[Federal Register Volume 69, Number 212 (Wednesday, November 3, 2004)]
[Proposed Rules]
[Pages 63997-64015]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-24176]


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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Parts 379, 381, 385, 390, and 395

[Docket No. FMCSA-1998-3706]
RIN 2126-AA76


Hours of Service of Drivers; Supporting Documents

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

ACTION: Supplemental notice of proposed rulemaking (SNPRM); request for 
comments.

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SUMMARY: The FMCSA intends to clarify that each motor carrier has the 
duty under the current regulations to: Verify the accuracy of drivers' 
hours of service (HOS) and records of duty status (RODS), and this 
obligation extends to the HOS and RODS of independent drivers or owner-
operators while driving for the motor carrier; ensure each driver 
collects and submits to the employing motor carrier all supporting 
documents with the RODS; and ensure all motor carriers know of the 
requirement to maintain supporting documents in a method that allows 
cross reference to the RODS. This notice also proposes a supporting 
document based self-monitoring system that would be the carrier's 
primary method for ensuring compliance with the HOS regulations. In 
recognition of developing technologies, the FMCSA proposes to permit 
the use of electronic documents as a supplement to, and, in certain 
circumstances, in lieu of, paper supporting documents. The intended 
effect of this proposal is to provide clearer and more detailed 
definitions of ``supporting documents'', ``employee'', ``driver'', and 
a requirement for each motor carrier to use a self-monitoring system to 
verify accuracy of HOS and RODS.

DATES: We must receive your comments by January 3, 2005.

ADDRESSES: You may submit comments identified by DOT DMS Docket Number 
FMCSA-1998-3706 by any of the following methods:
    <bullet> Web site: http://dms.dot.gov. Follow the instructions for 
submitting comments on the DOT electronic docket site.
    <bullet> Fax: 1-202-493-2251.
    <bullet> Mail: Docket Management Facility; U.S. Department of 
Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, 
Washington, DC 20590-0001.
    <bullet> Hand Delivery: Room PL-401 on the plaza level of the 
Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 
a.m. and 5 p.m., Monday through Friday, except Federal Holidays.
    <bullet> Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting 
comments.
    Instructions: All submissions must include the agency name and 
docket number or Regulatory Identification Number (RIN) for this 
rulemaking. Note that all comments received will be posted without 
change to http://dms.dot.gov, including any personal information 
provided. Please see the Privacy Act heading for further information.
    Docket: For access to the docket to read background documents or 
comments received, go to http://dms.dot.gov at any time or to Room PL-
401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., 
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, 
except Federal Holidays.
    Privacy Act: Anyone is able to search the electronic form of all 
comments received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review DOT's 
complete Privacy Act Statement in the Federal Register published on 
April 11, 2000 (65 FR 19477) or you may visit http://dms.dot.gov.
    Comments received after the comment closing date will be included 
in the docket and we will consider late comments to the extent 
practicable. The FMCSA may, however, issue a final rule at any time 
after the close of the comment period.

FOR FURTHER INFORMATION CONTACT: Mr. Jerry Fulnecky, Office of 
Enforcement and Compliance, (202) 366-4553, FMCSA, Department of 
Transportation, 400 Seventh Street, SW., Washington, DC 20590.

SUPPLEMENTARY INFORMATION:

Legal Basis for the Rulemaking

    This rulemaking is required by, and based on, section 113 (Driver's 
Record of Duty Status) of the Hazardous Materials Transportation 
Authorization Act of 1994, Pub. L. 103-311, August 26, 1994, 108 Stat. 
1673, at 1676 (hereinafter the HMTAA). Section 113, however, assumes 
the existence of FMCSA's more general authority to regulate the HOS of 
commercial motor vehicle (CMV) drivers and related matters. That 
authority is conferred by the Motor Carrier Act of 1935,\1\ now 
codified at 49 U.S.C. 31502(b), and the Motor Carrier Safety Act of 
1984,\2\ 49 U.S.C. 31136(a).
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    \1\ Public Law 74-255, 49 Stat. 543, August 9, 1935.
    \2\ Public Law 98-554, Title II, 98 Stat. 2832, October 30, 
1984.
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    Section 113(a) requires FMCSA to amend 49 CFR part 395 to improve 
both driver and carrier compliance with the HOS regulations and the 
effectiveness and efficiency of HOS enforcement, at a cost reasonable 
to the motor carrier industry. As described in detail later in the 
preamble, this proposal would close the loopholes that made it possible 
for some operators to obscure their violations of the HOS rules by 
failing to collect, retain, or properly to index, documents that could 
be used to check the accuracy of drivers' RODS. Drivers--both employees 
and owner-operators--would be required to collect all documents that 
could be used to evaluate RODS data, put their name or the vehicle 
number on those documents and forward them to the employing motor 
carrier. The carrier would have to maintain these records and collect 
related documents from other sources that could be used to check each 
driver's RODS. All of these records would have to be available to 
special agents in the same manner as RODS themselves. The 
enforceability of the HOS regulations would be substantially improved. 
As for the cost of the proposal, there would be none if motor carriers 
and drivers were in full compliance with the current supporting 
documents regulation, as interpreted by a series of administrative and 
Federal appellate court decisions.\3\ Because that is not the case, the 
costs will be borne by motor carriers not now collecting, retaining, 
and/or indexing supporting documents. FMCSA estimates the annual cost 
of the rule would be $14.2 million,\4\ a modest sum given the very 
large carrier and driver population that would be covered by it. The

[[Page 63998]]

requirements of Section 113(a) would therefore be satisfied.
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    \3\ See the section below headed Motor Carrier Responsibilities 
for a discussion of the Federal appellate court decisions and the 
section headed Collection and Retention of Supporting Documents for 
a discussion of the administrative decisions.
    \4\ See the section headed Regulatory Impact Analysis for the 
discussion of how the agency estimated the $14.2 million costs.
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    More specifically, section 113(b)(1) provides that the new rules 
must require written or electronic documents used by a motor carrier in 
connection with a specific trip to include at least the driver's name 
or the vehicle's number, thus ensuring that the document can be tied to 
a particular driver and used as a supporting document to verify the 
accuracy of his/her RODS. This requirement would be met by proposed 
Sec.  395.10(e) and (f).\5\ The former would require both the driver 
and the motor carrier to identify each supporting document and to add 
the driver's name, the date and the vehicle number, if that data does 
not already appear on the document. The latter would require the motor 
carrier to identify supporting documents, including those received from 
sources other than the driver, and to maintain them in a manner that 
permits them to be matched to a particular driver's RODS on a 
particular day.
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    \5\ See the section headed Section-By-Section Analysis for the 
discussion about proposed paragraphs Sec.  395.10(e) and (f).
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    Section 113(b)(2) requires a regulatory provision specifying the 
number and kind of supporting documents that must be retained by a 
motor carrier. The new regulatory definition of ``supporting document'' 
in Sec.  395.2 would cover any document generated or received by a 
carrier or driver during the normal course of business that could be 
used to verify a driver's RODS. We are proposing and requesting 
comments on a long, but not exclusive, list of examples.
    Section 113(b)(3) requires a regulatory provision specifying how 
long a motor carrier must maintain HOS records; that period must be at 
least 6 months from the date of receipt. This SNPRM would require 
carriers to maintain RODS and all associated supporting documents for 6 
months from the date of receipt (Sec.  395.8(k)(1)).
    Section 113(b)(4) requires a provision authorizing motor carriers 
(individually or in groups), on a case-by-case basis, to use ``self-
compliance systems'' that ensure driver compliance with the HOS rules 
and allow enforcement officers to audit those systems to validate 
compliance. As explained below in the section entitled ``Supplemental 
Proposal,'' FMCSA believes the exemptions authorized in 1998 by section 
4007 of the Transportation Equity Act for the 21st Century \6\ (TEA-
21)--now codified at 49 U.S.C. 31315(b) and 31136(e) and 49 CFR part 
381, subpart C--dovetail perfectly with the ``self-compliance systems'' 
mandated here. The agency will therefore entertain requests for HOS 
self-compliance systems that meet the statutory standard for an 
exemption, i.e., maintenance of the same level of safety under the 
exemption as would be achieved by complying with the Federal Motor 
Carrier Safety Regulations (FMCSRs).
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    \6\ Public Law 105-178, 112 Stat. 107, at 401, June 9, 1998.
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    Section 113(b)(5) requires a regulatory provision allowing case-by-
case waivers of the RODS requirements of part 395 for motor carriers 
(either individually or in groups) when sufficient supporting 
documentation is provided to enforcement personnel by an intelligent 
vehicle-highway system, as defined in section 6059 of the Intelligent 
Vehicle-Highway Systems Act of 1991. FMCSA has determined that, 
contrary to Congressional expectations, Intelligent Transportation (IT) 
systems have not yet advanced to the point where electronic monitoring 
of supporting documents by enforcement officers is a feasible 
substitute for RODS. The motor carrier industry has been quite 
reluctant to integrate its data systems with those of the enforcement 
community in a way that would allow real-time access to supporting 
documents. FMCSA is therefore unable to carry out this mandate quite 
the way Congress intended. Nonetheless, the agency will entertain 
exemption requests under part 381 if motor carriers believe they can 
demonstrate compliance with the HOS requirement without the use of 
RODS.
    Section 113(c) defines ``supporting document'' for purposes of that 
section. The agency's new definition of the term in Sec.  395.2 would 
meet the statutory requirement.
    With one exception, all of the requirements of section 113 would 
therefore be met. That exception reflects the agency's inability to 
carry out section 113(b)(5), given the current state of IT systems.
    As indicated above, section 113 assumes the existence of FMCSA's 
general rulemaking authority. The Motor Carrier Act of 1935 provides 
that ``[t]he Secretary of Transportation may prescribe requirements 
for--(1) Qualifications and maximum hours of service of employees of, 
and safety of operation and equipment of, a motor carrier; and (2) 
qualifications and maximum hours of service of employees of, and 
standards of equipment of, a motor private carrier, when needed to 
promote safety of operation'' (49 U.S.C. 31502(b)). This SNPRM is based 
on the agency's authority to regulate ``maximum hours of service of 
employees.'' Although the proposal would not change the substantive HOS 
regulations, it would make them easier to enforce and thus more 
effective, an objective implied by the grant of authority.
    The Motor Carrier Safety Act of 1984 provides concurrent authority 
to regulate drivers, motor carriers, and vehicle equipment. It requires 
the Secretary to ``prescribe regulations on commercial motor vehicle 
safety. The regulations shall prescribe minimum safety standards for 
commercial motor vehicles. At a minimum, the regulations shall ensure 
that--(1) Commercial motor vehicles are maintained, equipped, loaded, 
and operated safely; (2) the responsibilities imposed on operators of 
commercial motor vehicles do not impair their ability to operate the 
vehicles safely; (3) the physical condition of operators of commercial 
motor vehicles is adequate to enable them to operate the vehicles 
safely; and (4) the operation of commercial motor vehicles does not 
have a deleterious effect on the physical condition of the operators'' 
(49 U.S.C. 31136(a)).
    This SNPRM is based primarily on the mandates to ensure that CMVs 
are ``operated safely'' and that the responsibilities imposed on 
drivers ``do not impair their ability to operate the vehicles safely'' 
(49 U.S.C. 31136(a)(1) and (2), respectively). Enhanced compliance with 
the HOS regulations will help to improve the operational safety of 
CMVs. This proposal would also make it easier for FMCSA to document, 
penalize, and deter cases where motor carriers permit, urge, or require 
drivers to exceed the HOS limits, thereby impairing their ability to 
drive safely.

Background on Hours of Service, RODS, and the Verification of RODS

    The FMCSA requires that the number of hours a driver may operate a 
CMV be limited on a daily and weekly basis. These HOS requirements, 
found in part 395 of Title 49 of the Code of Federal Regulations (49 
CFR part 395), are intended to provide drivers with opportunities to 
obtain sleep, and thereby reduce the risk of drivers operating CMVs 
while drowsy, tired, or fatigued. There is evidence that the majority 
of CMV crashes occur as a result of human error, that human error is 
often the result of inattention or diminished vigilance, and that 
inattention or diminished vigilance can often be the result of fatigue. 
Fatigue relates often to poor sleep quality and/or quantity, and poor 
sleep quality or quantity relates often to working schedules of CMV 
drivers. To facilitate enforcement of the HOS requirements,

[[Page 63999]]

the FMCSA requires that motor carriers collect and maintain paper RODS 
(daily logs) prepared by the drivers. Motor carriers have the option of 
requiring that their drivers use automatic on-board recording devices 
in lieu of paper daily logs. The driver and/or the motor carrier are 
subject to administrative civil penalties for failure to make or 
preserve RODS, or for making any false report in connection with RODS. 
They are also subject to criminal penalties for such violations.
    The HOS rules were first issued in the late 1930's (Ex Parte No. 
MC-2, 3 M.C.C. 665). Since that time, drivers have had the 
responsibility to prepare RODS. The original pocket rulebook from 1939 
states that carriers and drivers would be liable for the accuracy of 
entries made by drivers on the RODS. The Interstate Commerce Commission 
(ICC) explained the original two purposes of the RODS as follows:

``[to allow for] a standardized type of record to be maintained of 
the daily driving time and the weekly hours on duty which would be 
in the possession of each driver and which would enable a highway 
patrolman or other enforcement officer to determine immediately upon 
the stopping of the vehicle whether the driver had been on duty or 
was driving in violation of our regulations. * * * [and] to provide 
a record from which our field representatives could readily 
determine whether or not the carriers are complying with the 
regulations'' (24 M.C.C. 413).

