Unified Registration System, 28990-29060 [05-9692]

Agencies

• Federal Motor Carrier Safety Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 70, Number 96 (Thursday, May 19, 2005)]
[Proposed Rules]
[Pages 28990-29060]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-9692]



[[Page 28989]]

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Part II





Department of the Transportation





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Federal Motor Carrier Safety Administration



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49 CFR Parts 360, 365 et al.



Unified Registration System; Proposed Rule

Federal Register / Vol. 70, No. 96 / Thursday, May 19, 2005 / 
Proposed Rules

[[Page 28990]]


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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Parts 360, 365, 366, 368, 387 and 390

[Docket No. FMCSA-97-2349]
RIN 2126-AA22


Unified Registration System

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

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

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SUMMARY: FMCSA proposes a revised registration system. The Unified 
Registration System would apply to every motor carrier, freight 
forwarder and broker required to register with DOT under 49 CFR 390.19 
or 49 U.S.C. 13901, except Mexico-domiciled motor carriers registering 
to operate between Mexico and points in the United States beyond border 
commercial zones along the U.S.-Mexico international border. The 
entities covered by this system would be required to register with 
FMCSA and periodically update registration information provided on a 
newly proposed registration form. This proposal applies to entities 
that are already subject to FMCSA Commercial Regulations, the Federal 
Motor Carrier Safety Regulations (FMCSRs), or the Hazardous Material 
Regulations (HMRs).
    This action is being taken in response to section 103 of the ICC 
Termination Act of 1995 (ICCTA), which, among other things, requires 
the Secretary of Transportation (Secretary) to propose regulations to 
replace four current identification and registration systems with a 
single, on-line, Federal system. The purpose of this proposal is to 
consolidate and simplify current Federal registration processes and to 
increase public accessibility to data about interstate motor carriers, 
property brokers, and freight forwarders. FMCSA proposes to charge 
registration fees that will enable FMCSA to recoup costs associated 
with processing registration applications and administrative filings 
and maintaining this system.

DATES: You must submit comments on or before August 17, 2005.

ADDRESSES: You may submit comments, identified by DOT DMS Docket Number 
FMCSA-97-2349, by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Agency Web Site: https://dms.dot.gov. Follow the 
instructions for submitting comments on the DOT electronic docket site.
     Fax: 1-202-493-2251.
     Mail: Docket Management Facility; U.S. Department of 
Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, 
Washington, DC 20590-0001.
     Hand Delivery: Room PL-401 on the plaza level of the 
Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    Instructions: All submissions received must include the agency name 
and docket number or Regulatory Identification Number (RIN) for this 
rule. All comments received will be posted without change to https://
dms.dot.gov, including any personal information provided. For detailed 
instructions on submitting comments and additional information on the 
rulemaking process, see the ``Public Participation'' heading of the 
SUPPLEMENTARY INFORMATION section of this document. For a summary of 
DOT's Privacy Act Statement or information on how to obtain a complete 
copy of DOT's Privacy Act Statement please see the ``Privacy Act'' 
heading under Rulemaking Analyses and Notices.
    Docket: For access to the docket to read background documents or 
comments received, go to https://dms.dot.gov at any time or to Room PL-
401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., 
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, 
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Mr. Robert F. Schultz, Jr., Office of 
Bus and Truck Standards and Operations, (202) 366-4001, Federal Motor 
Carrier Safety Administration, Department of Transportation, 400 
Seventh Street, SW., Washington, DC 20590.

SUPPLEMENTARY INFORMATION:
    Public Participation: 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 DMS 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. FMCSA may, however, issue a final rule at any time after 
the close of the comment period.

Preamble Table of Contents

    The following is an outline of the preamble.

I. Legal Basis
II. Introduction
III. Pre-ICCTA Background
IV. Summary of the Advance Notice of Proposed Rulemaking
V. Congressionally Mandated Policy Issues
    A. Funding for State Enforcement of Motor Carrier Safety 
Regulations
    B. Single State Registration System
    C. Public Safety; Efficient Delivery of Transportation Services
    D. Registration of Private Motor Carriers and Exempt For-hire 
Motor Carriers
VI. The Proposed Replacement System
    A. Registration
    B. USDOT Numbers
    C. Transfer of Operating Authority
    D. Biennial Update Requirement
    E. Proposed User Fees for the New System
    F. Registration Fees
    G. General Fee Policy Changes and Revised Fees
    H. Financial Responsibility
    1. Bodily Injury and Property Damage Insurance (BI&PD) 
Requirement
    2. Cargo Insurance Requirement
    3. Insurance Filings by Insurers, Surety Companies and Financial 
Institutions
    4. Self-Insurance
    I. Designation of Process Agents
    J. Administrative Filings
    K. Cancellation and Reinstatement of USDOT Numbers
    L. The New Application Form
    M. Multi-Phase Application Process
VII. Special Transit Operation Provisions
VIII. Systems Under Consideration for Merger with the New Unified 
Registration System
    A. Registration for Certain Mexico-Domiciled Motor Carriers
    B. Hazardous Materials Safety Permit Application Process
    C. Hazardous Materials Cargo Tank Registration Process
IX. Performance and Registration Information Systems Management 
Program (PRISM)
X. Regulatory Evaluation of the Unified Registration System NPRM 
Summary of Benefits and Costs
    A. Background and Summary
    B. Costs
    1. New Registration Fees for Private and Exempt For-Hire 
Carriers
    2. New Process Agent Filings Required by FMCSA
    3. New Requirement and Fee for Insurance Representatives of 
Exempt For-Hire Carriers and Private Carriers of Hazardous Materials 
to File Proof of Liability Insurance
    4. New Requirement and Fee for Requiring Private Hazmat and 
Exempt For-Hire Carriers to File Reinstatement Requests
    5. Eliminating Transfers of Operating Authority
    6. Revising Other FMCSA Fees
    7. Total Costs of URS NPRM
    C. Benefits
    1. Cost Savings from Streamlined New Entrant Registration 
Process

[[Page 28991]]

    2. Safety Benefits from Process Agent Designation Filing 
Requirement
    3. Cost Savings from Eliminating Cargo Insurance Filing 
Requirement
    4. Total Benefits
    5. Net Benefits from URS NPRM
XI. Appendix to the Preamble--Proposed Form MCSA-1 and Instructions
XII. Rulemaking Analyses and Notices
List of Subjects

