public interest under 
5 U.S.C. 553(b)(3)(B).

Background

    On December 9, 1999, the President signed the Motor Carrier Safety 
Improvement Act of 1999 (Public Law 106-159). Section 210(a) of MCSIA, 
now codified as 49 U.S.C. 31144(f), requires the Secretary of 
Transportation to establish regulations specifying minimum requirements 
for applicant motor carriers seeking federal interstate operating 
authority, including a requirement that new entrants undergo a safety 
audit within the first 18 months of operations.
    Although operating authority has generally been construed in the 
past to mean registration of for-hire carriers subject to the 
jurisdiction transferred from the Interstate Commerce Commission 
following enactment of the ICC Termination Act of 1995 (ICCTA) (Public 
Law 104-88) (referred to herein as authorized for-hire motor carriers), 
the FMCSA believes section 210 extends this concept to all carriers 
subject to Federal safety jurisdiction. In other words, all new 
entrants, regardless of whether they need to register with the FMCSA 
under 49 U.S.C. 13901, will be required to meet certain minimum safety 
standards in order to continue operating in interstate commerce during 
and after the 18-month period following their receipt of a USDOT 
number.
    The FMCSA intends to improve the safety performance of new entrants 
by providing educational and technical assistance to new carriers as 
they begin their new business. The intent of the safety audit and 18-
month monitoring period is to provide new carriers the opportunity to 
understand their safety obligations under the Federal Motor Carrier 
Safety Regulations (FMCSRs) and applicable Hazardous Materials 
Regulations (HMRs). The safety audit will consist of a review of the 
new entrant's safety data, a review of requested motor carrier 
documents, and an interview session with the motor carrier by an 
individual certified under FMCSA regulations to perform safety audits. 
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 the qualification of drivers; driving a commercial motor 
vehicle; hours of service; vehicle inspection, repair, and maintenance; 
transporting and marking hazardous materials; controlled substances and 
alcohol use and testing; commercial driver's license standards; and 
financial responsibility. When presented with evidence that carriers 
cannot or will not exercise basic safety management controls, the FMCSA 
will require corrective action. If the necessary corrective action is 
not taken, a carrier will be denied the privilege of operating in 
interstate commerce.
    However, the safety enforcement remedies addressed in the rule are 
not the exclusive enforcement tools available to the agency to ensure 
safe operations by new entrants. New entrant carriers are subject, like 
any other carrier operating in the United States, to all Federal Motor 
Carrier Safety Regulations and operating requirements. The agency can 
and will, where necessary, apply the full range of enforcement actions 
to new entrant carriers. These include, but are not limited to, 
compliance reviews, civil penalties, and revocation of new entrant 
registration for serious safety violations.
    Currently, an applicant who wishes to begin commercial vehicle 
operations in interstate commerce is required to submit the Motor 
Carrier Identification Report, Form MCS-150, to FMCSA before commencing 
operations. Additionally, unless providing transportation exempt from 
ICCTA registration requirements, a for-hire motor carrier must also 
apply for the appropriate operating authority, make the necessary 
administrative filings as required by the ICCTA, and pay a fee.
    This regulation establishes new minimum requirements for all 
applicant motor carriers domiciled in the United States and Canada 
seeking to operate in interstate commerce for the first time. 
Applicants will be provided educational and technical assistance 
material to assist them in complying with the FMCSRs and applicable 
HMRs, and will be required to certify that they are knowledgeable 
about, and will comply, with these regulations. This will help ensure 
they are knowledgeable about applicable Federal motor carrier safety 
standards before being granted ``new entrant registration'' that will 
continue for a minimum of 18 months. During the 18-month period, FMCSA 
will evaluate the new entrant's safety management practices through a 
safety audit and monitor its on-road performance prior to granting the 
new entrant permanent registration.
    Section 210(b) of the MCSIA required the Secretary to consider 
establishing a proficiency examination as well as other requirements to 
ensure applicants understand applicable safety regulations

[[Page 31980]]