    In order to determine whether carriers are complying with the HOS 
regulations, the FMCSA is authorized, by 49 U.S.C. 504(c), to inspect 
and copy any record of a carrier, lessor, or association and to inspect 
the equipment of a carrier, or lessor, or other person controlling, 
controlled by, or under common control with a carrier, as long as these 
actions were made in furtherance of an investigation and regardless of 
whether or not the records were required to be maintained by the FMCSA 
regulations or orders.
    A third purpose of the RODS is that they enable motor carriers, at 
the time of dispatch, to ensure their drivers have sufficient time to 
safely complete trips within the HOS regulations. The FMCSA believes 
many motor carriers began to realize this purpose in the early years of 
the regulation.
    Over the last 60 years, many motor carriers have regularly audited 
or inspected drivers' RODS for accuracy to ensure their drivers are 
complying with the HOS regulations. This enables the motor carriers to 
verify, through their own self-monitoring system, that drivers are 
accurately reporting their HOS. It also allows drivers to calculate 
their available hours before being dispatched. This provides the motor 
carrier with a valuable management tool to efficiently dispatch trips 
within the HOS limitations.
    The FMCSA has learned from experience that in order for the motor 
carriers to ensure that drivers are alert and not fatigued, motor 
carriers must maintain self-monitoring systems that compare RODS to 
supporting documents. The Federal Highway Administration (FHWA) decided 
to adopt this practice of maintaining ``RODS supporting documents'' as 
a part of its regulatory oversight to assist motor carriers in 
operating safely. The FHWA published a final rule on November 26, 1982 
(47 FR 53383) which, in part, required motor carriers operating in 
interstate commerce to retain supporting documents, along with drivers' 
records of duty status, for at least six months from the date of 
receipt (49 CFR 395.8(k)). The FHWA did not define the term 
``supporting document'' in that final rule.
    In general, motor carriers use many different types of business 
records to document various business transactions, such as bills of 
lading, carrier pro forma invoices or waybills, credit and debit card 
receipts, customs declarations, delivery receipts, dispatch and 
assignment records, expense vouchers, freight bills, fuel billing 
statements, toll receipts, weight scale tickets, etc. These records, 
among others, are generated by motor carriers, drivers, and independent 
contractors (including independent owner-operators) for their own 
business purposes, or they are received from third parties which 
include consignors, consignees, vendors, toll highway authorities and 
operators, and other business, regulatory, or law enforcement agencies 
for a variety of motor carrier purposes.
    Motor carriers have been using these records not only to document 
various business transactions, but also to verify the accuracy of their 
drivers' RODS. Many motor carriers regularly maintain these records for 
their own internal management purposes. This practice, over the years, 
has become a standard motor carrier operating procedure among safe 
motor carriers. While a paper based supporting documents system 
continues as the primary method for testing the accuracy of drivers' 
records of duty status, there is a growing use of electronic systems 
and records by motor carriers that add to a motor carrier's ability to 
verify drivers' compliance with HOS rules. However, the FMCSA has 
encountered situations where the carrier often fails to maintain these 
electronic records for the 6-month period currently required for paper 
supporting documents.
    The FHWA published regulatory guidance in the Federal Register on 
November 17, 1993 (58 FR 60734, 60761), and published revised guidance 
on April 4, 1997 (62 FR 16370, 16425), that provided examples of the 
types of supporting documents that should be retained. Both of these 
publications outlined our position that supporting documents are the 
records of the motor carrier maintained in the ordinary course of 
business that are used or could have been used by the motor carrier to 
verify the information recorded on a driver's record of duty status, 
such as the examples provided above. An extensive, but not a complete, 
list of the various types of records considered to be supporting 
documents is provided in this guidance, and it is available on the 
FMCSA Web site at http://www.fmcsa.dot.gov/rulesregs/fmcsr/regs/395reg.htm. (Scroll to Question 10 in the guidance for Sec.  395.8.)

Motor Carrier Responsibilities

    Regardless of the type of supporting document system used by the 
motor carrier, the motor carrier's responsibility for compliance with 
the FMCSRs remains clear. It is well settled that the motor carrier is 
responsible for, and must police the actions of, its employees. This 
obligation under the FMCSRs was affirmed by the Associate Administrator 
for what was then the Office of Motor Carriers (of the Federal Highway 
Administration) in In the Matter of Horizon Transportation, Inc., 55 FR 
43292 (October 26, 1990) (Final Order February 12, 1990). A motor 
carrier's responsibility for the actions of independent contractors and 
owner operators it uses was outlined in In re R.W. Bozel Transfers, 
Inc., 58 FR 16918 (March 31, 1993) (Final Order August 6, 1992); and 
more recently in In the Matter of Commodity Carriers, Inc., Docket No. 
FHWA-97-2393 (Order Appointing Administrative Law Judge March 25, 1997) 
(adopted by the Associate Administrator on Review, May 27, 1999). 
Likewise, each motor carrier must have a system in place that allows it 
to effectively monitor compliance with the FMCSRs, especially those 
aimed at driver fatigue, a major safety concern (See In re National 
Retail Transportation, Inc., Docket No. FHWA-96-6390, document 4 (Final 
Order: Decision on Review September 12, 1996)).
    The United States Court of Appeals for the Sixth Circuit affirmed 
in A.D. Transport Express Inc. v. Federal Motor Carrier Safety 
Administration, 290 F.3d 761 (6th Cir. 2002) that supporting

[[Page 64000]]

documents must be maintained in a common sense manner so that FMCSA 
special agents can ``verify dates, times, and locations of drivers 
recorded on the RODS.'' The United States Court of Appeals for the 
District of Columbia Circuit, in Darrell Andrews Trucking, Inc. v. 
Federal Motor Carrier Safety Administration, 296 F.3d 1120 (D.C. Cir. 
2002), approved FMCSA's position that the term ``supporting document'' 
encompasses any document that could be used to support the RODS. The 
D.C. Circuit, in its decision, agreed with the Sixth Circuit that the 
FMCSA requirement for supporting documents to be maintained in a 
fashion that permits the matching of those records to the original 
drivers' RODS is a reasonable interpretation of 49 CFR 395.8(k)(1). In 
fact, the D.C. Circuit Court concluded that all the FMCSA is asking is 
that carriers refrain from destroying the agency's ability to match 
records with their associated drivers.

Previous NPRMs on Hours of Service Supporting Documents

1. 1998 Notice of Proposed Rulemaking

    On April 20, 1998, in response to section 113 of the HMTAA, the 
FHWA published an NPRM (63 FR 19457, RIN 2125-AD52, Docket No. FHWA-98-
3706) requesting comments on a proposed definition of ``supporting 
documents'' for the HOS regulations. The FHWA proposed that motor 
carriers develop and maintain effective auditing systems that would not 
have required the retention of supporting documents to monitor the 
accuracy of the drivers' RODS. The NPRM proposed that, if a motor 
carrier fails to have such a system, the motor carrier would be 
required to retain various types of business documents. The use of 
electronic recordkeeping methods was also proposed as a preferred 
alternative to paper records.
Comments to the April 20, 1998 NPRM
    We received 41 comments in response to the 1998 Supporting 
Documents NPRM. Two organizations each submitted two comments that were 
counted as separate comments. The respondents represented three 
advocacy groups, two consultants to the industry, one labor union, 17 
motor carriers, 13 trade associations including one motorcoach 
association, two on-board recorder manufacturers, and one State 
government agency.
    Three comments fully supported the NPRM. They were from Bestway 
Express, Inc., Insurance Institute for Highway Safety (IIHS), and the 
National Propane Gas Association (NPGA). Bestway Express had two 
suggestions, in addition to its approval of the FMCSA's efforts. One 
was to develop:

a process that allows self-assessment in program design for safety 
management. As an industry, and partner with Government, we need 
these kinds of initiatives as we go forward with performance-based 
standards. The approach that you have developed where a carrier can 
design a self-monitoring system, get pre-determined FMCSA assessment 
of that program, and then can implement their program is 
commendable.

    Bestway's other suggestion was that, ``A self-monitoring system, if 
SafeStat is the performance standards, is the only model to use as a 
long-range implementation plan.''
    The NPGA considered the proposal ``a significant step in 
implementation of electronic document technology into the operations of 
motor carriers generally.''
    In supporting the proposal, the IIHS noted:

    Although the proposal is less stringent than authorized by the 
Act [HMTAA], it is an important first step in improving truck driver 
and motor carrier compliance with HOS rules. Any weakening of the 
proposed rule would contravene the intent of the Act [HMTAA].

    Twenty-three (23) of the comments expressed their belief that the 
supporting documents NPRM should have been deferred until it could be 
considered in the context of the overall HOS rules. They believed the 
current HOS rule needs repair before the supporting documents rule is 
amended.
    The National Association of Small Trucking Companies (NASTC) 
commented that carriers generally recognize their obligation ``not only 
to `trust but to verify' the [drivers'] logs as submitted.'' It noted 
that the proposal squarely aimed at ``placing the burden on the carrier 
to catch drivers who make fraudulent log entries,'' and that ``the DOT 
cites over 30 different extrinsic documents which typically cross a 
trucking company's desk and suggests that some, part, or all of these 
documents can be used as an external check to stop log 
falsifications.''
    Many commenters believed the proposal would impose significant 
burdens upon industry by requiring records to be kept that are not now 
required. Many believed few if any documents are produced for each 
beginning, intermediate, and end of a trip and that those documents 
that are produced do not have the information required by the statute, 
such as driver's name and the vehicle number.
    Yellow Corporation's (Yellow) comments are indicative of LTL 
carriers generally. Yellow operates between fixed terminals, and 
manages HOS compliance through the payroll system, which, Yellow notes, 
is also used by investigative personnel during compliance reviews. Like 
many others, Yellow sees the proposal as expanding the burden of 
collecting many unnecessary records, when its present systems are 
adequate to do the job.
    A few commenters were very concerned that the FMCSA had 
misinterpreted and misapplied the definition of ``burden'' in 5 CFR 
1320.3(b)(2). They believed that collecting many receipts and keeping 
them for four months as proposed in the 1998 NPRM is not usual and 
customary in the motor carrier industry.
    The NASTC also believed that the supporting documents rule should 
provide examples of acceptable carrier programs that would meet the 
NPRM's requirements. The writer of the comments described an intricate 
system of log verification employed by ``one of our larger, more 
sophisticated members.''

    Their dispatcher only dispatches drivers on loads which their 
hours of service show they can deliver legally. This carrier 
receives its driver's trip package containing the driver prepared 
record of duty status, toll receipts, bills of lading, and many of 
the other 30+ items named in the proposed regulation. All of the 
driver logs are reviewed for completeness and compliance with the 
10, 15, and 70 hour rules. Approximately one third of the logs, 
selected randomly, are compared to supporting documents to determine 
if there has been any falsification. All log violations are noted 
and the offending drivers are notified by letter. Repeated 
violations result in warnings, out of service letters and ultimately 
termination.

He notes, however, that although the system could be reduced to writing 
for auditing purposes, the special agent conducting a compliance review 
would not be able to verify all the checking done by the record clerk, 
because the external documents used for that purpose are not retained 
centrally, or maybe not at all. Without reasonable guidelines, perhaps 
in the form of models or examples of acceptable systems or programs, 
the motor carrier can never know whether its system would pass muster. 
He also observed that the proposal fails to deal with distinctions 
between system design and system implementation, so that a carrier with 
an effectively designed system may be required to start over from 
scratch because a special agent found shortcomings in the way it was 
implemented.
    In addition, a few comments provided specific responses to the nine 
questions the agency asked primarily related to internal self-
compliance systems. The nine questions asked in the 1998 NPRM