I. Legal Basis for the Rule

    The ICC Termination Act of 1995 [Pub. L. 104-88, December 29, 1995, 
109 Stat. 888] (ICCTA) created a new 49 U.S.C. 13908 directing ``[t]he 
Secretary, in cooperation with the States, and after notice and 
opportunity for public comment,'' * * * to ``issue regulations to 
replace the current Department of Transportation identification number 
system, the single State registration system under section 14504, the 
registration system contained in this chapter, and the financial 
responsibility information system under section 13906 with a single, 
on-line, Federal system. The new system shall serve as a clearinghouse 
and depository of information on and identification of all foreign and 
domestic motor carriers, brokers, and freight forwarders, and others 
required to register with the Department as well as information on 
safety fitness and compliance with required levels of financial 
responsibility. In issuing the regulations, the Secretary shall 
consider whether or not to integrate the requirements of section 13304 
into the new system and may integrate such requirements into the new 
system.'' Title 49 U.S.C. 13908(c) also authorized the Secretary to 
``establish, under section 9701 of title 31, a fee system for 
registration and filing evidence of financial responsibility under the 
new system under subsection (a). Fees collected under the fee system 
shall cover the costs of operating and upgrading the registration, 
including all personnel costs associated with the system.'' Congress 
specified the rule must address:
     Funding for State enforcement of motor carrier safety 
regulations
     A determination of whether the existing Single State 
Registration System (SSRS) is duplicative and burdensome;
     The justification and need for collecting the statutory 
SSRS fee under 49 U.S.C. 14504(c)(2)(B)(iv);
     The public safety;
     The efficient delivery of transportation services; and
     How and under what conditions to extend the registration 
system to private motor carriers and exempt for-hire motor carriers.

This NPRM proposes a unified registration system and as such is well 
within the authority of the 1996 Act. The policy issues are addressed 
in the preamble under section V--Congressionally Mandated Policy 
Issues.
    Today's NPRM is concerned with Sec.  13908, the registration of 
motor carriers, brokers and freight forwarders. FMCSA proposes a new 
Federal on-line registration system for every motor carrier, freight 
forwarder and broker required to register with DOT under 49 CFR 390.19 
or 49 U.S.C. 13901, except Mexico-domiciled motor carriers registering 
to operate between Mexico and points in the United States beyond border 
commercial zones along the U.S.-Mexico international border. Title 49 
CFR 390.19 concerns the safety registration of all for-hire and private 
motor carriers, while 49 U.S.C. 13901 covers non-exempt for-hire motor 
carriers, freight forwarders and brokers. The registration systems for 
Mexico-domiciled carriers requesting to operate between Mexico and 
points in the United States beyond border commercial zones along the 
U.S.-Mexico international border, as well as Hazardous Materials Safety 
Permits and Hazardous Materials Cargo Tanks, are discussed in greater 
detail under section VIII--Systems under Consideration for Merger with 
the New Unified Registration System.
    FMCSA would integrate three of the four systems stipulated under 49 
U.S.C. 13908(a) into a new unified system. Also as directed by that 
statutory provision, we have considered integration of the fourth 
system, the Single State Registration System (SSRS) under section 
14504. We find that registration and financial responsibility 
compliance information currently generated by the SSRS is fully 
duplicated by the information collected under the proposed Unified 
Registration System and we preliminarily endorse the concept of 
integrating this fourth system under this rule. We have not proposed 
elimination of the SSRS at this time, however, because we require 
additional information to determine whether we can meet the conditions 
prescribed by Congress for merger and elimination of SSRS under section 
13908(d). That provision directs that before we can propose elimination 
of the SSRS, we must ensure that: (1) Fees collected and distributed to 
the States under the new Unified Registration System will be sufficient 
to provide each SSRS-participating State with at least a level of 
revenue commensurate with what the State received from SSRS fees in 
fiscal year 1995; and (2) all States would receive a minimum 
apportionment from the distribution of fees collected under the 
proposed Unified Registration System. As amplified in the subsequent 
``Single State Registration System'' discussion, we specifically seek 
public comment on fee structures or alternative measures that would 
permit full integration of the SSRS into the Unified Registration 
System and, in turn, would allow elimination of the SSRS program, while 
preserving the reimbursement and apportionment levels mandated by 49 
U.S.C. 13908(d). We also seek public comment on the advisability of 
recommending legislative change in a report to Congress under 49 U.S.C. 
13908(e)(3) in order to create greater latitude for incorporating the 
SSRS program into the Unified Registration System proposed here.
    The new system would incorporate the section 13304 requirement for 
a motor carrier, freight forwarder, or broker to designate an agent(s) 
for service of process for each State in which it intends to operate. 
Under the existing system, only non-exempt for-hire carriers must make 
such filings. The NPRM would extend the requirement to all registrants, 
including exempt for-hire and private carriers. Title 49 U.S.C. 503 
grants authority to extend the process agent filing requirement to 
private carriers. When FMCSA (then FHWA) solicited comment on whether 
to compel private carriers to make such filings, the public responded 
that exempt for-hire and private carriers should be subject to the same 
process agent filing requirement as non-exempt for-hire motor carriers, 
brokers, and freight forwarders (see the advance notice of proposed 
rulemaking (ANPRM) titled Motor Carrier Replacement Information/
Replacement System published August 26, 1996 at 61 FR 43816). FMCSA 
believes extending the requirement to exempt for-hire and private 
carriers would ensure the agency and the public are able to contact a 
carrier when necessary.
    Title 31 U.S.C. 9701 establishes general authority for agencies to 
``charge for a service or thing of value provided by the agency.'' 
Accordingly, FMCSA proposes to charge registration fees that will 
enable the agency to recoup costs associated with processing 
registration applications and administrative filings. All applicants, 
except certain FTA grantees and State sub-grantees, would pay a $200 
registration fee and pay for certain administrative filings.
    The Motor Carrier Safety Act of 1984 requires the Secretary to 
prescribe regulations on commercial motor vehicle safety. The 
regulations shall

[[Page 28992]]

prescribe minimum safety standards for commercial motor vehicles 
(CMVs). At a minimum, the regulations shall ensure that (1) CMVs are 
maintained, equipped, loaded, and operated safely; (2) the 
responsibilities imposed on operators of CMVs do not impair their 
ability to operate the vehicles safely; (3) the physical condition of 
operators of CMVs is adequate to enable them to operate the vehicles 
safely; and (4) the operation of CMVs does not have a deleterious 
effect on the physical condition of the operators (49 U.S.C. 31136(a)).
    This NPRM is intended to streamline the registration process and 
ensure that FMCSA can more efficiently track CMVs and ensure their safe 
operation. As such, it implements the section 31136(a)(1) mandate that 
FMCSA's regulations ensure that CMVs are maintained and operated 
safely. The Unified Registration System imposes no operational 
responsibilities on drivers. Therefore, this proposed regulation would 
not impair a driver's ability to operate vehicles safely (section 
31136(a)(2)), would not impact the physical condition of drivers 
(section 31136(a)(3)), and would not have a deleterious effect on the 
physical condition of drivers (section 31136(a)(4)). Accordingly, FMCSA 
has addressed the statutory mandate of section 31136(a) and finds that 
the proposed regulation is fully responsive to this mandate.

