Patterns of Safety Violations by Motor Carrier Management, 3520-3542 [2014-01174]

Agencies

• Federal Motor Carrier Safety Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 79, Number 14 (Wednesday, January 22, 2014)]
[Rules and Regulations]
[Pages 3520-3542]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-01174]


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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Parts 385 and 386

[Docket No. FMCSA-2011-0321]
RIN 2126-AB42


Patterns of Safety Violations by Motor Carrier Management

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

ACTION: Final rule.

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SUMMARY: FMCSA amends its regulations to enable the Agency to suspend 
or revoke the operating authority registration of for-hire motor 
carriers that show egregious disregard for safety compliance, permit 
persons who have shown egregious disregard for safety compliance to 
exercise controlling influence over their operations, or operate 
multiple entities under common control to conceal noncompliance with 
safety regulations. These amendments implement section 4113 of the 
Safe, Accountable, Flexible, Efficient Transportation Equity Act: A 
Legacy for Users (SAFETEA-LU), as amended by section 32112 of the 
Moving Ahead for Progress in the 21st Century Act (MAP-21), and are 
designed to enhance the safety of commercial motor vehicle (CMV) 
operations on our nation's highways.

DATES: Effective February 21, 2014.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule, 
call or email Juan Moya, Transportation Specialist, Enforcement 
Division, Federal Motor Carrier Safety Administration, telephone: 202-
366-4844; email: juan.moya@dot.gov. If you have questions on the 
docket, call Ms. Barbara Hairston, Docket Operations, telephone 202-
366-3024.

SUPPLEMENTARY INFORMATION: 

Abbreviations/Acronyms

Advocates for Highway and Auto Safety Advocates
American Trucking Associations ATA
Amalgamated Transit Union ATU
Commercial Motor Vehicle CMV
FedEx Corporation FedEx
Federal Motor Carrier Safety Administration FMCSA
Hazardous Materials Safety Permits HMSP
International Brotherhood of Teamsters IBT
Interstate Commerce Commission ICC
Institute of Makers of Explosives IME
Moving Ahead for Progress in the 21st Century Act MAP-21
Motor Carrier Safety Advisory Committee MCSAC
Motor Carrier State Assistance Program MCSAP
National Ground Water Association NGWA
Notice of Proposed Rulemaking NPRM
North American Transportation Consultants, Inc. NATC
Owner-Operator Independent Drivers Association, Inc. OOIDA
Safe, Accountable, Flexible, Efficient Transportation Equity Act: A 
Legacy for Users SAFETEA-LU
Secretary of Transportation Secretary
Transportation Intermediaries Association TIA
Truck Safety Coalition TSC
Transportation Trades Department, AFL-CIO TTD
United Motorcoach Association UMA
Werner Enterprises, Inc. Werner

Executive Summary

Purpose and Summary of the Major Provisions

    This rule enables FMCSA to suspend or revoke the operating 
authority registration of for-hire motor carriers that show egregious 
disregard for safety compliance, permit persons who have shown 
egregious disregard for safety compliance to exercise controlling 
influence over their operations, or operate multiple entities under 
common control to conceal noncompliance with safety regulations. 
Congress directed the Agency to implement this rule because it 
recognized the danger that carriers seeking to evade compliance with 
FMCSA's regulation pose to the motoring public. The rule establishes a 
two-part framework under which the Agency first determines whether a 
motor carrier has failed to comply with FMCSA's safety regulations or 
has attempted to conceal such noncompliance. If a motor carrier meets 
this initial threshold, the Agency then evaluates the motor carrier's 
conduct to determine whether the motor carrier has engaged in a pattern 
or practice of safety violations or is using other entities under 
common control to avoid compliance or mask the noncompliance. The rule 
establishes factors for the

[[Page 3521]]

Agency to consider when making these determinations and provides for 
administrative review. If the Agency ultimately determines that the 
motor carrier has engaged in such conduct, the carrier may have its 
operating authority registration suspended or revoked and may be 
subject to civil or criminal penalties.

Benefits and Costs

    FMCSA assessed the potential costs associated with this rule. These 
costs were found to be economically insignificant. Further discussion 
of this topic is covered in the Rulemaking Analyses section of this 
final rule.

Background

    Implementation of this rule enables the Agency to suspend or revoke 
the operating authority registration of motor carriers that show 
egregious disregard for safety compliance, permit persons who have 
shown egregious disregard for safety compliance to exercise controlling 
influence over their operations or operate multiple entities under 
common control to conceal noncompliance with safety regulations. Motor 
carriers that engage in such conduct may face suspension or revocation 
of their operating authority registration. FMCSA acknowledges that loss 
of operating authority registration is a significant penalty. This rule 
is necessary and appropriate, however, to address motor carriers that 
engage in a pattern or practice of willfully violating safety 
regulations or forming new entities or affiliate relationships to avoid 
compliance or mask or otherwise conceal noncompliance.
    FMCSA has determined that each year a small number of motor 
carriers have attempted to avoid regulatory compliance or mask or 
otherwise conceal noncompliance by submitting new applications for 
registration, often under a different name, to continue operations 
after being placed out of service or to avoid other negative 
consequences of non-compliant behavior including a poor safety history. 
Motor carriers and individuals do this for a variety of reasons that 
include avoiding payment of civil penalties, circumventing denial of 
operating authority registration based on a determination that they are 
not willing or able to comply with the applicable statutes or 
regulations, or avoiding a negative compliance history. Other motor 
carriers attempt to avoid compliance, or mask or otherwise conceal 
noncompliance, by creating or using an affiliated company under common 
operational control. They shift customers, vehicles, drivers, and other 
operational activities to one of the affiliated companies when FMCSA 
places one of the other commonly controlled companies out of service.
    On August 8, 2008, a fatal bus crash occurred in Sherman, Texas, 
highlighting the danger posed by motor carriers and other persons who 
avoid regulatory compliance or mask or otherwise conceal noncompliance. 
Seventeen motorcoach passengers died, and the driver and 38 other 
passengers received minor-to-serious injuries. The investigations 
conducted by FMCSA and the National Transportation Safety Board 
revealed that the motor carrier was operating without authority, was a 
reincarnation of another bus company that had been recently placed out 
of service for safety violations, and that both companies were under 
the control of the same person. FMCSA determined that the companies' 
flagrant disregard for safety under this person's control demonstrated 
a hazard to the safety of the motoring public.
    Based on these findings, FMCSA instituted a vetting process for 
for-hire passenger and household goods carriers that involves a 
comprehensive review of registration applications to determine whether 
the applicants are reincarnations or affiliates of other motor carriers 
with negative compliance histories or are otherwise not willing and 
able to comply with the applicable regulations. Although the vetting 
process was a significant improvement to the previous registration 
review and regulatory compliance process, it is not a complete solution 
to the problem of regulatory avoidance because it does not impose 
sanctions, and, therefore, deter, the motor carriers or individuals who 
engage in or condone egregious disregard for safety compliance.
    The Sherman crash is but one example that demonstrates how the 
practice of avoiding compliance or masking or otherwise concealing 
noncompliance to circumvent Agency enforcement action or to avoid a 
negative safety compliance history creates an unacceptable risk of harm 
to the public, resulting in the continued operation of at-risk carriers 
and impeding FMCSA's ability to execute its safety mission. This rule 
will help address these problems by providing a significant enforcement 
tool that allows the Agency to suspend or revoke the operating 
authority registration of motor carriers that show egregious disregard 
for safety compliance, permit persons who have shown egregious 
disregard for safety compliance to exercise controlling influence over 
their operations or operate multiple entities under common control to 
conceal noncompliance with safety regulations.
    Section 31135 of title 49, United States Code, originally enacted 
as Sec.  4113 of SAFETEA-LU (Pub. L. 109-59, 119 Stat. 1144), and 
subsequently amended by Sec.  32112 of MAP-21 (Pub. L. 112-141, 126 
Stat. 405), authorizes FMCSA to withhold, suspend, amend, or revoke the 
operating authority registration of a motor carrier if it or any person 
has engaged in a pattern or practice of avoiding compliance, or 
concealing noncompliance with regulations governing CMV safety 
prescribed under 49 U.S.C., Chapter 311, subchapter III. That section, 
as amended, also permits FMCSA to revoke the individual operating 
authority registration of any officer of a motor carrier that engages 
in or has engaged in a pattern or practice of, or assisted in avoiding 
compliance, or masking or otherwise concealing noncompliance while 
serving as an officer of a motor carrier. FMCSA is required to issue 
standards to implement the authority granted in Sec.  31135.
    To assist the Agency in developing those standards, FMCSA tasked 
the Motor Carrier Safety Advisory Committee (MCSAC) with identifying 
concepts that FMCSA should consider. On June 21, 2011, the MCSAC issued 
a number of recommendations, some of which formed the foundation for 
this rule. These recommendations include the concepts that a pattern is 
both widespread and continuing over time, involves more than isolated 
violations, and does not require a specific number of violations. The 
Agency also embraced the idea that FMCSA would have to exercise 
discretion to identify those motor carriers whose officers have shown 
egregious disregard for safety compliance.

Legal Basis for the Rulemaking

    The FMCSA has authority, delegated by the Secretary of 
Transportation (Secretary) under 49 CFR 1.87, to establish the minimum 
safety standards governing the operation and equipment of a motor 
carrier operating in interstate commerce (49 U.S.C. 31136(a) and 
31502(b)). Also, as amended by section 4114 of SAFETEA-LU, 49 U.S.C. 
31144(a) requires that the Secretary determine whether an owner or 
operator is fit to safely operate CMVs; periodically update the safety 
determinations of motor carriers; and prescribe, by regulation, 
penalties for violations of applicable commercial safety fitness 
requirements.
    Section 31135 of title 49, United States Code, was originally 
enacted as part the 1994 Recodification Act (Pub.

[[Page 3522]]

L. 103-272, 108 Stat. 745). It was subsequently amended as a part of 
Sec.  4113 of SAFETEA-LU, and then again by Sec.  32112 of MAP-21. 
Section 31135, as amended, requires employers and employees to comply 
with FMCSA's safety regulations that apply to the employees' and the 
employers' conduct. It prohibits motor carriers from using common 
ownership, common management, common control or common familial 
relationships to avoid compliance or mask or otherwise conceal 
noncompliance, or a history of noncompliance. It also authorizes FMCSA 
to withhold,\1\ suspend, amend, or revoke the operating authority 
registration of a motor carrier if it or any person has engaged in a 
pattern or practice of avoiding compliance, or concealing noncompliance 
with regulations governing CMV safety prescribed under 49 U.S.C., 
Chapter 311, subchapter III. FMCSA may suspend, amend, or revoke the 
individual registration of an officer of a motor carrier who has 
engaged in a pattern or practice of, or assisted in, avoiding 
compliance or masking or otherwise concealing noncompliance while 
serving as an officer of such motor carrier. FMCSA was required to 
establish standards implementing Sec.  31135 through rulemaking.
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    \1\ Although MAP-21 includes authority for FMCSA to withhold 
operating authority registration under Sec.  31135, FMCSA has 
elected not to incorporate that authority into this rule. The Agency 
has existing authority to withhold operating authority registration 
and will continue to exercise this authority under its current 
registration process.
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    FMCSA relies on 49 U.S.C. 13902, 13905, 31134, and 31135 for the 
authority and procedures to suspend and revoke operating authority 
registration in this rule. The Motor Carrier Act of 1935 (Pub. L. 74-
255, 49 Stat. 543) authorized the Interstate Commerce Commission (ICC) 
to issue operating authority registration to motor carriers, brokers, 
and freight forwarders subject to its jurisdiction and to suspend or 
revoke such operating authority registration for willful failure to 
comply with applicable statutes and regulations. The ICC Termination 
Act of 1995 (Pub. L. 104-88, 109 Stat. 803) transferred this authority 
to the Secretary by enacting 49 U.S.C. 13902 (establishing standards 
for issuing operating authority registration) and 13905 (establishing 
standards and procedures for suspending and revoking operating 
authority registration). Section 4113 of SAFETEA-LU amended 49 U.S.C. 
13902 to authorize FMCSA to deny an application for operating authority 
registration of a for-hire motor carrier if the motor carrier is not 
willing and able to comply with the duties of employers and employees 
established under 49 U.S.C. 31135. In addition, Sec.  32105 of MAP-21 
created new 49 U.S.C. 31134 establishing requirements for motor 
carriers seeking to obtain operating authority registration and USDOT 
numbers. This new section authorizes FMCSA to withhold, suspend, or 
revoke operating authority registration for failing to disclose, among 
other things, common management or control with any other person or 
applicant for operating authority registration or any other person or 
applicant for operating authority registration that has been determined 
to be unfit, unwilling or unable to comply with the requirements for 
registration. The changes enacted as a part of MAP-21 were effective 
October 1, 2012.

Discussion of Comments

    FMCSA published a notice of proposed rulemaking (NPRM) on November 
13, 2012 (77 FR 67613) and received 24 comments in response. The 
commenters included: Advocates for Highway and Auto Safety (Advocates), 
American Trucking Associations (ATA), Amalgamated Transit Union (ATU), 
FedEx Corporation (FedEx), GG Regulatory Consulting (GGRC), 
International Brotherhood of Teamsters (IBT), Institute of Makers of 
Explosives (IME), National Ground Water Association (NGWA), New York 
State Department of Motor Vehicles (NY DMV), North American 
Transportation Consultants, Inc. (NATC), Owner-Operator Independent 
Drivers Association (OOIDA), Transportation Intermediaries Association 
(TIA), Truck Safety Coalition (TSC), Transportation Trades Department 
AFL-CIO (TTD), United Motorcoach Association (UMA), Werner Enterprises, 
Inc. (Werner) and seven individuals.
    Several commenters fully supported the proposal, while others 
stated that they agreed with the general goals of the proposal, but not 
with the methods of accomplishing those goals. A majority of the 
commenters requested clarifications to make the rule easier to 
understand and implement. Several commenters stated that the Agency 
went too far in some aspects of the rule, and that the rule would have 
a broader application than they believe FMCSA intended. Still others 
questioned how the new rule would fit within FMCSA's existing 
enforcement programs. FMCSA responds to those comments, organized by 
subject, below.

General Comments

    The New York State Department of Motor Vehicles (NY DMV) and five 
individuals expressed general support for the rule while one individual 
expressed general opposition. GG Regulatory Consulting (GGRC) expressed 
support for North American Transportation Consultants, Inc.'s (NATC) 
comments and adopted them as its own.

Comment Period

    NATC requested that the Agency either extend the comment period or 
withdraw the rule so that FMCSA can address the commenters' issues and 
improve the rule.
    FMCSA Response. The Agency will not extend the comment period or 
withdraw the NPRM. The Agency provided a 60-day comment period during 
which it received 24 comments from interested members of the public. 
NATC did not identify any information suggesting that interested would-
be commenters were unable to submit comments during this time frame or 
explaining why this rule in particular should have had a longer comment 
period than the standard 60 days. Moreover, the purpose of notice and 
comment rulemaking is to provide an opportunity for interested members 
of the public to submit their views on the proposed Agency action and 
for the Agency to make adjustments, if warranted, in response to those 
comments. As a part of this process, FMCSA carefully considered all 
comments received, including those submitted by NATC, and made 
appropriate adjustments, as described below.