[[Page 64001]]

are reprinted below, along with the paraphrased comments of several 
commenters.
    Question (1). What types of self-monitoring systems should be 
considered in addition to the type proposed in this document?
    Yellow contended that any software application that verified RODS 
through comparison with internal documents should be acceptable, and 
that the FMCSA should not limit a carrier's choice of a self-monitoring 
system to any specific application(s). Alabama Power agreed with Yellow 
so long as the self-monitoring scheme would provide a reasonable 
assurance of compliance. ROCOR Transportation was satisfied with the 
present system with the possible addition of the existing interpretive 
guidance.
    Question (2). Whether and what conditions should be imposed upon 
motor carriers (such as accident or out of service prevention 
performance history) before the FMCSA would authorize a different self-
monitoring system as an alternative to compliance with this proposed 
rule?
    Yellow Corporation stated: ``The only conditions that should be 
considered in determining if the motor carrier must change its self 
monitoring system should be those directly related to errors/violations 
in the RODS or repeated violations of HOS.'' Alabama Power, on the 
other hand, believed the FMCSA should consider relative accident and 
out-of-service rates. Accident and out-of-service rates should be 
established for determining when additional monitoring is necessary. 
ROCOR Transportation was satisfied with the current system.
    Question (3). Whether motor carriers seeking additional 
authorization should have some established safety record with the FMCSA 
or other State or local enforcement agencies?
    This question apparently caused some confusion as Yellow 
Corporation answered as though the agency were asking about expanded 
operating authority, and believed the FMCSA should conduct a compliance 
audit of any carrier seeking to expand its operation by more than 20 
percent. Alabama Power believed that carriers or industries with 
established good safety records should be exempted from all or part of 
the HOS regulations.
    Question (4). What must happen before the FMCSA should disallow the 
use of a self-monitoring system or an alternative system?
    As noted above, Yellow believed that the system should not be 
blamed for failure of individuals to comply, and that the FMCSA should 
establish standards for any such system. Alabama Power leaned toward a 
performance test, which demonstrates the value of the system by 
performance on the highway, i.e., high accident and out-of-service 
rates. ROCOR Transportation believed the FMCSA special agent ought to 
be able to determine whether a carrier is effectively using a system, 
and make recommendations accordingly.
    Question (5). Are there any other advanced technology systems 
currently in use or under development that the motor carrier industry 
may use to validate HOS or support the RODS?
    Alabama Power believed most advanced systems are cost prohibitive, 
especially for utility companies where driving is a very minor part of 
their business. ROCOR Transportation acknowledged the industry has 
started using satellite technology.
    Question (6). Should waivers be considered on a case-by-case basis 
for other systems that do not quite meet these requirements, but may 
have other compensating features that produce equivalent safety 
results?
    Yellow's position was that the standards must recognize that 
differences in operations and practices will mean differences in 
monitoring programs. Therefore, variances must be considered on a case-
by-case basis. Alabama Power advocates a more open system that suits 
each carrier's needs.
    Question (7). Under what circumstances should the use of such 
alternative systems also operate as a substitute for the requirement to 
prepare and maintain RODS? Demonstration of the effective use of a 
system, in whole or in part, for verification should obviate any 
necessity to further examine the information produced by the system by 
enforcement personnel.
    Yellow preferred criteria that would accurately capture the hours 
and be verifiable to a particular driver through a failsafe means, 
e.g., a code or electronic signature. However, the company believed 
``(o)nly when all parties requiring HOS information have the most 
advanced technology can alternative systems fully replace the current 
requirement.'' Alabama Power would permit any normal timekeeping system 
when ``the nature of a carrier's or industry's business limits the 
exposure to public safety,'' and the carrier or industry has an 
adequate commercial motor vehicle safety record.
    Question (8). What impact would a six-month or longer record 
retention requirement have on the Federal government, State 
governments, and motor carriers?
    Yellow was firmly opposed to any expansion of the present six-month 
retention requirement, which, it believed, is more than adequate for 
purposes of evaluating compliance. Assuming the retention requirement 
includes all supporting records, the company contends a carrier's 
administrative costs would increase significantly. Alabama Power agreed 
that, as written, the proposal would significantly increase the 
administrative burden of carriers. ROCOR Transportation notes the irony 
of suggesting increased burdens at a time when the pressure is on to 
reduce administrative workload. ROCOR would have preferred reducing the 
retention period to four months, which would be enough to enable FMCSA 
special agents to assess a carrier's safety posture.
    The Georgia Public Service Commission (GPSC) believes the idea of 
reducing the retention time of RODS from six months to four months is 
unnecessary. It argued that in the current downsizing climate of 
government, six months is barely enough time to conduct compliance 
reviews where complaints have been received and to follow-up on serious 
crashes. It believed reducing the retention period to four months would 
result in time restraints that would not work for the governments 
because the workload of State and Federal compliance review personnel 
is increasing--not decreasing. They concluded that this would allow 
many serious complaints and crash investigations to go unfinished, as 
the evidence for substantiating the potential violations would have 
been discarded by the motor carriers. They suggested this issue is best 
left alone since most carriers and Congress are comfortable with the 
six-month time frame.
    Question (9). Would we enhance enforcement and prosecution efforts 
with the longer retention requirement (e.g., the ability to adequately 
enforce the rules, collect evidence for a criminal case, prepare the 
case, and successfully prosecute drivers or motor carriers for 
deliberately or recklessly violating HOS restrictions)?
    Neither Yellow nor Alabama Power sees any benefit in longer 
retention requirements.
FMCSA's Response to the Comments on the 1998 Supporting Documents 
Proposal
    The FMCSA agreed with those commenters who wanted to merge the 
supporting documents proposal into the HOS rule. The agency was under a 
legislative mandate to issue the NPRM on supporting documents, and used 
the opportunity to gather useful opinions

[[Page 64002]]

about a more systematic approach to monitoring HOS.
    The FMCSA was attentive to the comments concerning the 
administrative burdens resulting from what some thought was a 
prescriptive alternative. The FMCSA believes the NPRM may not have been 
clear. Many commenters seem to have either misunderstood the options in 
the original proposal, or, more likely, feared too much discretion on 
the part of special agents, in determining the effectiveness of any 
alternate system. This was particularly evident in the extensive 
comments of the NASTC. NASTC's comments described a carrier program 
that would definitely have satisfied a requirement for an effective 
system, but the writer was apprehensive about the possibility that such 
a model program (although it was entirely a paper system) could be 
thwarted by a finding by a special agent that some element was lacking.
    The actual intent of the proposal was captured much more accurately 
in the comments of Bestway, the NPGA and the IIHS. The FMCSA attempted 
to convert what, to some, appeared to be a very prescriptive statutory 
requirement into a rule that could provide an alternative to reliance 
on paperwork. There still appears to be a pervasive reluctance on the 
part of industry to employ technology to verify compliance with HOS 
rules. The agency understands that certain segments of the for-hire 
motor carrier industry do not favor the FHWA's and FMCSA's IT system 
joint program encouraging the installation and use of such satellite 
technologies for IT purposes, and at the same time, permitting FMCSA 
special agents the use of the same technology devices to assist in 
discovering violations of HOS regulations. On the other hand, there is 
a great deal of anxiety about increasing administrative burdens by 
requiring more verifying records to be kept and maintained.
    With respect to the retention period, the GPSC has persuaded the 
FMCSA that six months worth of records is needed for proper reviewing 
by Federal and State officials of a driver's and carrier's compliance 
with the rules and for crash investigations. The FMCSA has decided to 
retain the six-month requirement in this SNPRM.

2.2000 Notice of Proposed Rulemaking

    The April 20, 1998, NPRM was superseded by the May 2, 2000, Hours 
of Service NPRM (65 FR 25540, RIN 2126-AA23) [Docket No. FMCSA-97-2350; 
formerly FHWA-97-2350 and MC-96-28]. The supporting documents proposal 
was incorporated into the 2000 rulemaking based on comments to the 1998 
NPRM recommending that the supporting documents rule be considered in 
the broader context of a complete revision of the Hours of Service 
rules. In the May 2000 NPRM, the FMCSA attempted to go further than the 
1998 supporting documents NPRM by proposing basic changes to both the 
HOS and the means to verify compliance. The 2000 proposal addressed the 
issues raised by those commenters who believed the 1998 supporting 
documents proposal invited a ``one size fits all'' approach. The May 
2000 proposal focused on those operations involving long or regional 
trips away from a home base with little carrier supervision of, contact 
with, or control over the driver. The FMCSA proposed to minimize the 
paperwork burden for all other operations and, whenever possible, to 
accept records that are required by other Federal agencies, notably the 
Department of Labor's Wage and Hour Division. The FMCSA stated that 
this approach would be consistent with the requirements of section 113 
of the HMTAA.
Comments to the May 2, 2000 NPRM
    Because of the new approach taken in the May 2000 NPRM, there were 
very few comments that specifically addressed supporting documents. 
Instead commenters focused on the overall approach, stating that they 
found it confusing and that it would be hard to enforce.

Supplemental Proposal

    Today's SNPRM incorporates and supercedes both the April 20, 1998, 
supporting document NPRM and the supporting documents portion of the 
May 2, 2000, Hours of Service NPRM. Because of the original delay in 
issuing an HOS Final Rule based on the May 2000 NPRM and FMCSA's 
responsibility to issue regulations based on section 113 of the HMTAA, 
the FMCSA is issuing an SNPRM that is based on the proposed rules from 
the April 1998 NPRM but also adds entirely new language. Today's 
proposal addresses self-monitoring systems, records of duty status, and 
supporting documents for use in monitoring and enforcing the HOS 
(including minimum hours off duty, rest, and work) of CMV drivers.
    Agency case law, as noted above under Motor Carrier 
Responsibilities, interprets the FMCSRs to require motor carriers to 
establish commonsense self-monitoring systems to verify the accuracy of 
drivers' HOS and RODS. This rule would explicitly require the motor 
carrier to have a systematic inspection, verification, and maintenance 
system to verify the accuracy of the times and locations of each driver 
for every working day on each trip, as well as mileage for each trip. 
The self-monitoring system proposed by this rule is not a self-
compliance system as proposed in the 1998 NPRM. Rather, the FMCSA 
clarifies and strengthens in regulatory language the Agency's implied 
intent that all carriers must establish a RODS and supporting document 
self-monitoring system to verify accuracy of HOS and RODS.
    FMCSA has decided to address the self-compliance systems referred 
to in section 113(b)(4) and (b)(5) of the HMTAA by allowing motor 
carriers to apply for exemptions under 49 CFR part 381, subpart C 
(Sec. Sec.  381.300 through 381.330). Although the HMTAA uses the term 
``waiver,'' FMCSA believes the section 113(b)(5) provision allowing a 
waiver is equivalent to the exemption provision under section 4007 of 
the Transportation Equity Act for the 21st Century (TEA-21) (codified 
at 49 U.S.C. 31315(b)), as distinct from the TEA-21 waiver provision 
codified at 49 U.S.C. 31315(a)(1). This is because section 31315(a)(1) 
limits the duration of waivers to a period ``not in excess of three 
months.'' Thus, FMCSA believes that allowing a carrier to apply for 
regulatory relief in the form of an exemption, rather than a waiver, 
would best serve the industry's interests and comport with Congress' 
intent.
    The FMCSA is currently studying and developing standards required 
for an electronic on-board recorders (EOBR) system. See the September 
1, 2004, advance notice of proposed rulemaking (69 FR 53386) requesting 
public comments about EOBRs by November 30, 2004. It continues to 
define the minimum set of data elements necessary to allow safety 
enforcement personnel to determine compliance with the hours of service 
requirements in part 395 of the Federal Motor Carrier Safety 
Regulations. The FMCSA will continue to study the feasibility, and cost 
and benefits of internal self-compliance systems and currently has 
several workgroups studying and reviewing electronic systems and their 
capabilities.
    In this SNPRM, the FMCSA adopts the position that the use of 
electronic-based record keeping methods in a supporting documents 
system is preferred over traditional paper records. The FMCSA proposes 
to allow motor carriers to use electronic, laser or automated 
technology, (e.g. global positioning systems (GPS), automatic vehicle 
identifier transponders,

[[Page 64003]]

electronic bills of lading used by customs officials in the United 
States (U.S.) and other countries, and state driver-vehicle inspection 
reports using pen-based computer systems) in conjunction with paper 
supporting documents as long as the electronic supporting documents are 
retained for the same period as applies to paper supporting documents, 
are equally accessible and reviewable by special agents as are their 
paper counterparts, and can be produced, within 48 hours of demand, in 
hard copy. This position is in keeping with the requirements of the 
Paperwork Reduction Act of 1995 that the FMCSA eliminate duplication in 
record keeping and reduce the information collection burden on motor 
carriers. However, this SNPRM does not lose sight of the preeminent 
duty placed upon the Department of Transportation and the FMCSA by 
Congress to reduce crashes and fatalities, and to make the highways a 
safer method of travel.

Discussion of Specific Requirements

    To satisfy the legislative mandate, the FMCSA is proposing to (1) 
add definitions for the terms ``supporting document'', ``employee'', 
and ``driver'' to Sec.  395.2; (2) add a section entitled, ``Sec.  
395.10 Systematic verification and record retention''; (3) modify the 
record retention requirements in Sec. Sec.  390.29 and 390.31; and (4) 
clarify the motor carrier's responsibility to monitor drivers' 
compliance with the HOS and verify the accuracy of the drivers' RODS.

Definition of Supporting Documents

    The FMCSA is proposing in Sec.  395.2 to add the statutory 
definition of supporting documents as provided by Congress in the 
HMTAA, with the addition of clarifying language and a list of examples. 
The proposed list is only a sampling of the types of documents that the 
FMCSA believes could support the HOS and be used to verify the accuracy 
of RODS, when used either by themselves or with other documents. The 
FMCSA is also proposing to clarify that for the purpose of part 395 
definitions of ``employee'' and ``driver'' are the same as defined in 
Sec.  390.5. Thus all commercial motor vehicle drivers (including 
independent contractors) are considered to be employees of the motor 
carrier for the purposes of receiving, accepting, and submitting to the 
motor carrier any document defined as a supporting document while 
performing a transportation function. The FMCSA reaffirms in this 
notice that the term ``independent contractor'' includes an owner-
operator.
    The general rule as to what type of document falls into the 
category of ``supporting documents'' was outlined by the Administrative 
Law Judge Burton S. Kolko in National Retail Transportation in 1993 (In 
re National Retail Transportation, Inc., FHWA-96-6390, document 3 (July 
20, 1993)). In 1996, the Associate Administrator for Motor Carriers 
subsequently affirmed and adopted Judge Kolko's holding that 
``supporting documents'' are those documents which pass through the 
carrier's hands in the normal course of business and which could be 
used to verify the information recorded on a driver's RODS (In re 
National Retail Transportation, Inc., FHWA-96-6390, document 4 
(September 12, 1996)). A similar definition is found within the HMTAA 
(Pub. L. 103-311, 108 Stat. 1673 (August 26, 1994)).
    In order to achieve the FMCSA's goal of carrier compliance with the 
FMCSRs by effectively monitoring HOS, the motor carrier must be able to 
accurately determine, for each trip and for each day of the driver's 
trip, the location of the driver and the corresponding times that the 
driver was at those locations. To do so, a supporting document (whether 
it is paper or electronic based) must be verifiable.