II. Introduction

    As noted, FMCSA proposes a unified registration system, as required 
by section 103 of ICCTA. Section 103, codified as 49 U.S.C. 13908, 
directs the Secretary of Transportation to issue a rule to replace the 
following four systems with a ``single, on-line, Federal system:''
    (1) The current Department of Transportation identification number 
system (49 CFR part 390);
    (2) The Single State Registration System (SSRS) under 49 U.S.C. 
14504 (49 CFR part 367);
    (3) The registration system under 49 U.S.C. 13901-13905 (49 CFR 
part 365); and
    (4) The financial responsibility information system under 49 U.S.C. 
13906 (49 CFR part 387).

A detailed discussion of these systems appears in the 1996 ANPRM. The 
ANPRM is also available in the docket for this rule; access to the 
docket is explained above in ADDRESSES.
    The proposed replacement system would identify and house 
information about all interstate motor carriers, brokers and freight 
forwarders, and others that must register with the Department of 
Transportation. It would also be a depository for information on safety 
fitness and compliance with financial responsibility requirements.

III. Pre-ICCTA Background

    The Motor Carrier Act of 1935 [Pub. L. 74-255, 47 Stat. 543] placed 
regulatory authority over the motor carrier industry with the 
Interstate Commerce Commission (ICC). ICC was responsible for issuing 
operating authority and permits and administering matters related to 
insurance, safety, and enforcement as they applied to non-exempt for-
hire common and contract motor carriers.\1\ ICC exercised safety 
oversight over all for-hire and private motor carriers, but its 
economic oversight encompassed only non-exempt for-hire motor carriers.
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    \1\ The Motor Carrier Act and subsequent legislation created 
numerous exemptions to ICC jurisdiction based upon the commodity 
transported (e.g., fresh produce and other agricultural products) or 
circumstances underlying the transportation (e.g., property or 
passengers having a prior or subsequent movement by air carrier). 
These exemptions were retained in chapter 139 of ICCTA. For purposes 
of this document, the term ``non-exempt'' or ``exempt'' for-hire 
carrier refers to whether the carrier is subject to the chapter 139 
registration requirements.
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    In 1967, the Department of Transportation (DOT) was created and 
responsibility for motor carrier safety activities was transferred from 
ICC to the Bureau of Motor Carrier Safety within FHWA. The Bureau of 
Motor Carrier Safety subsequently became the Office of Motor Carriers. 
FHWA required all interstate motor carriers engaged in interstate or 
foreign commerce to obtain a USDOT identification number from the 
agency for safety oversight purposes (53 FR 18042, May 19, 1988). 
Affected parties included for-hire motor carriers subject to ICC 
economic oversight, as well as motor carriers exempt from ICC 
jurisdiction (such as private carriers and exempt for-hire motor 
carriers).
    ICC continued to regulate non-exempt for-hire interstate and 
foreign motor carriers of property and passengers, issuing certificates 
of public convenience and necessity (for common carriers), permits (for 
contract carriers and freight forwarders \2\), or licenses (for 
property brokers). These entities were assigned an MC or MX number as 
evidence of ICC authority/licensure, except freight forwarders who 
received FF numbers. Motor carriers, property brokers and freight 
forwarders were subject to financial responsibility filing requirements 
as a condition for receipt and retention of operating authority. ICC 
maintained an up-to-date, automated insurance monitoring system to 
validate compliance with the financial responsibility requirements.
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    \2\ Following deregulation of the freight forwarding industry in 
1986, only freight forwarders of household goods had to be licensed 
by the ICC. ICCTA subsequently reinstated the registration 
requirement for all freight forwarders.
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    ICCTA eliminated ICC, and transferred certain ICC regulatory 
responsibilities to the DOT. The savings provision in section 204 of 
ICCTA preserved all effective ICC regulations, rules and decisions 
until the Secretary finds modification of these documents is warranted, 
thereby preserving the status quo. FHWA gave public notice of the 
effectiveness of these ICC documents in 61 FR 14372, April 1, 1996.

IV. Summary of the Advance Notice of Proposed Rulemaking

    On August 26, 1996, FMCSA (then FHWA) published an ANPRM (61 FR 
43816) announcing plans to create a single, on-line Federal 
registration system. The ANPRM provided an historical overview to 
support why a replacement system is necessary, included a description 
of the four systems to be replaced, and posed specific questions for 
comment.
    FMCSA received 104 comments to the docket that may be viewed on the 
Internet by visiting https://dms.dot.gov/search and typing the last four 
digits of the docket number in the heading of this document. FMCSA has 
analyzed the comments to the ANPRM and taken them into consideration in 
the formulation of this notice.
    Most of the commenters supported the proposal of a single, on-line 
system with the following features:
    1. Fees assessed on all applicants and based solely upon the actual 
costs to operate the system;
    2. A requirement to register with a single governmental entity;
    3. Elimination of the SSRS and a reimbursement of lost revenue for 
fees to impacted States;
    4. A requirement that all registrants file proof of financial 
responsibility; and
    5. A requirement that all registrants file a designation of persons 
upon whom court process may be served (designation of agents for 
service of process).
    Several commenters suggested that FMCSA achieve complete regulatory 
uniformity for all entities under its jurisdiction by either 
eliminating requirements or broadening their applicability to all 
entities. Some responded that all carriers should be required to 
provide similar information in the new registration system. For 
example, some recommended that FMCSA should require all motor

[[Page 28993]]

carriers to file evidence of insurance while others wanted FMCSA to 
remove the existing insurance filing requirement.
    Although FMCSA has considered these suggestions, we cannot propose 
or implement them in a rulemaking proceeding without first obtaining 
legal authority through statutory change. Section 13908(e)(3) directs 
the Secretary to transmit to Congress a report on any findings of this 
rule and the changes the DOT decides to implement, together with 
recommendations for any proposed legislative changes. FMCSA plans in 
that report to address policies it wishes to adopt in response to the 
1996 ANPRM comments which require statutory change.
    FMCSA has incorporated several of the ANPRM responses in 
formulating today's proposal. In response to public comment, the USDOT 
Number would replace the MC, MX, and FF numbers, and all motor carriers 
under FMCSA jurisdiction would be required to file a process agent 
designation with FMCSA.

V. Congressionally Mandated Policy Issues

    Congress directed the Secretary to address the following policy 
issues in this rule:
    (1) Funding for State enforcement of motor carrier safety 
regulations;
    (2) A determination of whether the existing SSRS is duplicative and 
burdensome;
    (3) The justification and need for collecting the statutory SSRS 
fee under 49 U.S.C. 14504(c)(2)(B)(iv);
    (4) The public safety;
    (5) The efficient delivery of transportation services; and
    (6) How and under what conditions to extend the registration system 
to private motor carriers and exempt for-hire motor carriers.

