[Federal Register Volume 72, Number 215 (Wednesday, November 7, 2007)]
[Rules and Regulations]
[Pages 62795-62797]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-21833]



[[Page 62795]]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Part 385


FMCSA Policy on Calculating Crash Rates and Driver, Vehicle, and 
Hazardous Materials Out-of-Service Rates and the Top 30 Percent of the 
National Average Under 49 CFR 385.407

AGENCY: Federal Motor Carrier Safety Administration (FMCSA).

ACTION: Notice of enforcement policy.

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SUMMARY: FMCSA may not issue a hazardous materials safety permit to a 
motor carrier that has a crash rate, driver, vehicle or hazardous 
material out-of-service rate in the top 30 percent of the national 
average pursuant to 49 CFR 385.407. This document states the FMCSA 
policy on calculating motor carrier crash rates, and driver, vehicle, 
and hazardous material out-of-service rates that represent the top 30 
percent of the national average as indicated in the Motor Carrier 
Management Information System (MCMIS). The document explains how FMCSA 
calculates the top thirty percent of the national average and how it 
calculates whether a single motor carrier falls within the top thirty 
percent of the national average in each of these categories. The 
document restates without change the FMCSA policy that has been 
publicly available on its Web site since January 2005.

EFFECTIVE DATE: January 3, 2005.

FOR FURTHER INFORMATION CONTACT: James O. Simmons, Office of 
Enforcement and Compliance, Hazardous Materials Division, 1200 New 
Jersey Avenue, SE., Washington, DC 20590, (202) 493-0496 (voice), 
[email protected] (e-mail), Debra S. Straus, Office of the Chief 
Counsel, (202) 366-2266 (voice), or [email protected] (e-mail).

SUPPLEMENTARY INFORMATION:
    Background: Congress established the hazardous materials safety 
permit (safety permit) requirement as part of the Hazardous Materials 
Transportation Uniform Safety Act of 1990 (``HMTUSA'') Public Law 101-
615, 104 Stat. 3244 (Nov. 16, 1990). On January 1, 2000, the Federal 
Motor Carrier Safety Administration (FMCSA) was established as a 
separate administration within the U.S. Department of Transportation 
pursuant to the Motor Carrier Safety Improvement Act of 1999. FMCSA 
assumed responsibility for the enforcement of hazardous materials 
transportation laws by motor vehicle transportation. On June 30, 2004, 
FMCSA issued a Final Rule containing the regulations implementing the 
safety permit program. 69 FR 39350.
    The Final Rule, codified at 49 CFR Part 385, identifies who must 
hold a safety permit, establishes the application process for a safety 
permit, and the conditions that must be satisfied before FMCSA will 
issue a safety permit to a carrier. Those conditions are set out in 49 
CFR 385.407.
    Section 385.407 requires that a carrier must have a 
``Satisfactory'' safety rating, must certify that it has a satisfactory 
security program, and must be properly registered with the Pipeline and 
Hazardous Materials Safety Administration (PHMSA). 49 CFR 
385.407(a)(1), 385.407(b) & (c). Section 385.407(a)(2) additionally 
states that FMCSA will not issue a safety permit to a motor carrier 
that * * *:

    (ii) Has a crash rate in the top 30 percent of the national 
average as indicated in the FMCSA Motor Carrier Management 
Information System (MCMIS); or
    (iii) Has a driver, vehicle, hazardous materials, or total out-
of-service rate in the top 30 percent of the national average as 
indicated in the MCMIS.