before being granted operating authority. The FMCSA is not requiring a 
proficiency examination because it believes that the educational and 
technical assistance materials provided to the new entrants and the 
safety certifications on the required application forms will 
demonstrate the new entrants understand applicable safety regulations.
    The new MCS-150A form requires the new entrant to certify that it 
has a system(s) in place to ensure compliance with applicable 
requirements covering driver qualifications, hours of service, 
controlled substance and alcohol testing, vehicle condition, accident 
monitoring, and hazardous materials transportation. The certification 
reminds the new entrant of its statutory and regulatory 
responsibilities, which if neglected or violated, may subject the 
applicant to civil penalties and/or lead to the revocation of the new 
entrant registration.
    Motor carriers domiciled in Mexico seeking to operate in the United 
States will not be subject to this rule. The FMCSA adopted separate 
application and safety monitoring procedures for Mexico-domiciled 
carriers on March 19, 2002, (67 FR 12652, 67 FR 12702, and 67 FR 
12758). The FMCSA believes it is necessary to maintain separate 
procedures for Mexico-domiciled carriers because of: (1) The 
differences between the Mexican and U. S. regulatory systems, which 
present unique circumstances in ensuring compliance with the FMCSRs and 
HMRs by Mexico-domiciled carriers; and (2) the unique requirements 
imposed on certain Mexico-domiciled carriers by the Department of 
Transportation Appropriations Act. These differences are discussed in 
detail in the preambles to the notices of proposed rulemakings for the 
Mexican carrier rules published on May 3, 2001 (66 FR 22238, 22371 and 
22415).
    Under the new requirements, an applicant may request an application 
package by contacting the FMCSA website (www.fmcsa.dot.gov); or by 
contacting the FMCSA's Washington, DC headquarters by mail, fax or 
telephone. Applicants are strongly encouraged to complete the 
applications on line. The application package will contain the 
following:
    1. Educational and technical assistance material regarding the 
requirements of the FMCSRs and HMRs, if applicable.
    2. The Form MCS-150, The Motor Carrier Identification Report.
    3. The Form MCS-150A, Safety Certification for Applications for 
U.S. DOT Number. A copy of Form MCS-150A is available in the docket 
described above under ADDRESSES.

    For-hire motor carriers are also required to complete the 
application forms OP-1 or OP-1(P), as appropriate, and must submit them 
to the FMCSA at the same time as the Forms MCS-150 and MCS-150A. The 
FMCSA is planning to update these forms in the future to implement the 
provisions of the ICC Termination Act of 1995 (ICCTA).
    The educational and technical assistance package will consist of 
material designed to assist the applicant in complying with the FMCSRs 
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.
    Following completion of the application forms, FMCSA will register 
the new entrant and assign a United States Department of Transportation 
(USDOT) number. For-hire motor carriers, unless providing 
transportation exempt from ICCTA registration requirements, are 
required to obtain operating authority prior to commencing operations. 
The new entrant registration begins with the issuance of the USDOT 
number and will continue for 18 months. During the 18-month new entrant 
registration period, the new entrant will be required to undergo a 
safety audit designed to evaluate the adequacy of its safety management 
practices and to offer guidance and assistance in enhancing those 
practices. The agency is treating the term ``safety audit,'' which is 
used in Sec. 211 of the MCSIA regarding the certification of an 
individual under FMCSA regulations to perform safety audits, as 
equivalent to the ``safety review'' mandated by Sec. 210 of MCSIA. The 
statutory purpose of a ``safety review'' and a ``safety audit'' appears 
to be very similar. In addition, the term ``safety audit'' avoids any 
possible confusion with the safety reviews previously conducted by the 
agency, which were discontinued on September 30, 1994.
    The safety audit will generally occur at the new entrant's place of 
business, upon reasonable notice to the new entrant, which will include 
notice of what the audit will consist of and when it will take place. 
The safety audit will be an assessment of the adequacy of the new 
entrant's basic safety management controls. It will include, but not be 
limited to, a review of selected carrier records and operational 
practices, e.g., driver qualification records, driver records of duty 
status, and vehicle maintenance files. The safety audit is different 
than a compliance review in that it focuses on providing safety 
management and technical assistance and will not result in a safety 
fitness determination, i.e., a safety rating of satisfactory, 
conditional, or unsatisfactory. Safety ratings are assigned only after 
a compliance review. However, the safety audit could result in the new 
entrant having its new entrant registration revoked if it is found to 
have inadequate basic safety management controls and fails to take 
corrective action required by the FMCSA. Appendix A--Explanation of 
Safety Audit Evaluation Criteria will be used to determine the adequacy 
of the new entrant's basic safety management controls.
    The FMCSA is interested in comments on the advisability of 
conducting some safety audits at alternate locations. This would enable 
the agency to provide educational and technical assistance to a number 
of new entrants at one time and also perform the audits of the systems 
and records the new entrants will be required to provide. The FMCSA 
also invites comments on whether it is appropriate for private 
contractors certified by the FMCSA to conduct safety audits.
    Following completion of the safety audit, the auditor will review 
the findings with the new entrant. If the safety audit reveals that the 
carrier has basic safety management controls in place that are 
functioning adequately, the FMCSA will notify the new entrant in 
writing within 45 days that it has successfully met the safety audit 
requirements. However, the new entrant registration will remain in 
place and the carrier's performance will remain closely monitored by 
the FMCSA until the end of the 18-month period. If a safety audit has 
not been conducted on a new entrant, through no fault of the carrier, 
the new entrant designation will continue until such time as a safety 
audit is conducted. However, a new entrant who has not undergone a 
safety audit within the 18 months because it has refused to allow the 
FMCSA to conduct the safety audit may have its new entrant registration 
revoked ten days after receiving notice from the FMCSA.
    The FMCSA anticipates that the safety management practices of the 
large