A. Funding for State Enforcement of Motor Carrier Safety Regulations

    FMCSA believes that funds provided by the Motor Carrier Safety 
Improvement Act of 1999 [Pub. L. 106-159, December 9, 1999, 113 Stat. 
1764] (MCSIA) and the Transportation Equity Act for the 21st Century 
[Pub. L. 105-178, June 9, 1998, 112 Stat. 418] (TEA-21) adequately 
satisfied congressional concerns regarding funding for State 
enforcement of motor carrier safety regulations. Total funding for 
State enforcement activities through the FMCSA Motor Carrier Safety 
Assistance Program (MCSAP) has increased substantially since 1995 and 
is summarized below.

------------------------------------------------------------------------
                                                               Amount in
                         Fiscal year                           millions
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1995........................................................         $74
1996........................................................          77
1997........................................................          78
1998........................................................          79
1999........................................................          90
2000........................................................          90
2001........................................................         155
2002........................................................         160
2003........................................................         165
------------------------------------------------------------------------

    Although Congress has not yet passed a new surface transportation 
reauthorization bill for years beyond 2003, FMCSA anticipates Congress 
will do so and that the legislation will adequately address funding for 
the State enforcement of Federal Motor Carrier Safety Regulations.

B. Single State Registration System

    Under the Single State Registration System (SSRS), currently 
conducted by 38 States in accord with the requirements of 49 U.S.C. 
14504, interstate, for-hire motor carriers are required to register 
annually with one State and provide evidence to the State of Federal 
registration under 49 U.S.C. chapter 139. In addition to filing and 
maintaining evidence of Federal registration, motor carriers are 
required annually to: (1) File satisfactory proof of required insurance 
or qualification as a self-insurer; (2) pay required fees directly to 
the SSRS base State; and (3) file the name of a local agent for service 
of process. Congress designated the SSRS among those programs that we 
should consider for inclusion in the Unified Registration System under 
13908(a), but further provided in 49 U.S.C. 13908(d) that before we can 
propose elimination of the SSRS, we must be able to ensure that: (1) 
Registration fees collected under the proposed Unified Registration 
System and distributed to the States each fiscal year would be 
sufficient to provide each SSRS-participating State with at least as 
much revenue as it received from SSRS fees in fiscal 1995 [49 U.S.C. 
13908(d)(1)]; and (2) all States would receive a minimum apportionment 
from the distribution of fees collected under the proposed Unified 
Registration System.
    Comments received in response to the ANPRM suggest strongly that 
the existing SSRS is both duplicative and burdensome when assessed 
against current Federal registration and licensing requirements and 
particularly when evaluated under the proposed Unified Registration 
System. The essential information collected through SSRS (evidence of 
registration by interstate, for-hire carriers and proof of their 
compliance with financial responsibility requirements) already is 
available to all States through the FMCSA Licensing and Insurance 
database and will remain so under the Unified Registration System 
proposed here. In fact, SSRS participating States currently tap into 
the Licensing and Insurance database to download verifications of 
carriers' financial responsibility.
    It appears that the only information collected by the SSRS that is 
not currently available to FMCSA and would not be collected through 
Form MCSA-1 filings is the operational distribution of vehicles among 
States where registered carriers perform their interstate service. 
Because operational distribution data is collected solely for the 
purpose of apportioning SSRS registration fees among participating 
States, it is essentially an informational by-product of the SSRS fee 
collection system, and clearly provides neither safety nor compliance 
information to State users.
    The proposed Unified Registration System would generate the same 
registration and financial responsibility information captured by the 
SSRS and, thus, integrates the operational and compliance features of 
the SSRS. Continuation of the SSRS in tandem with the Unified 
Registration System proposed here would therefore appear to be 
duplicative. In view of the relative ease and universality with which 
the registration and financial responsibility compliance information 
can be accessed by the States through the FMCSA databases, the SSRS 
requirement that carriers maintain copies of their SSRS registration 
receipts in each vehicle also would appear to be unnecessarily 
burdensome. Although some participating SSRS States may support safety 
or transportation efficiency initiatives with revenues generated by the 
SSRS fee system prescribed under 49 U.S.C. 14504(c)(2)(B)(iv), there is 
no requirement that they do so. Indeed, comments in response to the 
ANPRM suggest that SSRS revenues are as likely as not to find their way 
into States' general funds where they may be applied to any 
programmatic purpose.
    Accordingly, when assessed in light of relevant factors prescribed 
at 49 U.S.C. 13908(b), the SSRS appears to be a viable candidate for 
integration with the other three systems proposed for unification. 
Moreover, the SSRS could for all practical purposes be considered 
already fully integrated under this proposal, inasmuch as all 
information critical to the SSRS would be captured under Form MCSA-1 
and available to

[[Page 28994]]

States through the on-line databases maintained by the FMCSA.
    Despite these considerations, we cannot at this time propose 
elimination of the SSRS. To be consistent with the 49 U.S.C. 13908(d) 
criteria for eliminating the SSRS program, the FMCSA would need to 
reimburse from Unified Registration System fees an annual amount 
totaling approximately $96 million to the 38 States currently 
participating in the SSRS and would further need to ensure availability 
of additional funds for distribution as a minimum apportionment among 
all States. Financing the required levels of State reimbursement would 
result in fees approximating $2300 per carrier, an expense that we 
believe would be unreasonably burdensome.
    The FMCSA specifically seeks public comment on the implications of 
this fee-based reimbursement to States as a means of preserving their 
SSRS-generated revenues and allowing for the required minimum 
apportionment, were the SSRS program to be eliminated. In addition, we 
seek public comment on alternative means by which we might ensure the 
required annual reimbursement and minimum apportionment levels under a 
fee assessment schedule different from that proposed here. Comments to 
the ANPRM, for example, mentioned, but did not necessarily endorse, the 
concept of imposing additional fees on insurers or assessing unified 
registration fees on other than a flat rate per carrier basis--such as 
per vehicle fees, a graduated rate based on fleet size, or a total 
carrier revenue basis. We would welcome comments on the viability of 
these and other alternatives as a means of fully integrating SSRS into 
the Unified Registration System, eliminating the SSRS program as 
presently observed by participating States, and still preserving the 
reimbursement and apportionment obligations imposed by 49 U.S.C. 
13908(d).
    Upon evaluation of the comments received in response to this issue, 
we will consider whether to recommend in a report to Congress under 49 
U.S.C. 13908(e)(3) legislative changes to eliminate (1) the SSRS 
program as prescribed under 49 U.S.C. 14504; and/or (2) the 
reimbursement and apportionment requirements of 49 U.S.C. 13908(d). It 
is our preliminary conclusion, based on comments submitted in response 
to the ANPRM and upon our assessment of a viable fee structure for the 
Unified Registration System, that all informational benefits of the 
existing SSRS program are fully captured by the rule proposed here and 
that reasonable registration fees associated with the proposed system 
could not sustain the reimbursement and apportionment requirements of 
the present statute. We encourage commentors to address specifically 
the policy and legislative implications of this preliminary conclusion.