Motor Carrier Self-Monitoring Systems

    Considering the Congressional mandate in section 113(b)(4) of the 
HMTAA and current state-of-the-art electronic technology, the FMCSA 
continues to study, evaluate, and develop standards for design and use 
of electronic data in establishing self-compliance systems. The current 
technology permits motor carriers to maintain a dual system of 
electronic tracking and paper supporting documents.
    This rule would explicitly require the motor carrier to have a 
self-monitoring system to verify the accuracy of the driver's times and 
locations for each working day on each trip, as well as mileage for 
each trip. Under Sec.  395.8(d) and (f)(4), drivers already are 
required to record their total miles driving each workday. The ``self-
monitoring system'' in this rulemaking differs from the ``self-
compliance system'' mentioned in the HMTAA and the 1998 NPRM. This rule 
strengthens and clarifies the FMCSA's long-standing position that motor 
carriers must actively monitor and verify drivers' HOS and RODS.
    The FMCSA requires motor carriers to be responsible for 
establishing and using a system to verify the accuracy of RODS and 
drivers' HOS. Regardless of the type of system used by the motor 
carrier (whether a ``supporting document'' system using traditional 
paper or one using electronic-based supporting documents), the motor 
carrier must be able to verify drivers' HOS and the accuracy of the 
duty report categories (on duty, driving, sleeper berth, off duty, time 
reporting for duty each day, time released from duty each day, and the 
total number of hours on duty each day) recorded by drivers on their 
RODS. The FMCSA believes that most carriers already produce, or could 
produce with relative ease, a document to verify the time and place of 
the driver and, as required by regulation, the vehicle mileage at the 
beginning and end of each workday. Various other supporting documents 
may be obtained during the trip, such as dispatch records, bills of 
lading, daily call-in records, shipping and receiving invoices, toll 
receipts, automatic vehicle identifier transponder records, and a 
variety of other receipts containing verifiable dates, times, and 
locations that can be identified with a specific driver. FMCSA 
considers it the motor carrier's responsibility to determine what 
supporting documents are available to the driver and motor carrier that 
could be used to verify the accuracy of RODS and HOS and to ensure that 
any electronic or mechanical means to reference date, time and location 
in the production of these documents is activated. The motor carrier 
must then collect, use, and maintain those documents.

Collection and Retention of Supporting Documents

    The FMCSA believes all drivers, whether on the company payroll or 
an owner-operator, have a current regulatory obligation to comply with 
the HOS and RODS requirements, and to cooperate with their motor 
carrier employers by collecting and submitting the supporting documents 
needed to verify compliance with the rules. The FMCSA is clarifying in 
Sec.  395.10(d)(2) that drivers must submit supporting documents to the 
motor carrier at the time the corresponding record of duty status is 
submitted.
    The FMCSA would also clarify that motor carriers are currently 
required to retain all ``supporting documents'' that all drivers 
(including independent contractors) receive during a trip. This 
retention requirement applies no matter how the carrier pays drivers 
for these trips. The FMCSA imposes this requirement on the motor 
carrier under whose authority the driver is performing transportation 
services. Documents passing through the hands of leased drivers would 
be passing through the hands of the motor carrier because

[[Page 64004]]

drivers are the employees and representatives of the motor carrier for 
purposes of the FMCSRs during the course of the transportation service 
provided. This conclusion is consistent with the decisions in the 
National Retail Transportation cases discussed above and the FMCSRs, 
and would resolve the confusion created by two separate administrative 
cases: (1) In re Ace Doran Hauling & Rigging Co., Final Order Under 49 
CFR 385.15, February 24, 2000 (see FMCSA-2000-6997, document 4); and In 
the Matter of Ace Doran Hauling & Rigging Co., FMCSA-2000-6997 (Order, 
July 11, 2000) (see also Order on Reconsideration and Final Order with 
Regard to Civil Penalties (February 8, 2001) and Order Vacating Order 
on Reconsideration and Final Order With Regard to Civil Penalties (May 
10, 2001)). In In the Matter of Spears Transfer & Expediting, Inc., 
FMCSA-2001-9110, document 5 (Decision On Petition For Safety Rating 
Review, April 26, 2002), FMCSA held that toll receipts and other 
supporting documents passing through the hands of a motor carrier's 
drivers are considered to be in the possession of a carrier, even if 
not forwarded to carrier management. FMCSA expressly stated that it was 
overruling any finding in the Ace Doran safety rating appeal 
inconsistent with the Spears decision. However, the Spears decision did 
not overrule Ace Doran in its entirety, because the Spears case 
involved company drivers rather than leased operators. This rule, when 
adopted, would complete the process of overruling the February 24, 
2000, Order in Ace Doran by clarifying that the obligation to retain 
supporting documents extends to both independent contractors and 
company drivers. In doing so, the rule incorporates the long-standing 
definition of employee in 49 CFR 390.5, which states than an employee 
``includes a driver of a commercial motor vehicle (including an 
independent contractor while in the course of operating a commercial 
motor vehicle) * * *''
    The Senate report accompanying the HMTAA discussed those situations 
where a motor carrier leases the service of drivers, such as 
independent contractors, owner-operators, or fleet-broker drivers 
employed by other motor carriers. S. Rep. No. 217, 103d Cong., 1st 
Sess. 1640 (1994). The report noted that documentation of a leased 
driver's duty status was frequently not obtained and retained by the 
motor carrier using the driver. This report also stated that it was the 
intent of the HMTAA to ensure that supporting documents, generated by 
such business arrangements, be retained by the motor carriers that 
perform the transportation service. Additionally, it is clear that it 
was Congress' intent to facilitate Federal and State enforcement 
efforts to document violations of the HOS regulations.
    The FMCSA's enforcement personnel have experienced difficulties in 
obtaining supporting documents for trip lease arrangements between 
motor carriers and owner-operators. Senator Exon, the legislation's 
sponsor, discussed the need for this provision during the floor debate 
preceding final passage of the HMTAA. He explained that ``reports that 
auditors have been forced to retrieve documents from garbage dumpsters 
or play hide-and-seek with firms that have a history of habitual HOS 
violations give rise to the need for this provision.'' Further, Senator 
Exon stated that ``the object of this provision is to help make the 
roads safer by giving enforcement personnel the ability to catch 
flagrant abusers. It is not designed to create a trap for drivers who 
receive, for example, a pre-stamped toll receipt or to unfairly punish 
drivers for a de minimus deviation from the current rules.'' See 140 
Cong. Rec. S11323 (daily ed. August 11, 1994).
    The legislation sets a record retention period of at least six 
months. The FMCSA believes that this requirement was based upon 
Congress' intent to have supporting documents maintained for an 
identical period as the time required for duty status record retention, 
which is also six months. The FMCSA has received a few telephone 
inquiries regarding the retention period for ``Supporting Data for 
Reports and Statistics; Supporting data for periodical reports of * * * 
hours of service, * * *, etc.'' identified in 49 CFR part 379, Appendix 
A, Item K.2.
    This retention period relates to an old FHWA monthly report 
acquired from the ICC in 1966. The FHWA required the report until 
December 15, 1967. The FHWA had required every motor carrier, other 
than a private carrier of property, to report on a Form BMC 60 ``every 
instance during the calendar month covered thereby in which a driver 
employed or used by it has been required or permitted to be on duty, or 
to drive or operate a motor vehicle in excess of the hours * * *.'' 
Class I motor carriers of passengers and Classes I and II motor 
carriers of property also had to file the same Form BMC 60 report ``for 
every calendar month in which no driver employed or used by it has been 
required or permitted to be on duty, or to drive or operate a motor 
vehicle in excess of the hours * * *.'' See 32 FR 7128, May 11, 1967.
    The FHWA had a retention period of three years. The FHWA removed 
the reporting requirement on December 15, 1967 (32 FR 17941). The ICC 
and the Surface Transportation Board never removed the retention period 
from its preservation of records list. Based upon the savings clause in 
the ICC Termination Act of 1995, the FHWA transferred the former ICC's 
preservation of records lists to the FHWA regulations on June 21, 1997 
(62 FR 32040). This action provided the initial appearance of a 
conflict between parts 379 and 395 with respect to HOS supporting data 
and HOS supporting documents.
    The proposal in this document in no way involves ``reporting'' data 
similar to the former report Form BMC 60. This proposal only relates to 
motor carrier recordkeeping requirements and a motor carrier's 
comparison of its own records to the driver's records of duty status. 
The Office of Management and Budget's (OMB) regulations in 5 CFR 
1320.3(m) identifying the definitions of a ``recordkeeping 
requirement'' explain that a report is different than the retention of 
a record, notification of the existence of records, and disclosure of 
records. The FMCSA believes a report is a document submitted directly 
to the FMCSA, as was Form BMC 60 until December 15, 1967. In part 379, 
Appendix A, item K.2.'s reference to hours of service data, therefore, 
does not have any actual effect upon this proposal and therefore, the 
FMCSA proposes to delete item K.2. from Appendix A for these reasons.

Ability To Transfer Paper Supporting Documents That Contain a Signature 
to Automated, Electronic, or Laser Technology Formats

    The FMCSA proposes to allow motor carriers to transfer supporting 
documents to electronic or laser technology systems. Currently, Sec.  
390.31(d) allows all records to be maintained in computer technology 
format, except those documents containing signatures.
    Under this proposal, all supporting documents, including those 
requiring a signature, would be eligible for retention in electronic, 
laser or other automated format, so long as the motor carrier can 
produce an accurate, legible, and unaltered printed copy of the 
original supporting document within 48 hours of demand. The FMCSA is 
therefore proposing a conforming amendment to Sec.  390.31(d). 
Automated, electronic, or laser technology systems that transmit 
information or a report directly to the driver or the motor carrier 
would also be acceptable.

[[Page 64005]]

However, the FMCSA is also proposing a requirement that automatic, 
electronic, or laser technology systems must be capable of reproducing 
the information stored in such systems for inspection at the motor 
carrier's place of business.

Motor Carrier's Discretion To Use Technology With Paper Supporting 
Documents

    The FMCSA is also proposing to allow motor carriers to use 
electronic, laser or automated technology, (e.g., GPS, automatic 
vehicle identifier transponders, electronic bills of lading used by 
customs officials in the U.S. and other countries, and State driver-
vehicle inspection reports prepared by using pen-based computer 
systems) with paper supporting documents to allow the motor carrier to 
reduce the retention of some paper documents. However, the electronic 
data that can be used for verification of RODS must be maintained for 6 
months.
    The FMCSA would accept the data supplied by these technologies as 
alternatives to supporting documents, if the motor carrier can produce 
a legible, unaltered, printed copy of the required information at its 
principal place of business or other location. In the latter case, 
production would be required within 48 hours after a request has been 
made. The FMCSA would allow motor carriers to use any intelligent 
transportation system, developed now or in the future, in the manner 
and to the extent it is effective, for HOS and RODS verification.
    The FMCSA's use of supporting document information obtained from 
electronic, laser, or automated technologies would be limited to the 
specific purpose of compliance with hours of service limits. The FMCSA 
believes the only information it would need from these systems would be 
date, time, location, driver, and vehicle specific information. The 
FMCSA would not use the information for any other purpose. The FMCSA 
proposes that all confidential, proprietary, and private information 
would be redacted by the agency before the agency would place the hours 
of service supporting information in publicly accessible locations. 
This means that the agency would redact such things as consignees and 
consignor names, routes, rates, and other proprietary information from 
any records it has acquired for enforcement purposes before placing the 
information in public dockets or other places that the public may have 
general access.
    The FMCSA may allow a motor carrier to refrain from keeping all 
supporting documents when the agency finds a carrier's HOS compliance 
and its system demonstrate it effectively complies with the HOS rules. 
The FMCSA will consider a motor carrier's request to be exempt from the 
supporting document requirements under 49 CFR part 381. The FMCSA will 
base its decision on the carrier's HOS compliance as shown by the 
compliance review and the specific request the carrier submits.
    The FMCSA also is interested in comments from suppliers and 
technology developers concerning the possibility of integrating various 
existing electronic data systems, such as NorPass and PrePass, to 
assist motor carriers interested in developing supporting-document 
information systems in lieu of paper documents. If technologically 
feasible, such alternative systems could reduce burden by allowing 
carriers, FMCSA, and State and local enforcement agencies to check HOS 
compliance remotely. The clearinghouse model may be relevant to this 
concept. The International Registration Plan, for example, uses a 
clearinghouse to apportion motor carrier registration fees (paid to the 
base State) among States in which registered vehicles have been driven.
    The FMCSA would be particularly interested in supporting-document 
information systems that could cull out dates, times, locations, 
drivers, and vehicle-specific information. The latter technology could 
enable motor carriers and FMCSA to redact confidential, proprietary, 
and private information (such as consignee and consignor names, routes, 
and rates) that may be reviewed or audited by law enforcement officials 
but should not enter the public domain.

Location of Records

    Under the proposed changes to Sec.  390.29, motor carriers could 
retain their time records, RODS and supporting documents at a location 
of their choice. However, the location would have to be suitable for 
preserving the records so that they would not be damaged or lost. In 
addition, a motor carrier must be able to produce such records at its 
principal place of business within 48 hours of a request by an 
authorized enforcement official if those records are kept at a location 
other than the principal place of business. Otherwise, records kept at 
the principal place of business must be produced upon demand and 
without unreasonable delay. This request for documents can be made by 
telephone, fax, mail, or by other means. Saturdays, Sundays and 
holidays would be excluded from the computation of the 48-hour period 
of time. This 48-hour period would provide a reasonable amount of time 
for documents to be sent via overnight mail. Furthermore, most business 
operations with electronic transfer capabilities could probably produce 
information in a shorter period.