[[Page 31981]]

majority of new entrants will prove to be adequate because of the 
combined effect of: (1) Providing educational material to the new 
entrant in the application process; (2) requiring the new entrant to 
certify that it understands and that it will comply with the FMCSRs; 
and (3) providing notice to the new entrant of the content of the 
safety audit. However, in those cases in which the safety audit reveals 
that the new entrant's safety management practices are inadequate, the 
FMCSA will notify the new entrant that it is required to take action to 
improve its practices. The new entrant will have 60 days to take the 
necessary remedial action, unless it transports passengers or carries 
hazardous materials, in which case it will have 45 days. These time 
periods are consistent with the period currently provided to motor 
carriers to improve proposed safety ratings following a compliance 
review. Failure by the carrier to make the necessary changes to remedy 
inadequate basic safety management controls will result in revocation 
of its new entrant registration and imposition of an out-of-service 
order (OOS) prohibiting operations in interstate commerce. The FMCSA is 
interested in comments on the resource cost to the economy of denying 
permanent registration.
    If a new entrant provides the FMCSA with a written response 
demonstrating that corrective action likely to achieve compliance with 
the requirements of the FMCSRs and applicable HMRs has been taken, and 
the FMCSA determines the new entrant's basic safety management controls 
are adequate, the new entrant will be notified in writing that its 
safety management practices are acceptable and that its new entrant 
registration will remain in place until the end of the 18-month period.
    The FMCSA believes that in most cases in which corrective action is 
needed, the remedial action will be taken in the required time frame. 
However, in those cases in which the new entrant does not take any 
remedial action, or takes action unlikely to improve its safety 
performance to an acceptable level, the FMCSA will initiate a 
proceeding to revoke the new entrant registration.
    The FMCSA Division Administrators or State Directors will make the 
initial determination about the adequacy of a new entrant's basic 
safety management controls and whether necessary corrective action has 
been taken. The Field Administrator of the appropriate FMCSA Service 
Center will conduct administrative review of this decision.
    A new entrant may request the FMCSA to conduct an administrative 
review if it believes the FMCSA has committed an error in determining 
that its basic safety management controls are inadequate. The new 
entrant's request must explain the error it believes the FMCSA 
committed in its determination and include a list of all factual and 
procedural issues in dispute. In addition, the new entrant must include 
any information or documents that support its argument. Following the 
administrative review, the FMCSA will notify the new entrant of its 
decision, which will constitute the final action of the agency.
    A new entrant whose registration has been revoked is prohibited 
from operating a CMV in interstate commerce and may not reapply for new 
entrant registration sooner than 30 days after the date of revocation. 
A new entrant reapplicant will be required to demonstrate to the 
FMCSA's satisfaction that it has corrected the deficiencies that 
resulted in revocation and otherwise has in place safety management 
systems that will function effectively.
    The rule provides that at the end of the 18-month period, if the 
new entrant has successfully met the requirements of the safety audit 
and is not currently under a notice from the FMCSA to remedy its safety 
management practices, its DOT registration will become permanent. 
Thereafter, it will be treated like any other motor carrier. If the 
carrier is under a notice to remedy its safety management practices, 
its new entrant designation will continue until FMCSA determines the 
new entrant has implemented actions necessary to achieve adequate 
safety management practices.

Rulemaking Analysis 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). It 
has been reviewed by the Office of Management and Budget. The subject 
of requirements for new entrant motor carriers will likely generate 
considerable public interest within the meaning of Executive Order 
12866. We have classified the rule as significant because of the high 
level of public and congressional interest in the new entrant safety 
assurance process. OMB has designated the rule as economically 
significant. A regulatory evaluation has been prepared and placed in 
the docket.
    A series of analyses and reports have demonstrated that new motor 
carriers are less likely to comply with safety regulations, and are 
more likely to be involved in crashes, than established motor carriers. 
In response to this, Congress directed the FMCSA to develop a program 
to ensure the safety of new entrants.
    The centerpiece of the new entrant program is the safety audit, 
which will be performed on all new entrants within 18 months of their 
registration. Individuals certified under the FMCSA regulations will 
perform these audits. The FMCSA anticipates a volume of approximately 
40,000 new entrant safety audits each year. A copy of the complete 
regulatory evaluation is available in the docket described above under 
ADDRESSES.

Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-
612), the FMCSA has considered the effects of this regulatory action on 
small entities and determined that such entities would not be adversely 
affected by this rule. We therefore certify that it would not have a 
significant impact on a substantial number of small entities.

