New Entrant Safety Assurance Process, 76730-76793 [06-9759]

Agencies

• Federal Motor Carrier Safety Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 71, Number 245 (Thursday, December 21, 2006)]
[Proposed Rules]
[Pages 76730-76793]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-9759]



[[Page 76729]]

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Part II





Department of Transportation





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Federal Motor Carrier Safety Administration



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49 CFR Parts 365, 385, 387, and 390



New Entrant Safety Assurance Process; Proposed Rule

Federal Register / Vol. 71, No. 245 / Thursday, December 21, 2006 / 
Proposed Rules

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Parts 365, 385, 387, and 390

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


New Entrant Safety Assurance Process

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

ACTION: Notice of Proposed Rulemaking (NPRM); request for comments.

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SUMMARY: FMCSA proposes changes to the New Entrant Safety Assurance 
Process that would raise the standard of compliance for passing the new 
entrant safety audit. The agency has identified 11 regulations that it 
believes are essential elements of basic safety management controls 
necessary to operate in interstate commerce and proposes that failure 
to comply with any one of the 11 regulations would result in automatic 
failure of the audit. Under this proposal, carriers would also be 
subject to the current safety audit evaluation criteria in Appendix A 
of part 385. Additionally, if a roadside inspection discloses certain 
violations, the new entrant would be subject to expedited actions to 
correct these deficiencies. The agency proposes to eliminate Form MCS-
150A--Safety Certification for Application for USDOT Number. The agency 
also intends to check compliance with the Americans with Disabilities 
Act and certain household goods-related requirements in the new entrant 
safety audit, if they apply to the new entrant's operation. However, 
failure to comply with these requirements would not impact the outcome 
of the safety audit. These changes would not impose additional 
operational requirements on any new entrant carrier. All new entrants 
would continue to receive educational information on how to comply with 
the safety regulations and be given an opportunity to correct any 
deficiencies found. FMCSA recognizes many new entrants are small 
businesses that are unaware of these requirements and continue to need 
the agency's assistance. Finally, FMCSA would make clarifying changes 
to some of the existing new entrant regulations and establish a 
separate new entrant application procedure and safety oversight program 
for non-North America-domiciled motor carriers. FMCSA believes this 
proposal would improve its ability to identify at-risk new entrant 
carriers and ensure deficiencies in basic safety management controls 
are corrected before the new entrant is granted permanent registration.

DATES: We must receive your comments by February 20, 2007.

ADDRESSES: You may submit comments, identified by DOT DMS Docket Number 
FMCSA-2001-11061, 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 am and 5 pm, Monday through Friday, except 
Federal Holidays.

FOR FURTHER INFORMATION CONTACT: Mr. Arturo H. Ramirez, (202) 366-8088, 
Chief, Enforcement and Compliance Division, Federal Motor Carrier 
Safety Administration (MC-ECE), 400 Seventh Street, SW., Washington, DC 
20590-0001. Office hours are from 7:45 a.m. to 4:15 p.m., ET, Monday 
through Friday, except Federal holidays.

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 of receiving 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.

Legal Basis for the Rule

    Title 49 U.S.C. 31144 requires the Secretary of Transportation 
(Secretary) to determine whether an owner or operator is fit to operate 
safely. Section 210 of the Motor Carrier Safety Improvement Act of 1999 
[Public Law 106-159, 113 Stat. 1764, December 9, 1999] (MCSIA) added 
Sec.  31144(g) \1\ directing the Secretary to establish regulations to 
require each owner and operator granted new operating authority to 
undergo a safety review within 18 months of starting operations. In 
issuing these regulations, the Secretary was required to: (1) Establish 
the elements of the safety review, including basic safety management 
controls; (2) consider their effects on small businesses; and (3) 
consider establishing alternate locations where such reviews may be 
conducted for the convenience of small businesses. The Secretary was 
also required to phase in the new entrant safety review requirements in 
a manner that takes into account the availability of certified motor 
carrier safety auditors. Congress mandated increased oversight of new 
entrants because studies indicated these operators had a much higher 
rate of non-compliance with basic safety management requirements and 
were subject to less oversight than established operators.
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    \1\ MCSIA originally codified section 31144(g) as Sec.  31144(c) 
and directed that it be added at the end of 49 U.S.C. 31144 
following preexisting subsections (c), (d), and (e). Section 
4114(c)(1) of the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act: A Legacy for Users (Public Law 109-59, 
119 Stat. 1144, August 10, 2005) (SAFETEA-LU) recodified this 
provision as Sec.  31144(g).
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    In addition to expanding the Secretary's authority under Sec.  
31144, Section 210 of MCSIA was a specific statutory directive 
consistent with the more general pre-existing legal authority provided 
by the Motor Carrier Safety

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Act of 1984 (the 1984 Act) [49 U.S.C. App. 2505 (1988)], which requires 
the Secretary to prescribe regulations on commercial motor vehicle 
safety. The regulations required by the 1984 Act must prescribe minimum 
safety standards for commercial motor vehicles (CMVs). At a minimum, 
the regulations shall ensure: (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 proposes changes to the New Entrant Safety Assurance 
Process to improve the agency's ability to identify at-risk new entrant 
motor carriers through screening and ensure deficiencies are corrected 
before granting them permanent registration. As such, it implements the 
Sec.  31136(a)(1) mandate that FMCSA regulations ensure CMVs are 
maintained and operated safely. It does not propose any new operational 
responsibilities on drivers pursuant to Sec. Sec.  31136(a)(2)-(4).