Applicability/Targeted Population

    Comment. NATC commented that the rule creates a new class of people 
subject to regulation by including the conduct of ``any person'' as a 
trigger and that this exceeds the Agency's authority. But NATC also 
commented that 49 CFR 390.13 already regulates the same conduct, 
rendering this rule redundant and in violation of an unspecified 
executive order. In addition, NATC commented that the rule should be 
changed to ``increase the specific action which should be taken against 
both the carrier and individual manage/ownership personnel who violate 
existing regulations.''
    FMCSA Response. Congress charged FMCSA with regulating the conduct 
of motor carriers to include the conduct of ``any person, however 
designated, exercising controlling influence over the operations of a 
motor carrier'' (49 U.S.C. 31135(d)(2)). By using the conduct of ``any 
person'' with controlling influence to trigger enforcement action 
against motor carriers, FMCSA implements that

[[Page 3523]]

authority Congress specifically authorized--and directed--the Agency to 
exercise.
    FMCSA disagrees with NATC's comment that this final rule is 
redundant or that the substance is covered by existing Sec.  390.13. 
Section 390.13 provides that ``No person shall aid, abet, encourage or 
require a motor carrier or its employees to violate the rules of this 
chapter.'' Unlike today's final rule, Sec.  390.13 places a direct 
prohibition on individual conduct. Moreover, it does not address 
Congress's mandate that the Agency penalize motor carriers for 
individual conduct that rises to the level of a pattern or practice of 
safety violations.
    Although NATC objected to creating a new class of people subject to 
FMCSA's jurisdiction, it nonetheless suggested that the Agency target 
that same class of people with enhanced penalties for violations of 
existing regulations. But the final rule is based on a specific 
congressional mandate: the Agency is directed to revoke or suspend the 
registration of motor carriers, not take action against individuals, 
except where those individuals are registered motor carriers. As a 
result, FMCSA did not make NATC's suggested changes.
    Because NATC did not identify the Executive Order it alleged the 
Agency to be in violation of and why, FMCSA cannot respond.
    Comment. NATC commented that 49 U.S.C. 31134 was established to 
screen motor carriers attempting to obtain operating authority, and 
that FMCSA is incorrectly attempting to apply that standard to carriers 
holding existing authority.
    FMCSA Response. FMCSA disagrees that Congress intended for this 
rule to apply only prospectively to motor carriers seeking new 
operating authority. Although Sec.  31134 contains provisions 
authorizing the Agency to withhold, revoke or suspend registrations, 
neither that section nor Sec.  31135, which specifically authorizes 
FMCSA to revoke or suspend registration based on patterns or practices 
of safety violations, limits FMCSA's authority to take action against 
existing registrants.
    Comment. Werner Enterprises, Inc. (Werner) commented that carriers 
with an excellent record and culture of safety and compliance could be 
targeted for hiring an officer with a history of noncompliance. Werner 
further commented that a carrier could be punished without having done 
anything to affect its safety rating negatively.
    FMCSA Response. This rule will target only the worst actors in the 
industry. As a practical matter, FMCSA finds it highly unlikely that a 
motor carrier with an excellent safety compliance record would place 
someone with a history of egregious disregard for safety compliance in 
a position of controlling influence over operations. But, in accordance 
with Congress's direction, the Agency has determined that it is 
appropriate to revoke or suspend the registration of motor carriers 
that permit such individuals to exercise control over operations. In 
discharging its mission to reduce crashes, injuries and fatalities, the 
Agency believes that it is not appropriate to wait until a crash or 
other adverse safety event occurs before taking action. To the 
contrary, the intent of this rule, as mandated by Congress, is to 
prevent non-compliant actors from circumventing their negative safety 
compliance records, and thus preventing crashes, injuries and 
fatalities from occurring in the first place.
    In the event that a motor carrier innocently places such a person 
in a position of controlling influence, the rule provides safeguards 
for the carrier. This rule requires that the Agency provide notice to 
the carrier of the Agency's intent to suspend or revoke and gives the 
carrier an opportunity to respond, which could include, among other 
things, submission of mitigating information showing that the person is 
not a safety risk, did not engage in the suspected conduct or has been 
removed from a position of controlling influence. But this does not 
mean that submission of mitigating information about a particular 
officer would necessarily be dispositive. If a motor carrier's safety 
management controls were so inadequate that placing the officer in a 
position of controlling influence would be just a symptom of a pattern 
or practice of safety violations, submitting mitigating information 
about a particular officer might not be sufficient.
    Comment. The International Brotherhood of Teamsters (IBT) commented 
in support of the rule and suggested expanding the Agency's vetting 
process to include property-carrying and hazardous materials motor 
carriers. NATC recommended extending the Agency's vetting program to 
all motor carriers requesting operating authority registration and 
suggested that all registrants be re-vetted every 5-10 years.
    FMCSA Response. FMCSA considers its vetting program to be an 
important tool in discharging its safety mission. The Agency does not 
believe that this rule is the appropriate vehicle for the expansion of 
that program. FMCSA will, however, take these comments under advisement 
and consider them in future vetting initiatives.
    Comment. IBT suggested that the Agency take enforcement action 
against drivers in the port/drayage sector of the motor carrier 
industry.
    FMCSA Response. Members of the industry in the port/drayage sector, 
including drivers, could be subject to enforcement if they meet the 
criteria established under this rule.
    Comment. Transportation Intermediaries Association (TIA) suggested 
expanding the scope of the rule to include those entities that engage 
in unlawful brokerage activities. Similarly, Owner-Operator Independent 
Drivers Association, Inc. (OOIDA) suggested expanding the rule to reach 
brokers and freight forwarders that reincarnate or use affiliated 
entities to avoid safety compliance.
    FMCSA Response. In accordance with Congress's mandate, this rule is 
limited to patterns or practices of safety violations. See 49 U.S.C. 
31135(a), (b)(1) and (b)(2). The commercial regulations at 49 CFR parts 
360 and 366-379, including provisions applicable to brokers and freight 
forwarders, are not based on FMCSA's safety jurisdiction (49 U.S.C., 
Chapter 311, subchapter III and 49 CFR parts 380-387 and 390-398) and, 
as a result, those regulations are outside the scope of this 
rulemaking. Brokers and freight forwarders that also operate CMVs, 
however, do fall under FMCSA's safety jurisdiction, and if such 
entities reincarnate or use affiliated entities to avoid compliance 
with safety regulations, then they too are covered under this rule.
    Comment. NATC asked whether a person not required to register under 
FMCSA's regulations constitutes a motor carrier for the purposes of 
this rule.
    FMCSA Response. Any entity registered under 49 U.S.C. 13902, 49 CFR 
part 365, and 49 CFR part 368 is a motor carrier for the purposes of 
this rule. To eliminate any confusion over the applicability of this 
rule, FMCSA amended the regulatory text to state explicitly that any 
entity registered or required to register is subject to this rule.
    Comment. United Motorcoach Association (UMA) commented that FMCSA 
should establish a ``venue'' for motor carriers to disclose when they 
are acquiring assets of a company placed out of service so that they 
are not considered to be reincarnating.
    FMCSA Response. Carriers currently may report these transactions to 
FMCSA and should file an updated MCS-150, as appropriate. It is 
important to note, however, that this rule does not prohibit

[[Page 3524]]

legitimate business transactions involving the sale and purchase of 
assets. It applies to carriers who attempt to avoid regulatory 
requirements or enforcement action by creating a new identity or 
affiliate relationship to mask the true nature of their identity. If a 
carrier is placed out of service and elects to sell its assets rather 
than take the corrective action necessary to resume operation, and 
there is no common ownership or operational control between the out of 
service carrier and the purchasing carrier, then this rule would not 
apply. FMCSA recently initiated a separate regulatory initiative on the 
related issue of the lease and interchange of passenger-carrying CMVs. 
See Lease and Interchange of Vehicles; Motor Carriers of Passengers, 
Notice of Proposed Rulemaking, Docket No. FMCSA-2012-0103, 78 FR 57822 
(Sept. 20, 2013).

Regulatory Noncompliance

    Comment. OOIDA and Transportation Trades Department, AFL-CIO (TTD) 
commented in support of the four categories of actions the Agency 
identified in Sec.  385.907 that would trigger liability under this 
rule. NATC commented that the Agency did not define ``avoid 
compliance'' and did not identify a standard for complying with 
statutory or regulatory safety requirements. Similarly, National Ground 
Water Association (NGWA) and OOIDA requested that FMCSA clarify the 
terms ``avoiding noncompliance,'' ``avoiding regulatory compliance,'' 
and ``concealing regulatory noncompliance.'' Several commenters 
requested a definition or clarification of what type of conduct 
constitutes ``masking or otherwise concealing noncompliance.''
    FMCSA Response. Section 385.907 identifies avoiding regulatory 
compliance as failure or concealing failure to (1) comply with 
statutory or regulatory requirements prescribed under 49 U.S.C. Chapter 
311, subchapter III, (2) comply with State or Federal orders issued to 
redress violations of those requirements, (3) pay a civil penalty for 
violating those requirements, or 4) respond to an enforcement action 
for a violation of those requirements. Any of these four types of 
conduct constitutes noncompliance, and anyone who has engaged in such 
conduct has avoided compliance. Anyone who attempts to hide, or evade 
the consequences of, such noncompliance has engaged in masking or 
otherwise concealing noncompliance.
    Comment. OOIDA sought clarification of ``. . . failure or 
concealing failure to . . . 2) comply with State or Federal orders 
issued to redress violations of those requirements,'' by asking what 
types of orders trigger enforcement.
    FMCSA Response. Failing to comply with any order issued by FMCSA or 
a State to enforce safety regulations issued under the authority of 49 
U.S.C. Chapter 311, subchapter III could trigger enforcement of this 
rule. These orders could include, but are not limited to, operations 
out-of-service orders, orders directing payment of civil penalties, 
orders directing compliance, orders revoking or suspending operating 
authority registration and orders directing a safety audit or other 
investigation.
    Comment. NATC asked what constitutes ``a history of non-
compliance.''
    FMCSA Response. A motor carrier that has engaged in one or more of 
the four types of conduct identified in Sec.  385.907 has a history of 
noncompliance.
    Comment. NATC commented that the Agency did not define ``failure to 
respond'' as used in Sec.  385.907 and asked whether a partial response 
would constitute failure to respond.
    FMCSA Response. Failure to respond means not taking action in 
response to, or not participating in, enforcement actions arising out 
of violations of safety requirements. Examples include, but are not 
limited to, failing to: submit proof of corrective action as directed 
by the Agency; produce information as directed by the Agency in 
furtherance of an audit or investigation; or pay a civil penalty as 
required by a final order imposing the penalty. Whether a partial 
response constitutes failure to respond is a highly fact-specific 
question that cannot be generalized prospectively but would be the 
subject of focused consideration in an action under this rule.
    Comment. OOIDA asked to what extent FMCSA will be focused on 
finding patterns or practices of safety violations that involve 
concealment and whether a single act of concealment could trigger 
enforcement.
    FMCSA Response. The Agency intends to pursue egregious conduct 
under this rule irrespective of whether it constitutes avoiding 
compliance or concealing noncompliance. One act of concealment could be 
sufficient to establish a pattern or practice; however, that 
determination is fact-specific and must be considered within the 
context of the officer or motor carrier's conduct and the factors set 
forth in Sec.  385.909.
    Comment. UMA commented that when a motor carrier that is placed out 
of service makes arrangements to fulfill its contractual obligations, 
that carrier should not automatically be considered to be 
reincarnating, or masking or avoiding a negative compliance history. 
UMA further commented that it would be better for FMCSA to monitor the 
continued operations of an out-of-service carrier while that carrier 
seeks reinstatement, citing financial obligations such as payroll and 
lease payments.
    FMCSA Response. The fact that a motor carrier contracts with 
another company after being placed out of service does not necessarily 
establish reincarnation. The Agency's orders may permit carriers to 
contract with other entities or to resume operations after receiving an 
out-of-service order under certain circumstances. How a motor carrier 
handles its contractual obligations may be one factor the Agency 
considers when determining whether a motor carrier has reincarnated, 
but it would not necessarily be dispositive. Each case is fact specific 
and would be evaluated in accordance with the factors in Sec.  
385.1007.
    Carriers must work with the appropriate enforcement personnel to 
ensure that they remain in compliance with all regulatory requirements. 
A carrier that operates within the parameters of existing regulations 
and orders is not, by definition, avoiding compliance or masking or 
concealing noncompliance. Although FMCSA regulations require a 
passenger carrier to make arrangements to transport stranded passengers 
to the next destination in the event a vehicle or driver is placed out-
of-service, that carrier would not normally be permitted to resume 
regular operations through the use of a third party.
    Comment. Institute of Makers of Explosives (IME) requested that 
FMCSA clarify that holders of hazardous materials safety permits (HMSP) 
would not be subject to liability under the proposed rule if they 
transferred assets to other related HMSP carriers while waiting to 
``age out'' of an out-of-service disqualification, as long as this 
arrangement was disclosed to the Agency and the assets transferred were 
not the cause of the disqualification.
    FMCSA Response. A carrier that transfers assets to an affiliated 
carrier to avoid being placed out of service or losing its HMSP engages 
in conduct that is designed to avoid regulatory compliance. Whether the 
conduct would then rise to the level of a pattern or practice of 
avoiding, masking or concealing would depend on the facts of the 
particular case.
    Comment. OOIDA commented that violations of 49 U.S.C. 31105, motor

[[Page 3525]]

carrier employee whistleblower protection provisions, should also be 
included in Sec.  385.907.
    FMCSA Response. The Agency did not incorporate OOIDA's suggestion 
that whistleblower protection provisions be included in Sec.  385.907. 
Congress limited the Agency's authority to suspend or revoke a motor 
carrier's registration for a pattern or practice of regulatory 
noncompliance involving violations of safety statutes at 49 U.S.C., 
Chapter 311, subchapter III (49 U.S.C. sections 31131-31151) and 
accompanying regulations (49 CFR parts 380-387 and 390-398). The motor 
carrier employee whistleblower protection provisions at 49 U.S.C. 31105 
are outside the scope of FMCSA's statutory authority for the purposes 
of this rule. Individuals seeking protection under Sec.  31105 can seek 
redress through the U.S. Department of Labor or by pursuing their 
rights in Federal court. Regardless, if the conduct that gave rise to 
the whistleblower claims involved violations of FMCSA's safety 
statutes, they could form the basis for enforcement under this rule.

Officer

    Comment. UMA, American Trucking Associations (ATA) and FedEx 
Corporation (FedEx) all commented that the Agency's interpretation of 
the statutory definition of ``officer'' is overly expansive and should 
not include contractors and consultants. OOIDA took the opposite 
position, commenting that the definition should include contractors and 
consultants.
    FMCSA Response. Including contractors and consultants in the 
definition of ``officer'' is consistent with Congress's intent. The 
statutory definition specifically includes ``any person, however 
designated, exercising controlling influence over the operations of a 
motor carrier.'' Nothing indicates that Congress intended to limit the 
concept of ``any person'' to something less than the plain meaning of 
the words ``any person.'' To the contrary, all evidence suggests that 
Congress sought to target bad actors based on their conduct and the 
influence they wield over motor carrier operations, regardless of their 
position, title or employment status.
    Comment. ATA commented that motor carriers rarely grant controlling 
influence to contractors and that defining ``officer'' to include 
contractors would have a chilling effect on motor carriers seeking 
outside help to improve safety practices. NATC also commented that 
contractors rarely have direct control over motor carrier compliance 
and could suffer unfairly from association with disreputable motor 
carriers.
    FMCSA Response. Contractors, agents or consultants who exercise 
controlling influence over motor carrier operations in an effort to 
reverse a culture of noncompliance or otherwise improve compliance 
would not be the subject of enforcement under this rule. That said, 
FMCSA has observed instances in which consultants have exercised 
controlling influence over operations to help motor carriers avoid 
compliance or evade the consequences of previous instances of 
noncompliance. Although these consultants are not technically 
employees, their influence is both palpable and detrimental to safety. 
The Agency intends for this final rule to have a deterrent effect on 
persons such as contractors, agents or consultants who exercise a 
controlling influence and advise motor carriers on how to circumvent 
FMCSA's safety regulations.
    Comment. FedEx commented that the rule should define ``contractor'' 
to exclude independent businesses operating pursuant to the Part 376 
leasing regulations.
    FMCSA Response. The Agency does not believe it is appropriate to 
define contractor because the term is not used in the regulatory text. 
Regardless, FMCSA does not believe that any classification of 
contractor should be categorically excluded from this rule, for the 
reasons stated above.

Controlling Influence

    Comment. Werner, ATA and FedEx commented that the Agency should 
define ``controlling influence.''
    FMCSA Response. In response to comments, the Agency added a 
definition of ``controlling influence.'' FMCSA describes this change in 
the Section-by-Section Analysis portion of this final rule.
    Comment. OOIDA asked whether owner-operators are intended to be one 
of the subjects of the rulemaking when they do not meet the definition 
of ``officer.''
    FMCSA Response. This rule covers any person who exercises 
controlling influence over a motor carrier's operations. An owner-
operator can be subject to this rulemaking either as a motor carrier or 
as an officer, depending on the capacity in which he or she is acting. 
For example, an owner-operator who engages in a pattern or practice of 
safety violations in his or her capacity as a motor carrier, operating 
under his or her own registration, could be subject to enforcement 
under this rule. An owner-operator who acts as an officer, exercising 
controlling influence over another motor carrier's operations and 
engaging in a pattern or practice of safety violations, could also be 
the subject of enforcement action. In accordance with congressional 
intent, an owner-operator who engages in a pattern or practice of 
safety violations while working under another motor carrier's 
registration risks having his or her own individual registration 
suspended or revoked. However, an owner-operator who neither acts as a 
motor carrier nor an officer would not be subject to this rule.