Executive Order 12988 (Civil Justice Reform)

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

Executive Order 13045 (Protection of Children)

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

Executive Order 12630 (Taking of Private Property)

    This rule will not effect a taking of private property or otherwise 
have taking implications under Executive Order 12630, Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights.

Executive Order 13132 (Federalism)

    This action has been analyzed in accordance with the principles and 
criteria contained in Executive Order 13132 dated August 4, 1999, and 
it has been determined that this action does

[[Page 31982]]

not have a substantial direct effect or sufficient federalism 
implications on States that would limit the policymaking discretion of 
the States. Nothing in this document directly preempts any State law or 
regulation. It will not impose additional costs or burdens on the 
States. This action will not have a significant effect on the States' 
ability to execute traditional State governmental functions. To the 
extent that States incur costs for conducting these safety audits, they 
will be reimbursed with federal funds under the Motor Carrier Safety 
Assistance Program (MCSAP). Since the MCSAP is an ``80/20'' program, 
FMCSA would reimburse the States for 80% of the costs incurred in 
conducting safety audits.

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 obtain approval from the Office of 
Management and Budget (OMB) for each collection of information they 
conduct, sponsor, or require through regulations. An analysis of this 
interim final rule has been made by the FMCSA, and it has been 
determined that it will affect a currently-approved information 
collection covered by OMB Control No. 2126-0013 (Motor Carrier 
Identification Report). Information collection 2126-0013, with an 
annual burden of 68,250 hours, expires on May 31, 2004.
    In addition to completing form MCS-150 (Motor Carrier 
Identification Report), this interim final rule will also require new 
entrants to complete a new supplemental form, entitled Safety 
Certification for Applications for U.S. DOT Number (MCS-150A). The 
completion of the supplemental form is the only portion of this interim 
final rule with PRA implications.
    Although the rule also involves two other forms new entrants must 
complete--the BOC-3 and OP forms, there is no impact on burden hours 
for those information collections resulting from this rule. The BOC-3 
form is covered by 2126-0015 (Designation of Agents, Motor Carriers, 
Brokers and Freight Forwarders), which expires on November 30, 2004. 
The OP series forms are covered by 2126-0016 (Revision of Licensing 
Application Forms of Application Procedures and Corresponding 
Regulations), which expires on March 31, 2005. However, this rule does 
not affect the burden hours involved with these two information 
collections.
    The FMCSA estimates that approximately 40,000 new entrants annually 
will be required to complete this supplemental form (MCS-150A) and that 
the supplemental form takes approximately 9 minutes to complete. 
Therefore, we estimate the total annual burden of this interim final 
rule to be 6,000 burden hours (9 minutes  x  40,000, divided by 60 
minutes). The new total burden for information collection 2126-0013 
would be 74,250 hours (the currently-approved 68,250 hours for 
completing the MCS-150, plus 6,000 hours for completing the MCS-150A).
    We particularly request your comments on whether the collection of 
information is necessary for the FMCSA to meet its goal of reducing 
truck crashes, including (1) whether the information is useful to this 
goal; (2) the accuracy of the estimate of the burden of the information 
collection; (3) ways to enhance the quality, utility and clarity of the 
information collected; and (4) ways to minimize the burden of the 
collection of information on respondents, including the use of 
automated collection techniques or other forms of information 
technology.
    You may submit comments on the information collection burden 
addressed by this interim final rule to the Office of Management and 
Budget (OMB). The OMB must receive your comments by June 27, 2002. You 
must mail or hand deliver your comments to: Attention: Desk Officer for 
the Department of Transportation, Docket Library, Office of Information 
and Regulatory Affairs, Office of Management and Budget, Room 10102, 
725 17th Street, NW., Washington, DC 20503.

National Environmental Policy Act

    The Federal Motor Carrier Safety Administration (FMCSA) is a new 
administration within the Department of Transportation (DOT). We are 
striving to meet all of the statutory and executive branch requirements 
on rulemaking. The 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.). We 
expect the draft FMCSA Order to appear in the Federal Register for 
public comment in the near future. The framework of the FMCSA Order is 
consistent with and reflects the procedures for considering 
environmental impacts under DOT Order 5610.1C. The FMCSA analyzed this 
interim final rule under the NEPA and DOT Order 5610.1C. We believe it 
would be among the type of regulations that would be categorically 
excluded from any environmental assessment.

Energy Effects

    We have analyzed this rule under Executive Order 13211, Actions 
Concerning Regulations that Significantly Affect Energy Supply, 
Distribution, or Use. We have determined that it is not a ``significant 
energy action'' under that order because it is not likely to have a 
significant adverse effect on the supply, distribution, or use of 
energy because it sets standards for new entrant motor carriers and has 
no direct relation to energy consumption. The Administrator of the 
Office of Information and Regulatory Affairs has not designated it as a 
significant energy action. Therefore, it does not require a Statement 
of Energy Effects under Executive Order 13211.