Regulatory History

    In response to the MCSIA statutory mandate, on May 13, 2002, FMCSA 
published an interim final rule (IFR) titled New Entrant Safety 
Assurance Process (67 FR 31978), which became effective January 1, 
2003. Although operating authority has generally been construed in the 
past to mean registration of for-hire carriers subject to the 
jurisdiction transferred from the former Interstate Commerce Commission 
following enactment of the ICC Termination Act of 1995 [Public Law 104-
88, 109 Stat. 888, December 29, 1995] (ICCTA), FMCSA interpreted 
Section 210 of MCSIA as extending this concept to all carriers subject 
to Federal safety jurisdiction (see 67 FR 31979, May 13, 2002). For 
this reason, FMCSA applied the New Entrant Safety Assurance Process to 
all domestic and Canada-domiciled new entrants, regardless of whether 
they needed to register with FMCSA under 49 U.S.C. 13901. Mexico-
domiciled new entrants are covered under a separate application process 
and safety monitoring system (see 67 FR 12652, 67 FR 12701, and 67 FR 
12757 published March 19, 2002).
    Under the current New Entrant Safety Assurance Process, FMCSA 
provides applicants with an application package including, upon 
request, educational and technical assistance materials. The applicant 
must complete the application, including Form MCS-150A--Safety 
Certification for Application for USDOT Number, which requires the 
carrier to certify procedures are in place for basic safety management 
controls. Following completion of the application forms, FMCSA 
registers the new entrant and assigns a United States Department of 
Transportation (USDOT) Number. For-hire motor carriers, unless 
providing transportation exempt from ICCTA registration requirements, 
also are required to obtain FMCSA operating authority under 49 U.S.C. 
13902, prior to commencing operations. The new entrant safety 
monitoring period begins when FMCSA issues the new entrant provisional 
registration via a USDOT Number and continues for 18 months. To 
maintain its provisional registration, a new entrant must comply with 
all FMCSA regulations and applicable hazardous materials regulations.
    Within the first 18 months of a new entrant's operation, FMCSA will 
conduct a safety audit (SA) of the carrier's operations to educate the 
carrier on compliance with the Federal Motor Carrier Safety Regulations 
(FMCSRs) and Hazardous Materials Regulations (HMRs) and to determine if 
the carrier is exercising basic safety management controls as defined 
in 49 CFR 385.3. An SA is not a compliance review. It does not result 
in a safety rating. These terms are defined in Sec.  385.3.
    During the SA, FMCSA gathers information by reviewing the carrier's 
compliance with ``acute'' and ``critical'' provisions of the FMCSRs and 
applicable HMRs. Acute regulations are those where the consequences of 
non-compliance are so severe as to require immediate corrective actions 
by a motor carrier, regardless of the overall basic safety management 
controls of the motor carrier (e.g., allowing a driver with a suspended 
license to operate a vehicle). Critical regulations are defined as 
those where noncompliance relates to management or operational controls 
and are indicative of breakdowns in a carrier's management controls 
(e.g., allowing a driver to operate a vehicle before his/her medical 
exam). Parts of the FMCSRs and HMRs having similar characteristics are 
combined together into six regulatory areas called ``factors.'' The SA 
scoring evaluates each of the following factors and determines the 
adequacy of the carrier's safety management controls based on this 
evaluation. The six factors are:

Factor 1--General: Parts 387 and 390.
Factor 2--Driver: Parts 382, 383, and 391.
Factor 3--Operational: Parts 392 and 395.
Factor 4--Vehicle: Parts 393 and 396 and inspection data for the last 
12 months.
Factor 5--Hazardous Materials: Parts 171, 177, 180 and 397.
Factor 6--Accident: Recordable Accident Rate per Million Miles.

    For each instance of noncompliance with an acute regulation, 1.5 
points are assessed against the carrier. For each instance of 
noncompliance with a critical regulation, 1 point is assessed. For 
factors 1-5, if the combined violations of acute and critical 
regulations for each factor are equal to three or more points, the 
carrier is determined not to have basic safety management controls for 
that individual factor. If the recordable accident rate (factor 6) is 
greater than 1.7 recordable accidents per million miles for an urban 
carrier (1.5 for all other carriers), the carrier is determined to have 
inadequate basic safety management controls (i.e., the carrier fails 
the factor). If the carrier's accident rate is anywhere between zero 
and 1.5 (1.7 for urban carriers), the carrier is considered to have 
adequate safety management controls in factor 6. A new entrant fails 
the SA if it fails three or more separate factors. Currently, FMCSA is 
studying a new approach to assessing the severity of violations as part 
of its announced CSA 2010 initiative (69 FR 51748). This initiative may 
ultimately replace the ``acute and critical'' methodology described 
here.
    If the SA discloses the new entrant's basic safety management 
controls are adequate, the carrier retains the new entrant registration 
and continues to be monitored until the end of the 18-month period. 
FMCSA will grant permanent registration only if the new entrant 
successfully completes the monitoring period. If the basic safety 
management controls are inadequate, the new entrant is given an 
opportunity to correct the deficiencies. To provide that opportunity, 
FMCSA notifies the new entrant that unless the deficiencies are 
remedied, the registration will be revoked in 45 days (for carriers 
using passenger vehicles with a capacity to transport 16 or more 
passengers or vehicles transporting hazardous materials as defined 
under 49 CFR Sec.  383.5) or 60 days (for all other new entrants). 
FMCSA may extend the compliance period if it determines the new entrant 
is making a good faith effort to remedy the problems. If, within the 45 
or 60 days, the new entrant fails to respond to the notice or fails to 
correct the deficiencies, FMCSA issues an out-

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of-service order prohibiting further operations in interstate commerce 
and revokes the new entrant registration.

Discussion of the Proposed Rule

    FMCSA decided to publish an NPRM rather than a final rule because 
today's action proposes substantive changes to the May 13, 2002 IFR. 
These proposals would benefit from further notice and comment before 
promulgation as a final rule. Following is a discussion of these 
proposed changes.