C. Public Safety; Efficient Delivery of Transportation Services

    FMCSA believes the proposals in this rule address public safety and 
the efficient delivery of transportation services as intended by 
Congress. FMCSA has established a requirement under 49 CFR 390.19 for 
interstate carriers operating in the U.S. to update their information 
biennially and proposes to continue that requirement in this rule. The 
effectiveness and usefulness of FMCSA safety-related initiatives such 
as the Motor Carrier Safety Status Measurement System (SafeStat) and 
the Performance and Registration Information Systems Management Program 
(PRISM) are directly linked to the accurate and efficient collection 
and reporting of motor carrier safety data. Timely and accurate safety 
information has multiple benefits--it enables FMCSA to: (1) Track 
safety performance trends; (2) develop more effective driver and 
vehicle safety programs; (3) monitor the safety status of individual 
carriers; (4) ensure carrier compliance with FMCSRs; and (5) track any 
changes in the motor carrier industry that may affect carrier safety.

D. Registration of Private Motor Carriers and Exempt For-Hire Motor 
Carriers

    FMCSA has carefully considered the extent to which the registration 
process should include private motor carriers and exempt for-hire motor 
carriers. This rule proposes to extend the public liability insurance 
filing requirements to private carriers of hazardous materials and 
exempt for-hire motor carriers. FMCSA does not propose to extend the 
insurance filing requirement to private carriers of non-hazardous 
commodities because there is currently no statutory authority to do so. 
Additionally, FMCSA proposes to require all motor carriers to file a 
process agent designation with FMCSA as a condition for registration. 
FMCSA believes there is an inherent crash risk in all interstate 
commercial motor vehicle operations due to the vehicle miles traveled 
and exposure to other vehicles on the highway. Accordingly, this rule 
proposes that most carriers, except private carriers of non-hazardous 
materials, be required to provide proof of financial responsibility and 
that all carriers be equally accessible for service of legal process. 
Expanding these filing requirements would result in greater safety 
benefits to the general public and enhance the ability to easily obtain 
motor carrier information when necessary.
    Motor carriers conducting operations in interstate commerce have 
been required to file the MCS-150 prior to commencing operations since 
July 2000, pursuant to ICCTA and 49 CFR 390.19. Shortly after receipt 
of a completed MCS-150, FMCSA assigns a USDOT Number to the motor 
carrier and notifies it of the number assigned. All safety performance 
data on each motor carrier are linked to the USDOT Number. This 
includes roadside inspection data, crash data, and safety and 
compliance review information. The USDOT Number is used to link data 
together to produce summaries or reports on specific motor carriers.

VI. The Proposed Replacement System

A. Registration

    FMCSA intends to create a unified registration process consistent 
with ICCTA requirements. All private or for-hire motor carriers 
transporting property or passengers in interstate commerce in the U.S. 
would be required to register with FMCSA except Mexico-domiciled motor 
carriers registering to operate between Mexico and points in the United 
States beyond border commercial zones along the U.S.-Mexico 
international border. Requiring these entities to register allows FMCSA 
to have a more complete census of motor carriers under its 
jurisdiction. This information could then be shared with other Federal 
and State regulatory agencies, as well as the general public, which 
would aid in promoting safety. The majority of comments to the ANPRM in 
this docket support the creation of a more simplified registration 
system that includes the universe of motor carriers subject to FMCSA 
jurisdiction.
    FMCSA also proposes that property brokers and freight forwarders be 
included in the unified system because ICCTA requires us to register 
them and ensure that they maintain the necessary evidence of financial 
responsibility.
    The proposed registration system would simplify the registration 
process for motor carriers in that motor carriers would only be 
required to complete one form, proposed Form MCSA-1--FMCSA Registration 
Form (USDOT Number Application). Under the current system, there are 
six forms, with most carriers being required to file at least two of 
the six. Motor carriers will no longer have to decide which form(s) to

[[Page 28995]]

complete, hoping to complete the correct form(s) on the initial 
application.
    This proposal encourages continued use of electronic filing because 
it significantly reduces processing time for registration applications 
and related documents. Currently, motor carriers and other applicants 
have the option of using the Safety and Fitness Electronic Records 
System (SAFER) on-line site to apply for operating authority, obtain a 
USDOT Number and make safety certifications. Applicants pay 
registration fees and civil forfeiture fines by credit card using an 
electronic link from SAFER to the U.S. Department of Treasury's on-line 
financial management service (Pay.Gov). Electronic filing reduces 
current paper-based processing time by between 2 to 4 weeks (based on 
the additional time required for applications to reach FMCSA by mail 
and to manually process them.)
    If this notice is promulgated as a final rule, the new integrated 
on-line application process would replace the existing electronic 
options for filing applications for operating authority, a USDOT Number 
and related documents. FMCSA believes the proposed on-line registration 
system would significantly reduce application-processing time. An 
applicant would not need to determine the appropriate application to 
file, and the on-line replacement system would feature a built-in 
error-checking feature to alert the applicant when incorrect 
information has been entered, prompting for valid information. This 
quality control feature would decrease time spent by agency employees 
contacting applicants to correct the application. Incomplete 
applications would automatically be rejected by the system. As a 
result, application processing would be more efficient for both 
customers and FMCSA.
    FMCSA proposes an on-line application process because: (1) More 
than 70 percent of motor carriers in the United States now have 
Internet access, with the trend clearly increasing; (2) there is 
widespread public access to computers and the Internet in public 
libraries, Internet cafes, or other commercial establishments; (3) 
automated error-checking would result in more accurate information 
about the applicant; (4) on-line filing would allow USDOT Numbers to be 
issued in a more timely manner, and (5) electronic filing is more cost-
effective for FMCSA compared to manually processing applications.
    Although FMCSA would not mandate electronic filing of registration 
applications and related documents at this time, we invite comments and 
suggestions regarding the following issues:
    (1) What would be the impact (benefits or hardships) on applicants 
of a mandatory on-line filing requirement?
    (2) Should FMCSA immediately require on-line filing or should there 
be a phase-in period for mandatory on-line filing? If so, how long 
should the phase-in period be?
    Current registration procedures in 49 U.S.C. 13902 allow anyone to 
oppose a request for permanent operating authority by non-exempt for-
hire motor carriers, property brokers, and freight forwarders, provided 
the protest is based upon the applicant's failure to comply with: (1) 
The registration procedures; (2) applicable DOT regulations, including 
the FMCSRs and the HMRs; (3) the safety fitness standards; and/or (4) 
financial responsibility requirements. This proposed Unified 
Registration System would continue to allow protests for applications 
covered under section 13902, but would not extend the right of protest 
to applications for registration filed by private motor carriers or 
exempt for-hire motor carriers. Information on opposing a registration 
is under proposed 49 CFR part 360, subpart B of this proposal.