Unfunded Mandates

    This rule does not impose an unfunded Federal mandate resulting in 
the expenditure by State, local, and tribal governments, in the 
aggregate, or by the private sector, of $100 million or more in any one 
year. (2 U.S.C. 1531 et seq.) Any costs incurred by the States are 
reimbursable under the Motor Carrier Safety Assistance Program (MCSAP). 
To the extent that States incur costs for conducting these safety 
audits, they will be reimbursed with federal funds under MCSAP.

List of Subjects in 49 CFR Part 385

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

    In consideration of the foregoing, Title 49, Code of Federal 
Regulations, Chapter III, part 385 is amended as set forth below:

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, 31136, 31144, 
31148, and 31502; and 49 CFR 1.73.

    2. Amend Sec. 385.1 by redesignating paragraph (b) as paragraph (c) 
and revising it, and by adding new paragraph (b) to read as follows:

[[Page 31983]]

Sec. 385.1  Purpose and scope.

* * * * *
    (b) This part establishes the safety assurance program for a new 
entrant motor carrier initially seeking to register with FMCSA to 
conduct interstate operations. It also describes the consequences that 
will occur if the new entrant fails to maintain adequate basic safety 
management controls.
    (c) The provisions of this part apply to all motor carriers subject 
to the requirements of this subchapter, except non-business private 
motor carriers of passengers.

    3. Amend Sec. 385.3 by revising the section heading and adding 
definitions and acronyms in alphabetical order to read as follows:


Sec. 385.3  Definitions and acronyms.

* * * * *
    CMV means a commercial motor vehicle as defined in Sec. 390.5 of 
this subchapter.
* * * * *
    FMCSA means the Federal Motor Carrier Safety Administration.
    FMCSRs mean Federal Motor Carrier Safety Regulations (49 CFR parts 
350-399).
    HMRs means the Hazardous Materials Regulations (49 CFR parts 100-
178).
    New entrant is a motor carrier not domiciled in Mexico that applies 
for a United States Department of Transportation (DOT) identification 
number in order to initiate operations in interstate commerce.
    New entrant registration is the registration (US DOT number) 
granted a new entrant before it can begin interstate operations in an 
18-month monitoring period. A safety audit must be performed on a new 
entrant's operations within 18 months after receipt of its US DOT 
number and it must be found to have adequate basic safety management 
controls to continue operating in interstate commerce at the end of the 
18-month period.
* * * * *

    4. Part 385 is amended by adding a new subpart D to read as 
follows:
Subpart D--New Entrant Safety Assurance Program
Sec.
385.301   What is a motor carrier required to do before beginning 
interstate operations?
385.303   How does a motor carrier register with the FMCSA?
385.305   What happens after the FMCSA receives a request for new 
entrant registration?
385.307   What happens after a motor carrier begins operations as a 
new entrant?
385.309   What is the purpose of the safety audit?
385.311   What will the safety audit consist of?
385.313   Who will conduct the safety audit?
385.315   Where will the safety audit be conducted?
385.317   Will a safety audit result in a safety fitness 
determination by the FMCSA?
385.319   What happens after the completion of the safety audit?
385.321   What failures of safety management practices disclosed by 
the safety audit will result in a notice to a new entrant that its 
DOT new entrant registration will be revoked?
385.323   May the FMCSA extend the period under Sec. 385.319(c) for 
a new entrant to take corrective action to remedy its safety 
management practices?
385.325   What happens after a new entrant has been notified under 
385.319(c) to take corrective action to remedy its safety management 
practices?
385.327   What happens when a new entrant receives a notice under 
Sec. 385.319(c) that its new entrant registration will be revoked 
and it believes the FMCSA made an error in its determination?
385.329   May a new entrant that has had its U.S. DOT registration 
revoked and its operations placed out of service (OOS) reapply?
385.331   What happens if a new entrant operates a CMV after having 
been issued an order placing its interstate operations out of 
service (OOS)?
385.333   What happens at the end of the 18-month safety monitoring 
period?
385.335   If the FMCSA conducts a compliance review on a new 
entrant, will the new entrant also be subject to a safety audit?
385.337   What happens if a new entrant refuses to permit a safety 
audit to be performed on its operations?

Subpart D--New Entrant Safety Assurance Program


Sec. 385.301  What is a motor carrier required to do before beginning 
interstate operations?

    (a) Before a motor carrier of property or passengers begins 
interstate operations, it must register with the FMCSA and receive a 
USDOT number. In addition, for-hire motor carriers must obtain 
operating authority from FMCSA following the registration procedures 
described in 49 CFR part 365, unless providing transportation exempt 
from 49 CFR part 365 registration requirements.
    (b) This subpart applies to motor carriers domiciled in the United 
States and Canada.
    (c) A Mexico-domiciled motor carrier of property or passengers must 
register with the FMCSA by following the registration procedures 
described in 49 CFR part 365 or 368, as appropriate. The regulations in 
this subpart do not apply to Mexico-domiciled carriers.