    The safety permit requirement became effective for motor carriers 
on the date after January 1, 2005, when the motor carrier was required 
to file a Motor Carrier Identification Report Form (MCS-150) according 
to a schedule set forth in 49 CFR 390.19(a). A motor carrier is 
required to file its MCS-150 form every two years. Thus, the safety 
permit requirement was implemented over the course of two years as 
motor carriers subject to the permit requirement reached the date for 
filing their MCS-150. The application for the safety permit was 
incorporated into the MCS-150, as an expanded form entitled ``MCS-150B 
or Combined Motor Carrier Identification Report and HM Permit 
Application.''
    On or about January 3, 2005, the Office of Enforcement and 
Compliance (OEC) published on its public Web site \1\ the formula for 
determining the national average, the crash rates and driver, vehicle 
and hazmat out-of-service (OOS) rates that established the threshold 
for the ``top 30 percent of the national average,'' and other 
information about calculating these rates. The website also explained 
how a carrier can calculate its own crash and OOS rates. For OOS rates, 
OEC explained that it determined the top 30 percent of the national 
average as follows:
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    \1\ http://www.safersys.org/HazMatRatesPost.aspx#OOSRates.
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    To calculate this percentage for (OOS) Rate, FMCSA looked at the 
driver, vehicle, or HM OOS percentage rates of all carriers (HM and 
non-HM) for calendar years 2003 and 2004. FMCSA then determined what 
the numerical value was that resulted in 70 percent of the carriers 
having a driver, vehicle, or HM OOS percentage rate lower than that 
figure, and 30 percent of the carriers having a driver, vehicle, or 
HM OOS percentage rate higher than that figure.

    The published guidance also instructed carriers on how to calculate 
their OOS percentage rates:

    Divide the total number of out-of-service inspections from the 
previous twelve month time period for each category by the total 
number of inspections for that category for the same twelve month 
time period. For example, if for the previous twelve month time 
period a motor carrier had twenty driver inspections and two of 
these resulted in an out-of-service condition then the Driver out-
of-service rate would be 0.10. (2 / 20 x 100% = 10%)

    The OEC Web site provided notice to the regulated community on how 
FMCSA would establish the national averages and cut-offs for the top, 
or worst-performing, 30 percent of the motor carrier population. Using 
these formulas, FMCSA established the thresholds for crash rates, 
vehicle, driver, and hazardous materials OOS rates and published these 
thresholds on its Web site in January 2005. The thresholds remained 
effective for the first two years of the program. In January 2007, 
using data for calendar years 2005 and 2006, FMCSA recalculated the top 
thirty percent of the national average and published the threshold 
crash rates, driver, vehicle, and hazardous materials OOS rates that 
would be effective in 2007 and 2008. The threshold rates were as 
follows:

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                                                  Motor carrier     Driver OOS      Vehicle OOS     Hazmat  OOS
                                                   crash rate          rate            rate            rate
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2005 & 2006...................................             0.125           8.92%           33.3%           5.88%

[[Page 62796]]

 
2007 & 2008...................................             0.125           9.52%          33.33%           6.06%
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Challenges to the Rule

    Over the course of the two-year implementation period of the safety 
permit requirement, two motor carriers that were denied safety permits 
challenged the adequacy of the notice to the regulated community of 
FMCSA's method for calculating the top thirty percent of the national 
average and the crash and OOS rates for individual carriers. Despite 
the clear and accessible notice on the agency's public Web site of the 
threshold rates and the method by which these rates and those of 
individual carriers are calculated, the challenging motor carriers 
asserted that this notice was insufficient because it was not published 
in the Federal Register. FMCSA maintains its position that adequate and 
fair notice was provided to the regulated community of the method by 
which it would apply the conditions for issuing a safety permit under 
49 CFR 385.407. Nevertheless, to foreclose further challenges, FMCSA is 
restating its methodology through this publication in the Federal 
Register.