Retention Period

    The FMCSA is proposing that all supporting documents, whether in 
electronic or paper format, be retained for the entire retention 
period. In this proposal, the term ``all supporting documents'' means 
all documents, whether electronic or paper, that can be used to verify 
the driver's RODS and time record entries for any particular trip. 
These documents must be capable of being matched by a special agent of 
the FMCSA or other authorized representative or a Federal, State, 
local, or tribal government to the original drivers' RODS. In addition, 
supporting documents may be required to be kept for longer periods 
based upon other Federal, State, or local laws, rules, or orders (e.g., 
Internal Revenue Service rules). The FMCSA is proposing that these 
supporting documents must be kept for six months after receipt by the 
motor carrier, unless a longer period of time is required by another 
authority (see proposed Sec. Sec.  395.8(k) and 395.10(h)).

Appendix B to Part 385, Explanation of Safety Rating Process

    Section VII of Appendix B to part 385 lists critical and acute 
regulations, which play an important role in assigning a safety rating. 
The descriptions of section 395.8(i) in this section of the appendix 
would be updated to conform to the requirements of the SNPRM. New 
descriptions for the clarifications provided at Sec.  395.10 would also 
be added, to allow the agency to accurately update the safety rating 
process on the effective date of the final rule. The FMCSA asks the 
public to comment on whether these regulatory citations are appropriate 
or different citations should be used, and whether the citations should 
be ``critical'' or ``acute'' violations.

Regulatory Impact Analysis

    This SNPRM imposes no new regulations and therefore imposes no new 
costs or benefits. The purpose of this SNPRM is to bring existing rules 
into conformity with directions given by Congress and to remove any 
potential for misunderstanding of the rules by motor carriers or 
enforcement personnel.
    As a result of past misunderstandings, some motor carriers and 
drivers do not believe the November 26, 1982, final

[[Page 64006]]

rule applies to them. They would now incur costs which they should have 
incurred with the promulgation of the 1982 rule. The FMCSA has 
estimated those costs and puts them in the context of the benefits 
necessary to make this proposal cost-effective.
    Cost-effectiveness occurs when the benefits from a proposal equal 
or exceed the costs. In this case, that is the cost-effectiveness of 
clarifying the rule versus ignoring the misinterpretations. Given 
Congressional direction and an internal desire for clarity, 
consistency, and fairness, ignoring the misinterpretations is not an 
option. A meaningful reality check and perspective will be obtained by 
going through the calculations. For this analysis, FMCSA assumes that 
25 percent of drivers and owner-operators are not in compliance with 
the existing regulation. The cost to bring them into compliance would 
be $14.2 million per year. As explained in the Regulatory Evaluation in 
the docket, in order for this proposal to be cost-effective, it would 
have to deter an estimated 228 crashes, including 2.3 fatal crashes. 
FMCSA seeks comment and data whether its 25 percent estimate is 
correct.

Benefits

    The direct benefits of this rule are better conformity with the 
instructions of Congress, better clarity, and more even and thorough 
enforcement of HOS regulations. Enforcement is only a shadow benefit of 
the real benefit sought, which is safer roadways. Conformity and 
clarity are desirable, intangible qualities that do not lend themselves 
to straightforward quantification; therefore we do not estimate a 
tangible value for these benefits.
    It would be most desirable if the FMCSA could directly compute the 
decrease in highway accidents and fatalities as a function of easier 
enforcement of HOS rules. Certainly, such a function exists in a 
probabilistic sense, but knowing or estimating that function would 
require experimentation in the real world, costing real lives. 
Therefore, the agency presents the reduction in accidents necessary to 
make this rule cost-effective.
    The FMCSA knows from previous studies that accidents occur roughly 
in proportion, with fatalities being the rarest and property-damage-
only (PDO) being the most common. The agency has not found anything in 
this SNPRM to suggest that it would affect one severity category 
differently from any other, so the agency assumes that those 
proportions would be unaltered.

                           Table 1.--Number of Crashes and Costs in 2000, by Severity
----------------------------------------------------------------------------------------------------------------
                                                               PDO         Injury         Fatal         Total
----------------------------------------------------------------------------------------------------------------
Crashes \7\.............................................       338,000        96,000         4,917       438,917
Percentage..............................................           77%           22%            1%          100%
Cost per Crash \8\......................................        $5,026      $100,382    $3,650,810  ............
----------------------------------------------------------------------------------------------------------------
\7\ FMCSA, ``Large Truck Crash Facts 2000,'' Tables 13 through 18. 2002.
\8\ Zaloshnja, Eduard, Ted Miller, and Rebecca Spicer (National Technical Information Service, Springfield, VA)
  Costs of Large Truck- and Bus-Involved Crashes, October 2000. (Inflated to 2002 dollars.)

    Keeping the ratio constant, averting one accident involving a 
fatality also averts 22 accidents with injuries and 77 accidents with 
PDO. Therefore, a measure that averts one fatal accident results in 
total savings of approximately $6,246,216 from the 100 total accidents 
avoided. Even if these costs were considered new costs, the rule would 
only have to avert 228 accidents annually to be cost-beneficial, of 
which about 2.3 would involve a fatality, 50.2 would involve an injury, 
and 175.5 would involve PDO. Multiplying these values by the 
corresponding values from Table 1 yields $14.3 million in savings from 
reducing the accident rate.

Costs

    While the FMCSA does not believe this SNPRM would impose any costs 
because all of its requirements are already required, the FMCSA has 
prepared the following analysis to show the effects on those not 
complying with the current rule. Their costs should be attributed to 
existing rules, even if, due to misunderstanding, they only begin 
assuming those costs after this clarification.
    Drivers whose records have not been retained would have to place 
identifying information on all supporting documents that could be used 
to verify their RODS. Recognizing that no two trips are the same 
regarding the amount of documentation produced, the FMCSA used standard 
figures to approximate the central tendency of costs. The FMCSA assumes 
that ten pieces of information would need to be kept from each full day 
of travel. The agency estimates that it would take approximately 15 
seconds to write the necessary information on each document. Assuming 
250 full workdays in a year, this totals 625 minutes, or 10.42 hours, 
per driver per year. Using Bureau of Labor Statistics (BLS) data on 
``Median Weekly Earnings'' from the Occupational Employment and Wages 
Estimates data for 1999 and 2000, the agency estimates average truck 
driver's wages of $15.82 per hour (including a 20 percent increase to 
account for employee fringe benefits). Annualized, this is $165 per 
driver affected.
    The FMCSA assumes that this cost is imposed only on owner-operators 
not complying correctly with the current rule. According to Professor 
Francine LaFontaine of the University of Michigan, there are 
approximately 300,000 owner-operators.\9\ The FMCSA believes that most 
of these owner-operators are complying with these provisions. If only 
75 percent of owner-operators are currently collecting and retaining 
the required supporting documents, 75,000 (0.25 times 300,000) are not. 
This translates into an annual compliance cost of $12.4 million (75,000 
times $165).
---------------------------------------------------------------------------

    \9\ Francine LaFontaine, Incentive Contracting in Practice: A 
Detailed Look at Owner Operator Leases in the U.S. Truckload 
Trucking Industry, Working Paper, June 2000, available at http://webuser.bus.umich.edu/Departments/BusEcon/research/wp.lafontaine.2000.06.06.html.
---------------------------------------------------------------------------

    Owner-operators would also have to perform the administrative tasks 
of filing, maintaining, periodically deleting, and, if inspected, 
retrieving the supporting documents. This whole process would take 
between 1 and 2 hours annually, depending on many factors. The agency 
uses a proxy of one and a half hours and the same wage rate (since this 
calculation would come out of driving for owner-operators). This 
amounts to just under another $1.8 million, for a total of $14.2 
million.
    Motor carriers must have a self-monitoring system in place. This 
system should explain how they use supporting documents (and other 
means) to ensure

[[Page 64007]]

that their drivers comply with the HOS regulations. Since this is not a 
new requirement, it would not impose any additional costs to motor 
carriers.

Section-by-Section Analysis

Part 379, Appendix A, Row K.2

    As discussed above in the section headed ``Collection and Retention 
of Supporting Documents,'' the FMCSA proposes to amend appendix A to 49 
CFR part 379 to remove the phrase ``hours of service,'' from item K.2. 
This would remove an obsolete reference to a report that has not been 
required since December 15, 1967.

Part 385, Appendix B, Section VII

    As discussed above in the section headed ``Appendix B to Part 385 
Explanation of Safety Rating Process,'' the FMCSA proposes to revise 
the citation for Sec.  395.8(i) and to add citations for Sec.  
395.10(a), (e), and (f) to the section VII list of acute and critical 
regulations. These citations play an important role in assigning a 
safety rating. The description for Sec.  395.8(i) is being updated to 
conform to the requirements of this SNPRM. New descriptions for 
paragraphs Sec.  395.10(a), (e), and (f) are also being added to allow 
the agency to accurately update the safety rating process on the 
effective date of a subsequent final rule.

Section 390.5 Definitions

    The FMCSA proposes to amend the definition of the term ``employee'' 
originally adopted from the Motor Carrier Safety Act of 1984, Pub. L. 
98-554, Oct. 30, 1984, Sec. 204(2), 98 Stat. 2829, 2833 (MCSA) (now 
codified at 49 U.S.C. 31132(2)). ``The Committee emphasize[d] that its 
inclusion of independent contractors under the definition of employee 
is for the purpose of [the MCSA] only; the Committee [did] not intend 
that this definition be construed as affecting the interpretation of 
the Internal Revenue Service as to the status of independent 
contractors under the tax laws.''
    ``Independent owner-operators'' employment status posed a unique 
problem to the [Congressional] drafters' of the MCSA. ``An independent 
owner-operator owns his own truck and drives it. He also may own 
several other trucks and have several drivers working for him. There is 
no question that the commercial motor vehicles he drives and his 
driving should be subject to the same safety rules as other commercial 
motor vehicles on the highway. All commercial motor vehicles if 
improperly maintained or operated pose a significant threat to the 
public safety.'' S. Rpt. 98-424, page 7.
    Independent owner-operators' employment status and inclusion in the 
MCSA has continually posed unique problems for owner-operators to 
understand their responsibilities and unique problems for FMCSA's 
enforcement of the regulations. Based on these continuing problems, the 
FMCSA proposes to add the phrase ``and an owner-operator'' after the 
phrase ``independent contractor.'' The Congressional intent was that 
term ``independent contractor'' would substitute for the term owner-
operators, however, many owner-operators and motor carriers may have 
forgotten this history. Adding the phrase after the phrase 
``independent contractor'' should ensure motor carriers and drivers 
understand that the MCSA's generic term ``employee'' used by the FMCSA 
includes owner-operators. The FMCSA also wants to restate that using 
the term ``employee'' continues the FMCSA's and Congressional intent 
that the term does not affect the interpretation of the Internal 
Revenue Service as to the status of independent contractors under the 
tax laws.

Section 390.29 Location of Records and Documents

    The FMCSA proposes to amend paragraph (b) by requiring the 
immediate production of records and documents that a motor carrier 
maintains at each principal place of business. The current requirement 
is silent as to when a motor carrier must produce records and documents 
that a motor carrier maintains at each principal place of business. 
Motor carriers have attempted to stall FMCSA special agents from 
conducting unannounced or short notice on-site investigations at the 
principal place of business generally providing the reason that Sec.  
390.29(b) allows them to produce records for up to 48 hours after a 
demand is made. The FMCSA never intended to allow such practices. The 
proposal would make clear that all records and documents which are 
maintained at the principal place of business where an investigation is 
occurring must be produced upon demand by a special agent of the FMCSA 
or other authorized representative of a Federal, State, local, or 
tribal government.
    Paragraph (b)(2) would continue to allow records and documents that 
motor carriers maintain at their regional offices or driver work-
reporting locations to be made available for inspection within 48 hours 
after a demand is made. The FMCSA would continue to exclude Saturdays, 
Sundays, and Federal holidays from the computation of the 48-hour 
period of time.

Section 390.31 Copies of Records or Documents

    The FMCSA proposes to revise paragraph (d) to incorporate guidance 
that was published allowing automated, electronic, or laser technology 
systems to store copies of records or documents provided the motor 
carrier can produce an accurate, legible, and unaltered printed copy of 
the required data and provided that alternate means for signature 
verification are available. If the FMCSA adopts this proposed 
paragraph, the two interpretations published on April 4, 1997 (62 FR 
16730) on page 16408, column three for Sec.  390.31 would become 
obsolete and unnecessary.

Section 395.1 Scope of the Rules in This Part

    The FMCSA proposes to move the introductory phrase of Sec.  
395.8(a) to Sec.  395.1(p). The FHWA moved the three exceptions and 
exemptions contained in the CFR before August 31, 1992 at Sec. Sec.  
395.8(k)(2) Retention of driver's record of duty status, 395.8(l)(1) 
100 air-mile radius, and 395.8(l)(2) Hawaiian driver's records of duty 
status to Sec.  395.1 on July 30, 1992 (57 FR 33638, at 33645). The 
FMCSA intends to move the exception for private motor carrier of 
passengers (nonbusiness) and its drivers to Sec.  395.1 to list the 
various exceptions and exemptions in one convenient location at the 
front of part 395.

Section 395.2 Definitions

    The FMCSA proposes to revise the introductory phrase of Sec.  395.2 
to ensure that the public knows that all definitions used in Part 395 
that are not separately defined in this section are defined in Sec.  
390.5.