Sec. 385.303  How does a motor carrier register with the FMCSA?

    A motor carrier may contact the FMCSA by internet 
(www.fmcsa.dot.gov); or Washington, DC headquarters by mail at, FMCSA, 
400 7th Street SW., Washington, DC 20590; fax (703) 280-4003; or 
telephone 1-800-832-5660, and request the application materials for a 
new entrant motor carrier.


Sec. 385.305  What happens after the FMCSA receives a request for new 
entrant registration?

    (a) The requester for new entrant registration will be directed to 
the FMCSA Internet website (www.fmcsa.dot.gov) to secure and/or 
complete the application package online.
    (b) The application package will contain the following:
    (1) Educational and technical assistance material regarding the 
requirements of the FMCSRs and HMRs, if applicable.
    (2) The Form MCS-150, The Motor Carrier Identification Report.
    (3) The Form MCS-150A, The Safety Certification for Applications 
for U.S. DOT Number.
    (4) Application forms to obtain operating authority under 49 CFR 
365, as appropriate.
    (c) Upon completion of the application forms, the new entrant will 
be issued a USDOT number.
    (d) For-hire motor carriers, unless providing transportation exempt 
from 49 CFR part 365 registration requirements, must also comply with 
the procedures established in 49 CFR part 365 to obtain operating 
authority before operating in interstate commerce.


Sec. 385.307  What happens after a motor carrier begins operations as a 
new entrant?

    After a new entrant satisfies all applicable pre-operational 
requirements, it will be subject to the new entrant safety monitoring 
procedures for a period of 18 months. During this 18-month period:
    (a) The new entrant's roadside safety performance will be closely 
monitored to ensure the new entrant has basic safety management 
controls that are operating effectively. An accident rate or driver or 
vehicle violation rate that is higher than the industry average for 
similar motor carrier operations may cause the FMCSA to conduct an 
expedited safety audit or compliance review at any time.
    (b) A safety audit will be conducted on the new entrant, once it 
has been in operation for enough time to have sufficient records to 
allow the agency to

[[Page 31984]]

evaluate the adequacy of its basic safety management controls. This 
period will generally be at least 3 months.
    (c) All records and documents required for the safety audit shall 
be made available for inspection upon request by an individual 
certified under FMCSA regulations to perform safety audits.


Sec. 385.309  What is the purpose of the safety audit?

    The purpose of a safety audit is to:
    (a) Provide educational and technical assistance to the new 
entrant; and
    (b) Gather safety data needed to make an assessment of the new 
entrant's safety performance and adequacy of its basic safety 
management controls.


Sec. 385.311  What will the safety audit consist of?

    The safety audit will consist of a review of the new entrant's 
safety management systems and a sample of required records to assess 
compliance with the FMCSRs, applicable HMRs and related record-keeping 
requirements as specified in Appendix A of this part. The areas for 
review include, but are not limited to, the following:
    (a) Driver qualification;
    (b) Driver duty status;
    (c) Vehicle maintenance;
    (d) Accident register; and
    (e) Controlled substances and alcohol use and testing requirements.


Sec. 385.313  Who will conduct the safety audit?

    An individual certified under the FMCSA regulations to perform 
safety audits will conduct the safety audit.


Sec. 385.315  Where will the safety audit be conducted?

    The safety audit will generally be conducted at the new entrant's 
business premises.


Sec. 385.317  Will a safety audit result in a safety fitness 
determination by the FMCSA?

    A safety audit will not result in a safety fitness determination. 
Safety fitness determinations follow completion of a compliance review.


Sec. 385.319  What happens after the completion of the safety audit?

    (a) Upon the completion of the safety audit, the auditor will 
review the findings with the new entrant.
    (b) If the FMCSA determines that the safety audit discloses that 
the new entrant has adequate basic safety management controls, the 
FMCSA will provide the new entrant written notice as soon as 
practicable, but not later than 45 days after the completion of the 
safety audit, that it has adequate basic safety management controls. 
The new entrant's safety performance will continue to be closely 
monitored for the remainder of the 18-month period of new entrant 
registration.
    (c) If the FMCSA determines that the findings of the safety audit 
disclose that the new entrant's basic safety management controls are 
inadequate, it will provide the new entrant written notice, as soon as 
practicable, but not later than 45 days after the completion of the 
safety audit, that its USDOT new entrant registration will be revoked 
and its operations placed out-of-service unless it takes the actions 
specified in the notice to remedy its safety management practices 
within:
    (1) 45 days of the date of the notice if the new entrant transports 
passengers in a CMV designed or used to transport 16 or more 
passengers, including the driver, or transports hazardous materials 
requiring placarding; or
    (2) 60 days of the date of the notice for all other new entrants.