Strengthening the Safety Audit

    In FY 2000, FMCSA published a report titled ``Analysis of New 
Entrant Motor Carrier Safety Performance and Compliance Using 
SafeStat,'' which compared the safety performance of new entrant 
carriers to that of experienced carriers. A copy of the report is in 
the docket for this rule. The report indicated new entrant carriers had 
significantly higher crash involvement than experienced carriers. New 
entrant carriers had significantly worse driver safety compliance and 
performance compared to experienced carriers. To a lesser degree, new 
entrant carrier vehicle safety compliance and performance were also 
worse than for experienced carriers. For these reasons, FMCSA intends 
to ensure all new entrant carriers have basic safety programs and 
controls in place before granting permanent registration.
    In response to comments to the 2002 IFR (see the section below 
titled ``Discussion of Comments''), as well as feedback from FMCSA 
field staff and State partners administering the New Entrant Safety 
Assurance Process, the Administrator convened an internal working group 
in the summer of 2003 to review and improve the process. The working 
group identified 11 regulatory violations which reflect a clear lack of 
basic safety management controls yet are not properly weighted by the 
existing SA. Under the current system, a new entrant could commit one 
of these 11 violations and still pass the SA. The group recommended 
that FMCSA strengthen the SA pass/fail criteria to give more 
appropriate weight to these 11 basic safety management requirements and 
clarify several vague regulatory requirements.
    Based on this recommendation, FMCSA proposes that committing any 
one of the following 11 regulatory violations would result in an 
automatic failure of the SA:
    1. Sec.  382.115(a)/Sec.  382.115(b)--Failing to implement an 
alcohol and/or controlled substances testing program (domestic and 
foreign motor carriers, respectively).
    2. Sec.  382.211--Using a driver who has refused to submit to an 
alcohol or controlled substances test required under part 382.
    3. Sec.  382.215--Using a driver known to have tested positive for 
a controlled substance.
    4. Sec.  383.37(a)--Knowingly allowing, requiring, permitting, or 
authorizing an employee with a commercial driver's license which is 
suspended, revoked, or canceled by a State or who is disqualified to 
operate a commercial motor vehicle.
    5. Sec.  383.51(a)--Knowingly allowing, requiring, permitting, or 
authorizing a driver to drive who is disqualified to drive a commercial 
motor vehicle.
    6. Sec.  387.7(a)--Operating a motor vehicle without having in 
effect the required minimum levels of financial responsibility 
coverage.
    7. Sec.  391.15(a)--Using a disqualified driver.
    8. Sec.  391.11(b)(4)--Using a physically unqualified driver.
    9. Sec.  395.8(a)--Failing to require a driver to make a record of 
duty status.
    10. Sec.  396.9(c)(2)--Requiring or permitting the operation of a 
commercial motor vehicle declared ``out-of-service'' before repairs are 
made.
    11. Sec.  396.17(a)--Using a commercial motor vehicle not 
periodically inspected.
    The agency believes carriers committing these violations do not 
have the basic safety management controls in place to safely operate in 
interstate commerce. The working group identified, and FMCSA accepted, 
these 11 infractions because they are so basic to ensuring safety that 
no carrier should be allowed to operate if any of these violations are 
found and not corrected. For example, implementation of an alcohol and 
controlled substances testing program is a fundamental requirement for 
any interstate carrier. A carrier that has implemented a program to 
ensure its drivers do not operate after testing positive for drugs or 
alcohol will reduce the risk of that carrier/driver being involved in a 
fatal accident. Allowing drivers who refuse to submit to drug or 
alcohol testing to drive indicates the carrier does not have an 
effective drug and alcohol testing program. Similarly, only qualified 
drivers should be permitted to drive. A carrier does not exercise 
sufficient safety management controls if it uses drivers who are 
disqualified from operating a CMV, physically unqualified, or who have 
had their commercial driver's license suspended, revoked, or canceled.
    Additionally, the primary mission of the agency is to reduce 
crashes, injuries and fatalities involving large trucks and buses. For 
this mission to succeed, carriers must operate safe vehicles. To 
accomplish this, vehicles must be periodically inspected and kept in 
safe operating condition. Therefore, a new entrant would fail the 
safety audit if it does not inspect its vehicles periodically or 
operates any vehicle declared out-of-service before making the required 
repairs.
    Further, driver fatigue has been identified as a contributing 
factor in many CMV crashes. To achieve the highest level of safety, 
carriers must have a system to safeguard the public against fatigued 
drivers by ensuring their drivers adhere to the agency's hours-of-
service limitations. Hours-of-service violations comprise the largest 
percentage of driver out-of-service violations at the roadside. One 
effective safety management control for preventing fatigued drivers 
from operating a CMV is to have in place a system requiring drivers to 
submit records of duty status or other records, as appropriate. This 
recordkeeping requirement is fundamental to an effective driver 
monitoring system.
    Finally, the agency believes it is essential for the traveling 
public to receive adequate compensation for personal injuries or 
property damage caused by CMVs operating on the highways. Therefore, 
carriers lacking required minimum financial responsibility would not be 
permitted to operate.
    FMCSA emphasizes that the purpose of the proposed revision is to 
improve the safety management of new entrants, not to remove them from 
operations. The agency believes the regulations identified above are 
evidence of whether a new entrant has a systemic program to ensure it 
has the basic safety management controls to operate in interstate 
commerce.
    As discussed above, when a new entrant fails an audit, even for one 
of the automatic failures described above, it will be afforded due 
process and given time to correct its failures and improve its safety 
management controls. This proposal emphasizes FMCSA's commitment to 
highway safety and would allow the agency to ensure new entrants are 
not permitted to operate without first correcting serious deficiencies 
in a timely manner.
    FMCSA believes it is incumbent upon all new entrant carriers to be 
informed about, and familiar with, the FMCSRs prior to receiving a 
safety audit. To this end, FMCSA provides outreach and educational 
materials to carriers to help them prepare for the audit. Carriers 
discovered to have committed one of the

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11 violations identified above, after having been informed of the need 
to comply prior to receiving permanent registration, and found to have 
not corrected the deficiency, will not be permitted to continue to 
operate. Establishing these 11 violations as grounds for failing the 
safety audit would promote public safety by encouraging new entrants to 
correct serious deficiencies in their safety management controls and 
reducing the number of potentially unsafe carriers operating on the 
nation's highways.
    It should be noted that most of these 11 regulations correspond to 
requirements necessary for Mexico-domiciled long-haul carriers to 
obtain authority to operate in the United States, as established by 
Congress under Section 350(a)(1)(B) of the Fiscal Year 2002 DOT 
Appropriations Act [Public Law 107-87, Title III, sec. 350, 115 Stat. 
864, Dec. 18, 2001]. The requirements applicable to Mexico-domiciled 
long-haul carriers are:
     Verification of a controlled substances and alcohol 
testing program consistent with 49 CFR part 40;
     Verification of a carrier's system of compliance with 
hours-of-service rules, including hours-of-service records;
     Verification of proof of financial responsibility;
     An evaluation of that motor carrier's safety inspection, 
maintenance, and repair facilities or management systems, including 
verification of records of periodic vehicle inspections; and
     Verification of drivers' qualifications, including a 
required commercial driver's license.