Subpart E--Hazardous Materials Safety Permits

Calculating Crash Rates

    Under 49 CFR 385.407(a)(2)(ii), FMCSA may not issue a safety permit 
to a motor carrier that has a crash rate in the top 30 percent of the 
national average as indicated in the MCMIS. To calculate the threshold 
rate above which a motor carrier's crash rate will fall into the top, 
or worst-performing, 30 percent of the national average, FMCSA looked 
at all carriers in its census (HM and non-HM) that had more than one 
crash during the previous two-years. To calculate the national average, 
FMCSA:
    (1) Determined the number of crashes for each qualifying carrier 
over a two-year period.
    (2) Determined the number of power units that the carrier operated 
over the two year period.
    (3) For each carrier, divided the number of crashes by the number 
of power units times 2 to determine each carrier's crash rate, i.e., 
[( of crashes) / ( of power units x 2) = crash rate].
    (4) Using these rates, determined the numerical value that resulted 
in 70 percent of the carriers having a crash rate lower than that 
figure, and 30 percent of the carriers having a crash rate higher than 
that figure.
    The resulting numerical value represents the threshold for the 
worst-performing 30 percent of the national average. The threshold 
crash rate will be recalculated every two years using the crash data 
from the previous two years. FMCSA examines two years of data in order 
to evaluate crash rates that accurately represent occurrences in the 
industry and that will remain consistent throughout the two-year period 
during which carriers are required to apply for a safety permit. (The 
calculations to determine crash rates have been performed in this 
manner since the inception of the program in January 2005. Information 
on the Web site erroneously indicated that only one year of data was 
considered in setting the national averages when in fact two years of 
data has consistently been used.)
    FMCSA examines one year of crash data to determine the crash rate 
for an individual carrier that is applying for a safety permit. The 
carrier will divide the number of crashes for the previous twelve-month 
period by the total number of power units that it operated during that 
twelve-month period. For example, if a motor carrier had 2 crashes and 
10 power units, the crash rate would be 0.20 based upon a calculation 
of (2 = 10 = 0.20). FMCSA examines one year of data to remain 
consistent with FMCSA practice of reviewing one year of records during 
a compliance review. FMCSA does not consider a single crash to be 
statistically valid. Thus, crash rates will be calculated only for 
carriers with more than one crash in the previous twelve-month period.

Calculating Out-of-Service (OOS) Rates

    Under 49 CFR 385.407(a)(2)(iii), FMCSA may not issue a safety 
permit to a motor carrier that has a driver, vehicle, hazardous 
material or total out-of-service (OOS) rate in the top 30 percent of 
the national average as indicated in the MCMIS. To calculate the 
threshold rates above which a motor carrier's rate will fall into the 
top, or worst-performing, 30 percent of the national average for each 
of the listed categories, FMCSA separately examined the driver, 
vehicle, or hazmat OOS rate of all the carriers in its census. OEC did 
not include carriers that only had one inspection and only considered 
hazmat carriers in the calculation for the hazmat OOS rate. OEC 
examined two years of data, initially for calendar years 2003 and 2004, 
and subsequently, for calendar years 2005 and 2006.
    In each category, OEC determined the OOS rate for each qualifying 
carrier in the census by dividing the total number of OOS violations by 
the total number of inspections over the two-year period. For the 
hazmat OOS rate, the total number of hazmat OOS violations was divided 
by the total number of hazmat inspections over the two-year period. OEC 
then determined the numerical value that resulted in 70 percent of the 
carriers having a driver, vehicle, or hazmat OOS rate lower than that 
figure, and 30 percent of the carriers having a driver, vehicle, or 
hazmat OOS percentage rate higher than that figure. These numbers 
established the threshold above which a carrier falls into the top, or 
worst-performing, 30 percent of the national average in each category. 
OEC determined that looking at a total OOS rate was redundant and that 
total OOS rates were adequately considered by the examination of OOS 
rates in each of the three categories. The threshold rates representing 
the cut-off for the top thirty percent of the national average will be 
recalculated every two years on the first workday of the year. The 
first calculations for the national average were made on January 3, 
2005 using the available MCMIS data for calendar years 2003 and 2004, 
the second calculations for the national average were made on January 
3, 2007, using the available MCMIS data for calendar years 2005 and 
2006.
    A motor carrier calculates its OOS rate in each of the three 
categories by examining the number of inspections and OOS violations 
during the preceding twelve-month period. The carrier must then divide 
the number of OOS violations for the category by the total number of 
inspections for that category. The resulting figure is the motor 
carrier's OOS rate for the particular category. For example, if during 
the previous twelve-month period, a motor carrier had twenty driver 
inspections and two of these resulted in an OOS condition, the driver 
OOS rate would be 0.10 (2 / 20 = 0.10 or 10%). Each of the OOS 
categories, Driver, Vehicle, and Hazardous Materials, shall be 
calculated separately. FMCSA does not consider a single OOS inspection 
in any category to be statistically valid and thus will not deny a 
permit to a carrier based upon an OOS

[[Page 62797]]

rate that results from a single OOS inspection.

    Issued on: October 31, 2007.
John H. Hill,
Administrator.
 [FR Doc. E7-21833 Filed 11-6-07; 8:45 am]
BILLING CODE 4910-EX-P