Sec. 385.321  What failures of safety management practices disclosed by 
the safety audit will result in a notice to a new entrant that its DOT 
new entrant registration will be revoked?

    The failures of safety management practices consist of a lack of 
basic safety management controls as described in Appendix A of this 
part and will result in a notice to a new entrant that its DOT new 
entrant registration will be revoked.


Sec. 385.323  May the FMCSA extend the period under Sec. 385.319(c) for 
a new entrant to take corrective action to remedy its safety management 
practices?

    (a) If a new entrant that transports passengers in a CMV designed 
or used to transport 16 or more passengers, including the driver, or 
transports hazardous materials in quantities requiring placarding, has 
submitted evidence that corrective actions have been taken pursuant to 
Sec. 385.319(c) and the FMCSA cannot make a determination regarding the 
adequacy of the corrective actions within the 45 day period, the period 
may be extended for up to 10 days at the discretion of the FMCSA.
    (b) The FMCSA may extend the 60-day period in Sec. 385.319(c)(2), 
for up to an additional 60 days provided FMCSA determines that the new 
entrant is making a good faith effort to remedy its safety management 
practices.


Sec. 385.325  What happens after a new entrant has been notified under 
Sec. 385.319(c) to take corrective action to remedy its safety 
management practices?

    (a) If the new entrant provides evidence of corrective action 
acceptable to the FMCSA within the time period provided in 
Sec. 385.319(c), including any extension of that period authorized 
under Sec. 385.323, the FMCSA will provide written notification to the 
new entrant that its DOT new entrant registration will not be revoked 
and it may continue operations.
    (b) If a new entrant, after being notified that it is required to 
take corrective action to improve its safety management practices, 
fails to submit a written response demonstrating corrective action 
acceptable to FMCSA within the time specified in Sec. 385.319(c), 
including any extension of that period authorized under Sec. 385.323, 
the FMCSA will revoke its new entrant registration and issue an out-of-
service order effective on:
    (1) Day 46 from the date of notification if the new entrant 
transports passengers in a CMV designed to transport 16 or more 
passengers, including the driver, or transports hazardous materials in 
quantities requiring placarding; or
    (2) Day 61 from the date of notification for all other new 
entrants; or
    (3) If an extension has been granted under Sec. 385.323, the day 
following the expiration of the extension date.
    (c) The new entrant may not operate in interstate commerce on or 
after the effective date of the out-of-service order.


Sec. 385.327  What happens when a new entrant receives a notice under 
Sec. 385.319(c) that its new entrant registration will be revoked and 
it believes the FMCSA made an error in its determination?

    (a) If a new entrant receives a revocation notice, it may request 
the FMCSA to conduct an administrative review if it believes the FMCSA 
has committed an error in determining that its basic safety management 
controls were inadequate.
    (1) The request must be made to the Field Administrator of the 
appropriate FMCSA Service Center.
    (2) The request must explain the error the new entrant believes the 
FMCSA committed in its determination.
    (3) The request must include a list of all factual and procedural 
issues in dispute, and any information or documents that support the 
new entrant's argument.
    (b) The new entrant should submit its request no later than 15 days 
from the date of the notice of the inadequacy of its basic safety 
management controls. Submitting the request within 15 days will allow 
the FMCSA to issue a written decision before the prohibitions outlined 
in Sec. 385.319(c) take effect. Failure to petition within this 15-day

[[Page 31985]]

period may prevent the FMCSA from issuing a final decision before the 
prohibitions take effect.
    (c) The FMCSA may request that the new entrant submit additional 
data and attend a conference to discuss the issue(s) in dispute. If the 
new entrant does not attend the conference, or does not submit the 
requested data, the FMCSA may dismiss the new entrant's request for 
review.
    (d) The FMCSA will complete its review and notify the new entrant 
in writing of its decision within 30 days after receiving a request for 
review from a hazardous materials or passenger new entrant and within 
45 days from any other new entrant.
    (e) A new entrant must make a request for an administrative review 
within:
    (1) 90 days of the date when it was initially notified under 
Sec. 385.319(c) that its basic safety management controls were 
inadequate; or
    (2) 90 days after it was notified that its corrective action under 
Sec. 385.319(c) was insufficient and its basic safety management 
controls remain inadequate.
    (f) The Field Administrator's decision constitutes the final agency 
action.
    (g) Notwithstanding this subpart, a new entrant is subject to the 
suspension and revocation provisions of 49 U.S.C. 13905 for violations 
of DOT regulations governing motor carrier operations.


Sec. 385.329  May a new entrant that has had its U.S. DOT registration 
revoked and its operations placed out of service (OOS) reapply?