Expedited Action

    Under existing Sec.  385.307(a), having ``an accident rate or 
driver or vehicle violation rate that is higher than the industry 
average for similar motor carrier operations' triggers an expedited SA 
or compliance review of the new entrant. (The reference to a ``driver 
or vehicle violation rate'' is an error and should read ``driver or 
vehicle out-of-service rate.'') The agency proposes to replace the 
abbreviated expedited action provisions under Sec.  385.307(a) with the 
same ``Expedited Action'' provisions applicable to Mexico-domiciled 
carriers under Sec.  385.105. As the agency stated in proposing the 
expedited action provisions for Mexico-domiciled carriers, we believe 
these violations pose the greatest threat to public safety and raise 
serious questions about a carrier's willingness and ability to conduct 
safe operations. See 66 FR 22416 (May 3, 2001). In addition to 
identifying potentially unsafe new entrant carriers, expanding the 
expedited action provisions would also make the treatment of Mexico-
domiciled new entrants and all other new entrants more uniform.
    This change would improve the New Entrant Safety Assurance Process 
by tightening scrutiny of new entrants before and after the safety 
audit. New entrants discovered with these violations could be 
identified during a roadside inspection or by any other means even if 
the agency had not yet conducted a safety audit.
    Discovery of certain violations during a roadside inspection or by 
any other means would subject the new entrant to expedited action. If 
the carrier had not already submitted to an audit, the carrier would be 
flagged for review as soon as practicable. If the carrier already had 
submitted to an audit before discovery of an ``expedited action 
violation,'' FMCSA would send the carrier a letter requesting evidence 
of corrective action within 30 days of the notice or the carrier's 
registration would be revoked. Additionally, if FMCSA determined the 
violation warranted a more thorough review of the carrier's operation, 
the agency would schedule a compliance review. The following actions 
would trigger expedited action against the motor carrier:
     Using a driver who does not have a valid commercial 
driver's license.
     Operating vehicles that have been placed out-of-service 
for violations of the Federal Motor Carrier Safety Regulations or 
compatible State laws and regulations without taking necessary 
corrective action.
     Being involved in, through action or omission, a hazardous 
materials incident involving--
     A highway route controlled quantity of certain radioactive 
materials (Class 7).
     Any quantity of certain explosives (Class 1, Division 1.1, 
1.2, or 1.3).
     Any quantity of certain poison inhalation hazard materials 
(Zone A or B).
     Being involved in, through action or omission, two or more 
hazardous materials incidents involving hazardous materials other than 
those listed above.
     Using a driver who tests positive for controlled 
substances or alcohol or who refuses to submit to required drug or 
alcohol tests.
     Operating a motor vehicle that is not insured as required.
     Having a driver or vehicle out-of-service rate of 50 
percent or more based on at least three inspections within a 
consecutive 90-day period.
    The last item above would replace the ``vehicle or driver violation 
rate that is higher than the industry average for similar motor carrier 
operations'' requirement under Sec.  385.307. From an operational 
standpoint, the ``50 percent or more threshold'' would provide for more 
effective and efficient monitoring of new entrant performance because 
it is a non-subjective and easily measured rate.

Applicability of Proposed Requirements to Current New Entrants

    The changes in today's notice of proposed rulemaking, if 
promulgated as a final rule, would apply to motor carriers still 
subject to the current new entrant safety monitoring process on the 
final rule's effective date. Assuming all changes are adopted, these 
new entrants would be subject to expedited enforcement action for 
committing any of the seven violations or actions identified under the 
section ``Expedited Action.'' If a current new entrant has not had a 
safety audit prior to the final rule effective date, it would be 
audited in accordance with the safety audit procedures adopted in the 
final rule, including the applicable 11 automatic failure factors 
identified under the section ``Strengthening the Safety Audit.'' 
However, the automatic failure factors would not be retroactively 
applied to safety audits completed prior to the final rule's effective 
date. The safety audit outcomes determined prior to the final rule's 
effective date would remain unchanged by the final rule.

Form MCS-150A--Safety Certification for Application for USDOT Number

    The purpose of the MCS-150A is for a new entrant to certify it has 
a system in place to ensure compliance with the FMCSRs and applicable 
HMRs. However, based on the SAs conducted to date, FMCSA has found many 
new entrants certified on the MCS-150A they are knowledgeable about the 
FMCSRs and applicable HMRs and have in place the safety management 
controls necessary to conduct interstate operations, but are not, in 
fact, in compliance with the FMCSRs and applicable HMRs. Therefore, 
while the intent of the MCS-150A is valid, in practice it fails. 
Consequently, FMCSA is proposing to eliminate the form. Conforming 
amendments are proposed to eliminate mention of the MCS-150A throughout 
the regulations.

Timing of Administrative Reviews

    The administrative review provisions in current Sec.  385.327 are 
ambiguous with respect to the time during which a carrier is allowed to 
file a request for administrative review and when it must file a 
request for administrative review,

[[Page 76734]]

if it wants the review to be completed before its registration is 
revoked. FMCSA is proposing to revise the section to clarify that, if a 
new entrant disagrees with the findings of an SA, the new entrant must 
file a request for an administrative review within 90 days of the date 
of the notice of audit failure or within 90 days of the notice of its 
corrective action being insufficient. However, if a new entrant wants a 
decision before the revocation takes effect, the new entrant must file 
a request for review within 15 days of the date of the notice of audit 
failure. Requests filed after 15 days will be considered, but it is 
possible the revocation would take effect before the administrative 
review process is completed, even if the new entrant eventually 
prevails and its registration is restored.

``Chameleon'' Carriers

    The agency is concerned about carriers attempting to evade 
enforcement actions and/or out-of-service orders issued against them by 
re-registering as new entrants and operating as different entities 
under new USDOT Numbers. We call these entities ``chameleon'' carriers.
    Such a carrier might attempt to conceal its former identity by 
leaving blank the response to items 16 and 17 on the ``Motor Carrier 
Identification Number--Application for USDOT Number'' (Form MCS-150). 
Items 16 and 17 of the MCS-150 request the carrier's USDOT Number or MC 
or MX Number. In other cases, the carrier may attempt to hide the fact 
that its USDOT Number is revoked by falsifying the response to item 28 
on the MCS-150, which asks whether the carrier's USDOT Number 
registration is currently revoked by FMCSA, and if so, requires the 
carrier to list this number. Item 30 on the MCS-150 requires the 
carrier to certify the information provided on the MCS-150 is true, 
correct and complete. Unfortunately, some carriers deliberately fail to 
disclose information regarding their history in order to evade civil 
penalties assessed against the company or to circumvent out-of-service 
orders and other operational restrictions by obtaining new USDOT 
Numbers. Often these chameleon carriers go undetected until the agency 
conducts an SA or compliance review.
    The agency is committed to ensuring only safe carriers are 
permitted to continue operating on our nation's highway. FMCSA has the 
authority to correct, modify, or revoke new entrant registration issued 
inadvertently, or obtained by fraud, misrepresentation or other 
wrongful means. Proposed Sec.  385.306 clarifies what action may be 
taken against any carrier not providing truthful and complete 
information on its MCS-150.
    If a carrier obtains a new USDOT Number after being ordered to 
cease operations based on a failed safety audit, prior Unsatisfactory 
rating, failure to pay a civil penalty or any other reason, and the 
information is discovered after the carrier received another USDOT 
Number, the agency will revoke the carrier's new registration and may 
also take additional enforcement action against the carrier. If a 
carrier obtains a new USDOT Number, but was not subject to an 
outstanding order to cease operations under a previous number, the 
agency may determine the new USDOT Number should not be revoked and, 
instead, link the history of the two companies by identifying in our 
database the new USDOT Number as the primary active number. The old 
USDOT Number would be listed in the database as one under which the 
carrier has also done business, and its safety history, including 
enforcement actions against the carrier, would be imputed to the new 
entity.
    A carrier that ceased interstate operations and wishes to reapply 
should submit an updated MCS-150 and list its old USDOT Number when 
applying. The agency would reactivate the USDOT Number upon approval of 
the application.