Pattern or Practice

    Comment. TTD commented in support of the factors the Agency set 
forth in Sec.  385.909 to determine whether a pattern or practice 
exists. ATA, NATC, FedEx and OOIDA requested that the Agency define 
``pattern of noncompliance'' or otherwise establish objective factors 
for ``pattern or practice.''
    FMCSA Response. Congress charged the Agency with rooting out those 
bad actors that have engaged in a pattern or practice of avoiding 
regulatory compliance. That charge does not lend itself to the 
establishment of rigid factors or a single definition. Each case must 
be assessed based on the facts specific to that situation; no two acts 
of noncompliance or avoidance are exactly the same. As such, the Agency 
must have the flexibility to tailor its enforcement actions to the 
facts of the specific cases. The factors in Sec.  385.909 are designed 
to provide a framework for identifying objective information the Agency 
can evaluate when determining whether a violation occurred. Moreover, 
the factors provide the Agency the necessary flexibility to balance a 
suspected violation against potentially mitigating circumstances.
    Comment. OOIDA commented that without a more exact formula for 
determining what is a pattern or practice, enforcement officials would 
not be able to ensure uniform application of the rule and motor 
carriers could be subject to inconsistent enforcement actions. 
Similarly, FedEx commented that the Agency could develop significant 
regional differences in the application without more specific 
guidelines.
    FMCSA Response. The Agency is not persuaded that enforcement rules 
require a formulaic approach in order to avoid inconsistent application 
or result. To the contrary, the Agency believes enforcement is best 
served when there is room for discretion, explanation, and 
consideration of the unique circumstances of each individual and 
carrier. Regardless, the administrative review procedure in the rule 
mitigates

[[Page 3526]]

the potential for inconsistency because one person--the Assistant 
Administrator--is responsible for administrative review in all cases.
    Comment. FedEx recommended establishing predicate acts that must 
occur prior to the Agency determining that a pattern or practice 
exists.
    FMCSA Response. In order for FMCSA to determine that a motor 
carrier or officer has engaged in a pattern or practice of avoiding 
compliance or concealing noncompliance, the Agency must first determine 
that the motor carrier or officer has engaged in one or more acts of 
regulatory noncompliance as described in Sec.  385.907. Those acts that 
fall within one of the four prongs in Sec.  385.907 are themselves the 
predicate acts that must occur prior to the Agency making a 
determination that a motor carrier or officer engaged in a pattern or 
practice of avoiding regulatory compliance or concealing noncompliance.
    Comment. OOIDA asked the Agency to clarify what types of data it 
would rely on in enforcing this rule. OOIDA specifically asked whether 
the Agency would use violations identified in inspection reports from 
Motor Carrier State Assistance Program (MCSAP) partners and during 
safety audits. OOIDA commented that it believes the inspection data 
FMCSA collects is inaccurate and unreliable and would undermine the 
lawfulness and utility of enforcement actions. NATC asked whether the 
Agency has established standards to ensure uniform investigations and 
whether there is a process for reviewing the investigation results 
before they are used as a basis for action under this rule.
    FMCSA Response. To enforce this rule, FMCSA will use the same data 
gathered in accordance with the same investigative procedures that it 
currently uses in enforcement actions. In fact, data gathered in 
previous investigations in accordance with those procedures may be used 
to inform the Agency Official's action under the rule. For example, the 
Agency intends to use information obtained from compliance reviews, 
safety audits, roadside inspections and other investigations concerning 
safety performance. FMCSA's investigative standards and policies, 
including those of its MCSAP partners, will generally apply to 
proceedings arising under this rule, just as they would to any other 
Agency enforcement proceeding.
    Comment. FedEx commented that information gathered in accordance 
with pending enforcement actions should not be one of the factors in 
Sec.  385.909, suggesting that only those enforcement actions that 
constitute final agency actions should be taken into consideration.
    FMCSA Response. This rule is designed to deter motor carriers and 
individuals from attempting to avoid enforcement action by masking or 
concealing noncompliance or creating new identities or affiliate 
relationships. This rule is necessary because, in many cases, motor 
carriers attempt to avoid detection by concealing evidence of 
noncompliance or creating new identities when they believe enforcement 
action has or will be initiated due to a poor safety performance 
history. The Agency has observed that some motor carriers engage in 
evasive conduct to avoid even the threat of scrutiny. These carriers 
constantly shift their assets, hoping that the Agency cannot keep up 
with them. In some cases, motor carriers may disappear and pop up 
elsewhere before the Agency can issue an order or a notice of claim.
    The Agency will look at all aspects of a motor carrier's safety 
performance history, as it does in any other type of investigation. The 
motor carrier's safety performance history provides critical 
information about the carrier, irrespective of whether that information 
culminated in a formal investigation or closed enforcement case. The 
fact that pending or unresolved enforcement actions exist, however, are 
often an indicator that, especially in the context of reincarnated 
carriers, a motor carrier may be taking evasive action to avoid a 
negative safety compliance history. But the fact that there is a 
pending or unresolved enforcement action associated with a motor 
carrier is not in and of itself dispositive; the Agency will consider 
and evaluate the facts associated with the underlying conduct that gave 
rise to the enforcement action. As in any other type of enforcement 
action, the motor carrier is given the opportunity, in accordance with 
principles of due process, to rebut the Agency's claims and submit its 
own evidence.
    Regardless, the Agency understands FedEx's concerns with the 
language as proposed. To address this concern, FMCSA changed proposed 
Sec.  385.909(e) to clarify that the purpose of considering pending and 
closed enforcement actions is to evaluate a carrier's safety 
performance history. As such, that factor now reads: ``(e) Safety 
performance history, including pending or closed enforcement actions, 
if any. . . .''
    Comment. NATC commented that the rule does not incorporate the 
MCSAC recommendation that ``a pattern is both widespread and continuing 
over time, and does not require a specific number of violations.'' 
Similarly, Werner commented that the rule did not distinguish between 
conduct that occurred recently or in the distant past.
    FMCSA Response. The Agency disagrees that the rule does not 
incorporate the MCSAC recommendation or does not distinguish between 
current and past conduct. To the contrary, the factors in Sec.  385.909 
were designed to do just that. For example, the first factor, ``the 
frequency, remoteness in time, or continuing nature of the conduct,'' 
allows the Agency Official to consider how often or enduring the 
conduct is, including whether it was confined to the past or continues 
currently. Moreover, the rule does not require the Agency to identify a 
specific number of violations. As explained in the NPRM, as few as one 
violation identified in Sec.  385.907 is sufficient to trigger 
enforcement of the rule.

Common Ownership, Management, Control or Familial Relationship

    Comment. TTD commented in support of the factors in proposed Sec.  
385.911 to determine whether there is common ownership, management, 
control or familial relationship. NATC requested that the Agency change 
the language in that section from ``the Agency Official may consider, 
among other things, the following factors,'' (emphasis added) to ``the 
Agency Official must consider, among other things, the following 
factors.'' NATC also asked the Agency to identify the other factors 
that the Agency Official could consider under proposed Sec.  385.911. 
FedEx and NATC commented that the Agency did not define or set 
standards to determine ``common familial relationship.'' ATA suggested 
that the rule specify that a single factor may not be sufficient to 
establish common ownership, management, control or familial 
relationship, so as not to capture carriers with operations that 
resemble another carrier's operations because of a legitimate purchase 
of that other carrier's business. NATC recommended establishing a 
minimum number of factors that must be present to establish common 
ownership, management, control or familial relationship.
    FMCSA Response. The substance of proposed Sec.  385.911 now appears 
as Sec.  385.1007 in new Subpart L as a part of the non-substantive 
restructuring described below. As with identifying a pattern or 
practice of noncompliance, identifying common ownership,

[[Page 3527]]

management, control or familial relationships does not lend itself to a 
rigid formula. Chameleon carriers exploit the facts of their particular 
circumstances and the limitations of existing Agency regulations and 
resources to evade detection. There are myriad ways a motor carrier can 
structure and restructure operations in an attempt to avoid the 
consequences of noncompliance. As such, the Agency must have the 
flexibility to evaluate motor carrier operations from a common sense 
approach, looking at the facts of each situation as they arise. The 
factors are designed to root out chameleon carriers by evaluating the 
individual characteristics of their actions.
    To preserve its flexibility, the Agency declines to establish a 
finite set of factors or establish a minimum number of factors that 
must be present. It may be that common ownership is evident by 
considering only a few of the factors on the list. The Agency does not 
believe that it is the best use of its resources to require the Agency 
Official to engage in analyses that would not affect the outcome of his 
or her decision. Similarly, if evidence related to one of the factors 
clearly indicates common ownership, there is no reason that the Agency 
must find evidence supporting other factors. Finally, the Agency does 
not believe that it is prudent to prohibit the Agency Official from 
evaluating any relevant and admissible evidence that might prove--or 
disprove--such relationships simply because the evidence does not 
directly relate to one of the factors. Therefore, FMCSA did not make 
NATC's suggested language change.
    Comment. ATA recommended that FMCSA change the language proposed in 
Sec.  385.905(a)(3) to read: ``If two or more motor carriers use common 
ownership, common management, common control or common familial 
relationship with the intent to permit any or all such motor carriers 
to avoid compliance. . . .''
    FMCSA Response. As a part of the restructuring of new Subpart L, 
FMCSA moved the text of Sec.  385.905(a)(3) to Sec.  385.1005 and 
modified the text slightly to make it conform to the statutory 
language. That text now reads: ``Two or more motor carriers shall not 
use common ownership, common management, common control, or common 
familial relationship to enable any or all such motor carriers to avoid 
compliance, or mask or otherwise conceal non-compliance, or a history 
of non-compliance, with statutory or regulatory requirements prescribed 
under 49 U.S.C. Chapter 311, subchapter III, or with or an order issued 
under such requirements.'' ATA's suggested language deviates from the 
statute and, as such, Agency did not make that change.

Egregious Disregard

    Comment. OOIDA commented that the Agency did not define 
``egregious.'' Similarly, NGWA requested that the Agency clarify 
``egregious disregard.''
    FMCSA Response. The Agency does not believe it is necessary to 
define ``egregious'' because this term does not appear in the 
regulatory text. For purposes of the final rule preamble, the word 
takes its ordinary meaning: extraordinarily bad. The final rule thus 
targets the small number of carriers whose acts of noncompliance 
involve more than isolated instances of noncompliance resulting from 
simple negligence. The rule targets carriers whose conduct demonstrates 
a willful, and possibly repeated, attempt to avoid compliance or shield 
noncompliance. This conduct, when viewed in light of the factors 
contained in the rule, shows a disregard for the Agency's safety 
requirements and therefore presents an unacceptable increased risk to 
safety warranting application of the rule.

Relationship to Other Agency Programs or Enforcement Activities

    Comment. OOIDA asked FMCSA to explain the relationship between 
today's final rule and existing rules and to explain whether today's 
final rule was intended to create an entirely new enforcement process. 
OOIDA also asked that the Agency explain how the procedures in 49 CFR 
parts 385 and 386 are different from today's final rule.
    FMCSA Response. In response to OOIDA's comment, FMCSA carefully 
considered the differences and similarities between the proposed rule 
and the Agency's existing enforcement procedures under 49 CFR parts 385 
and 386 as well as the suspension and revocation practices conducted 
under the authority of 49 U.S.C. 13905. Although today's final rule 
promulgates new causes of action, the Agency believes that it is more 
efficient and effective for these rules to fit seamlessly within the 
structure of existing enforcement procedures. As a result, the Agency 
decided to make a number of changes to the structure of today's final 
rule to eliminate confusion and more closely align it with existing 
Agency enforcement practices.
    First, instead of combining the pattern or practice and common 
ownership elements of this rule, FMCSA separated them by creating a new 
49 CFR part 385, subpart L titled ``Reincarnated carriers.'' FMCSA did 
this because there are inherent differences between an enforcement 
proceeding evaluating a pattern or practice and one evaluating 
reincarnation or affiliation. For example, there might be an 
intervening person in a pattern or practice proceeding, but there will 
never be one in a reincarnation proceeding. In addition, the factors 
for evaluating the two different types of cases are very different. The 
revised structure simplifies the rule and makes it easier to understand 
which procedures apply to the two different types of enforcement 
actions.
    Second, FMCSA aligned the factors for evaluating reincarnated 
carriers under today's final rule with the existing procedures at 49 
CFR 386.73 for evaluating reincarnated and affiliated carriers. Both 
rules have the same objective: determining whether the commonalities 
between entities rise to the level of reincarnation or affiliation. The 
only substantive difference is that Sec.  386.73 authorizes the Agency 
to issue an out-of-service order or record consolidation order, while 
today's final rule authorizes the Agency to suspend or revoke 
registration. In light of those similarities, the Agency decided 
against having two separate sets of factors--which could evolve into 
two separate standards for evaluating the same conduct. As a result, 
the factors previously set forth at Sec.  386.73 also apply to FMCSA's 
evaluation of common ownership, management, control or familial 
relationship under today's final rule.
    Third, to align this rule with existing suspension and revocation 
proceedings initiated under the authority of 49 U.S.C. 13905, FMCSA 
eliminated the requirement that the Agency must first suspend a 
carrier's registration prior to initiating a revocation proceeding. 
This change conforms today's final rule to current Agency suspension 
and revocation practices, as described in FMCSA Policy on Granting, 
Withholding, Suspending, Amending or Revoking Operating Authority 
Registration, 77 FR 46147, Aug. 2, 2012.
    Comment. Advocates for Highway and Auto Safety (Advocates) 
commented that under Sec.  385.915, a revocation proceeding can only 
take place after a suspension proceeding and that the Agency should 
streamline the process so that a carrier's registration could be 
revoked after only one proceeding. Advocates reasoned that the 
compliance orders the motor carrier failed to comply with that 
triggered enforcement under this rule can serve as the predicate for 
initiating revocation proceedings.

[[Page 3528]]