B. USDOT Numbers

    The current registration systems administered by FMCSA use four 
identification numbers: the USDOT Number, which most motor carriers 
subject to FMCSA jurisdiction are required to obtain, the Motor Carrier 
(MC) number, which is assigned to non-exempt for-hire motor carriers 
and brokers registering under chapter 139; the FF number which is 
assigned to freight forwarders; and the MX number, which is assigned to 
Mexico-domiciled carriers operating in the U.S. border commercial 
zones.
    FMCSA proposes to discontinue issuance of MC, MX and FF numbers and 
to phase out the use of current MC, MX and FF numbers within 2 years of 
the effective date of a final rule. The USDOT Number would become the 
sole identification number for all entities registered by DOT. This 
approach is prudent and simple because all registered motor carriers 
have a USDOT Number and because 16 States have elected to use the USDOT 
numbering system for registering intrastate motor carriers and their 
vehicles. Pursuant to 49 CFR 390.21, motor carriers would not need to 
remove the obsolete numbers from their vehicles.
    FMCSA would issue a USDOT Number with a distinctive suffix to any 
Mexico-domiciled carrier granted registration. This unique USDOT Number 
would display on the side of the vehicle pursuant to the CMV marking 
requirement under 49 CFR 390.21, and would meet DOT's obligation under 
section 350(a)(4) of the 2002 Department of Transportation 
Appropriations Act [Pub. L. 107-87, Title III, section 350, Dec. 18, 
2001, 115 Stat. 864] by allowing FMCSA to distinguish Mexico-domiciled 
motor carriers authorized to conduct operations beyond the border 
commercial zones from those authorized for only within-zone operations.

C. Transfer of Operating Authority

    As stated above, FMCSA now assigns a unique USDOT Number to each 
corporation, partnership or individual proprietorship that is 
responsible for the safety of interstate motor carrier operations. 
FMCSA also assigns unique USDOT Numbers to subsidiary corporations. 
Generally speaking, USDOT Numbers are assigned to one carrier and 
remain assigned to that carrier. Motor carriers that obtain a USDOT 
Number under 49 CFR 390.19, but are not required to register with FMCSA 
under 49 U.S.C. Chapter 139, are encouraged but not required to notify 
the agency when changes in ownership occur. Motor carriers that 
register under section 13901 are however subject to notification 
requirements.
    Current part 365, subpart D permits for-hire motor carriers, 
brokers and freight forwarders that register under chapter 139 to 
merge, transfer or lease their operating authority (identified by MC or 
FF numbers), and establishes procedures for agency approval of these 
transactions. These entities are required to file transfer applications 
with FMCSA and pay a $300 fee.
    ICCTA removed the provisions governing transfers of operating 
authority by repealing former 49 U.S.C. 10926. As a result, FMCSA (then 
FHWA) proposed removing the transfer regulations in a February 13, 
1998, NPRM (63 FR 7362). In response to this proposal, the Distribution 
& LTL Carriers Association (DLTL), the Transportation Lawyers 
Association (TLA), Landstar System, Inc., the American Bus Association 
(ABA), and Federal Express Corporation argued that disallowing transfer 
of registration would subject motor carriers to a more expensive 
registration process when ownership changes occur--a cost without a 
corresponding safety benefit. Most of these additional costs would 
result from having to change MC numbers on vehicles. DLTL contended

[[Page 28996]]

that continuing to allow transfers would ``assist * * * in keeping 
track of the existing applicant universe and calculating new 
entrants.'' TLA, Landstar, and ABA commented about the costs and 
burdens resulting from elimination of transfer approval, but did not 
provide specific figures.
    On May 16, 2001, FMCSA published a notice in the Federal Register 
(66 FR 27059) announcing the withdrawal of the February 1998 NPRM with 
the intention of addressing the transfer issue in today's rulemaking 
action.
    FMCSA proposes to remove regulations in 49 CFR part 365, subpart D 
that govern the transfer of operating authority. As a result of this 
action, MC numbers would no longer be subject to transfer. Although 
commenters to the February 1998 NPRM were concerned about the cost of 
re-marking vehicles with new MC numbers if transfers were not allowed, 
FMCSA has discontinued use of the MC number to identify vehicles and 
now requires all FMCSA regulated motor carriers to mark their 
commercial motor vehicles with their USDOT Number and the legal or 
``doing business as'' name of the business entity that owns the motor 
carrier. See the final rule entitled Federal Motor Carrier Safety 
Regulations, General; Commercial Motor Vehicle Marking, published in 
the June 2, 2000, Federal Register at 65 FR 352387. Furthermore, as 
discussed above, FMCSA proposes to issue only a USDOT Number and 
discontinue use of MC, MX and FF numbers.
    Unlike chapter 139 certificates and permits, which have 
traditionally been considered transferable motor carrier assets, a 
USDOT Number is a unique identifier used to monitor a carrier's safety 
performance. As such, the USDOT Number never has been subject to 
transfer. In order to preserve the sanctity of the number as an 
identifier of each entity's operational profile and safety history, the 
proposed rule preserves the prohibition on transfers.
    The proposed rule would continue to permit retention of the 
existing USDOT Number in instances where there is a change in legal 
name, form of business, or address, provided that there is no change in 
the ownership, management, or control of the involved entity. 
Circumstances in which retention of the USDOT Number would be 
permissible include: (1) A change in the legal name of a sole 
proprietorship, corporation, or partnership: (2) a change in the trade 
name or assumed name of an entity; and (3) a change in the form of a 
business, such as the incorporation of a partnership or sole 
proprietorship. We specifically invite commenting parties to identify 
additional instances in which FMCSA might permit retention of a USDOT 
Number following structural, practical, or ministerial changes to a 
registered entity.
    To ensure the continuing relevance and viability of the USDOT 
Number as a unique identifier and repository for safety data associated 
with a particular entity, the proposed rule would require all entities 
requesting a change in legal name, form of business, or address to: (1) 
File a revised From MCSA-1 within 20 days of the precipitating change; 
and (2) submit a certification accompanying the revised Form MCSA-1 
confirming that there has been no change in the ownership, management, 
or control of the entity holding the involved USDOT Number. This 
prescribed process would allow FMCSA to monitor more closely and in a 
timely manner informational changes affecting all entities holding 
USDOT Numbers. The proposed 20-day notification period would impose a 
time limit for submitting changes in key information for the first time 
on most registrants and would abbreviate the 45-day notification period 
currently applicable to Mexico-domiciled carriers operating in border 
commercial zones under 49 CFR 368.4. The 20-day notification period 
would apply to all carriers, including Mexico-domiciled carriers 
operating in border commercial zones.