Reapplication Process

    Current Sec.  385.329(a) states a new entrant whose new entrant 
registration has been revoked and whose operations have been placed 
out-of-service must wait 30 days after the revocation date to reapply. 
Current Sec.  385.329(b) states the motor carrier will be required to 
initiate the application process ``from the beginning,'' demonstrate it 
has corrected the deficiencies resulting in revocation, and otherwise 
ensure it has adequate basic safety management controls. Some have 
interpreted ``from the beginning'' to mean the carrier must resubmit 
all documents submitted when the new entrant initially applied for new 
entrant registration and, if the application is accepted, undergo 
another SA and receive a new USDOT Number. The agency proposes to 
address the reapplication issue by establishing two separate procedures 
based upon what caused the revocation.
    Under proposed Sec.  385.329(b), a new entrant whose registration 
is revoked for failing the safety audit would reapply by submitting an 
updated Form MCS-150 and providing evidence of corrective action (which 
FMCSA would review for adequacy). If FMCSA concludes the re-applicant 
has taken adequate corrective action, it would grant the application 
and the re-applicant would not be subject to a second SA. The carrier 
would remain a new entrant, retain the same USDOT Number and continue 
to be monitored for 18 months from the date the new application is 
approved. For-hire motor carriers must also reapply for operating 
authority under 49 U.S.C. Sec.  13902, if their operating authority was 
revoked.
    If FMCSA revokes a new entrant's registration because it refused to 
submit to an audit, the new entrant would be required to submit an 
updated MCS-150, retain the same USDOT Number, and submit to an SA as 
soon as practicable once the new application is approved. FMCSA intends 
to flag these carriers so they will receive an SA as soon as 
practicable once they reenter the program. In all instances, a carrier 
reapplying for new entrant authority would be prohibited from operating 
in interstate commerce until its new application is approved. As in the 
case above, a new 18-month monitoring period would start upon approval 
of the new application.
    To retain historical information on a revoked new entrant's past 
performance, FMCSA would require the new entrant to retain the same 
USDOT Number when reapplying for registration. This is consistent with 
what FMCSA has done in the past and is currently doing whenever a 
carrier is placed out-of-service and subsequently remedies whatever 
deficiencies resulted in the out-of-service order.

Household Goods

    Currently, the SA does not evaluate compliance with FMCSA's 
household goods (HHG) regulations (49 CFR part 375). In order to 
strengthen its oversight of the HHG industry, FMCSA is proposing to 
include questions regarding HHG requirements in the audit. Because the 
HHG requirements are not safety related, however, FMCSA would not count 
the answers toward the pass/fail determination. Instead, any violations 
found would be enforced through other means (e.g., a compliance 
review).

Americans With Disabilities Act

    The SA also does not evaluate compliance by passenger carriers with 
the Americans with Disabilities Act of 1990 [Public Law 101-336, 104 
Stat. 327, July 26, 1990] (ADA). DOT regulations at 49 CFR part 37 
prohibit discrimination against individuals with disabilities in the 
provision of transportation services, and require

[[Page 76735]]

certain vehicles to be readily accessible to and usable by such 
individuals. In order to strengthen its oversight over ADA issues, 
FMCSA is proposing to include questions regarding ADA compliance in 
audits of new entrant passenger carriers. As with violations of the HHG 
requirements, FMCSA would not count the answers toward the pass/fail 
determination. Instead, any violations found would be enforced by 
forwarding apparent violations to the U.S. Department of Justice or, if 
the carrier is a recipient of DOT financial assistance, through DOT 
administrative enforcement action.

Other Changes

    Today's proposal would amend Sec.  385.319, which concerns the new 
entrant's responsibilities for remedying deficient safety management 
practices discovered during the safety audit. It adds an additional 
category of passenger carriers to the description of which carriers 
must remedy deficiencies within 45 days of notification by FMCSA--new 
entrants that haul passengers in a vehicle used or designed to 
transport between 9 and 15 passengers for compensation.\2\ The 
corrective action periods in Sec.  385.319(c) were modeled after the 
45- and 60-day effective dates of Unsatisfactory safety ratings in 49 
CFR 385.11. Section 385.11 subjects all motor carriers transporting 
passengers by CMV to the 45-day requirement, including CMVs designed to 
transport between 9 and 15 passengers for compensation. The May 2002 
IFR inadvertently failed to apply the 45-day requirement to small 
vehicle passenger carriers, subjecting them instead to the 60-day 
period applicable to property carriers not hauling hazardous materials 
requiring placarding. We propose to amend Sec.  385.319(c), as well as 
Sec. Sec.  385.323, 385.325, and 385.327 to make them consistent with 
Sec.  385.11. Section 385.319 has also been rewritten to cross 
reference the definition of CMVs relating to hazardous materials 
carriers in 49 CFR 390.5 for purposes of consistency.
---------------------------------------------------------------------------

    \2\ Under existing FMCSA regulations, most of the FMCSRs do not 
apply to the transportation of passengers in such vehicles within a 
75 air-mile radius of the driver's work reporting location, or when 
the carrier is not directly compensated. See 49 CFR Sec.  
390.3(f)(6). However, section 4136 of SAFETEA-LU eliminated the 75 
air-mile distance limitation. Therefore, all carriers transporting 
passengers in CMVs designed to carry between 9 and 15 passengers 
will be subject to the new entrant requirements, provided such 
carriers are directly compensated. In a separate rulemaking, Sec.  
390.3(f)(6) will be amended to achieve consistency with this 
statutory change.
---------------------------------------------------------------------------

    Current Sec.  385.337(a) states: ``The initial refusal to permit an 
SA to be performed may subject the new entrant to the penalty 
provisions in 49 U.S.C. Sec.  521(b)(2)(A).'' The term ``initial'' 
before the word ``refusal'' unnecessarily limits FMCSA's ability to 
impose penalties against recalcitrant carriers. Therefore, FMCSA is 
proposing to remove the word ``initial'' before the word ``refusal''; 
this change would permit FMCSA to consider any refusal as a basis for 
imposing penalties.