    FMCSA Response. Taking into account this comment, as well as 
current enforcement procedures, FMCSA agrees that it is not necessary 
to require a suspension proceeding prior to a revocation proceeding and 
has therefore decided to eliminate this requirement, as discussed 
above. Regardless, revocation proceedings must comply with the 
requirements of 49 U.S.C 13905. Under section 13905, FMCSA may revoke 
registration only after FMCSA has issued an order to the carrier 
directing compliance and the carrier has willfully failed to comply for 
30 days. An order that triggers enforcement could be one that was 
issued before the revocation proceeding was initiated or one that was 
issued during the revocation proceeding. In either scenario, Sec. Sec.  
385.913 and 385.1011 provide 30 days for the motor carrier to show 
cause why its registration should not be revoked.
    Comment. OOIDA commented that the enforcement procedures in 49 CFR 
part 385 make distinctions between acute and critical violations and 
requests this level of specificity for this rule.
    FMCSA Response. The existing safety fitness determination 
procedures at part 385 subpart A serve a different purpose, making the 
need for distinguishing between acute and critical violations 
unnecessary for this rule. Congress has determined that those carriers 
engaging in a pattern or practice of safety violations present a risk 
to the public that goes beyond what the Agency can address through a 
safety fitness determination. A safety fitness determination is 
critical to ensuring that only qualified carriers operate on the 
nation's highways. But this rule identifies conduct--a pattern or 
practice of safety violations--that goes beyond what can be routinely 
detected in an investigation or isolated inspection. A pattern relates 
to conduct that is widespread and continuing over time, involves more 
than isolated violations, and does not require a specific number of 
violations. A practice is an organization's policy, whether written or 
not, that informs its conduct and operational management; the practice 
could be evidenced by one or more instances of conduct. Thus, under 
this rule, the Agency considers a carrier's safety compliance, not just 
in terms of individual instances of noncompliance, but in the greater 
context of how the carrier deals with that noncompliance. Accumulating 
a series of safety violations could affect a carrier's safety rating, 
but would not necessarily trigger enforcement under this rule if that 
carrier took corrective action and otherwise managed those violations 
responsibly. Conversely, carriers that seek to avoid the consequences 
of accumulating those violations, or that perpetuate a culture of 
avoiding compliance with safety regulations, would be candidates for 
enforcement under this rule even in cases where the particular 
violations discovered in the most recent review or inspection did not 
in themselves warrant an unsatisfactory safety fitness determination.
    Comment. OOIDA commented that the public could assist FMCSA with 
its enforcement efforts if it would make the FMCSA Register more 
accessible and informative. With more information, members of the 
public could help FMCSA identify new applicants with histories of 
noncompliance.
    FMCSA Response. FMCSA appreciates OOIDA's comments on how to 
improve the FMCSA Register. Although it is not appropriate to codify 
changes to the FMCSA Register as a part of this rulemaking, FMCSA will 
take OOIDA's comments under advisement.
    Comment. OOIDA requested that FMCSA explain the Agency's standard 
for denying applications for operating authority based on failure to 
disclose affiliations with other motor carriers.
    FMCSA Response. The focus of this rule is on the suspension or 
revocation of existing operating authority registration. Although FMCSA 
has the authority to deny registration applications for failure to 
disclose relationships with other registrants, that authority is beyond 
the scope of today's rule. For additional information on FMCSA's 
policies governing the grant or denial of operating authority 
registration applications, see FMCSA's Policy on Granting, Withholding, 
Suspending, Amending or Revoking Operating Authority Registration (77 
FR 46147, August 2, 2012).
    Comment. TIA commented that another way to achieve the objectives 
of today's rule is to require motor carriers to re-register every year 
and to link the Agency's Unified Carrier Registration requirements with 
operating authority. TIA also suggested that the Agency consolidate its 
out-of-service processes as well as develop links between a number of 
FMCSA's enforcement programs.
    FMCSA Response. FMCSA appreciates TIA's comments on how to improve 
its enforcement program, but does not believe that TIA's suggestion 
would fulfill Congress's directive to take action against patterns or 
practices of safety violations.
    Comment. TIA recommended that FMCSA should prohibit the sale of 
operating authority numbers.
    FMCSA Response. TIA's recommendation is beyond the scope of this 
proceeding; however, it is the subject of a separate Agency rule. See 
Unified Registration System, 78 FR 52608, August 23, 2013.
    Comment. Some commenters recommended that FMCSA train and work with 
State and local partners and provide information to industry 
stakeholders in an effort to eliminate the noncompliance today's rule 
targets.
    FMCSA Response. FMCSA works with the State and local enforcement 
partners through the MCSAP, as well as the Agency's outreach and 
education programs. As part of this collaborative effort, FMCSA 
provides grants, training, and guidance to State and local agencies 
regarding policies, procedures, implementation, and administration of 
CMV programs. These cooperative efforts, although not specifically the 
focus of today's final rule, will continue to ensure that information 
shared with industry stakeholders is responsive to correcting 
noncompliance in areas relevant to this rule.
    Information about some of FMCSA's outreach programs can be accessed 
at www.nafmp.org (North American Fatigue Management Program) and 
www.tsi.dot.gov (Transportation Safety Institute). Additional 
information for drivers, motor carriers and law enforcement partners 
can be found on FMCSA's Web site: www.fmcsa.dot.gov.
    Comment. Some commenters recommended implementation of more 
stringent processes to oversee, monitor, and verify ownership of 
operating authorities and to deactivate USDOT numbers that have been 
inactive for long periods of time.
    FMCSA Response. FMCSA will take this suggestion under advisement. 
FMCSA is continually implementing new methods to detect motor carriers 
attempting to circumvent the regulations by creating new entities. This 
rule provides another tool to prevent this from happening. For more 
information on the deactivation of DOT numbers, see Unified 
Registration System, 78 FR 52608, August 23, 2013.
    Comment. NATC commented that the NPRM did not address how FMCSA 
would handle those who operate without authority after being identified 
as unfit to safely manage carrier operations.
    FMCSA Response. NATC is correct that the NPRM did not expressly 
address these issues. Any motor carrier that operates without authority 
is currently subject to enforcement based on that lack of authority. 
See 49 CFR 392.9a. Nothing in this rulemaking changes that. Regardless, 
the Agency

[[Page 3529]]

would consider a motor carrier's history of operating without authority 
when determining whether to pursue enforcement under this rule.
    Comment. Amalgamated Transit Union (ATU) and TTD commented that 
they support the rule, but caution the Agency not to overlook other 
important safety issues such as driver fatigue. An anonymous commenter 
stated that FMCSA should prohibit the use of loose-leaf record of duty 
status log books because it leads to violations of hours-of-service 
rules.
    FMCSA Response. While issues such as driver fatigue and limitations 
on driving time are beyond the scope of this rulemaking, the Agency 
recognizes their importance. They are the subjects of other on-going 
Agency regulatory and enforcement initiatives. Information about the 
North American Fatigue Management Program is available at 
www.nafmp.org.

Regulating the Conduct of Individuals

    Comment. NATC expressed concern that penalties under the rule are 
applied to the carrier and not the individual determined to have 
engaged in conduct constituting egregious disregard for safety 
compliance. NATC recommends that FMCSA change the rule to include or 
increase the potential penalties against an individual person, rather 
than focus on the motor carrier that employs the individual. Werner 
recommended targeting the person who engaged in the conduct (committed 
the ``pattern'') and not the hiring motor carrier.
    FMCSA Response. Section 31135 authorized FMCSA to take enforcement 
action only against registered individuals and motor carriers. That 
means that under this rule, individuals holding their own operating 
authority registration are subject to enforcement if they engage in a 
pattern or practice of safety violations while working as an officer 
for another motor carrier. MAP-21 authorizes FMCSA to suspend or revoke 
the registration of any person who engages in a pattern or practice of 
avoiding compliance, or masking or otherwise concealing noncompliance. 
As such, if an individual who exercises a controlling influence over a 
motor carrier's operations also possesses his or her own operating 
authority registration, FMCSA may suspend or revoke that registration 
in addition to the carrier's registration. Section 385.919 (which was 
Sec.  385.921 before being re-numbered in the final rule) provides that 
individuals holding operating authority registration are also subject 
to civil or criminal penalties.

Civil and Criminal Remedies

    Comment. NATC commented that if FMCSA pursued criminal prosecution 
and the presently available enforcement remedies more vigorously, the 
deterrent effect would render the rule unnecessary.
    FMCSA Response. FMCSA agrees that the possibility of criminal 
prosecution can act as a deterrent to the kind of conduct contemplated 
by the rule. It is not, however, the only or most effective deterrent, 
because FMCSA does not have direct authority to prosecute criminal 
violations. Once FMCSA identifies the potential need for criminal 
prosecution, it must refer the case to the Department of Justice with 
recommendations on disposition. Congress, in recognition of this 
limitation on FMCSA's authority, empowered the Agency through MAP-21 to 
take appropriate enforcement action in areas for which the Agency has 
direct and exclusive authority: all matters concerning operating 
authority registration and imposition of civil penalties for violation 
of safety regulations. Consistent with past practice, FMCSA will 
continue to recommend criminal prosecution in appropriate cases. Any 
action by FMCSA to suspend or revoke a motor carrier's operating 
authority registration or impose a civil penalty would not preclude 
pursuit of criminal penalties.
    Comment. UMA commented that a motor carrier should be placed out of 
service only to protect the public and not as punishment; fines and 
criminal prosecution should be the only penalties for violations.
    FMCSA Response. Underlying UMA's comment is the premise that out-
of-service orders and civil or criminal penalties address different 
conduct; FMCSA rejects this distinction. This final rule targets those 
motor carriers that engage in willful noncompliance with safety 
regulations. Willful noncompliance with safety regulations is the 
clearest indication that a registered entity presents a risk to the 
motoring public. While civil and criminal penalties may have a 
deterrent effect, they do not in and of themselves ensure public 
safety. Shutting down a motor carrier that refuses to comply with 
safety requirements or follow FMCSA orders does.
    Comment. IBT recommended that civil and criminal penalties be used 
against motor carriers that repeatedly violate FMCSA's safety 
regulations, regardless of whether the Agency suspends or revokes 
registration.
    FMCSA Response. FMCSA will continue to pursue civil and criminal 
penalties against motor carriers that violate the Agency's regulations. 
The procedures in today's final rule provide the Agency with additional 
enforcement tools. To make clear that today's final rule is not the 
exclusive remedy for unlawful conduct, the Agency amended proposed 
Sec.  385.921, now Sec.  385.919, to state that nothing in this rule 
precludes FMCSA from taking action against a motor carrier for other 
unlawful conduct.

Due Process

    Comment. NATC, UMA, and Werner expressed concern that the rule does 
not afford due process.
    FMCSA Response. FMCSA is aware of the potential impact any 
determination under the rule could have on a motor carrier and the 
person whose conduct gives rise to an enforcement action. Accordingly, 
FMCSA deliberately included a procedural due process mechanism that 
grants motor carriers and individuals the right to notice of the 
proceeding and an opportunity to be heard. As with any action FMCSA 
takes, the Agency is keenly aware that it must act judiciously and 
fairly.
    Sections 385.911 and 385.913 (which were proposed as Sec. Sec.  
385.913 and 385.915 before being re-numbered in the final rule) require 
FMCSA to provide written notice to the motor carrier and person who are 
alleged to have engaged in the conduct that resulted in the suspension 
or revocation proceeding. This notice must inform the motor carrier and 
person of the factual and legal basis for the determination and notify 
the person of his or her right to intervene in the proceeding. By 
intervening, the person is able to present argument and evidence, 
independently of the motor carrier, in defense or extenuation of the 
allegations. The procedures provide the motor carrier and intervening 
person the right to request administrative review of the Agency 
Official's decision. Additionally, under Sec.  385.915 (which was 
proposed as Sec.  385.917 before being re-numbered in the final rule), 
motor carriers and intervening persons have the right, at a later date, 
to request FMCSA to rescind an order the Agency issued under the rule. 
Collectively, these procedures ensure that the rights of motor carriers 
and individuals who may be affected by the rule are protected.
    Regardless, FMCSA acknowledges the concerns that commenters 
expressed about protecting the rights of motor carriers and 
individuals. To eliminate any confusion over the rights and 
responsibilities of the parties to a suspension or revocation 
proceeding,

[[Page 3530]]

Sec.  385.911(e) makes clear that when administrative review is 
requested, the Agency Official must respond with evidence supporting 
each issue in dispute. The Agency Official's determination may be 
supported by either direct or circumstantial evidence. If the evidence 
is circumstantial, the Agency Official's determination may also be 
supported by the reasonable inferences drawn from the evidence. 
Finally, the Assistant Administrator may request additional evidence, 
but his review is limited to those issues identified in the petition 
for review.
    Comment. NATC was concerned that implementation of the rule would 
result in a taking without due process.
    FMCSA Response. Application of the rule will not result in a taking 
without due process of law. The procedures contained in Sec. Sec.  
385.911, 385.913, and 385.915 ensure both motor carriers and officers 
receive notice and an opportunity to be heard concerning any allegation 
that either engaged in a pattern or practice of safety violations or 
created a new entity or affiliate relationship to avoid regulatory 
requirements. The Agency's determination is made in context of these 
procedures, which provide due process and protect the carrier's and 
individual's interests.
    Comment. NATC commented that the revocation procedures do not 
require the Agency to show a willful failure to comply.
    FMCSA Response. Sections 385.913 and 385.1011 state that the Agency 
Official may revoke a motor carrier's registration only if the motor 
carrier willfully violated an order for at least 30 days.

Due Diligence/Hiring Concerns

    Comment. NATC commented that existing databases and Web sites do 
not have adequate information about individuals for an employer to make 
a determination on a prospective officer's history of noncompliance. 
NATC commented that contractors would suffer guilt by association even 
if they had not themselves been noncompliant or exercised controlling 
influence over motor carrier operations. UMA commented that there is no 
formal mechanism for carriers to disclose hiring decisions. UMA went on 
to suggest that FMCSA is creating an informal blacklist, the contents 
of which carriers would have to guess. UMA commented that this would 
bar certain people from the industry without due process and would be 
shifting responsibility for regulating to motor carriers.
    Werner commented that an innocent carrier could be held responsible 
for the conduct of an employee, even though the carrier was not aware 
of the employee's conduct. Werner is particularly troubled that a 
carrier could face enforcement action when the employee's conduct 
occurred before the carrier hired the employee. Werner and ATA 
commented that carriers do not have reliable access to background 
information on prospective hires and that checking references does not 
always yield the necessary information because many employers are 
unwilling to provide information other than the dates of hire and 
termination. ATA commented that publicly available safety data for 
motor carriers is generally available only for three years, and that 
prospective employers might reject qualified applicants because of 
their inability to confirm the compliance history of previous 
employers.
    Werner and ATA stated that carriers will be put in the position of 
having to make a decision as to whether the perspective employee was in 
a position to exercise ``controlling influence'' without having 
adequate information. Werner commented that this would create a 
presumption against hiring people where information is not readily 
available, and could result in a person's lifetime ban from the 
industry if they were associated in any way with a questionable 
carrier. ATA commented that the rule would penalize innocent employees 
who happened to work for companies with poor safety cultures. ATA 
recommended that the Agency limit a motor carrier's liability for an 
officer's conduct with a previous employer.
    FedEx commented that there are no fixed standards for determining 
whether a carrier has exercised due diligence in hiring. FedEx stated 
that checking the history of previous motor carrier employers without 
additional scrutiny into the applicant's role with previous employers 
could result in a blanket refusal to hire an individual even if that 
individual had no involvement in noncompliance. FedEx further commented 
that the evaluations the rule requires are overly burdensome and will 
create a significant amount of administrative work for employers.
    FMCSA Response. Motor carriers are responsible for the people they 
hire to act on their behalf. This concept is not unique; motor 
carriers, like all other employers, conduct due diligence to avoid 
negligent hiring claims under existing law. The concept of negligent 
hiring is a long-standing legal principle and myriad employers have 
navigated the due diligence requirements to protect themselves from 
liability. As a result, FMCSA believes that most companies already have 
procedures or policies for investigating prospective employees. The 
Agency finds it difficult to believe that any responsible motor carrier 
would engage someone to exert controlling influence over its operations 
without engaging in a level of due diligence sufficient to understand 
the person's qualifications and prior work experience in the industry. 
The requirements of this rule are thus consistent with standard 
business practices, and, as a result, the Agency believes that motor 
carrier employers should not face additional burdens with respect to 
conducting the requisite due diligence in hiring. Placing limits on 
liability would discourage motor carriers from engaging in due 
diligence, and, accordingly, the Agency declines to adopt this 
suggestion.
    That said, the Agency acknowledges that there are limitations to 
what an employer can discover and that applicants can misrepresent 
their work experiences. But as the Agency stated in the NPRM, this rule 
targets only the worst motor carriers. The Agency must present evidence 
demonstrating willful conduct before it may issue an order to suspend 
or revoke operating authority registration. The Agency would not be 
able to sustain an order suspending or revoking registration merely on 
evidence that a person previously worked for a motor carrier that had a 
history of noncompliance or even that the person exercised controlling 
influence over a noncompliant motor carrier's operations. FMCSA could 
only suspend or revoke the registration on competent evidence that the 
person exercised controlling influence and was personally involved, 
either by act or omission, in a pattern or practice of avoiding 
compliance, or masking or otherwise concealing noncompliance. The 
Agency must therefore establish that the officer engaged in willful 
conduct to avoid compliance or hide noncompliance.
    Comment. NATC suggested that FMCSA create a database of individuals 
unqualified to work in the motor carrier industry. If FMCSA does not do 
that, NATC commented, it will place an unreasonable burden on motor 
carriers and will force the industry to develop its own standards and 
blacklists without due process. Werner and ATA suggested that the best 
solution is for FMCSA to maintain a list or clearinghouse of 
individuals who have engaged in a pattern or practice of avoiding 
compliance.

[[Page 3531]]

    FMCSA Response. The Agency acknowledges the commenters' interests 
in creating a clearinghouse for the purposes of identifying officers 
who have engaged in a pattern or practice of safety violations, but it 
declines to make this information available in the form of a list or 
clearinghouse. A clearinghouse or list would not take into account all 
of the factors the Agency might take under consideration such as 
remoteness in time and whether the individual continues to present a 
risk to safety or has rehabilitated him or herself. The Agency intends 
for this rule to address non-compliance in the context of the point in 
time and circumstances raised in the Agency Official's order. A list of 
the type the commenters suggested could have the effect of unfairly 
excluding individuals from the motor carrier industry. That said, 
FMCSA's enforcement decisions under this rule will be available to the 
public. Although those decisions will identify the individual officers 
who have engaged in a pattern or practice of safety violations, they 
will also provide the context and circumstances giving rise to the 
Agency Official's decision.
    Comment. UMA suggested that FMCSA should register individuals 
responsible for safety compliance and revoke that registration if the 
Agency can show noncompliance with safety regulations.
    FMCSA Response. Section 31135 authorized the Agency to suspend or 
revoke motor carrier registration for permitting an officer who engages 
in or has engaged in a pattern or practice of safety violations to act 
on the motor carrier's behalf. It did not authorize FMCSA to create a 
new registration scheme for those individuals who are employed by motor 
carriers to manage for safety compliance. To the contrary, in section 
31135, Congress authorized FMCSA to use its existing tools--suspension 
or revocation of a motor carrier's operating authority registration--to 
address patterns and practices of safety violations. FMCSA has never 
registered individuals who are not operating as motor carriers, brokers 
or freight forwarders; it need not do so now to effectuate Congress's 
intent.