Section 395.8 Records of Duty Status

    As discussed above under the section-by-section subheading ``Sec.  
395.1 Scope of the rules in this part,'' the FMCSA proposes to revise 
the introductory phrase of paragraph (a) to move the exception for 
private motor carriers of passengers (nonbusiness) and their drivers to 
Sec.  395.1(p).
    The FMCSA proposes to revise paragraph (d)(3) to include coach and 
bus vehicle numbers to be included on the record of duty status.
    Paragraph (i) would revise the current requirement to include that 
motor carriers and drivers must collect supporting documents along with 
the records of duty status. The FMCSA

[[Page 64008]]

intends that the use of the term ``systematically'' in this section and 
subsequent sections would have the ordinary common-sense definition to 
mean a methodical procedure that is marked by thoroughness and 
regularity.
    The FMCSA proposes paragraph (k) would revise the current 
requirement to include that motor carriers and drivers must retain 
systematically supporting documents and the records of duty status.

Section 395.10 Systematic Verification and Record Retention

    This proposed new section would clarify existing requirements that 
have been implied by the FMCSA and its predecessors and upheld by the 
D.C. and Sixth Circuit Courts.
    First, the FMCSA would clarify that every motor carrier must 
systematically and effectively monitor its drivers' hours of service 
and the accuracy of the information contained on drivers' records of 
duty status by comparing paper records of duty status, automatic on-
board recording device records, or GPS records with information 
contained in supporting documents. Supporting documents could include 
third-party records, including State weight or toll receipts or 
transponder records maintained on behalf of States by providers such as 
PrePass or NorPass. The motor carrier's required monitoring procedure 
would be methodical, thorough, and regular. The procedure must allow an 
FMCSA special agent to verify drivers' records using the supporting 
documents.
    In addition to the system employed by one of NASTC's larger, more 
sophisticated members that was described above in the discussion of 
comments to the NPRM, the FMCSA believes the following example would 
also be a best practice for what the agency is seeking to attain by 
this proposal to require systematic and effective monitoring to ensure 
drivers comply with the Federal HOS.
    An Indiana-based motor carrier uses a system that combines 
electronic technology and paper supporting documents for determining 
driver compliance with HOS requirements. This carrier's system consists 
of a three (3) level false RODS checking system.
    Level One: The first level of the analysis uses an electronic 
interface with the fuel billing system automatically comparing all fuel 
purchases and cash advances--by date and time--with each driver's daily 
RODS. The system looks for ``on duty not driving'' time which coincides 
with the particular fuel purchase or cash advance. A non-match may 
indicate an inaccurate log. However, whether or not there is a match, 
the carrier passes the RODS on to Level Two.
    Level Two: The carrier compares RODS with any and all receipts that 
are in the driver's trip envelope for that trip. This includes purchase 
receipts, tolls, scales, and any other dated supporting documents.
    Level Three: The carrier audits the RODS by using ``point-to-
point'' mileage software to check the miles and hours driven for 
accuracy.
    In addition to the three-level approach above, the carrier also 
uses information from all moving violations, accident reports, roadside 
inspections, and motorist complaints to check the accuracy of driver's 
RODS.
    Using this three-level approach, the carrier approaches a 100 
percent check of all RODS for falsification. In other words, their goal 
is 100 percent with the rare instance where there is not enough 
supporting documents for one trip to accurately verify the RODS.
    Paragraph (b) would clarify that the FMCSA would measure the motor 
carrier's compliance against a certain level to determine its 
effectiveness. The level where FMCSA currently determines whether too 
many false records and non-compliance exists is whether an FMCSA 
special agent finds 10 percent or greater drivers' records to be false 
or in violation. The FMCSA may use any supporting documents or other 
evidence, whether or not in the motor carrier's possession, to 
determine the validity of the drivers' paper or automatic records of 
duty status and the effectiveness of the motor carrier's supporting 
document monitoring system. The FMCSA, however, may limit its special 
agents' use of records that the motor carrier does not possess or could 
not have possessed, at the FMCSA's discretion.
    The FMCSA proposes in paragraph (c) that it would clarify that the 
motor carrier would be required to begin to systematically use 
effective supporting documents that FMCSA believes to be more effective 
to verify the accuracy of the hours of service and paper or automatic 
records of duty status, if the agency determines the motor carrier's 
monitoring is ineffective in verifying the drivers' compliance with the 
hours of service and the accuracy of the paper or automatic records of 
duty status. In addition, the FMCSA believes it is important to note 
that the phrase ``verifying the drivers' compliance with the hours of 
service'' as is currently interpreted would include that the agency 
would determine that a carrier's system is ineffective if the carrier 
has a significant number of HOS violations or false RODS.
    Paragraph (d) proposes to clarify that the motor carrier's drivers 
must retain all supporting documents that come into the possession of 
the driver in the ordinary course of the driving operation. This would 
include all independent contractors and owner operators as discussed 
above. In addition, the FMCSA would clarify that the driver must 
provide the supporting documents and the paper or automatic records of 
duty status to authorized enforcement officials of Federal, State or 
local government upon request or demand as well as to the motor 
carrier.
    The FMCSA proposes in paragraph (e) to clarify the motor carrier's 
and driver's responsibilities to identify supporting documents and the 
paper or automatic record of duty status they support. In addition, the 
regulation would include clarifying the responsibility that motor 
carriers and drivers must not obscure or deface other information 
contained in the supporting document. The responsibility that motor 
carriers and drivers must not obscure or deface other information 
contained in the supporting document comes from 49 U.S.C. 521.
    The FMCSA proposes that the identification system may include 
legibly adding the driver's full name, date, and vehicle number, if 
those items do not already appear on the document. The FMCSA, however, 
is not requiring the carrier or driver add such information to cross-
reference the documents. The current implication in the rules is only 
that a means to cross-reference the documents is necessary. Thus, a 
carrier may use a different system to cross reference supporting 
documents to RODS.
    Paragraph (f) also proposes to clarify the motor carrier's 
responsibility to identify additional supporting documents that it 
receives from any source, but that the driver probably does not 
receive. This would include documents generated by the carrier and 
documents from both carrier and third-party electronic systems (e.g., 
GPS reports, on-board computer records, transponder reports, and 
scanned or electronically mailed documents). Various toll authorities 
are allowing carriers to pay tolls using transponders for which the 
carrier may get periodic reports of use or charges that the FMCSA would 
consider to be supporting documents. In addition, electronic-mail 
messages have become widely used between drivers and motor carriers. 
These messages have references to dates, times, or locations, which 
must remain activated, and must be kept in a manner that permits 
matching of

[[Page 64009]]

records to the driver's RODS. Motor carriers should recognize, however, 
that such records are not in the public domain, and exert appropriate 
privacy controls.
    The FMCSA proposes in paragraph (g) to restate the current 
requirement that motor carriers must provide RODS and supporting 
documents to any duly authorized Federal, State or local government 
enforcement official upon request or demand as is required currently, 
and would continue to be required, under Sec. Sec.  390.29, 390.31, and 
395.8(k).
    Finally, the FMCSA proposes in paragraph (h) to clarify that the 
violations of these clarified rules would be considered failures of the 
motor carrier's and driver's responsibilities to verify and maintain 
records of duty status and supporting documents. The FMCSA proposes 
such violations would include civil and criminal penalties under 49 
U.S.C. 521 for such violations as:
    (1) Failure to prevent a driver from falsifying his records of duty 
status;
    (2) Failure to prevent alteration of supporting documents;
    (3) Alteration of supporting documents which changes their 
accuracy;
    (4) Failure to prevent a driver from exceeding the hours-of-
service; and
    (5) Failure to have an effective system to verify and maintain 
records of duty status and supporting documents.

Rulemaking Analyses and Notices

Executive Order 12866 (Regulatory Planning and Review) and DOT 
Regulatory Policies and Procedures

    The FMCSA has determined that this document does not contain an 
economically significant regulatory action under Executive Order 12866. 
The FMCSA has estimated that this rulemaking would have an annual 
economic impact on the motor carrier industry of less than $100 
million. The proposal is significant under Executive Order 12866 
because of substantial public interest. The proposal has been reviewed 
by OMB.
    The FMCSA has determined this regulatory action is significant 
under the regulatory policies and procedures of the DOT because of the 
high level of interest concerning motor carrier safety issues expressed 
by Congress, motor carriers, their drivers and other employees, State 
governments, safety advocates, and members of the traveling public.
    As discussed below, current FMCSA regulations have required the 
retention of all supporting documents since January 1, 1983, the 
effective date of the November 26, 1982, final rule, and responsible 
motor carriers have collected and retained all such documents both in 
the ordinary course of business and for purposes of regulatory 
compliance. This rule would explicitly require motor carriers to have 
systematic means to inspect, verify, and maintain drivers' HOS and 
RODS; more clearly would define who must collect and retain supporting 
documents; and would explain how supporting documents are to be 
collected, where they must be kept, and for how long. This rulemaking 
action would not create a serious inconsistency with any other agency's 
action or materially alter the budgetary impact of any entitlements, 
grants, user fees, or loan programs. The FMCSA discussed the regulatory 
impact analysis earlier in this document under the heading Regulatory 
Impact Analysis. Evaluation of the information collection costs of this 
proposed rule is described fully below in the Paperwork Reduction Act 
section.

Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-
612), the agency has evaluated the effects of this rulemaking on small 
entities. The Regulatory Flexibility Act requires Federal agencies to 
analyze the impact of rulemakings on small entities, unless the Agency 
certifies that the rule will not have a significant economic impact on 
a substantial number of small entities. This proposal does not impose 
any costs on the public and therefore does not impose any costs upon 
small entities. FMCSA, however, has prepared an Initial Regulatory 
Flexibility Analysis because of the considerable public interest in 
this proposal to show the negligible potential economic impact it would 
have on small entities domiciled in the United States. We performed the 
analysis in the broadest possible terms by counting all the costs that 
small entities might begin to bear as a result of this clarification, 
even if those costs should have been borne by them all along.
    This Initial Regulatory Flexibility Analysis must include the 
following elements:
    1. A description of reasons why action is being considered;
    2. The objectives of, and legal basis for, the rule;
    3. A description and estimated number of small entities regulated 
and domiciled in the United States;
    4. A description and estimate of compliance requirements including 
differences in cost, if any, for different groups of small entities;
    5. Identification of duplication, overlap, and conflict with other 
rules and regulations; and
    6. A description of significant alternatives to the rule.

Initial Regulatory Flexibility Analysis

1. Description of Reasons Action Is Being Taken
    The purpose of the proposal is to bring existing rules into 
conformity with directions given by Congress and to remove any 
potential for misunderstanding of the rules by motor carriers or 
enforcement personnel. As a result of past misunderstanding, some motor 
carriers and drivers did not believe the rule applied to them. They 
would now incur costs which they should have incurred with the passage 
of the rule on November 26, 1982 (47 FR 53383).
    This SNPRM would clarify existing requirements that have been 
implied by the FMCSA and its predecessors and upheld by the D.C. and 
Sixth Circuit Courts as discussed above. The SNPRM would clarify 
decisions in the National Retail Transportation cases discussed above, 
and would resolve the confusion created by two separate administrative 
cases: (1) In re Ace Doran Hauling & Rigging Co., Final Order Under 49 
CFR 385.15, February 24, 2000 (see FMCSA-2000-6997, document 4); and In 
the Matter of Ace Doran Hauling & Rigging Co., FMCSA-2000-6997 (Order, 
July 11, 2000) (see also Order on Reconsideration and Final Order with 
Regard to Civil Penalties (February 8, 2001) and Order Vacating Order 
on Reconsideration and Final Order With Regard to Civil Penalties (May 
10, 2001)). In the Matter of Spears Transfer & Expediting, Inc., FMCSA-
2001-9110, document 5 (Decision On Petition For Safety Rating Review, 
April 26, 2002), FMCSA held that toll receipts and other supporting 
documents passing through the hands of a motor carrier's drivers are 
considered to be in the possession of a carrier, even if not forwarded 
to carrier management. FMCSA expressly stated that it was overruling 
any finding in the Ace Doran safety rating appeal inconsistent with the 
Spears decision. However, the Spears decision did not overrule Ace 
Doran in its entirety, because the Spears case involved company drivers 
rather than leased operators. This proposal, when adopted, would 
complete the process of overruling the February 24, 2000, Order in Ace 
Doran by clarifying that the obligation to retain supporting documents 
extends to both independent contractors and company drivers. In doing 
so, the proposal incorporates the