The New Entrant Safety Assurance Process and Non-North America-
Domiciled Motor Carriers

    Congress ratified the Central American Free Trade Agreement in the 
summer of 2005. In preparation for implementation of this treaty, FMCSA 
examined the agency's programs to ensure that any CMVs entering the 
United States from Central American countries were operating safely. 
Central American motor carriers, and indeed any motor carrier from a 
country other than the United States, Canada, or Mexico (non-North 
America-domiciled motor carriers), are not covered by FMCSA's existing 
New Entrant oversight programs. There are 64 carriers from Central 
American countries that have registered with the agency to operate CMVs 
in the United States.
    The registered Central American carriers are domiciled in 
Guatemala, El Salvador, Belize, Honduras, Panama, and Nicaragua. The 
average vehicle fleet size for these carriers is one or two tractor-
trailers. Sixty-three of the 64 carriers classified their operations as 
private motor carriers of property. A single carrier listed its 
operation type as private motor carrier of passengers (business). Most 
of the Central American carriers contracted with the same processing 
agent located in Brownsville, Texas, to file the USDOT Number 
application with FMCSA. Each of the carriers, including the passenger 
carrier, listed general freight or motor vehicles as its cargo type.
    FMCSA has considered several options for a safety monitoring 
process for non-North America-domiciled motor carriers, including (1) 
subjecting them to the safety monitoring process for Mexico-domiciled 
carriers; (2) subjecting them to the New Entrant Safety Assurance 
Process for U.S. and Canada-domiciled carriers; or (3) developing an 
alternate oversight program compatible with existing regulatory 
authority.
    The safety monitoring system for Mexico-domiciled carriers is based 
upon standards set out in the NAFTA Arbitral Panel Report \3\ dated 
February 6, 2001, and the provisions of Section 350 of the FY 2002 
Department of Transportation Appropriations Act. The NAFTA Arbitral 
Panel (the Panel) noted that: (1) The United States is not required to 
treat applications from Mexico-domiciled trucking firms in exactly the 
same manner as applications from U.S. or Canadian firms, as long as 
they are reviewed on a case by case basis; and (2) given the different 
enforcement mechanisms in place in the United States and Mexico, it may 
be justifiable for the United States to address legitimate safety 
concerns through different methods of ensuring compliance with the U.S. 
regulatory regime. Similarly, the Panel found it may not be 
unreasonable for the United States to implement different procedures 
with respect to service providers from another NAFTA country if 
necessary to ensure compliance with its own local standards by these 
service providers.
---------------------------------------------------------------------------

    \3\ In the Matter of Cross-Border Trucking Services, Secretariat 
File No. USA-MEX-98-2008-01, Final Panel, (February 6, 2001).
---------------------------------------------------------------------------

    Mexico's motor carrier safety regulatory system lacks several of 
the components that are central to the U.S. system. As the Panel found, 
the U.S. is responsible for the safe operation of motor carriers within 
U.S. territory, regardless of the carriers' country of origin, and 
FMCSA believes we must ensure each carrier is safe to protect U.S. 
highway users. The safety monitoring process for Mexico-domiciled 
carriers provides FMCSA with the necessary level of assurance, in a 
manner consistent with the Panel's findings, and the relevant 
provisions of NAFTA. It ensures that Mexican motor carriers seeking 
U.S. operating authority are capable of complying with the U.S. safety 
regulatory regime.
    The New Entrant Safety Assurance Process for U.S. and Canada-
domiciled carriers is based upon an in-depth understanding of the 
safety systems in each country and a long history of cross-border truck 
and bus operations. Because FMCSA lacks understanding and experience 
with the safety systems of Central American and other non-North 
American countries, the agency deems it appropriate to adopt an 
alternate method of overseeing the compliance and safety of non-North 
America-domiciled-motor carriers. The alternate oversight method for 
non-North America-domiciled motor carriers is similar to FMCSA's 
oversight program for Mexico-domiciled motor carriers. It also is 
consistent with sec. 210(a) of MCSIA because it would require a safety

[[Page 76736]]

review of a new entrant non-North America-domiciled motor carrier 
within the first 18 months of operations. FMCSA would implement the 
minimum requirements provision of sec. 210(b) for these carriers 
through Form OP-1(NNA). Because sec. 210(a) of MCSIA requires the 
Secretary to issue regulations mandating safety reviews of all new 
entrant carriers, today's action proposes such regulations for non-
North America-domiciled motor carriers. Due to FMCSA's lack of 
knowledge regarding the safety regimes of their home countries (as 
opposed to Canada and Mexico), FMCSA will use experience gained through 
the alternate oversight safety monitoring system to determine whether 
further regulatory changes may be appropriate in the future. The agency 
requests information on the safety systems of Central American and 
other non-North American countries.

Monitoring the Safety of Existing Non-North America-Domiciled Motor 
Carriers

    FMCSA will educate, review and monitor the 64 registered non-North 
America-domiciled motor carriers and any additional non-North American 
carriers issued a USDOT Number prior to the effective date of any final 
rule promulgated for today's notice of proposed rulemaking. Compliance 
reviews will be conducted within three months on all existing non-North 
America-domiciled motor carriers to assess their compliance with U.S. 
regulations. With respect to additional non-North America-domiciled 
carriers that register with FMCSA before the effective date of any 
final rule promulgated for today's notice of proposed rulemaking, FMCSA 
will (1) manually review each application for USDOT Number (Form MCS-
150) filed by non-North America-domiciled motor carriers to ensure they 
are complete and accurate; and (2) conduct a compliance review of these 
carriers within 6-12 months of issuing a USDOT Number registration and/
or operating authority. FMCSA will monitor all non-North America-
domiciled motor carriers for violations of the 11 regulations that the 
agency considers as minimum standards for safe operations (the same 
violations proposed as automatic failure factors in this NPRM) and 
conduct an expedited compliance review of any non-North America-
domiciled motor carrier when a violation of these regulations is 
discovered. While the consequences of undergoing a compliance review 
and failing a new entrant safety audit may be somewhat different (civil 
penalties, a safety rating, and perhaps an operations out-of-service 
order resulting from a compliance review compared to proposed 
revocation of new entrant operating authority resulting from a new 
entrant safety audit), FMCSA believes conducting a compliance review is 
an equivalent level of oversight due to its comprehensive nature, the 
resultant safety rating for the carrier, and the possibility of civil 
penalties. In addition, non-North America-domiciled motor carriers 
would be subject to the same cross-border inspections as Mexico-
domiciled carriers. Vehicles operated by non-North America-domiciled 
motor carriers will be subject to the same inspection standards as 
other CMVs entering or operating within the United States and will be 
inspected at the U.S.-Mexico international border unless displaying a 
valid safety decal.
    Through the agency's process of gathering information on non-North 
America-domiciled motor carriers, another group of carriers from 
Central America has been identified. This group of carriers allegedly 
drives or flies drivers into interior States to purchase used tractor/
trailers, school buses, farm equipment, and other vehicles. These 
vehicles are transported to Central America through the United States 
and Mexico without proper registration, insurance or licensing. This 
migration of exports from the United States is funneled primarily 
through one location--the Los Indios Port of Entry to Mexico.
    To address this situation, FMCSA will initially educate southbound 
non-North America-domiciled motor carriers by providing warnings and 
informing them of the requirements for complying with the Federal Motor 
Carrier Safety Regulations. Following the educational period, FMCSA 
will perform periodic compliance strike force activities targeting non-
registered southbound traffic at the Los Indios Port of Entry to 
Mexico. Non-compliant carriers will receive enforcement action ranging 
from roadside inspection citations to placing drivers and vehicles out 
of service, if warranted. FMCSA requests comments on this alternate 
oversight system for non-North America-domiciled motor carriers.