Timing of Suspension or Revocation

    Comment. Truck Safety Coalition (TSC), IBT, and TIA each generally 
supported the rule. Each commenter expressed concern, however, that 
revocation and suspension orders issued under the rule do not take 
effect immediately and requested that FMCSA either make the orders 
immediately effective or dramatically reduce the time in which carriers 
have to respond to the action under Sec. Sec.  385.913 and 385.915.
    FMCSA Response: FMCSA appreciates these and other comments 
expressing concern that the suspension and revocation process would 
take too long or be unnecessarily cumbersome. In response to these 
comments, FMCSA decided to make changes to the suspension and 
revocation procedures in this rule, as described below. That said, MAP-
21, and in particular 49 U.S.C. 13905, requires that registered 
entities be given notice and an opportunity for a proceeding before 
FMCSA suspends or revokes operating authority registration. FMCSA does 
not have statutory authority, therefore, to issue a suspension or 
revocation order under 49 U.S.C. 31135 that becomes immediately 
effective and for which procedural due process is provided after the 
fact.
    Moreover, FMCSA carefully considered the timeframes and has 
determined that they are not only consistent with other Agency 
enforcement procedures, but also provide both a fair opportunity for 
the registered entity to be heard and an efficient process to stop 
carriers who flagrantly disregard requirements from operating. But we 
emphasize that this rule was not meant to address situations with 
carriers that the Agency considers an immediate threat to public 
safety; FMCSA has authority under 49 U.S.C. 521(b)(5) to issue an 
imminent hazard operations out-of-service order, which is immediately 
effective. FMCSA issues these orders when it determines that a 
carrier's operation substantially increases the likelihood of serious 
injury or death if not discontinued immediately. If the facts warrant, 
FMCSA could issue an order under today's rule, as well as an imminent 
hazard operations out-of-service order.
    Comment. FedEx suggested that the Agency amend proposed Sec.  
385.913(e) (Sec.  385.911(e) in the final rule) so that any suspension 
order is automatically stayed until after the Assistant Administrator 
conducts his review. Conversely, TSC commented that a motor carrier 
should not be able to continue operating for an additional 60 days 
after the Agency concludes that its registration should be suspended or 
revoked.
    FMCSA Response. FMCSA acknowledges the desire of TSC and others for 
swift resolution in an enforcement action while at the same time 
acknowledging FedEx's concern that carriers not be prematurely shut 
down. Loss of registration is a significant sanction; as such, FMCSA 
carefully balanced the public safety interest in suspending or revoking 
an unsafe motor carrier's registration with the need to protect the due 
process rights of motor carriers and individuals that are the subject 
of enforcement proceedings. One of those safeguards includes providing 
adequate opportunity for the carrier or individual to be heard before 
registration is suspended or revoked. In addition, this rule was not 
meant to replace other FMCSA enforcement tools to prevent carriers from 
operating when their operations present an immediate risk of harm, such 
as imminent hazard procedures at 49 U.S.C. 521 and 49 CFR 386.72.
    Comment. NATC commented that there are no time requirements by 
which the Agency must respond to a petition for administrative review. 
Similarly, TSC commented that the Agency does not have a fixed time 
within which to respond to a carrier's submission. Advocates 
recommended that proposed Sec. Sec.  385.913 and 385.915 establish a 
time within which the Assistant Administrator must render a decision on 
whether to suspend or revoke a motor carrier's registration.
    FMCSA Response. The rule provides for specific timeframes within 
which the Agency must act in response to a petition for administrative 
review of suspension or revocation proceedings. With respect to 
suspension proceedings, Sec.  385.911(e)(3) (proposed as Sec.  
385.913(e)(3)) requires FMCSA, through the Agency Official, to serve a 
response to the petition no later than 15 days following the service of 
the petition. Recognizing the Assistant Administrator's limited 
resources, FMCSA changed Sec.  385.911(e)(5) (proposed as Sec.  
385.913(e)(5)) to require the Assistant Administrator to issue a 
written decision within 60 days instead of 30 days. Section 385.913(e) 
applies the same time frame to administrative review procedures for 
revocation proceedings.
    Section 385.915 (proposed as Sec.  385.917) requires the Agency 
Official to act on a petition for rescission within 60 days. NATC is 
correct, however that the proposed rule did not establish a time frame 
for the Agency Official to respond to a request for administrative 
review of a denial of a petition for rescission under Sec.  385.915. To 
correct this omission, the Agency added a new paragraph (g) granting 
the Agency Official 15 days to respond to a petition for review of the 
order denying the petition for rescission. New paragraph (h) grants the 
Assistant Administrator 60 days from service of either the petition for 
review or the Agency

[[Page 3532]]

Official's timely-served response to serve a decision to act on the 
petition.

Privacy Analysis

    Comment. NATC commented that it disagreed with the Agency's privacy 
impact analysis because the rule fails to address the rights of the 
individuals who will be refused work, and that a determination without 
an impartial Federal judge directly impacts the privacy of the 
individuals involved.
    FMCSA Response. The Agency's privacy impact analysis explains how 
FMCSA will safeguard the personally identifying information the Agency 
collects or uses in connection with the rule. NATC's comment about the 
rights of individuals relates to the process the Agency has developed 
to protect individual rights. The Agency addresses those comments in 
the section entitled ``Due Process,'' above.

Economic Analysis

    Comment. NATC commented that the proposed rule would have a major 
impact on the motor carrier industry and stated that FMCSA had not 
documented the number of carriers that would be impacted by this rule, 
the economic impact of their loss of operating authority, or the fact 
that the impact will be smaller than $100 million. Furthermore, NATC 
commented that the rule would impose costs on carriers by requiring 
them to conduct background checks on new employees. Finally, NATC said 
that small entities will be adversely affected by the loss of 
individuals deemed unfit by the FMCSA.
    FMCSA Response. In the NPRM, the Agency estimated the cost of 
suspension or revocation of a company's operating authority. The use of 
the proposed rule against a typical carrier would require the State-
level re-licensing and re-registering of an average of 10 CMVs, which 
would cost at most $32,000. We estimate that the rule would have been 
applied six times in the year preceding this final rule, which would 
have created total societal costs of $192,000. The costs of this rule 
would remain well below the $100 million threshold for economic 
significance even if the Agency were to apply it to a much larger 
number of carriers each year; therefore, no detailed analysis is 
necessary. FMCSA has indicated that this rule would be used only in 
egregious circumstances. It is therefore unlikely to have a 
``significant economic impact on a substantial number of small 
entities'' (SEISNOSE). The small number of companies affected by this 
rulemaking allows FMCSA to certify that it will not have a SEISNOSE. 
With regard to background checks, employers vet new employees already 
as part of good business practices. Vetting for the purposes of 
ensuring compliance with this rule is consistent with established 
business practices and therefore does not impose additional costs on 
carriers.

Changes From the NPRM

    This final rule makes the following changes to the NPRM in response 
to comments. FMCSA separated the rule into two subparts: Subpart K 
governing patterns or practices of safety violations and Subpart L 
governing reincarnated carriers. As a result of this change, FMCSA 
eliminated proposed Sec.  385.911 and renumbered proposed Sec. Sec.  
385.913-385.923 as Sec. Sec.  385.911-385.921. FMCSA changed the 
regulatory text in Sec.  385.901 to make clear that this rule applies 
to all entities required to be registered under 49 U.S.C. Sec.  13902. 
In Sec.  385.903, FMCSA added a definition of ``controlling influence'' 
to clarify what types of conduct would trigger enforcement under this 
rule. In Sec.  385.909, FMCSA changed the title to ``Pattern or 
practice,'' to eliminate confusion and made a change to the factors 
that the Agency Official considers in determining whether a motor 
carrier or a person acting on its behalf has engaged in a pattern or 
practice of safety violations. The factor that previously considered 
the existence of pending or closed enforcement cases was changed to 
clarify that the Agency would be considering safety compliance history, 
including pending or closed enforcement cases. FMCSA changed the 
regulatory text in proposed Sec.  385.913(b) (now Sec.  385.911(b)) to 
make clear that the motor carrier's or intervening person's response to 
the show cause order must state the factual or legal basis for the 
response. FMCSA also changed the regulatory text in proposed Sec.  
385.913(e) (now Sec.  385.911(e)) to make clear the parties rights and 
responsibilities on administrative review. In proposed Sec.  385.915, 
now Sec.  385.913, FMCSA made changes that mirror the changes to Sec.  
385.911(e) and also eliminated the requirement that the Agency must 
first obtain a suspension order prior to initiating a revocation 
proceeding. In proposed Sec.  385.917 (now Sec.  385.915), FMCSA 
changed the rule to give the Agency Official 15 days to respond to a 
petition for review of a denial of a petition for rescission. FMCSA 
amended proposed Sec.  385.921, now Sec.  385.919, to make clear that 
nothing in this rule precludes the Agency from taking action against a 
carrier for other violations.
    New Subpart L consists of Sec. Sec.  385.1001-385.1019. Sections 
385.1001-385.1003 establish the applicability and defined terms 
relevant to reincarnated carriers under Subpart L. Sections 385.1005 
and 385.1007 establish the prohibition against reincarnation and the 
factors for evaluating a violation. They are substantively the same as 
what was proposed, with minor changes to conform to the statutory 
language and Sec.  386.73. Sections 385.1009-385.1019 contain the 
procedures for suspension and revocation, administrative review, 
rescission and penalties that are substantially the same as Sec. Sec.  
385.911-385.921. Subpart L is described in more detail in section-by-
section explanation below.
    Several other conforming changes were made throughout the document 
to update the regulatory text as a result of the renumbering of 
sections in Subpart K and the movement of other sections to Subpart L.

Section-by-Section Analysis

    FMCSA amends 49 CFR Parts 385 and 386 in the following ways.

Subpart K--Pattern or Practice of Safety Violations by Motor Carrier 
Management Section 385.901

    Section 385.901 remains primarily as proposed with one minor 
modification. FMCSA changed the regulatory text in Sec.  385.901 to 
make clear that this rule applies to all entities registered or 
required to be registered under 49 U.S.C. 13902. The explanatory text 
in the NPRM made clear that all entities required to register are 
subject to this rule; these changes are designed to eliminate any 
ambiguity.
Section 385.903
    The definitions of the terms Agency Official and officer remain as 
proposed. The term ``Agency Official'' is the Director of FMCSA's 
Office of Enforcement and Compliance or his or her designee. The term 
``officer'' is identical to the statutory definition codified at 49 
U.S.C. 31135. In response to comments requesting that the Agency define 
``controlling influence,'' the Agency added the following definition to 
Sec.  385.903: ``Controlling influence'' means having or exercising 
authority, whether by act or omission, to direct some or all of a motor 
carrier's operational policy and/or safety management controls.''
    Whether an officer exercises controlling influence is fact-
specific. For example, controlling influence could be authority or 
responsibility over day-to-day vehicle maintenance, or it could be 
about implementing or failing to implement operational safety policies. 
Someone exercising controlling

[[Page 3533]]

influence could be directing others working on the company's behalf 
regarding compliance with safety management controls. That person could 
be an employee or an outside consultant engaged to oversee safety 
management controls or the workers that manage such controls. The 
degree to which a person exercises controlling influence is the degree 
to which his or her conduct affects the carrier's operation and safety 
performance. To determine whether, and to what degree, a person 
exercises controlling influence, the Agency will consider the 
individual's role in the company, irrespective of title, in the context 
of all available information about the company's operations.
    To eliminate any potential confusion between the operating 
authority registration required under 49 U.S.C. 13902, which is subject 
to revocation under this rule, and USDOT registration required under 49 
U.S.C. 31134, which is not subject to revocation under this rule, the 
Agency added the following definition of ``registration'' applicable to 
Subpart K: ``Registration means the registration required under 49 
U.S.C. 13902, 49 CFR Part 365, and 49 CFR Part 368.''
Section 385.905
    Section 385.905(a)(1) and (2) remain substantively as proposed. 
These paragraphs describe the conduct that could trigger suspension or 
revocation of a motor carrier's operating authority registration. The 
only non-substantive change substitutes the words ``49 U.S.C. Chapter 
311, subchapter III'' for ``subchapter'' to make more clear that the 
safety regulations that could trigger the application of this rule are 
those promulgated under the authority of 49 U.S.C. Chapter 311, 
subchapter III. Section 385.905(b)(1) remains substantively as 
proposed, with one minor language change to make clear that the Agency 
Official may issue an order requiring compliance with FMSCA's safety 
requirements as a part of a suspension or revocation proceeding. 
Section 385.905(b)(2) remains as proposed. These paragraphs describe 
how the Agency would determine whether that conduct occurred.
    Paragraph (a)(1) sets forth the Agency's authority to suspend or 
revoke the motor carrier's operating authority registration if it 
engages or has engaged in a pattern or practice of avoiding regulatory 
compliance or masking noncompliance. Paragraph (a)(2) sets forth the 
Agency's authority to suspend or revoke a motor carrier's operating 
authority registration if it permits any person to exercise controlling 
influence over the motor carrier's operations if that person engages or 
has engaged in a pattern or practice of avoiding regulatory compliance 
or masking noncompliance while acting on behalf of any motor carrier. 
For purposes of this rule, a person acts on behalf of a motor carrier 
when the person exercises controlling influence over part or all of the 
motor carrier's operations. Paragraph (b) authorizes FMCSA's Director 
of the Office of Enforcement and Compliance or his or her designee (the 
Agency Official) to exercise the authorities established in paragraph 
(a).
    For purposes of clarity, the Agency deleted the substance of the 
reincarnated and affiliate carrier provisions that were proposed at 
Sec.  385.905(a)(3) and (b)(3), and moved them to Sec. Sec.  385.1005 
and 385.1007.
Section 385.907
    Section 385.907 remains as proposed. Under this section, the Agency 
Official determines whether a motor carrier or person acting on its 
behalf has avoided regulatory compliance or masked or otherwise 
concealed regulatory noncompliance based on the results of an 
investigation by FMCSA, State, or local enforcement personnel. This 
conduct includes failure to or concealing failure to: (1) comply with 
statutory or regulatory safety requirements; (2) comply with FMCSA, 
State, or local orders intended to redress violations of Federal 
regulatory safety requirements; (3) pay civil penalties for violations 
of regulatory safety requirements; or (4) respond to enforcement 
actions arising out of violations of regulatory safety requirements. 
Regulatory safety requirements include statutory or regulatory 
requirements prescribed under 49 U.S.C. Chapter 311, subchapter III, 
which include 49 U.S.C. sections 31131-31151 and 49 CFR Parts 380-387 
and 390-398.
Section 385.909
    The majority of this section remains as proposed. If the Agency 
Official concludes that the motor carrier or person acting on its 
behalf has failed, or concealed failure, to do one or more of the 
actions described in Sec.  385.907, the Agency Official determines 
whether such conduct constitutes a pattern or practice of noncompliance 
or masking noncompliance by considering the factors set forth in this 
section. In response to comments, FMCSA clarifies the meaning of the 
factor in paragraph (e) by changing the regulatory text to state 
``Safety compliance history, including pending or closed enforcement 
actions, if any.'' This change clarifies that the purpose of this 
factor is to evaluate a carrier's safety performance history. In 
addition, the Agency amended the title of this section to read 
``Pattern or practice,'' to streamline the organization of Subpart K.
Section 385.911
    For purposes of clarity, the Agency deleted the substance of 
proposed Sec.  385.911, which set forth the factors for evaluating 
reincarnated and affiliate motor carriers, and moved it to Sec.  
385.1007. As a result of this change, FMCSA re-numbered proposed Sec.  
385.913 to Sec.  385.911. This section authorizes the Agency Official 
to issue an order suspending the motor carrier's registration and 
establishes the procedures FMCSA will follow to suspend a motor 
carrier's registration, including administrative review. With the 
following exceptions, the substance of that section remains as 
proposed.
    FMCSA changed the regulatory text in paragraph (a)(2) to make clear 
that any order triggering a revocation proceeding would have to be one 
directing compliance with safety requirements. FMCSA changed the 
regulatory text in paragraph (b)(4) to make clear that motor carriers 
(and by extension intervening persons) must state the factual or legal 
basis for their responses to an order to show cause issued under this 
section. Accordingly, and like safety rating proceedings under 49 CFR 
Part 385, a motor carrier or intervening person who alleges that the 
show cause order was issued in error has the burden of proof to 
demonstrate error. This paragraph is also consistent with the Agency's 
current practice under 49 U.S.C. 13905, which governs suspension and 
revocation proceedings.
    FMCSA also changed the regulatory text in paragraph (d)(2)(i) to 
require that the Agency Official's suspension order include information 
on how to submit a petition for administrative review, which is 
described in paragraph (e) of this section. In addition, FMCSA amended 
the language of paragraph (e) (introductory paragraph) to include 
specific instructions on how to petition the Assistant Administrator 
for review of the Agency Official's order.
    FMCSA changed the regulatory text in paragraph (e)(3) to make clear 
that the Agency Official must respond with legal argument or evidence 
to support issues a petitioner raises on review. The changes also make 
clear that the Agency Official may base his or her decision on direct 
or circumstantial evidence, including the reasonable inferences drawn 
from that evidence, in addition to