[[Page 64010]]

long-standing definition of employee in 49 CFR 390.5, which states than 
an employee ``includes a driver of a commercial motor vehicle 
(including an independent contractor while in the course of operating a 
commercial motor vehicle) * * *''
2. Objectives and Legal Basis
    The objective for this action is to improve both (A) compliance by 
commercial motor vehicle (CMV) drivers and motor carriers with the HOS 
requirements, and (B) the effectiveness and efficiency of Federal and 
State enforcement officers reviewing such compliance. As noted above, 
the legal basis for this rule is section 113 of the Hazardous Materials 
Transportation Authorization Act of 1994, Pub. L. 103-311, 108 Stat. 
1673 (August 26, 1994).
3. Description and Estimated Number of Small Entities Regulated and 
Domiciled in the United States
    The main cost generating element of this proposal is to bring all 
owner-operators into compliance with the record keeping requirements of 
the hours-of-service regulations. We assume 25 percent of approximately 
300,000 existing owner-operators are not in compliance with the 
existing regulations for cost estimation purposes. Owner-operators are 
acting as either drivers or motor carriers.
4. Description and Estimate of Compliance Requirements
    This proposal would apply to those small entities regulated by the 
FMCSA that use CMV drivers. It is difficult to determine exactly how 
many small entities would be affected by this proposal, partly because 
it is unknown how many motor carriers were unaware that the existing 
rule applies to them and partly because it is not known year-to-year 
how many small entities on average would use CMV drivers. However, as 
of June 2004, there were 650,000 U.S.-domiciled motor carriers on the 
FMCSA's Motor Carrier Management Information System (MCMIS) census 
file. This includes both for-hire and private motor carriers domiciled 
in the United States. The Small Business Administration (SBA) defines 
small businesses in the motor carrier industry based on thresholds for 
average annual revenues, below which SBA considers a motor carrier 
small. For trucking companies, the threshold is $21.5 million in annual 
sales, while for motorcoach and related industries the threshold is $6 
million in annual sales. Data from the 1997 Economic Census (U.S. 
Census Bureau), North American Industrial Classification System (NAICS) 
Code 4841, ``General Freight Trucking,'' indicates that 99 percent of 
``general freight'' trucking firms had less than $25 million in annual 
sales in 1997 (which most closely corresponds to the SBA threshold of 
$21.5 million for motor carriers). In the case of passenger (or 
motorcoach) carriers, the 1997 Economic Census, NAICS Code 4855, 
``Charter Bus Industry,'' indicates that 94 percent of charter bus 
firms had less than $5 million in annual sales in 1997 (which most 
closely corresponds to the SBA threshold of $6 million for passenger 
carriers).
    Because the FMCSA does not have annual sales data on private 
carriers, it assumes the revenue and operational characteristics of 
private motor carriers are generally similar to those of for-hire motor 
carriers. Regardless of which of the above percentages is used (99, 94, 
or 96 percent), FMCSA estimates that over 600,000 of the approximately 
650,000 total motor carriers in the MCMIS Census File meet the 
definition of small businesses.
    Although these small entities would have to keep records verifying 
all of their employees' status regarding the HOS, there is no 
additional administrative cost borne by most of them because they 
already have to maintain those records under the current system. Of the 
three hundred thousand (300,000) owner-operators, some unknown number 
are not in compliance due to misinterpretation of the rule. Now they 
would incur the recordkeeping costs they should have incurred since 
January 1, 1983, which are the same as the costs that other motor 
carriers have been bearing.
    The FMCSA believes that all the costs of this proposal would be 
borne by owner-operators who were required to bear them all along but 
were unaware of that fact.
    Data from the 1997 Economic Census, NAICS Code 4841 (General 
Freight Trucking) and NAICS Code 4855 (Charter Bus Industry) are 
contained in the tables 2 and 3.

                            Table 2.--Average Annual Revenues of Small Trucking Firms
                                   [NAICS Code 4841, General Freight Trucking]
----------------------------------------------------------------------------------------------------------------
                                                                                               Compliance costs
                                                        Number of firms     Average annual     per driver ($165
                    Revenue size                          (percent of      revenues per firm    per driver), as
                                                        segment total)        (Millions)       percent of annual
                                                                                               revenues per firm
----------------------------------------------------------------------------------------------------------------
Less than $25 million...............................            *27,609                1.33              0.0124
----------------------------------------------------------------------------------------------------------------
*99 percent of segment total.


                          Table 3.--Average Annual Revenues of Small Passenger Carriers
                                     [NAICS Code 4855, Charter Bus Industry]
----------------------------------------------------------------------------------------------------------------
                                                                                               Compliance costs
                                                        Number of firms     Average annual     per driver ($165
                    Revenue size                          (percent of      revenues per firm    per driver), as
                                                        segment total)        (Millions)       percent of annual
                                                                                               revenues per firm
----------------------------------------------------------------------------------------------------------------
Less than $5 million................................             *1,022                0.98              0.0168
----------------------------------------------------------------------------------------------------------------
*94 percent of segment total.

    Since we do not have sufficient information to estimate the 
distribution of the number of drivers per small firm, we provide 
reasonable bounds of one employee per firm to 30 employees per firm. 
Between these boundaries, the costs range from 0.0124 percent and 0.372 
percent of annual revenues. These bounds overestimate the effect on the

[[Page 64011]]

larger motor carriers because they generally have more than the average 
revenue for firms in this size category. Even at 0.372 percent of 
annual revenues (i.e. $4,950 for a firm with 30 drivers), this rule is 
clearly not imposing a cost burden that would alter the market or force 
firms from the industry.
    There are other potentially affected industries, listed in Table 4. 
They are less directly affected than the two listed above, but still 
may include some firms employing owner-operators who wrongly assumed 
that their employers were the ones required to maintain the supporting 
documents for six months. These are listed for completeness only, as we 
do not expect many affected small entities in any of these industries.

             Table 4.--Other Potentially Affected Industries
------------------------------------------------------------------------
                                      Alphabetic       2002 NAICS short
           NAICS code                  keywords              title
------------------------------------------------------------------------
1112............................  ``Truck farming,    Other Vegetable
                                   field, bedding      (except Potato)
                                   plant and seed      and Melon
                                   production''.       Farming.
2389............................  ``Aerial or picker  Site Preparation
                                   truck,              Contractors.
                                   construction,
                                   rental with
                                   operator''.
4251............................  Fuel oil truck      Wholesale Trade
                                   jobbers.            Agents and
                                                       Brokers.
4842............................  ``Trucking used     Used Household and
                                   household,          Office Goods
                                   office, or          Moving.
                                   institutional
                                   furniture and
                                   equipment''.
4852............................  ``Bus line          Interurban and
                                   operation,          Rural Bus
                                   intercity''.        Transportation.
4854............................  ``Bus operation,    School and
                                   school and          Employee Bus
                                   employee''.         Transportation.
4871............................  ``Buses, scenic     ``Scenic and
                                   and sightseeing     Sightseeing
                                   operation''.        Transportation,
                                                       Land''.
5621............................  Dump trucking of    Other Waste
                                   rubble or brush     Collection.
                                   with collection
                                   or disposal.
7223............................  Ice cream truck     Mobile Food
                                   vendors.            Services.
------------------------------------------------------------------------

5. Compliance Requirements of the Rule
    Although these small entities would have to keep records verifying 
all of their employees' hours-of-service status, there is no additional 
administrative cost borne by most of them because they already have to 
maintain those records under the current system. Some portion of the 
300,000 owner-operators would now have to incur some additional cost 
related to providing motor carriers supporting documents that the 
owner-operators previously maintained for tax reporting and other 
business expense purposes.
    The FMCSA believes that all the costs of this proposal would be 
borne by owner-operators who failed to comply with our current 
regulations. These owner-operators would require no special technical 
or professional skills beyond what they already possess.
6. A Description of Significant Alternatives to the Rule
    As explained above, this rule would have minimal impact on small 
businesses. Any alternatives would be likely to increase the costs 
rather than decrease them since ignoring the misunderstanding is not a 
permissible option. For example, changing the reporting system so that 
records are kept electronically would be likely to impose high initial 
costs and small maintenance and power costs. Reducing the length of 
records retention would reduce costs, but only slightly. Short 
retention periods would restrict the special agent's ability to 
identify patterns that indicate unsafe practices.
    FMCSA welcomes comments on these or other possible alternatives and 
their impacts on small entities.

Unfunded Mandates Reform Act of 1995

    This proposed rule would not impose a Federal mandate resulting in 
the expenditure by State, local, and tribal governments, in the 
aggregate, or by the private sector, of $120.7 million or more in any 
one year (in 2003 dollars) (2 U.S.C. 1531 et seq.). The FMCSA believes 
the total projected cost of this proposal is $14.2 million per year and 
that the cost would be borne solely by owner-operators. State and local 
governments may see a reduction in enforcement costs, but FMCSA has not 
quantified this because it is not clear whether they would seek the 
same enforcement level at a lower cost or more enforcement at the same 
cost. For the purposes of this analysis, the agency assumed the latter. 
The FMCSA requests additional comments whether this should be 
considered a Federal mandate resulting in the expenditure by State, 
local, and tribal governments, in the aggregate, or by the private 
sector, of $120.7 million or more in any one year.

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et 
seq.), Federal agencies must obtain approval from the OMB for each 
collection of information they conduct, sponsor, or require through 
regulations. An analysis of this Supplemental Notice of Proposed 
Rulemaking has been made by the FMCSA, and it has been determined that 
it relates to the currently-approved information collection covered by 
OMB Control No. 2126-0001, entitled ``Hours-of-Service of Drivers 
Regulations.'' Information Collection 2126-0001, with an annual burden 
of 160,376,492 hours, expires on April 30, 2006.
    This SNPRM intends to clarify each motor carrier's hour-of-service 
and records of duty status responsibilities under the current 
regulations. The FMCSA has preliminarily determined that this proposal 
would not result in an increase in the existing information collection 
burden. However, the agency requests public comment on this 
determination. The OMB currently approves this information collection 
as follows:
    OMB Control Number: 2126-0001.
    Title: Hours of Service of Drivers Regulations.
    Respondents: 1,538,503,200 (motor carriers, CMV drivers).
    Estimated Annual Hour Burden for the Information Collection: 
160,376,492.
    Estimated Annual Cost to Respondents: $63,306,510 (4,220,434 
drivers employing logbooks x $15 per year per driver).
    Interested parties are invited to send comments regarding any 
aspect of these information collection requirements, including, but not 
limited to:
    (1) Whether the collection of information is necessary for the 
performance of the functions of the FMCSA, including whether the 
information has practical utility, (2) the accuracy of the estimated 
burden, (3) ways to enhance the quality, utility, and clarity of the 
collected information, and

[[Page 64012]]

(4) ways to minimize the collection burden without reducing the quality 
of the information collected.
    If you submit copies of your comments to the Office of Management 
and Budget concerning the information collection requirements of this 
document, your comments to OMB will be most useful if received at OMB 
by December 3, 2004. You should mail, hand deliver, or fax a copy of 
your comments to: Attention: Desk Officer for the Department of 
Transportation, Docket Library, Office of Information and Regulatory 
Affairs, Office of Management and Budget, Room 10102, 725 17th Street, 
NW., Washington, DC 20503, fax: (202) 395-6566.

National Environmental Policy Act

    The agency analyzed this supplemental proposed rule for the purpose 
of the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 
et seq.) and determined under our environmental procedures Order 
5610.1, published March 1, 2004 (69 FR 9680), that this action is 
categorically excluded (CE) under Appendix 2, paragraph 6.y.(7) of the 
Order from further environmental documentation. That CE relates to 
establishing regulations and actions taken pursuant to the regulations 
concerning prohibitions on motor carriers, agents, officers, 
representatives, and employees from making fraudulent or intentionally 
false statements on any application, certificate, report, or record. In 
addition, the agency believes that the action includes no extraordinary 
circumstances that would have any effect on the quality of the 
environment. Thus, the action does not require an environmental 
assessment or an environmental impact statement.
    We have also analyzed this proposed rule under the Clean Air Act, 
as amended (CAA) section 176(c), (42 U.S.C. 7401 et seq.) and 
implementing regulations promulgated by the Environmental Protection 
Agency. Approval of this action is exempt from the CAA's General 
conformity requirement since it involves policy development and civil 
enforcement activities, such as, investigations, inspections, 
examinations, and the training of law enforcement personnel. See 40 CFR 
93.153(c)(2). It would not result in any emissions increase nor would 
it have any potential to result in emissions that are above the general 
conformity rule's de minimis emission threshold levels. Moreover, it is 
reasonably foreseeable that the rule would not increase total CMV 
mileage, change the routing of CMVs, how CMVs operate, or the CMV 
fleet-mix of motor carriers. This action merely establishes standards 
for hours-of-service supporting document entries on records of duty 
status for motor carriers, agents, officers, representatives, and CMV 
drivers.
    We seek comment on these determinations.

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

    We have analyzed this proposed action under Executive Order 13211, 
Actions Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. The agency has determined preliminarily that this 
proposed action would not significantly affect the supply, 
distribution, or use of energy.

Executive Order 13045 (Protection of Children)

    We have analyzed this proposed action under Executive Order 13045, 
Protection of Children from Environmental Health Risks and Safety 
Risks. This proposed rule is not an economically significant rule and 
does not concern an environmental risk to health or safety that may 
disproportionately affect children.

Executive Order 12898 (Federal Actions To Address Environmental Justice 
in Minority Populations and Low income Populations)

    The FMCSA evaluated the environmental effects of the proposed 
action and alternatives in accordance with Executive Order 12898 and 
determined that there were no environmental justice issues associated 
with revising the supporting documents for records of duty status for 
the hours-of-service regulations. Environmental justice issues would be 
raised if there were ``disproportionate'' and ``high and adverse 
impact'' on minority or low-income populations. FMCSA analyzed the 
demographic makeup of the trucking industry potentially affected by the 
proposal and determined that there was no disproportionate impact on 
minority or low-income populations.

Executive Order 12988 (Civil Justice Reform)

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

Executive Order 12630 (Taking of Private Property)

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

Executive Order 13132 (Federalism)

    This proposed action has been analyzed in accordance with the 
principles and criteria contained in Executive Order 13132, dated 
August 4, 1999, and it has been determined that it would not have 
significant Federalism implications or limit the policymaking 
discretion of the States.

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.

List of Subjects

49 CFR Part 379

    Freight forwarders, Maritime carriers, Motor carriers, Moving of 
household goods, Reporting and recordkeeping requirements.