Proposed Registration and Safety Monitoring Process for Non-North 
America-Domiciled Motor Carriers Applying for a USDOT Number

    Today's action proposes regulations governing the registration and 
safety monitoring of new entrant non-North America-domiciled motor 
carriers. The proposals are discussed as follows:

A. Proposed Application Process for Non-North America-Domiciled Motor 
Carriers
B. Proposed New Form--OP-1(NNA) for Non-North America-Domiciled Motor 
Carriers Requesting New Entrant Registration
C. Proposed Safety Monitoring System for Non-North America-Domiciled 
Motor Carriers.
A. Proposed Application Process for Non-North America-Domiciled Motor 
Carriers
    FMCSA proposes to add a new subpart H to part 385 to address the 
specific requirements of the application process for all non-North 
America-domiciled motor carriers applying for a USDOT Number. First, 
proposed Sec.  385.601 explains that subpart H would apply to any non-
North America-domiciled motor carrier that wants to operate within the 
United States to provide transportation of property or passengers in 
interstate commerce.
    Proposed Sec.  385.603 requires these applicants to file--
     Proposed Form OP-1(NNA)--Application for U.S. Department 
of Transportation (USDOT) Registration by Non-North America-Domiciled 
Motor Carriers,
     Form MCS-150--Motor Carrier Identification Report, and
     A notification of the means used to designate process 
agents.
    The application would need to be filled out in English and be 
complete to be considered. Information on obtaining applications is 
also provided.
    Proposed Form OP-1(NNA) would serve the dual purpose as being an 
application for new entrant registration (for all non-North America-
domiciled carriers) and operating authority (for for-hire carriers 
subject to the requirements of 49 CFR part 365). Together with the MCS-
150, the OP-1(NNA) would provide a more complete picture of the 
carrier's operational characteristics as well as its safety compliance 
and other key information than could be obtained through either form 
alone.
    FMCSA would not impose a registration fee for new entrant 
registration unless the applicant also requires operating authority 
under part 365, for which an application fee is charged. Under FMCSA's 
current regulations, a non-North America-domiciled for-hire carrier of 
non-exempt commodities must submit Form OP-1 and pay a $300 application 
fee. Conforming amendments are proposed to Sec. Sec.  365.101 and 
365.105 to clarify that a non-North America-domiciled motor carrier 
would request operating authority by using Form OP-1(NNA)

[[Page 76737]]

and consequently be subject to the application fee.
    Form MCS-150 would be used to obtain a USDOT Number. Conforming 
amendments have been made to proposed Sec.  390.19 to require a non-
North America-domiciled motor carrier to file the MCS-150 before 
beginning operations within the United States and to submit an updated 
form every 24 months after issuance of a USDOT Number.
    Form BOC-3. The non-North America-domiciled motor carrier 
additionally would be required to notify the agency regarding 
designation of process agents by either: (1) Submission in the 
application package of Form BOC-3--Designation of Agents-Motor 
Carriers, Brokers and Freight Forwarders, or (2) a letter stating that 
the applicant will use a process agent that will submit the Form BOC-3 
electronically.
    Proposed Sec.  385.605 would require a non-North America-domiciled 
carrier to use only drivers who possess a valid commercial driver's 
license and to subject those drivers to drug and alcohol testing as 
required under 49 CFR part 382. Acceptable commercial driver's licenses 
would include: (1) A CDL, (2) Canadian commercial driver's license or 
(3) a Licencia de Federal de Conductor issued by Mexico. FMCSA believes 
the CDL and corresponding drug and alcohol testing requirements are 
justified because drivers' licenses issued by the various non-North 
American countries may not meet FMCSA standards or State licensing 
standards regarding commercial motor vehicles not requiring a CDL.
    In proposed Sec.  385.607, FMCSA explains how the agency would 
process an application for new entrant registration filed by a non-
North America-domiciled motor carrier. To the extent practicable, the 
agency would validate the accuracy of information and certifications 
with data in its databases, and the databases of the governments of the 
country where the carrier's principal place of business is located. 
FMCSA would not grant new entrant registration unless the carrier 
passes a pre-authorization safety audit (discussed later in this 
section). The criteria governing the pre-authorization safety audit are 
fully explained in a new Appendix to part 385, subpart H, which is 
modeled after the pre-authorization safety audit for certain Mexico-
domiciled carriers.
    After completing the pre-authorization safety audit, FMCSA would 
issue a USDOT Number if the applicant passes the audit.\4\ However, the 
applicant will not be authorized to, and must not, begin operating 
within the United States unless it has filed evidence of financial 
responsibility pursuant to 49 CFR part 387 and designated a process 
agent.
---------------------------------------------------------------------------

    \4\ Applications by for-hire carriers subject to part 365 would 
also be subject to a 10-day protest period. In such cases, a USDOT 
Number would not be issued until after the protest period has 
elapsed and any protests filed have been denied.
---------------------------------------------------------------------------