D. Biennial Update Requirement

    Under current Sec.  390.19, carriers are required to file Form MCS-
150, Motor Carrier Identification Report biennially, as provided by 
section 217 of MCSIA. Carriers now file Form MCS-150 on-line, by mail 
or by fax without a fee. The registration updates provide valuable 
information about carriers and their fleets, and provide useful data 
for assessing safety performance. This rule proposes to replace Form 
MCS-150 with the MCSA-1, which contains a section specifically 
developed for the biennial update. The requirement to update 
identification information would be removed from Sec.  390.19, re-
designated as Sec.  360.25 and made applicable to all entities under 
FMCSA jurisdiction, including passenger and property carriers, freight 
forwarders, and property brokers, except Mexico-domiciled motor 
carriers registering to operate between Mexico and points in the United 
States beyond border commercial zones along the U.S.-Mexico 
international border. This rule also proposes at Sec.  360.25 that 
notice of changes to key identifying information, such as changes in 
the legal name, form of business, or address be filed with FMCSA within 
20 days of the change. This requirement is also a critical component of 
the goal of obtaining and maintaining accurate, current and timely 
information, as required by section 217 of MCSIA.
    States participating in the joint Federal-State PRISM program check 
motor carriers' MCS-150 ``date of last update'' in FMCSA information 
systems as part of their annual International Registration Plan (IRP) 
license plate renewal processes. If the motor carrier's MCS-150 data 
will exceed 24 months old before the end of the license plate 
registration period, the State requires them to update their MCS-150 
data as a condition for receiving their IRP license plate. This 
approach ensures that motor carriers who obtain IRP license plates in 
PRISM states cannot let their MCS-150 data expire. FMSCA has determined 
that motor carriers who update their MCS-150 data in this manner 
already meet the periodic filing requirement of the current 49 CFR 
390.19 and would require no additional filing with FMCSA. Such carriers 
would need to continue to comply with the Sec.  360.25 requirement to 
file accurate information. The PRISM process is discussed in more 
detail later in this document.

E. Proposed User Fees for the New System

    This rule proposes revised and new fees to maintain the information 
systems necessary to accurately identify motor carriers, brokers, and 
freight forwarders operating in interstate commerce. Until this rule, 
FMCSA had not proposed a fee schedule for recouping costs associated 
with its increased responsibilities for maintaining complete and 
accurate information on entities it regulates.
    Title 49 U.S.C. 13908 specifically directs the Secretary to create 
and implement a unified on-line registration system that captures 
information about the identification, safety fitness, and financial 
responsibility of registered entities. Section 13908(c) grants the 
Secretary discretion to establish a fee system that covers the costs of 
this registration system.
    In accordance with section 13908(c), FMCSA proposes separate fees 
to cover a number of distinct, but related, activities associated with 
registration. (The full breakout of proposed fees is discussed in the 
section entitled ``Regulatory Evaluation of the Unified Registration 
System (URS) NPRM: Summary of Benefits and Costs'' and in the full 
Regulatory Evaluation that has been placed in the public docket.) The 
principle underlying the assignment of

[[Page 28997]]

the proposed user fees is that the users would pay only for costs that 
they incur.

F. Registration Fees

    Currently, non-exempt for-hire motor carriers, freight forwarders 
and brokers initially seeking operating authority under 49 U.S.C. 
chapter 139 pay a $300 filing fee. However, private carriers and exempt 
for-hire carriers are not subject to a filing fee when requesting a 
USDOT Number under 49 CFR part 390. As proposed in this NPRM, all 
entities under FMCSA jurisdiction would pay a $200 registration fee at 
the time the application is filed.

G. General Fee Policy Changes and Revised Fees

    In addition to the $200 initial registration fees, FMCSA is 
proposing changes to a number of other licensing and insurance fees. 
The section in this notice entitled ``Regulatory Evaluation of the 
Unified Registration System (URS) NPRM: Summary of Benefits and Costs'' 
includes a detailed explanation and complete list of the proposed 
licensing and insurance filing fee changes.
    FMCSA has changed the fee scale in various ways in an effort to 
administer system costs more equitably among users. Certain fees would 
be entirely eliminated. Currently, for example, carriers that are 
subject to chapter 139 registration requirements must pay a $14 fee for 
name change requests. Yet private and exempt for-hire carriers that are 
not subject to chapter 139 registration requirements are not charged 
for making name changes. Under this proposal, the name change fee would 
be eliminated for all registrants.
    Other fees would change and be made applicable to a broader scope 
of carriers. Currently, only those carriers that are subject to the 
chapter 139 registration requirements must pay an $80 fee to reinstate 
operating authority that has been revoked (voluntarily or 
involuntarily). FMCSA proposes to increase to $100 the reinstatement 
fee for chapter 139 registrants. Additionally, a reinstatement fee 
would be made applicable to private and exempt for-hire motor carriers. 
If a private or exempt for-hire motor carrier failed to comply with 
financial responsibility or process agent filing requirements, FMCSA 
would de-activate its USDOT Number and charge a $100 reinstatement fee 
to reactivate the USDOT Number. The $100 fee would compensate the 
agency for expenses related to processing reinstatement requests.
    Based on our experience in reinstating chapter 139 operating 
authority, the reinstatement process often involves substantial FMCSA 
staff time. Usually, the carriers have to be contacted several times 
before the appropriate information is obtained to conclude the 
reinstatement process. We believe the same would be true for private 
and exempt for-hire carriers seeking reinstatement.