    (a) A new entrant whose U.S. DOT registration has been revoked and 
whose operations have been placed OOS by the FMCSA may reapply under 
Sec. 385.301 no sooner than 30 days after the date of revocation.
    (b) The motor carrier will be required to initiate the process from 
the beginning, and will be required to demonstrate that it has 
corrected the deficiencies that resulted in revocation of its 
registration and otherwise will ensure that it will have adequate basic 
safety management controls.


Sec. 385.331  What happens if a new entrant operates a CMV after having 
been issued an order placing its interstate operations out of service 
(OOS)?

    If a new entrant operates a CMV in violation of an out-of-service 
(OOS) order and Sec. 385.325(b), it is subject to the penalty 
provisions in 49 U.S.C. 521(b)(2)(A), not to exceed $10,000 for each 
offense.


Sec. 385.333  What happens at the end of the 18-month safety monitoring 
period?

    (a) If a safety audit has been performed within the 18-month 
period, and the new entrant is not currently subject to an order 
placing its operations out-of-service under Sec. 385.325(b) or under a 
notice ordering it to take specified actions to remedy its safety 
management controls under Sec. 385.319(c), the FMCSA will remove the 
new entrant designation and notify the new entrant in writing that its 
registration has become permanent. Thereafter, the FMCSA will evaluate 
the motor carrier on the same basis as any other carrier.
    (b) If a new entrant is determined to be ``unfit'' after a 
compliance review its new entrant registration will be revoked. (See 
Sec. 385.13)
    (c) A new entrant that has reached the conclusion of the 18-month 
period but is under an order to correct its safety management practices 
under Sec. 385.319(c) will have its new entrant registration removed 
following FMCSA's determination that the specified actions have been 
taken to remedy its safety management practices. The motor carrier will 
be notified in writing that its new entrant designation is removed and 
that its registration has become permanent. Thereafter, the FMCSA will 
evaluate the motor carrier on the same basis as any other carrier.
    (d) If a safety audit or compliance review has not been performed 
by the end of the 18-month monitoring period through no fault of the 
motor carrier, the carrier will be permitted to continue operating as a 
new entrant until a safety audit or compliance review is performed and 
a final determination is made regarding the adequacy of its safety 
management controls. Based on the results of the safety audit or 
compliance review, the FMCSA will either:
    (1) Remove the new entrant designation and notify the new entrant 
in writing that its registration has become permanent; or
    (2) Revoke the new entrant registration in accordance with 
Sec. 385.319(c).


Sec. 385.335  If the FMCSA conducts a compliance review on a new 
entrant, will the new entrant also be subject to a safety audit?

    If the FMCSA conducts a compliance review on a new entrant that has 
not previously been subject to a safety audit and issues a safety 
fitness determination, the new entrant will not have to undergo a 
safety audit under this subpart. However, the new entrant will continue 
to be subject to the 18-month safety-monitoring period prior to removal 
of the new entrant designation.


Sec. 385.337  What happens if a new entrant refuses to permit a safety 
audit to be performed on its operations?

    (a) If a new entrant refuses to permit a safety audit to be 
performed on its operations, the FMCSA will provide the carrier with 
written notice that its registration will be revoked and its operations 
placed out of service unless the new entrant agrees in writing, within 
10 days from the service date of the notice, to permit the safety audit 
to be performed. The initial refusal to permit a safety audit to be 
performed may subject the new entrant to the penalty provisions in 49 
U.S.C. 521(b)(2)(A).
    (b) If the new entrant does not agree to undergo a safety audit as 
specified in paragraph (a) of this section, its registration will be 
revoked and its interstate operations placed out of service effective 
on the 11th day from the service date of the notice issued under 
paragraph (a) of this section.
    5. Amend appendix A to part 385 as follows:
    a. In section I. General, revise paragraph (b);
    b. In section II. Source of the Data for the Safety Audit 
Evaluation Criteria, revise the introductory text of paragraph (b);
    c. In section IV. Overall Determination of the Carrier's Basic 
Safety Management Controls, designate the first paragraph as paragraph 
(a) and revise it, designate the second paragraph as paragraph (b), and 
designate the last paragraph as paragraph (c) and revise it.
    The revisions read as follows:

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

I. General

* * * * *
    (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 new 
entrant registration, 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.
* * * * *

[[Page 31986]]

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

* * * * *
    (b) The safety audit is a review of a Mexico-domiciled or new 
entrant motor carrier's operation and is used to:
* * * * *

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

    (a) 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 new entrant registration, provisional operating 
authority, or provisional Certificate of Registration revoked.
* * * * *
    (c) 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 new entrant registration revoked, or having the 
provisional operating authority or provisional Certificate of 
Registration suspended and possibly revoked.
* * * * *

    Issued on: May 6, 2002.
Joseph M. Clapp,
Administrator.
[FR Doc. 02-11730 Filed 5-10-02; 8:45 am]
BILLING CODE 4910-EX-P