[[Page 3534]]

other types of documents and testimony. Paragraph (e)(4) makes clear 
that the Assistant Administrator's review is limited to those issues 
identified in the petition for review. The Assistant Administrator may, 
however, require the parties to produce additional evidence. If the 
petitioner does not provide the additional evidence requested, this 
paragraph authorizes the Assistant Administrator to dismiss the 
petition for review. This provision is consistent with the procedures 
for safety rating cases in 49 CFR part 385.
    Changes to paragraph (e)(5) extend the Assistant Administrator's 
decision making period from 30 to 60 days. The Agency made this change 
acknowledging the heavy case load the Assistant Administrator carries 
as well as his or her limited resources.
Section 385.913
    This section was proposed as Sec.  385.915, but was renumbered to 
Sec.  385.913. It establishes the procedures for revoking a motor 
carrier's operating authority registration for failure to comply with 
an order issued under Subpart K. To conform to existing Agency 
practices, this section was amended to eliminate the requirement that 
the Agency first obtain a suspension order prior to seeking revocation 
of a motor carrier's operating authority registration. This section now 
requires that the Agency determine that a motor carrier has willfully 
violated an order directing compliance for a period of at least 30 days 
before revoking operating authority registration, but that order is no 
longer required to be a suspension order issued under Sec.  385.911, or 
even an order issued under part 385, subpart K. Changes to this section 
make clear that any order directing compliance with FMCSA's safety 
regulations and in effect for more than 30 days could form the basis 
for revocation under this section. Finally, FMCSA made changes to 
paragraph (b)(4) that are identical to the changes made at Sec.  
385.911(b)(4) and changes to paragraph (d)(2)(i) that are identical to 
the changes made at Sec.  385.911(d)(2)(i).
    The rest of the substance of this section remains as proposed.
Section 385.915
    This section was proposed as Sec.  385.917, but was renumbered to 
Sec.  385.915. This section establishes the procedures for motor 
carriers and intervening persons to file petitions for rescission of an 
order issued under this rule. The Agency added a provision stating that 
a motor carrier is permitted to resume operations, so long as it is 
otherwise in compliance with FMCSA's requirements, as soon as a 
suspension order is rescinded. Although this was implied in the text as 
proposed, the Agency decided to change the regulatory text to make this 
clear. The Agency also made minor changes to make clear that a motor 
carrier that applies for and is granted registration after rescission 
of a revocation order would be subject to the new entrant requirements 
at 49 CFR part 385. The Agency made changes to paragraph (f), 
describing how to file a petition for review, that are identical to the 
changes made at Sec.  385.911(e). Finally, the Agency added a new 
paragraph (g) (renumbering old paragraph (g) as paragraph (h)) that 
sets a time limit of 15 days for the Agency Official to respond to a 
petition for review. Previously, no time limit was set. New paragraph 
(h) allows the Assistant Administrator 60 days from service of the 
petition or a timely-filed response, whichever is later, to act on the 
petition.
Section 385.917
    This section was proposed as Sec.  385.919, but was renumbered to 
Sec.  385.917. This section states that orders issued under the rule 
would not amend or supersede existing FMCSA orders, prohibitions, or 
requirements. The Agency amended this section to state, in addition, 
that suspension or revocation under this rule is not the exclusive 
remedy for FMCSA to pursue against motor carriers that violate the 
FMCSRs. It also states that nothing precludes FMCSA from taking 
enforcement action against a motor carrier's operating authority 
registration or USDOT registration for other conduct violating 
applicable statutes, regulations or FMCSA orders. FMCSA could take that 
action as a part of a separate proceeding, or in combination with a 
proceeding instituted under this rule.
Section 385.919
    This section was proposed as Sec.  385.921, but was renumbered to 
Sec.  385.919. This section states that existing statutory civil and 
criminal penalties and sanctions could apply to motor carriers subject 
to enforcement under this rule. For example, among other things, FMCSA 
could also seek revocation of a motor carrier's USDOT number 
registration pursuant to its authority under 49 U.S.C. 31134(c).
Section 385.921
    This section was proposed as Sec.  385.923, but was renumbered to 
Sec.  385.921. This section states that the regulations governing the 
service of documents and the computation of time at 49 CFR 386.6 and 
386.8 would apply to proceedings under this rule, except as otherwise 
provided. The Agency made one minor change to this section. It now 
states that all documents served under subpart K must include a 
certificate of service.

Subpart L--Reincarnated and Affiliated Motor Carriers

Section 385.1001
    This section establishes that Subpart L--Reincarnated and 
Affiliated Motor Carriers--applies to for-hire motor carriers holding 
or required to hold operating authority registration.
Section 385.1003
    This section defines Agency Official, using the same definition 
that was proposed in Sec.  385.903. It also defines a reincarnated or 
affiliated carrier as one with common ownership, common management, 
common control or common familial relationship. To eliminate any 
potential confusion between the operating authority registration 
required under 49 U.S.C. 13902, which is subject to revocation under 
this rule, and USDOT registration required under 49 U.S.C. 31134, which 
is not subject to revocation under this rule, the Agency added the 
following definition of ``registration'' applicable to Subpart L: 
``Registration means the registration required under 49 U.S.C. 13902, 
49 CFR part 365, and 49 CFR part 368.''
Section 385.1005
    This section prohibits carriers from reincarnating or using 
affiliates to avoid compliance with safety requirements.
Section 385.1007
    Section 385.1007 sets forth the factors the Agency Official 
evaluates to determine whether a carrier or carriers have violated the 
prohibition on reincarnating or using affiliates to avoid compliance 
with safety requirements. Paragraph (a) establishes that the Agency 
Official may issue an order to suspend or revoke one or more motor 
carriers' operating authority registration for violations of Sec.  
385.1005. Paragraph (b) establishes that the Agency Official must use 
the factors set forth at Sec.  386.73 to determine whether a motor 
carrier has reincarnated or whether two or more motor carriers are 
affiliates. These factors are substantively the same as those that were 
in proposed Sec.  385.911.
    FMCSA recognizes that motor carriers may have legitimate business 
purposes for affiliating or changing their business identity and that 
this conduct is not per se unlawful. This rule is triggered only when 
one or more carriers reincarnate or affiliate for the purpose of 
avoiding

[[Page 3535]]

compliance or masking or concealing regulatory noncompliance or a 
history of noncompliance. Paragraph (c) identifies conduct that 
constitutes avoiding or concealing regulatory noncompliance or a 
history of noncompliance. The conduct in paragraph (c) is substantively 
similar to that which was proposed in Sec.  385.907. The Agency made 
minor changes to the wording of the four proposed types of conduct and 
added a fifth type of conduct: avoiding being linked with a negative 
compliance history. These changes conform this rule to statutory 
language at 49 U.S.C. 31135(b)(1), which, in addition to prohibiting 
motor carriers from reincarnating or affiliating to avoid compliance, 
or mask or otherwise conceal non-compliance, also prohibits motor 
carriers from concealing a history of non-compliance. This change also 
aligns today's final rule with the pre-existing regulatory scheme at 
Sec.  386.73, which uses identical language.
Section 385.1009
    This section sets forth procedures for suspending a motor carrier's 
operating authority registration. These procedures are substantively 
the same as those in Sec.  385.911, which apply to suspensions based on 
patterns or practices of safety violations. The only difference is 
that, because of the differences between engaging in pattern or 
practice of safety violations and reincarnating or affiliating to avoid 
regulatory compliance, there are no provisions for intervening persons.
Section 385.1011
    This section sets forth procedures for revoking a motor carrier's 
operating authority registration. These procedures are substantively 
the same as those in Sec.  385.913, which apply to suspensions based on 
patterns or practices of safety violations. The only difference is that 
this section does not contain a provision for intervening persons 
because there would not be an intervening person in a reincarnated or 
affiliated carrier case.
Section 385.1013
    This section establishes motor carriers seeking to file petitions 
for rescission of an order issued under this rule should follow the 
procedures in Sec.  385.915.
Section 385.1015
    This section, which is identical to Sec.  385.917, states that 
orders issued under the rule would not amend or supersede existing 
FMCSA orders, prohibitions, or requirements. In addition, suspension or 
revocation of operating authority under this rule is not the exclusive 
remedy for FMCSA to pursue against motor carriers that violate the 
FMCSRs. For example, among other things, FMCSA could also seek 
revocation of a motor carrier's USDOT number registration pursuant to 
its authority under 49 U.S.C. 31134(c).
Section 385.1017
    This section establishes that motor carriers that violate 49 CFR 
part 385, subpart L are subject to civil or criminal penalties.
Section 385.1019
    This section states that the regulations governing the service of 
documents and the computation of time at 49 CFR 386.6 and 386.8 would 
apply to proceedings under this rule. The Agency made one minor change 
to this section. It now states that all documents served under subpart 
L must include a certificate of service.

Appendix A to Part 386--Penalty Schedule; Violations of Notices and 
Orders

    The substance of this section remains as proposed, with minor 
changes caused by the renumbering of sections in Subpart K and movement 
of others to Subpart L. This section establishes the penalty for 
operating in violation of an order suspending or revoking operating 
authority registration under this rule.

Rulemaking Analyses

Executive Order 12866 (Regulatory Planning and Review) as Supplemented 
by E.O. 13563 and DOT Regulatory Policies and Procedures

    This action does not meet the criteria for a significant regulatory 
action, either as specified in Executive Order 12866, as supplemented 
by Executive Order 13563 (76 FR 3821, January 18, 2011) or within the 
meaning of the DOT regulatory policies and procedures (44 FR1103, 
February 26, 1979). The estimated economic costs of the rule do not 
exceed the $100 million annual threshold nor does the Agency expect the 
rule to have substantial Congressional or public interest. Therefore, 
this rule has not been formally reviewed by the Office of Management 
and Budget.
    FMCSA assessed the potential costs associated with this rule. While 
there should be no cost associated with this rule, there could 
potentially be cost associated with the transfer to other firms of 
assets from motor carriers that have had their operating authority 
registration suspended or revoked. These State-level license and 
registration fees can total $3,200 per CMV, depending on weight. For an 
average carrier with 10 vehicles, the cost of re-registering the 
vehicles and returning them to operation for a different carrier would 
be an estimated $32,000. We estimate that the rule would have been 
applied six times in the year preceding this final rule, which would 
have created total societal costs of $192,000. Therefore, the costs of 
this rule will remain below the $100 million threshold for economic 
significance even if the Agency were to apply it to a much larger 
number of carriers each year. These costs will not reach the level of 
economic significance unless an unexpectedly large number of carriers 
is suspended which, as previously noted, is highly unlikely due to the 
egregious nature of the circumstances that would provoke action under 
this rule. As a result, these costs were found to be economically 
insignificant. Moreover, any transfer costs incurred could have been 
avoided by complying with the FMCSRs or declining to mask or otherwise 
conceal evidence of noncompliance with the FMCSRs. Motor carriers that 
have their operating authority registration suspended or revoked would 
lose revenue, but this revenue would be reallocated to other firms.
    Additionally, FMCSA evaluated the effects of this final rule in 
accordance with Executive Order 12898 and determined that there are no 
environmental justice issues associated with its provisions nor any 
collective environmental impacts resulting from its promulgation. 
Environmental justice issues would be raised if there were 
``disproportionate'' and ``high and adverse impact'' on minority or 
low-income populations. This NPRM is exempt from analysis under the 
National Environmental Policy Act due to a categorical exclusion (see 
below).

Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) 
requires Federal agencies to consider the effects of the regulatory 
action on small business and other small entities and to minimize any 
significant economic impact. The term ``small entities'' comprises 
small businesses and not-for-profit organizations that are 
independently owned and operated and are not dominant in their fields, 
and governmental jurisdictions with a population of less than 
50,000.\2\
---------------------------------------------------------------------------

    \2\ Regulatory Flexibility Act (5 U.S.C. 601 et seq.) see 
National Archives at https://www.archives.gov/federal-register/laws/regulatory-flexibility/601.html.
---------------------------------------------------------------------------

    Accordingly, DOT policy requires an analysis of the impact of all 
regulations on small entities, and mandates that

[[Page 3536]]

agencies strive to lessen any adverse effects on these businesses. 
Under the Regulatory Flexibility Act, as amended by the Small Business 
Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 
857), the rule is not expected to have a significant economic impact on 
a substantial number of small entities. Consequently, I certify the 
action would not have a significant economic impact on a substantial 
number of small entities.

Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement 
Fairness Act of 1996 (Pub. L. 104-121), FMCSA wants to assist small 
entities in understanding this rule so that they can better evaluate 
its effects on them. If the rule would affect your small business, 
organization, or governmental jurisdiction and you have questions 
concerning its provisions or options for compliance, please consult the 
FMCSA point of contact, Juan Moya, listed in the FOR FURTHER 
INFORMATION CONTACT section of this rule.
    Small businesses may send comments on the actions of Federal 
employees who enforce or otherwise determine compliance with Federal 
regulations to the Small Business and Agriculture Regulatory 
Enforcement Ombudsman and the Regional Small Business Regulatory 
Fairness Boards. The Ombudsman evaluates these actions annually and 
rates each agency's responsiveness to small business. If you wish to 
comment on actions by employees of FMCSA, call 1-888-REG-FAIR (1-888-
734-3247).

Unfunded Mandates Reform Act of 1995

    This rule would not impose an unfunded Federal mandate, as defined 
by the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532 et seq.), 
that would result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of $150.7 
million (which is the value of $100 million in 2012 after adjusting for 
inflation) or more in any 1 year.

National Environmental Policy Act and Clean Air Act

    FMCSA analyzed this Final Rule for the purpose of the National 
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.) and 
determined under its environmental procedures Order 5610.1, published 
February 24, 2004 (69 FR 9680), that this action does not have any 
effect on the quality of the environment. Therefore, this Final Rule is 
categorically excluded from further analysis and documentation in an 
environmental assessment or environmental impact statement under FMCSA 
Order 5610.1, paragraph 6(u) of Appendix 2. The Categorical Exclusion 
under paragraph 6(u) relates to regulations implementing rules of 
practice for proceedings before the Assistant Administrator and to 
determine whether a motor carrier has failed to comply with applicable 
statutes and regulation and to issue an appropriate order to compel 
compliance, which is the focus of this rulemaking. A Categorical 
Exclusion determination is available for inspection or copying in the 
regulations.gov Web site listed under ADDRESSES.
    In addition to the NEPA requirements to examine impacts on air 
quality, the Clean Air Act (CAA) as amended (42 U.S.C. 7401 et seq.) 
also requires FMCSA to analyze the potential impact of its actions on 
air quality and to ensure that FMCSA actions conform to State and local 
air quality implementation plans. No additional contributions to air 
emissions are expected from this rule and FMCSA expects the rule to not 
be subject to the Environmental Protection Agency's General Conformity 
Rule (40 CFR parts 51 and 93).