H. Financial Responsibility

1. Bodily Injury and Property Damage Insurance (BI&PD) Requirement
    The Motor Carrier Act of 1980 [Pub. L. 96-296, 94 Stat. 820] 
prescribed for safety reasons minimum levels of financial 
responsibility for certain motor carrier classifications. The motor 
carrier classifications include: For-hire interstate motor carriers of 
property in vehicles with a gross vehicle weight rating (GVWR) in 
excess of 10,000 lbs. (including ICC-exempt); private and for-hire 
interstate motor carriers of certain hazardous materials; and 
interstate and intrastate carriers of hazardous materials in bulk. In 
1982, the Bus Regulatory Reform Act of 1982 [Pub. L. 97-261, 96 Stat. 
1120] granted FMCSA (then FHWA) authority to regulate the levels of 
financial responsibility covering for-hire motor carriers of passengers 
operating in interstate commerce. These carriers are not currently 
required to provide proof of insurance or other financial 
responsibility as a condition for receiving a USDOT Number. Instead, 
FMCSA verifies financial responsibility as a part of its compliance 
review process. The actual review of financial responsibility requires 
that an enforcement official ensure that there is at the motor 
carrier's place of business a valid endorsement (Form MCS-90 or Form 
MCS-82), or valid authorization to self-insure that indicates that the 
carrier possesses the required financial responsibility coverage 
meeting the minimum prescribed limits.
    For-hire motor carriers, brokers and freight forwarders that are 
subject to the chapter 139 registration requirements must file evidence 
of BI&PD insurance with FMCSA on prescribed forms as a precondition to 
receiving and holding authorities and permits. Their financial 
responsibility requirements take the form of certificates of insurance, 
surety bonds, proof of qualifications as a self-insurer, endorsements, 
or trust agreements.
    FMCSA proposes at Sec.  360.9 to continue the filing requirement 
for these carriers and extend its applicability to exempt for-hire 
motor carriers, including passenger carriers, and private interstate 
motor carriers transporting hazardous materials. These carriers are 
already required by statute (49 U.S.C. 31138 and 31139) and regulations 
(49 CFR part 387) to obtain and maintain BI&PD insurance. This rule 
would merely require the filing of evidence of financial responsibility 
with FMCSA.
    Motor carriers transporting hazardous materials in intrastate 
commerce are similarly required by statute and regulations to obtain 
and maintain BI&PD insurance. The requirement to file evidence of 
financial responsibility with FMCSA would not extend to them. They 
would continue to maintain proof of the required financial 
responsibility at the motor carrier's principal place of business as 
required under 49 CFR 387.7(d)(1).
    The proposed filing requirement would provide the public with 
assurances that all for-hire motor carriers, and private carriers 
transporting hazardous materials in interstate commerce, have the 
financial means to compensate members of the public for injuries or 
damages caused by their negligence. These filings would also increase 
public accessibility to insurance information and would enable FMCSA to 
more effectively track insurance cancellations. Under the current 
system, FMCSA receives a notice of cancellation only if the carrier is 
registered under chapter 139. A carrier not subject to the chapter 139 
requirements could lose its insurance coverage, but FMCSA would 
generally not be made aware unless the fact was discovered during a 
compliance review of the carrier. The proposed extension of the BI&PD 
insurance filing to all carriers subject to the Motor Carrier Act of 
1980 and Bus Regulatory Reform Act of 1982 insurance requirements 
would, therefore, better enable FMCSA to identify and bring into 
compliance uninsured motor carriers or remove them from the public 
highways.
2. Cargo Insurance Requirement
    Title 49 U.S.C. 13906(a)(3) authorizes the Secretary to require 
motor carriers to file evidence of cargo insurance to cover loss or 
damage to property transported by them. Under current 49 CFR 
387.303(c), non-exempt for-hire common carriers of property and freight 
forwarders are required to maintain cargo insurance of $5,000 per 
vehicle, and $10,000 per occurrence, and file evidence of this 
insurance with FMCSA. Under the proposed revised Sec.  387.303(c), 
FMCSA would require only motor carriers and freight forwarders engaged 
in transportation of household goods to maintain and file

[[Page 28998]]

evidence of cargo insurance with the agency. Penalties for failure to 
comply would remain the same.
    There does not appear to be a need to require non-exempt for-hire 
motor carriers of property to maintain cargo insurance since these 
carriers typically have cargo insurance well above FMCSA limits because 
their shipper clients generally require it as a condition of doing 
business. Where motor carriers of property and freight forwarders deal 
directly with individual members of the public, such as in the 
transportation of household goods, the agency believes it is in the 
public interest to continue to require cargo insurance. FMCSA has found 
that shippers of household goods tend to be less knowledgeable about 
the regulations than most shippers of other types of property, and 
therefore need the protection afforded by the current regulatory 
scheme. Therefore, FMCSA proposes to retain the requirement that 
household goods carriers and freight forwarders of household goods 
obtain and file minimum levels of cargo insurance, as provided by part 
387. FMCSA requests comments about its proposal to eliminate the cargo 
insurance requirement for non-exempt for-hire carriers of property and 
freight forwarders.
3. Insurance Filings by Insurers, Surety Companies and Financial 
Institutions
    FMCSA proposes to require all insurers, surety companies, and 
financial institutions to file evidence of insurance using the web-
based (HTML) format. FMCSA currently accepts insurance filings in three 
formats: paper filings, electronic (ASCII) filings, and web-based 
(HTML) filings. The current paper-based insurance system is very labor 
intensive.
    On August 15, 2001, FMCSA began allowing Internet filings. FMCSA 
also allows the public to access carrier licensing and insurance 
information through the Internet by selecting keyword ``L&I System'' at 
https://www.fmcsa.dot.gov.
    With the implementation of the registration and financial 
responsibility filing requirements of 49 U.S.C. 13906 and 13908, FMCSA 
will have the capability and financial resources to improve the 
accuracy and timeliness of insurance application processing.
    Accordingly, FMCSA proposes to require all carriers, property 
brokers, and freight forwarders subject to 49 CFR part 387 to have 
their insurers use Internet filings to file the necessary evidence of 
surety bonds, trust fund agreements, bodily injury and property damage 
insurance, household goods cargo insurance, and notices of 
cancellations. We believe web-based filings will promote efficiencies 
for FMCSA, insurers, sureties, financial institutions, and the public. 
FMCSA seeks comment on whether the proposed mandatory web-based filing 
would be a significant burden on small insurers, surety companies, and 
financial institutions. FMCSA also invites comments, ideas and 
suggestions regarding a potential phase-in approach as opposed to 
immediate mandatory on-line filing. FMCSA invites comments on any 
anticipated hardships that mandatory on-line filing may cause.
4. Self-Insurance
    Existing regulations provide a motor carrier with the option to 
meet its financial responsibility obligations through self-insurance, 
but only with FMCSA approval following review of the carrier's 
financial health and safety rating. Risks for which a carrier may self-
insure include bodily injury and property damage liability (BI&PD), as 
well as cargo liability. The self-insurance program is specifically 
authorized by statute (49 U.S.C. 13906, 31138, and 31139), and is also 
apparently beneficial to the industry. Comments filed in response to 
FMCSA's (then FHWA) August 26, 1996 Unified Registration System ANPRM 
strongly favored retaining the self-insurance program.
    On May 5, 1999, FMCSA separately proposed procedural changes to the 
self-insurance process for for-hire motor carriers (see Qualifications 
of Motor Carriers to Self-Insure Their Operations and Fees to Support 
the Approval and Compliance Process at 66 FR 24123). Specifically, 
FMCSA would have reevaluated the security and collateral requirements 
of any self-insured carrier that fails to generate from operat