49 CFR Part 381

    Motor carriers.

49 CFR Part 385

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

49 CFR Part 390

    Highway safety, Intermodal transportation, Motor carriers, Motor 
vehicle safety, Reporting and recordkeeping requirements.

49 CFR Part 395

    Highway safety, Motor carriers, Reporting and recordkeeping 
requirements.

    In consideration of the foregoing, the FMCSA proposes to amend 49 
CFR parts 379, 381, 385, 390, and 395, as set forth below:

PART 379--PRESERVATION OF RECORDS

    1. The authority citation for part 379 continues to read as 
follows:

    Authority: 49 U.S.C. 13301, 14122 and 14123; and 49 CFR 1.73.

Appendix A to Part 379--[Amended]

    2. Amend Appendix A to 49 CFR part 379 by removing the phrase 
``hours of service,'' from item K.2.
* * * * *

[[Page 64013]]

PART 381--WAIVERS, EXEMPTIONS, AND PILOT PROGRAMS

    3. The authority citation for part 381 is revised to read as 
follows:

    Authority: 49 U.S.C. 31136(e) and 31135; sec. 113(b)(4) and (5) 
of Pub. L. 103-311, 108 Stat. 1677; and 49 CFR 1.73.

PART 385--SAFETY FITNESS PROCEDURES

    4. The authority citation for part 385 continues to read as 
follows:

    Authority: 49 U.S.C. 113, 504, 521(b), 5105(e), 5109, 5113, 
13901-13905, 31136, 31144, 31148, and 31502; Sec. 350 of Pub. L. 
107-87; and 49 CFR 1.73.

    5. Amend section VII in Appendix B to part 385 by revising the 
citation and text for Sec.  395.8(i) and adding citations and text for 
Sec.  395.10(a), (e), and (f), in alphanumerical order, to read as 
follows:

Appendix B to Part 385--Explanation of Safety Rating Process

* * * * *

VII. List of Acute and Critical Regulations

* * * * *


Sec.  395.8(i)  Failing to require driver to forward within 13 days of 
completion, the original of the record of duty status and all 
supporting documents (critical).

* * * * *


Sec.  395.10(a)  Failing to verify the accuracy of paper records of 
duty status or automatic on-board recording device records by comparing 
their information with the information contained within each supporting 
document (critical).


Sec.  395.10(e)  Failing to systematically identify each supporting 
document and the paper or automatic record of duty status it supports 
(critical).


Sec.  395.10(f)  Failing to maintain each supporting document in a 
manner that permits the matching of the record to the original driver's 
record of duty status (critical).

* * * * *

PART 390--FEDERAL MOTOR CARRIER SAFETY REGULATIONS; GENERAL

    6. The authority citation for part 390 continues to read as 
follows:

    Authority: 49 U.S.C. 508, 13301, 13902, 31133, 31136, 31502, 
31504, and sec. 204, Pub. L. 104-88, 109 Stat. 803, 941 (49 U.S.C. 
701 note); sec. 114, Pub. L. 103-311, 108 Stat. 1673, 1677; sec. 
217, Pub. L. 106-159, 113 Stat. 1748, 1767; and 49 CFR 1.73.

    7. Amend Sec.  390.5 by revising the definition of the term 
``employee'' to read as follows:


Sec.  390.5  Definitions.

* * * * *
    Employee means any individual, other than an employer, who is 
employed by an employer and who in the course of his or her employment 
directly affects commercial motor vehicle safety. Such term includes a 
driver of a commercial motor vehicle (including an independent 
contractor and an owner-operator while in the course of operating a 
commercial motor vehicle), a mechanic, and a freight handler. Such term 
does not include an employee of the United States, any State, any 
political subdivision of a State, or any agency established under a 
compact between States and approved by the Congress of the United 
States who is acting within the course of such employment. This 
definition does not affect the status of a driver as an independent 
contractor or employee under United States Department of the Treasury, 
Internal Revenue Service interpretations of the tax laws or in any 
other context beyond this subchapter.
* * * * *
    8. Revise Sec.  390.29(b) to read as follows:


Sec.  390.29  Location of records and documents.

* * * * *
    (b)(1) All records and documents required by this subchapter which 
are maintained at the principal place of business must be produced upon 
demand by a special agent of the Federal Motor Carrier Safety 
Administration or other authorized representative of a Federal, State, 
local, or tribal government.
    (2) All records and documents required by this subchapter which are 
maintained at a regional office or driver work-reporting location must 
be made available for inspection, upon demand by a special agent of the 
Federal Motor Carrier Safety Administration or other authorized 
representative of a Federal, State, local, or tribal government at the 
motor carrier's principal place of business or other location specified 
by the special agent or other authorized representative within 48 hours 
after a demand is made. Saturdays, Sundays, and Federal holidays are 
excluded from the computation of the 48-hour period of time.
    9. Revise Sec.  390.31(d) to read as follows:


Sec.  390.31  Copies of records or documents.

* * * * *
    (d) Exception. All records may be maintained through the use of 
automated, electronic, or laser technology systems provided the motor 
carrier can produce an accurate, legible, and unaltered printed copy of 
the required data; and provided that alternate means for signature 
verification are available.

PART 395--HOURS OF SERVICE OF DRIVERS

    10. The authority citation for part 395 continues to read as 
follows:

    Authority: 49 U.S.C. 504, 14122, 31133, 31136, and 31502; sec. 
113, Pub. L. 103-311, 108 Stat. 1673, 1676; and 49 CFR 1.73.

    11. Amend Sec.  395.1 by revising paragraph (a)(1) and adding a new 
paragraph (p) to read as follows:


Sec.  395.1  Scope of rules in this part.

    (a) General. (1) The rules in this part apply to all motor carriers 
and drivers, except as provided in paragraphs (b) through (p) of this 
section.
* * * * *
    (p) Private motor carriers of passengers (nonbusiness). The 
provisions of Sec.  395.8 do not apply to a private motor carrier of 
passengers (nonbusiness) or its drivers.
    12. Amend Sec.  395.2 by revising the introductory text and adding 
the definition of ``Supporting document,'' alphabetically, to read as 
follows:


Sec.  395.2  Definitions.

    Words or phrases used in this part are defined in Sec.  390.5 of 
this subchapter, except as provided in this section--
* * * * *
    Supporting document means any document that is generated or 
received by a motor carrier or commercial motor vehicle driver in the 
normal course of business that could be used, as produced or with 
additional identifying information, to verify the accuracy of a 
driver's record of duty status. For the purposes of this definition, 
any document includes, but is not limited to any record or document, 
either written or electronic, that is available individually or in 
combination with other records or documents, to provide a date, time, 
or location to verify the accuracy of a driver's record of duty status. 
Examples of supporting documents include: accident/incident reports, 
bills of lading, border crossing reports, carrier pro forma invoices 
(pros or waybills), cash advance receipts, credit card receipts and 
statements, customs declarations, delivery receipts, dispatch/
assignment records, driver reports (facsimile or call-in logs), expense 
vouchers, freight bills, fuel billing statements, fuel receipts, gate 
receipts, global positioning reports, inspection reports, invoices, 
interchange reports, International Registration Plan

[[Page 64014]]

receipts, International Fuel Tax Agreement receipts, lessor settlement 
sheets, lodging receipts, lumper receipts, on-board computer reports, 
over/short and damage reports, overweight/oversize reports and 
citations, port of entry receipts, telephone billing statements, toll 
receipts, traffic citations, transponder reports, trip permits, trip 
reports, waybills, weight/scale tickets, and other transportation and 
payroll-related documents.
* * * * *
    13. Amend Sec.  395.8 by adding introductory text and revising 
paragraphs (a), (d)(3), (i), and (k) to read as follows:


Sec.  395.8  Driver's record of duty status.

    Subject to the exceptions and exemptions in Sec.  395.1:
    (a) Every motor carrier must require every driver used by the motor 
carrier to systematically and effectively record, inspect, verify, and 
maintain, records of all hours of service by duty status for each 24-
hour period using the methods prescribed in either paragraph (a)(1) or 
(2) of this section:
    (1) Every driver who operates a commercial motor vehicle must 
record his/her duty status on paper, in duplicate, for each 24-hour 
period. The duty status time must be recorded on a specified paper 
grid, as shown in paragraph (g) of this section. The grid and the 
requirements of paragraph (d) of this section may be combined with any 
company forms. The previously approved format of the Daily Log, Form 
MCS-59 or the Multi-day Log, MCS-139 and 139A, which meets the 
requirements of this section, may continue to be used; or
    (2) Every driver who operates a commercial motor vehicle must 
record his/her duty status by using an automatic on-board recording 
device that meets the requirements of Sec.  395.15 of this part. The 
requirements of Sec.  395.8 paragraphs (e) and (k)(1) and (2) of this 
section also apply.
* * * * *
    (d) * * *
    (3) Vehicle number(s) (Coach, bus, truck, tractor, and trailer 
number(s));
* * * * *
    (i) Collecting and filing driver's paper records of duty status and 
supporting documents. Each motor carrier must systematically collect 
drivers' records of duty status and associated supporting documents for 
each driver it uses. The driver must systematically collect and submit 
or forward by mail the original driver's record of duty status and all 
associated supporting documents to the regular employing motor carrier 
within 13 days following the completion of the form.
* * * * *
    (k) Retention of driver's record of duty status. (1) Each motor 
carrier must systematically maintain records of duty status and all 
associated supporting documents for each driver it uses for a period of 
six months from the date of receipt.
    (2) The driver must systematically retain a copy of each record of 
duty status and all associated supporting documents for the previous 
seven consecutive days in his or her possession and make it available 
for inspection while on duty.
* * * * *
    14. Add Sec.  395.10 to read as follows:


Sec.  395.10  Systematic verification and record retention.

    (a) Every motor carrier must systematically and effectively monitor 
its driver's hours of service and the accuracy of the information 
contained on the driver's record of duty status by comparing paper 
records of duty status, as required by Sec.  395.8, or automatic on-
board recording device records, as required by Sec.  395.15, with 
information contained within supporting documents. Each system must 
enable a special agent of the Federal Motor Carrier Safety 
Administration or other authorized representative of a Federal, State, 
local, or tribal government to verify the drivers' paper records of 
duty status or automatic on-board recording device records using the 
supporting documents.
    (b) A special agent of the Federal Motor Carrier Safety 
Administration or other authorized representative of a Federal, State, 
local, or tribal government may deem a motor carrier's system to be 
effective only when the special agent or other authorized 
representative finds fewer than 10 percent of the drivers' paper 
records of duty status or automatic on-board recording device records 
are false. A special agent of the Federal Motor Carrier Safety 
Administration or other authorized representative of a Federal, State, 
local, or tribal government may use any supporting documents or other 
evidence, whether or not in the motor carrier's possession, to 
determine the validity of the drivers' paper or automatic records of 
duty status and the effectiveness of the motor carrier's supporting 
document based monitoring system.
    (c) If a special agent of the Federal Motor Carrier Safety 
Administration or other authorized representative of a Federal, State, 
local, or tribal government determines a motor carrier's systematic 
monitoring is ineffective in verifying the drivers' compliance with the 
hours of service and the accuracy of the paper or automatic records of 
duty status, the FMCSA may require the carrier to begin to 
systematically use supporting documents that FMCSA believes are 
effective to verify the accuracy of the hours of service and paper or 
automatic records of duty status.
    (d) Every motor carrier must require every driver to retain, and 
every driver must retain, all supporting documents containing 
references to date, time, or location, that come into the possession of 
the driver in the ordinary course of the driving operation. The driver 
must provide the supporting documents and the paper or automatic 
records of duty status:
    (1) To any duly authorized enforcement official of Federal, State 
or local government upon request or demand; and
    (2) To the motor carrier at the time the driver submits the 
corresponding record of duty status to the motor carrier as required by 
the motor carrier or Sec.  395.8(i) of this part.
    (e) The motor carrier and the driver must identify each supporting 
document and the paper or automatic record of duty status it supports. 
A motor carrier and a driver must not obscure or deface other 
information contained in the supporting document. An identification 
system may include legibly adding the driver's full name, date, and 
vehicle number, if those items do not already appear on the document.
    (f) The motor carrier must identify each supporting document 
whether received from the driver or from any other source including 
carrier-generated documents and electronic systems (i.e., global 
positioning reports, on-board computer, transponder reports, scanned, 
or electronically-mailed documents), ensure that any electronic or 
mechanical means to reference date, time and location in the production 
of these documents is activated, and maintain those documents in a 
manner that permits the matching of those records to the original 
driver's record of duty status.
    (g) Supporting documents must be provided to any duly authorized 
enforcement official of Federal, State or local government upon request 
or demand along with the corresponding records of duty status as 
required in Sec. Sec.  390.29, 390.31, and 395.8(k) of this subchapter.
    (h) A motor carrier and a driver may be subject to civil or 
criminal penalties under 49 U.S.C. 521 for:

[[Page 64015]]

    (1) A failure by the motor carrier to prevent a driver from 
falsifying his records of duty status; failure to prevent alteration of 
supporting documents; alteration of supporting documents which changes 
their accuracy; or the failure to prevent a driver from exceeding the 
hours-of-service;
    (2) A driver's falsification of a record of duty status or 
alteration of supporting documents which changes their accuracy; and
    (3) A failure by the motor carrier to have an effective system to 
verify and maintain records of duty status and supporting documents.

    Issued on: October 21, 2004.
Annette M. Sandberg,
Administrator.
[FR Doc. 04-24176 Filed 11-2-04; 8:45 am]
BILLING CODE 4910-EX-P