Paperwork Reduction Act

    This rule would call for no new collection of information under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

Executive Order 12630 (Taking of Private Property)

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

Executive Order 12988 (Civil Justice Reform)

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

Executive Order 13045 (Protection of Children)

    Executive Order 13045, ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (April 23, 1997, 62 FR 19885), requires 
that agencies issuing economically significant rules, which also 
concern an environmental health or safety risk that an Agency has 
reason to believe may disproportionately affect children, must include 
an evaluation of the environmental health and safety effects of the 
regulation on children. Section 5 of Executive Order 13045 directs an 
Agency to submit for a covered regulatory action an evaluation of its 
environmental health or safety effects on children. The FMCSA has 
determined that this rule is not a covered regulatory action as defined 
under Executive Order 13045. This determination is based on the fact 
that this rule is not economically significant under Executive Order 
12866, because the changes in this rule would not have an impact of 
$100 million or more in any given year. In addition, this rule does not 
constitute an environmental health risk or safety risk that would 
disproportionately affect children.

Executive Order 13132 (Federalism)

    A rule has implications for federalism under Executive Order 13132, 
Federalism, if it has a substantial direct effect on State or local 
governments and would either preempt State law or impose a substantial 
direct cost of compliance on States or localities. FMCSA has analyzed 
this rule under that Order and has determined that it does not have 
implications for federalism.

Executive Order 12372 (Intergovernmental Review)

    The regulations implementing Executive Order 12372 regarding 
intergovernmental consultation on Federal programs and activities do 
not apply to this program.

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

    The FMCSA has analyzed this rule under Executive Order 13211, 
``Actions Concerning Regulations That Significantly Affect Energy 
Supply, Distribution, or Use.'' This rule is not a significant energy 
action within the meaning of section 4(b) of the Executive Order. This 
rule is a procedural action, is not economically significant, and would 
not have a significant adverse effect on the supply, distribution, or 
use of energy.

Privacy Impact Analysis

    FMCSA conducted a Privacy Threshold Analysis for the Final Rule and 
determined that the rulemaking has privacy implications that will be 
addressed by modifying the following two documentations: FMCSA 
Enforcement Management Information System, Privacy Impact Assessment 
and DOT/FMCSA 002 System of Records Notice for Motor Carrier Safety 
Proposed Civil and Criminal Enforcement Cases. These documents have 
been placed in the docket.

[[Page 3537]]

List of Subjects

49 CFR Part 385

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

49 CFR Part 386

    Administrative practice and procedure, Brokers, Freight forwarders, 
Hazardous materials transportation, Highway safety, Motor carriers, 
Motor vehicle safety, Penalties.

    For the reasons stated in the preamble, FMCSA amends title 49 CFR, 
Code of Federal Regulations, chapter III, as follows:

PART 385--SAFETY FITNESS PROCEDURES

0
1. The authority citation for part 385 is revised to read as follows:

    Authority: 49 U.S.C. 113, 504, 521(b), 5105(e), 5109, 13901-
13905, 14701, 31133, 31135, 31136, 31137(a), 31144, 31148, and 
31502; Sec. 113(a), Pub. L. 103-311; Sec. 408, Pub. L. 104-88; Sec. 
350, Pub. L. 107-87; and 49 CFR 1.87.


0
2. Add a new subpart K, consisting of Sec. Sec.  385.901 through 
385.921, to read as follows:
Subpart K--Pattern or Practice of Safety Violations by Motor Carrier 
Management
385.901 Applicability.
385.903 Definitions.
385.905 Suspension or revocation of registration.
385.907 Regulatory noncompliance.
385.909 Pattern or practice.
385.911 Suspension proceedings.
385.913 Revocation proceedings.
385.915 Petitions for rescission.
385.917 Other orders unaffected; not exclusive remedy.
385.919 Penalties.
385.921 Service and computation of time.

Subpart K--Pattern or Practice of Safety Violations by Motor 
Carrier Management


Sec.  385.901  Applicability.

    The requirements in this subpart apply to for-hire motor carriers, 
employers, officers and persons registered or required to be registered 
under 49 U.S.C. 13902, 49 CFR part 365, and 49 CFR part 368. When used 
in this subpart, the term ``motor carrier'' includes all for-hire motor 
carriers, employers, officers and other persons, however designated, 
that are registered or required to be registered under 49 U.S.C. 13902, 
49 CFR part 365, and 49 CFR part 368.


Sec.  385.903  Definitions.

    As used in this subpart:
    Agency Official means the Director of FMCSA's Office of Enforcement 
and Compliance or his or her designee.
    Controlling Influence means having or exercising authority, whether 
by act or omission, to direct some or all of a motor carrier's 
operational policy and/or safety management controls.
    Officer means an owner, director, chief executive officer, chief 
operating officer, chief financial officer, safety director, vehicle 
maintenance supervisor, and driver supervisor of a motor carrier, 
regardless of the title attached to those functions, and any person, 
however designated, exercising controlling influence over the 
operations of a motor carrier.
    Registration means the registration required under 49 U.S.C. 13902, 
49 CFR part 365, and 49 CFR part 368.


Sec.  385.905  Suspension or revocation of registration.

    (a) General. (1) If a motor carrier engages or has engaged in a 
pattern or practice of avoiding compliance, or masking or otherwise 
concealing noncompliance, with regulations on commercial motor vehicle 
safety under 49 U.S.C. Chapter 311, subchapter III, FMCSA may suspend 
or revoke the motor carrier's registration.
    (2) If a motor carrier permits any person to exercise controlling 
influence over the motor carrier's operations and that person engages 
in or has engaged in a pattern or practice of avoiding compliance, or 
masking or otherwise concealing noncompliance, with regulations on 
commercial motor vehicle safety 49 U.S.C. Chapter 311, subchapter III 
while acting on behalf of any motor carrier, FMCSA may suspend or 
revoke the motor carrier's registration.
    (b) Determination. (1) The Agency Official may issue an order to 
revoke or suspend a motor carrier's registration, or require compliance 
with an order issued to redress violations of a statutory or regulatory 
requirement prescribed under 49 U.S.C. Chapter 311, subchapter III, 
upon a determination that the motor carrier engages or has engaged in a 
pattern or practice of avoiding regulatory compliance or masking or 
otherwise concealing regulatory noncompliance.
    (2) The Agency Official may issue an order to revoke or suspend a 
motor carrier's registration, or require compliance with an order 
issued to redress violations of a statutory or regulatory requirement 
prescribed under 49 U.S.C. Chapter 311, subchapter III, upon a 
determination that the motor carrier permitted a person to exercise 
controlling influence over the motor carrier's operations if that 
person engages in or has engaged in a pattern or practice of avoiding 
regulatory compliance or masking or otherwise concealing regulatory 
noncompliance.


Sec.  385.907  Regulatory noncompliance.

    A motor carrier or person acting on behalf of a motor carrier 
avoids regulatory compliance or masks or otherwise conceals regulatory 
noncompliance by, independently or on behalf of another motor carrier, 
failing to or concealing failure to:
    (a) Comply with statutory or regulatory requirements prescribed 
under 49 U.S.C., Chapter 311, subchapter III;
    (b) Comply with an FMCSA or State order issued to redress 
violations of a statutory or regulatory requirement prescribed under 49 
U.S.C., Chapter 311, subchapter III;
    (c) Pay a civil penalty assessed for a violation of a statutory or 
regulatory requirement prescribed under 49 U.S.C., Chapter 311, 
subchapter III; or
    (d) Respond to an enforcement action for a violation of a statutory 
or regulatory requirement prescribed under 49 U.S.C., Chapter 311, 
subchapter III.


Sec.  385.909  Pattern or practice.

    The Agency Official may determine that a motor carrier or person 
acting on behalf of a motor carrier engages or has engaged in a pattern 
or practice of avoiding regulatory compliance, or masking or otherwise 
concealing regulatory noncompliance for purposes of this subpart, by 
considering, among other things, the following factors, which, in the 
case of persons acting on behalf of a motor carrier, may be related to 
conduct undertaken on behalf of any motor carrier:
    (a) The frequency, remoteness in time, or continuing nature of the 
conduct;
    (b) The extent to which the regulatory violations caused by the 
conduct create a risk to safety;
    (c) The degree to which the conduct has affected the safety of 
operations, including taking into account any crashes, deaths, or 
injuries associated with the conduct;
    (d) Whether the motor carrier or person acting on a motor carrier's 
behalf knew or should have known that the conduct violated applicable 
statutory or regulatory requirements;
    (e) Safety performance history, including pending or closed 
enforcement actions, if any;
    (f) Whether the motor carrier or person acting on a motor carrier's 
behalf engaged in the conduct for the purpose of avoiding compliance or 
masking or otherwise concealing noncompliance; and

[[Page 3538]]

    (g) In the case of a person acting on a motor carrier's behalf, the 
extent to which the person exercises a controlling influence on the 
motor carrier's operations.


Sec.  385.911  Suspension proceedings.

    (a) General. The Agency Official may issue an order to suspend a 
motor carrier's registration based on a determination made in 
accordance with Sec.  385.905(b).
    (b) Commencement of proceedings. The Agency Official commences a 
proceeding under this section by serving an order to show cause to the 
motor carrier and, if the proceeding is based on the conduct of another 
person, by also serving a copy on the person alleged to have engaged in 
the pattern or practice that resulted in a proceeding instituted under 
this section, which:
    (1) Provides notice that the Agency is considering whether to 
suspend the motor carrier's registration;
    (2) Provides notice of the factual and legal basis for the order;
    (3) Directs the motor carrier to show good cause within 30 days of 
service of the order to show cause why its registration should not be 
suspended;
    (4) Informs the motor carrier that its response to the order to 
show cause must be in writing, state the factual and legal basis for 
its response, and include all documentation, if any, the motor carrier 
wants considered;
    (5) Informs the motor carrier of the address and name of the person 
to whom the response should be directed and served;
    (6) Provides notice to the person(s) alleged to have engaged in the 
pattern or practice that resulted in the proceeding instituted under 
this section, if any, of their right to intervene in the proceeding; 
and
    (7) Informs the motor carrier that its registration will be 
suspended on the 35th day after service of the order, if the motor 
carrier or an intervening person does not respond to the order.
    (c) Right of individual person(s) to intervene. A person(s) alleged 
to have engaged in the pattern or practice that resulted in a 
proceeding under this section may intervene in the proceeding. The 
person(s) may--but are not required to--serve a separate response and 
supporting documentation to an order served under paragraph (b) of this 
section, within 30 days of being served with the order. Failure to 
timely serve a response constitutes waiver of the right to intervene.
    (d) Review of response. The Agency Official will review the 
responses to the order to show cause and determine whether the motor 
carrier's registration should be suspended.
    (1) The Agency Official may take the following actions:
    (i) If the Agency Official determines that the motor carrier's 
registration should be suspended, he or she will enter an order 
suspending the registration;
    (ii) If the Agency Official determines that it is not appropriate 
to suspend the motor carrier's registration, he or she may enter an 
order directing the motor carrier to correct compliance deficiencies; 
or
    (iii) If the Agency Official determines the motor carrier's 
registration should not be suspended and a compliance order is not 
warranted, he or she will enter an order terminating the proceeding.
    (2) If the Agency Official issues an order to suspend the motor 
carrier's registration, the order will:
    (i) Provide notice to the motor carrier and any intervening 
person(s) of the right to petition for administrative review of the 
order within 15 days of service of the order suspending registration, 
and provide notice of the procedures in paragraph (e) of this section;
    (ii) Provide notice that a timely petition for administrative 
review will stay the effective date of the order unless the Assistant 
Administrator orders otherwise for good cause; and
    (iii) Provide notice that failure to timely serve a petition for 
administrative review constitutes waiver of the right to contest the 
order suspending the registration and will result in the order becoming 
a Final Agency Order 20 days after it is served.
    (e) Administrative review. The motor carrier or the intervening 
person(s) may petition the Assistant Administrator for review of an 
order issued under paragraph (d)(1)(i) of this section. The petition 
must be in writing and served on the Assistant Administrator. Service 
on the Assistant Administrator is effected by delivering a copy to 
USDOT Dockets, Docket Operations, 1200 New Jersey Avenue, West Building 
Ground Floor, Room 12-140, SE., Washington, DC 20590-0001 or by 
submitting the documents electronically to www.regulations.gov. The 
petition must also be served on all parties to the proceedings and on 
Adjudications Counsel, Federal Motor Carrier Safety Administration, 
1200 New Jersey Ave. SE., Washington, DC 20590-0001.
    (1) A petition for review must be served within 15 days of the 
service date of the order for which review is requested. Failure to 
timely serve a request for review waives the right to request review.
    (2) A petition for review must include:
    (i) A copy of the order in dispute;
    (ii) A copy of the petitioner's response to the order in dispute, 
with supporting documents if any;
    (iii) A statement of all legal, factual and procedural issues in 
dispute; and
    (iv) Written argument in support of the petitioner's position 
regarding the legal, factual or procedural issues in dispute.
    (3) The Agency Official must serve a response to the petition for 
review no later than 15 days following receipt of the petition. The 
Agency Official must address each assignment of error by producing 
evidence or legal argument which supports the Agency Official's 
determination on that issue. The Agency Official's determination may be 
supported by circumstantial or direct evidence and the reasonable 
inferences drawn therefrom.
    (4) The Assistant Administrator's review is limited to the legal, 
factual and procedural issues identified in the petition for review. 
The Assistant Administrator may, however, ask the parties to submit 
additional information. If the petitioner does not provide the 
information requested, the Assistant Administrator may dismiss the 
petition for review.
    (5) The Assistant Administrator will serve a written decision on 
the petition for review within 60 days of the close of the time period 
for serving a response to the petition for review or the date of 
service of the response served under paragraph (e)(3), whichever is 
later.
    (6) If a petition for review is timely served in accordance with 
this section, the disputed order is stayed, pending the Assistant 
Administrator's review. The Assistant Administrator may enter an order 
vacating the automatic stay in accordance with the following 
procedures:
    (i) The Agency Official may file a motion to vacate the automatic 
stay demonstrating good cause why the order should not be stayed. The 
Agency Official's motion must be in writing, state the factual and 
legal basis for the motion, be accompanied by affidavits or other 
evidence relied on, and be served on all parties.
    (ii) Within 10 days of service of the motion to vacate the 
automatic stay, the petitioner may serve an answer in opposition, 
accompanied by affidavits or other evidence relied on.
    (iii) The Assistant Administrator will issue a decision on the 
motion to vacate within 10 days of the close of the time period for 
serving the answer to the

[[Page 3539]]

motion. The 60-day period for a decision on the petition for review in 
paragraph (e)(5) of this section does not begin until the Assistant 
Administrator issues a decision on the motion to vacate the stay.
    (7) The Assistant Administrator's decision on a petition for review 
of an order issued under this section constitutes the Final Agency 
Order.


Sec.  385.913  Revocation proceedings.