    The proposed Appendix to 49 CFR part 385, subpart H, sets forth 
criteria governing the pre-authorization safety audit. During the pre-
authorization safety audit, FMCSA would validate the accuracy of 
information provided in the application and determine whether the 
carrier has basic safety management controls necessary to ensure safe 
operations. FMCSA would gather information by reviewing a motor 
carrier's compliance with ``acute'' and ``critical'' regulations in the 
FMCSRs and HMRs. As stated under the discussion of the New Entrant 
Safety Assurance Process for U.S. and Canada-domiciled carriers, FMCSA 
is studying a new approach to assessing the severity of violations as 
part of its announced CSA 2010 initiative. This initiative may 
ultimately replace the ``acute and critical'' methodology described in 
the Appendix to part 385, subpart H.
    Conforming amendments are proposed for Sec. Sec.  387.7 and 387.31 
to require all non-North America-domiciled motor carriers--private and 
for-hire--to maintain and file evidence of financial responsibility 
with the agency as a condition of registration. FMCSA believes 
conditioning registration upon receipt of evidence of financial 
responsibility is appropriate for all non-North America-domiciled motor 
carriers because the financial responsibility standards within their 
countries of domicile may not meet U.S. Federal and State requirements. 
Section 4120 of The Safe, Accountable, Flexible, Efficient 
Transportation Equity Act: A Legacy for Users (SAFETEA-LU) [Pub. L. 
109-59, 119 Stat. 1762, August 10, 2005] created new Sections 
31138(c)(4) and 31139(c) in title 49 of the U.S. Code, authorizing 
FMCSA to require filing of evidence of financial responsibility by 
private property and passenger motor carriers under its jurisdiction. 
However, only those private motor carriers domiciled in non-North 
American countries would be subject to financial responsibility filing 
requirements under this proposal. FMCSA plans to address the issue of 
extending financial responsibility requirements to U.S. and Canada-
domiciled private motor carriers in a separate rulemaking.\5\
---------------------------------------------------------------------------

    \5\ Mexico-domiciled private carriers are subject to the same 
financial responsibility filing requirements as U.S. for-hire 
carriers pursuant to 49 U.S.C. 13902(g).
---------------------------------------------------------------------------

    The new entrant registration would not become permanent unless the 
carrier successfully completes the proposed 18-month safety monitoring 
system proposed under new subpart I to part 385. Successful completion 
of the safety monitoring system includes having each CMV operated in 
the United States pass a North American Standard commercial motor 
vehicle inspection every 90 days (as indicated by issuance of a valid 
safety decal for each of these vehicles) and obtaining a Satisfactory 
safety rating as a result of the required compliance review.
    Under proposed Sec.  385.609, the applicant must notify FMCSA 
within 45 days of any changes or corrections to certain key information 
in the Form OP-1(NNA) or the Form BOC-3--the form used to designate a 
process agent. Failure to do so would be grounds for revocation or 
suspension of its new entrant registration.
B. Proposed New Form--OP-1(NNA) for Non-North America-Domiciled Motor 
Carriers Requesting New Entrant Registration
    Proposed Form OP-1(NNA) and its instructions are based extensively 
on the OP-1(MX) form with certain modifications applicable to non-North 
America-domiciled applicants. Proposed Section I of the form solicits 
information about the applicant's name, address, official 
representative, and form of business. Proposed Section IA would require 
the applicant to disclose any existing operations in the United States, 
including whether it had previously applied for a USDOT Number. 
Proposed Section II solicits information about any relationships or 
affiliations with other entities registered with FMCSA or its 
predecessor agencies. This information would help FMCSA verify the 
applicant's domicile in a non-North American country and determine 
whether the applicant holds similar registration in its country of 
domicile. Information regarding registration with the applicant's 
country of domicile would enable FMCSA to confirm motor carrier safety 
issues with its licensing authority.
    Under proposed Section III of the form, the applicant would 
identify the type(s) of registration requested. FMCSA would require a 
separate filing fee for each type of registration requested. Section 
4303(f) of SAFETEA-LU

[[Page 76738]]

imposed a January 1, 2007, deadline for the agency to modify carrier 
registrations for non-exempt for-hire motor carriers under 49 U.S.C. 
chapter 139 to eliminate distinctions between common and contract 
carriers. Accordingly, FMCSA has removed the common and contract 
carrier designations from the description of types of registration 
under proposed Section III and modified the proposed instructions for 
Section III to explain which for-hire registrations require a 
registration fee.
    Proposed Section IV notifies the applicant of financial 
responsibility requirements. Consistent with long-haul Mexico-domiciled 
new entrants, all non-North America-domiciled applicants (private and 
for-hire) would be required to file evidence of financial 
responsibility with the agency as a condition of registration. FMCSA 
also proposes making the cargo insurance requirement for non-North 
America-domiciled motor carriers consistent with what was proposed in 
the Unified Registration System NPRM (70 FR 28990 published May 19, 
2005). The May 19, 2005, NPRM proposes that only household goods 
carriers must maintain and file evidence of cargo insurance with the 
agency. FMCSA would modify proposed Form OP-1(NNA) if the Unified 
Registration System final rule results in different cargo insurance 
requirements.
    Under proposed Section V, the applicant would certify and 
substantiate that it has a system in place to ensure compliance with 
applicable requirements covering driver qualifications, hours of 
service, drug and alcohol testing, vehicle condition, accident 
monitoring, and hazardous material transportation. Substantiation would 
be in the form of narrative responses describing how the applicant will 
monitor hours of service, how it will maintain an accident register and 
how it will monitor accidents. FMCSA would also require that the 
applicant include the names of individuals in charge of its safety 
program and drug and alcohol testing and identify specific locations 
where the applicant maintains current FMCSRs. Information obtained 
under Section V would enable FMCSA to evaluate, upon initial 
application, the safety compliance program of the applicant. FMCSA 
would reject an application that could not offer a specific, 
unambiguous plan to ensure compliance.
    Proposed Section VI of the form would include new registration 
requirements for motor carriers of household goods created under 
Section 4204 of SAFETEA-LU. Section 4204 amended 49 U.S.C. 13902(a) to 
require such an applicant to: (1) Provide evidence of participation in 
an arbitration program and a copy of its notice to shippers about the 
availability of binding arbitration; (2) identify its tariff and 
provide a copy of the notice of the availability of the tariff for 
inspection; (3) certify it has read, and is willing to comply with all 
U.S. Federal laws regarding consumer protection, estimating, consumers' 
rights and responsibilities, and options for limiting liability for 
loss and damage; and (4) disclose certain financial, operational and 
familial relationship with any other entity involved in the 
transportation of household goods within 3 years of the proposed date 
of registration.
    Proposed Section VII would require the applicant to specify the 
scope of registration, indicating intended principal border crossing 
points.
    Under proposed Section VIII, the applicant would be required to 
make specific certifications regarding compliance with laws of the 
United States. The applicant would need to affirm its willingness and 
ability to provide the proposed service and to comply with all 
pertinent statutory and regulatory requirements. Certifications under 
proposed Section VIII would remind the applicant of statutory and 
regulatory responsibilities which, if neglected or violated, might 
subject the applicant to disciplinary or corrective action by FMCSA. 
The applicant would need to confirm its understanding that its process 
agent is deemed its official representative