    (a) General. The Agency Official may issue an order to revoke a 
motor carrier's registration, if he or she:
    (1) Makes a determination in accordance with Sec.  385.905(b), and
    (2) Determines that the motor carrier has willfully violated any 
order directing compliance with any statutory or regulatory requirement 
prescribed under 49 U.S.C., Chapter 311, subchapter III for a period of 
at least 30 days.
    (b) Commencement of proceedings. The Agency Official commences a 
proceeding under this section by serving an order to show cause to the 
motor carrier and, if the proceeding is based on the conduct of another 
person, by also serving a copy on the person alleged to have engaged in 
the pattern or practice that resulted in a proceeding instituted under 
this section, which:
    (1) Provides notice that the Agency is considering whether to 
revoke the motor carrier's registration;
    (2) Provides notice of the factual and legal basis for the order;
    (3) Directs the motor carrier to comply with a statute, regulation 
or condition of its registration;
    (4) Informs the motor carrier that the response to the order to 
show cause must be in writing, state the factual and legal basis for 
its response and include all documentation, if any, the motor carrier 
wants considered;
    (5) Informs the motor carrier of the address and name of the person 
to whom the response should be directed and served;
    (6) Provides notice to the person, if any, of his or her right to 
intervene in the proceeding within 30 days of service of the order; and
    (7) Informs the motor carrier that its registration may be revoked 
on the 35th day after service of the order issued under this section if 
the motor carrier or intervening person has not demonstrated, in 
writing, compliance with the order, or otherwise shown good cause why 
compliance is not required or the registration should not be revoked.
    (c) Right of individual person(s) to intervene. A person(s) alleged 
to have engaged in the pattern or practice that resulted in a 
proceeding instituted under this section may intervene in the 
proceeding. The person(s) may--but are not required to--serve a 
separate response and supporting documentation to an order served under 
paragraph (b) of this section, within 30 days of being served with the 
order. Failure to timely serve a response constitutes waiver of the 
right to intervene. If the Agency Official previously issued an order 
under Sec.  385.911 based on the same conduct, a person who was given 
the opportunity to but did not intervene under Sec.  385.911(c) may not 
intervene under this section.
    (d) Review of response. The Agency Official will review the 
response(s) to the order and determine whether the motor carrier's 
registration should be revoked.
    (1) The Agency Official will take one of the following actions:
    (i) If the Agency Official determines the motor carrier's 
registration should be revoked, he or she will enter an order revoking 
the motor carrier's registration; or
    (ii) If the Agency Official determines the motor carrier's 
registration should not be revoked, he or she will enter an order 
terminating the proceeding.
    (2) If the Agency Official issues an order to revoke the motor 
carrier's registration, the order will:
    (i) Provide notice to the motor carrier and any intervening 
person(s) of the right to petition for administrative review of the 
order within 15 days of service of the order revoking the motor 
carrier's registration, and provide notice of the procedures in Sec.  
385.911(e);
    (ii) Provide notice that a timely petition for review will stay the 
effective date of the order unless the Assistant Administrator orders 
otherwise for good cause; and
    (iii) Provide notice that failure to timely serve a petition for 
review constitutes waiver of the right to contest the order revoking 
the motor carrier's registration and will result in the order becoming 
a Final Agency Order 20 days after it is served.
    (iv) Provide notice that a Final Agency Order revoking the motor 
carrier's registration will remain in effect and bar approval of any 
subsequent application for registration until rescinded by the Agency 
Official pursuant to Sec.  385.915.
    (e) Administrative review. The motor carrier or intervening person 
may petition the Assistant Administrator for review of an order issued 
under paragraph (d)(1)(i) of this section by following the procedures 
set forth in Sec.  385.911(e).


Sec.  385.915  Petitions for rescission.

    (a) A motor carrier or intervening person may submit a petition for 
rescission of an order suspending or revoking registration under this 
subpart based on action taken to correct the deficiencies that resulted 
in the suspension or revocation.
    (b) A petition for rescission must be made in writing to the Agency 
Official.
    (c) A petition for rescission must include a copy of the order 
suspending or revoking the motor carrier's registration, a factual 
statement identifying all corrective action taken, and copies of 
supporting documentation.
    (d) The Agency Official will issue a written decision on the 
petition within 60 days of service of the petition. The decision will 
state the factual and legal basis for the decision.
    (e) If the Agency Official grants the petition, the written 
decision under paragraph (d) is the Final Agency Order. Rescinding an 
order suspending a motor carrier's registration permits that motor 
carrier to resume operations so long as it is in compliance with all 
other statutory and regulatory requirements. Rescinding an order 
revoking a motor carrier's registration does not have the effect of 
reinstating the revoked registration. In order to resume operations in 
interstate commerce, the motor carrier whose registration was revoked 
must reapply for registration. If registration is granted, the motor 
carrier would also become subject to the new entrant regulations at 49 
CFR part 385.
    (f) If the Agency Official denies the petition, the petitioner may 
petition the Assistant Administrator for review of the denial. The 
petition must be in writing and served on the Assistant Administrator. 
Service on the Assistant Administrator is effected by delivering a copy 
to USDOT Dockets, Docket Operations, 1200 New Jersey Avenue, West 
Building Ground Floor, Room 12-140 SE., Washington, DC 20590-0001 or by 
submitting the documents electronically to www.regulations.gov. The 
petition must also be served on all parties to the proceedings and on 
Adjudications Counsel, Federal Motor Carrier Safety Administration, 
1200 New Jersey Ave. SE., Washington, DC 20590-0001. The petition for 
review of the denial must be served within 15 days of the service of 
the decision denying the petition for rescission. The petition for 
review must identify the legal, factual or procedural issues in dispute 
with respect to the denial of the petition for rescission. The petition 
for review may not, however, challenge the basis of the underlying 
suspension or revocation order.

[[Page 3540]]

    (g) The Agency Official may file a written response within 15 days 
of receipt of the petition for review.
    (h) The Assistant Administrator will issue a written decision on 
the petition for review within 60 days of service of the petition for 
review or a timely served response, whichever is later. The Assistant 
Administrator's decision constitutes the Final Agency Order.


Sec.  385.917  Other orders unaffected; not exclusive remedy.

    If a motor carrier subject to an order issued under this subpart is 
or becomes subject to any other order, prohibition, or requirement of 
the FMCSA, an order issued under this subpart is in addition to, and 
does not amend or supersede the other order, prohibition, or 
requirement. Nothing in this subpart precludes FMCSA from taking action 
against any motor carrier under 49 U.S.C. 13905 or 49 U.S.C. 31134 for 
other conduct amounting to willful failure to comply with an applicable 
statute, regulation or FMCSA order.


Sec.  385.919  Penalties.

    (a) Any motor carrier that the Agency determines engages or has 
engaged in a pattern or practice of avoiding regulatory compliance or 
masking noncompliance or violates an order issued under this subpart 
shall be subject to the civil or criminal penalty provisions of 49 
U.S.C. 521(b) and applicable regulations.
    (b) Any motor carrier who permits the exercise of controlling 
influence over its operations by any person that the Agency determines, 
under this subpart, engages in or has engaged in a pattern or practice 
of avoiding regulatory compliance or masking noncompliance while acting 
on behalf of any motor carrier, shall be subject to the civil or 
criminal penalty provisions of 49 U.S.C. 521(b) and applicable 
regulations.


Sec.  385.921  Service and computation of time.

    Service of documents and computations of time will be made in 
accordance with Sec. Sec.  386.6 and 386.8 of this subchapter. All 
documents that are required to be served or filed must be served or 
filed with a certificate of service.

0
3. Add a new subpart L consisting of Sec. Sec.  385.1001 through 
385.1019, to read as follows:
Subpart L--Reincarnated Carriers
385.1001 Applicability.
385.1003 Definitions.
385.1005 Prohibition.
385.1007 Determination of violation.
385.1009 Suspension proceedings.
385.1011 Revocation proceedings.
385.1013 Petitions for rescission.
385.1015 Other orders unaffected; not exclusive remedy.
385.1017 Penalties.
385.1019 Service and computation of time.

Subpart L--Reincarnated Carriers


Sec.  385.1001  Applicability.

    The requirements in this subpart apply to for-hire motor carriers 
registered or required to be registered under 49 U.S.C. 13902, 49 CFR 
part 365, and 49 CFR part 368.


Sec.  385.1003  Definitions.

    As used in this subpart:
    Agency Official means the Director of FMCSA's Office of Enforcement 
and Compliance or his or her designee.
    Registration means the registration required under 49 U.S.C. 13902, 
49 CFR part 365, and 49 CFR part 368.
    Reincarnated or affiliated motor carriers means motor carriers with 
common ownership, common management, common control or common familial 
relationship.


Sec.  385.1005  Prohibition.

    Two or more motor carriers shall not use common ownership, common 
management, common control, or common familial relationship to enable 
any or all such motor carriers to avoid compliance, or mask or 
otherwise conceal non-compliance, or a history of non-compliance, with 
statutory or regulatory requirements prescribed under 49 U.S.C. Chapter 
311, subchapter III, or with an order issued under such requirements.


Sec.  385.1007  Determination of violation.

    (a) General. The Agency Official may issue an order to suspend or 
revoke the registration of one or more motor carriers if he or she 
determines that the motor carrier or motor carriers have reincarnated 
or affiliated to avoid regulatory compliance or mask or otherwise 
conceal regulatory noncompliance, or a history of noncompliance.
    (b) Reincarnation or affiliation. The Agency Official may determine 
that one or more motor carriers are reincarnated if there is 
substantial continuity between entities such that one is merely a 
continuation of the other. The Agency Official may determine that motor 
carriers are affiliates if business operations are under common 
ownership, common management, common control or common familial 
relationship. To make these determinations, the Agency Official may 
consider, among other things, the factors in 49 CFR 386.73(c) and 
examine, among other things, the records identified in 49 CFR 
386.73(d).
    (c) Regulatory noncompliance. The Agency Official may determine 
that a motor carrier or its officer, employee, agent, or authorized 
representative, avoids regulatory compliance or masks or otherwise 
conceals regulatory noncompliance, or a history of noncompliance by 
operating or attempting to operate a motor carrier as a reincarnated or 
affiliated entity to:
    (1) Avoid complying with an FMCSA order;
    (2) Avoid complying with a statutory or regulatory requirement;
    (3) Avoid paying a civil penalty;
    (4) Avoid responding to an enforcement action; or
    (5) Avoid being linked with a negative compliance history.


Sec.  385.1009  Suspension proceedings.

    (a) General. The Agency Official may issue an order to suspend a 
motor carrier's registration based on a determination made in 
accordance with Sec.  385.1007.
    (b) Commencement of proceedings. The Agency Official may commence a 
proceeding under this section by serving an order to one or more motor 
carriers which:
    (1) Provides notice that the Agency is considering whether to 
suspend the motor carrier's registration;
    (2) Provides notice of the factual and legal basis for the order;
    (3) Directs the motor carrier to comply with a regulation or 
condition of its registration;
    (4) Informs the motor carrier that the response to the order must 
be in writing, state the factual or legal basis for its response, and 
include all documentation, if any, the motor carrier wants considered;
    (5) Informs the motor carrier of the address and name of the person 
to whom the response should be directed and served;
    (6) Informs the motor carrier that its registration may be 
suspended on the 35th day after service of the order issued under this 
section if the motor carrier has not demonstrated, in writing, 
compliance with any compliance directive issued, or otherwise shown 
good cause why compliance is not required or the registration should 
not be suspended.
    (c) Review of response. The Agency Official will review the 
responses to the order and determine whether the motor carrier's 
registration should be suspended.
    (1) The Agency Official will take one of the following actions:
    (i) If the Agency Official determines the motor carrier's 
registration should be suspended, he or she will enter an

[[Page 3541]]

order suspending the motor carrier's registration; or
    (ii) If the Agency Official determines the motor carrier's 
registration should not be suspended, he or she will enter an order 
terminating the proceeding.
    (2) If the Agency Official issues an order to suspend the motor 
carrier's registration, the order will:
    (i) Provide notice to the motor carrier of the right to petition 
the Assistant Administrator for review of the order within 15 days of 
service of the order suspending the registration, and provide notice of 
the procedures in Sec.  385.911(e);
    (ii) Provide notice that a timely petition for review will stay the 
effective date of the order unless the Assistant Administrator orders 
otherwise for good cause; and
    (iii) Provide notice that failure to timely serve a petition for 
review constitutes waiver of the right to contest the order suspending 
the motor carrier's registration and will result in the order becoming 
a Final Agency Order 20 days after it is served.
    (iv) Provide notice that a Final Agency Order suspending the motor 
carrier's registration will remain in effect and bar approval of any 
subsequent application for registration until rescinded by the Agency 
Official pursuant to Sec.  385.1013.
    (d) Administrative Review. The motor carrier may petition the 
Assistant Administrator for review of an order issued under paragraph 
(c)(1)(i) of this section by following the procedures set forth in 
Sec.  385.911(e).


Sec.  385.1011  Revocation proceedings.

    (a) General. The Agency Official may issue an order to revoke a 
motor carrier's registration, if he or she:
    (1) Makes a determination in accordance with Sec.  385.1007, and
    (2) Determines that the motor carrier has willfully violated an 
order directing compliance for a period of at least 30 days.
    (b) Commencement of proceedings. The Agency Official commences a 
proceeding under this section by serving an order to one or more motor 
carriers, which:
    (1) Provides notice that the Agency is considering whether to 
revoke the motor carrier's registration;
    (2) Provides notice of the factual and legal basis for the order;
    (3) Directs the motor carrier to comply with a statute, regulation 
or condition of its registration;
    (4) Informs the motor carrier that the response to the show cause 
order must be in writing, state the factual or legal basis for its 
response, and include all documentation, if any, the motor carrier 
wants considered;
    (5) Informs the motor carrier of the address and name of the person 
to whom the response should be directed and served; and
    (6) Informs the motor carrier that its registration may be revoked 
on the 35th day after service of the order issued under this section if 
the motor carrier has not demonstrated, in writing, compliance with any 
order directing compliance, or otherwise shown good cause why 
compliance is not required or the registration should not be revoked.
    (c) Review of response. The Agency Official will review the 
response(s) to the order and determine whether the motor carrier's 
registration should be revoked.
    (1) The Agency Official will take one of the following actions:
    (i) If the Agency Official determines the motor carrier's 
registration should be revoked, he or she will enter an order revoking 
the motor carrier's registration; or
    (ii) If the Agency Official determines the motor carrier's 
registration should not be revoked, he or she will enter an order 
terminating the proceeding.
    (2) If the Agency Official issues an order to revoke the motor 
carrier's registration, the order will:
    (i) Provide notice to the motor carrier and any intervening 
person(s) of the right to petition the Assistant Administrator for 
review of the order within 15 days of service of the order revoking the 
motor carrier's registration, and provide notice of the procedures in 
Sec.  385.911(e);
    (ii) Provide notice that a timely petition for review will stay the 
effective date of the order unless the Assistant Administrator orders 
otherwise for good cause; and
    (iii) Provide notice that failure to timely serve a petition for 
review constitutes waiver of the right to contest the order revoking 
the motor carrier's registration and will result in the order becoming 
a Final Agency Order 20 days after it is served.
    (iv) Provide notice that a Final Agency Order revoking the motor 
carrier's registration will remain in effect and bar approval of any 
subsequent application for registration until rescinded by the Agency 
Official pursuant to Sec.  385.1013.
    (d) Administrative review. The motor carrier or intervening person 
may petition the Assistant Administrator for review of an order issued 
under paragraph (c)(1)(i) of this section by following the procedures 
set forth in Sec.  385.911(e).


Sec.  385.1013  Petitions for rescission.

    A motor carrier may submit a petition for rescission of an order 
suspending or revoking registration under this subpart by following the 
procedures set forth in Sec.  385.915.


Sec.  385.1015  Other orders unaffected; not exclusive remedy.

    If a motor carrier subject to an order issued under this subpart is 
or becomes subject to any other order, prohibition, or requirement of 
the FMCSA, an order issued under this subpart is in addition to, and 
does not amend or supersede the other order, prohibition, or 
requirement. Nothing in this subpart precludes FMCSA from taking action 
against any motor carrier under 49 U.S.C. 13905 for other conduct 
amounting to willful failure to comply with an applicable statute, 
regulation or FMCSA order.


Sec.  385.1017  Penalties.

    Any motor carrier that the Agency determines to be in violation of 
this subpart shall be subject to the civil or criminal penalty 
provisions of 49 U.S.C. 521(b) and applicable regulations.


Sec.  385.1019  Service and computation of time.

    Service of documents and computations of time will be made in 
accordance with Sec. Sec.  386.6 and 386.8 of this subchapter. All 
documents that are required to be served or filed must be served or 
filed with a certificate of service.

PART 386--RULES OF PRACTICE FOR MOTOR CARRIER, INTERMODAL EQUIPMENT 
PROVIDER, BROKER, FREIGHT FORWARDER, AND HAZARDOUS MATERIALS 
PROCEEDINGS

0
4. The authority citation for part 386 continues to read as follows:

    Authority:  49 U.S.C. 113, chapters 5, 51, 59, 131-141, 145-149, 
311, 313, and 315; Sec. 204, Pub. L. 104-88, 109 Stat. 803, 941 (49 
U.S.C. 701 note); Sec. 217, Pub. L. 105-159, 113 Stat. 1748, 1767; 
Sec. 206, Pub. L. 106-159, 113 Stat. 1763; subtitle B, title IV of 
Pub. L. 109-59; and 49 CFR 1.81 and 1.87.


0
5. In Appendix A to Part 386, add a new paragraph IV.j. to read as 
follows:

Appendix A to Part 386--Penalty Schedule; Violations of Notice and 
Orders

* * * * *
    IV. * * *
    j. Violation--Conducting operations during a period of 
suspension or revocation under Sec. Sec.  385.911, 385.913, 385.1009 
or 385.1011.
    Penalty--Up to $11,000 for each day that operations are 
conducted during the suspension or revocation period.


[[Page 3542]]


    Issued under the authority of delegation in 49 CFR 1.87.
Anne S. Ferro,
Administrator.
[FR Doc. 2014-01174 Filed 1-21-14; 8:45 am]
BILLING CODE 4910-EX-P