76730 Federal Register / Vol. 71, No. 245 / Thursday, December 21, 2006 / Proposed Rules 

1MCSIA originally codified section 31144(g) as 

§ 31144(c) and directed that it be added at the end 

of 49 U.S.C. 31144 following preexisting 

subsections (c), (d), and (e). Section 4114(c)(1) of 

the Safe, Accountable, Flexible, Efficient 

Transportation Equity Act: A Legacy for Users 

(Public Law 109–59, 119 Stat. 1144, August 10, 

2005) (SAFETEA-LU) recodified this provision as 

§ 31144(g). 

DEPARTMENT OF TRANSPORTATION 

Federal Motor Carrier Safety 

Administration 

49 CFR Parts 365, 385, 387, and 390 

[Docket No. FMCSA–2001–11061] 

RIN 2126–AA59 

New Entrant Safety Assurance Process 

AGENCY: Federal Motor Carrier Safety 

Administration (FMCSA), DOT. 

ACTION: Notice of Proposed Rulemaking 

(NPRM); request for comments. 

SUMMARY: FMCSA proposes changes to 

the New Entrant Safety Assurance 

Process that would raise the standard of 

compliance for passing the new entrant 

safety audit. The agency has identified 

11 regulations that it believes are 

essential elements of basic safety 

management controls necessary to 

operate in interstate commerce and 

proposes that failure to comply with any 

one of the 11 regulations would result 

in automatic failure of the audit. Under 

this proposal, carriers would also be 

subject to the current safety audit 

evaluation criteria in Appendix A of 

part 385. Additionally, if a roadside 

inspection discloses certain violations, 

the new entrant would be subject to 

expedited actions to correct these 

deficiencies. The agency proposes to 

eliminate Form MCS–150A—Safety 

Certification for Application for USDOT 

Number. The agency also intends to 

check compliance with the Americans 

with Disabilities Act and certain 

household goods-related requirements 

in the new entrant safety audit, if they 

apply to the new entrant’s operation. 

However, failure to comply with these 

requirements would not impact the 

outcome of the safety audit. These 

changes would not impose additional 

operational requirements on any new 

entrant carrier. All new entrants would 

continue to receive educational 

information on how to comply with the 

safety regulations and be given an 

opportunity to correct any deficiencies 

found. FMCSA recognizes many new 

entrants are small businesses that are 

unaware of these requirements and 

continue to need the agency’s 

assistance. Finally, FMCSA would make 

clarifying changes to some of the 

existing new entrant regulations and 

establish a separate new entrant 

application procedure and safety 

oversight program for non-North 

America-domiciled motor carriers. 

FMCSA believes this proposal would 

improve its ability to identify at-risk 

new entrant carriers and ensure 

deficiencies in basic safety management 

controls are corrected before the new 

entrant is granted permanent 

registration. 

DATES: We must receive your comments 

by February 20, 2007. 

ADDRESSES: You may submit comments, 

identified by DOT DMS Docket Number 

FMCSA–2001–11061, by any of the 

following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Agency Web site: http:// 

dms.dot.gov. Follow the instructions for 

submitting comments on the DOT 

electronic docket site. 

• Fax: 1–202–493–2251. 

• Mail: Docket Management Facility; 

U.S. Department of Transportation, 400 

Seventh Street, SW., Nassif Building, 

Room PL–401, Washington, DC 20590– 

0001. 

• Hand Delivery: Room PL–401 on 

the plaza level of the Nassif Building, 

400 Seventh Street, SW., Washington, 

DC, between 9 a.m. and 5 p.m., Monday 

through Friday, except Federal 

Holidays. 

Instructions: All submissions received 

must include the agency name and 

docket number or Regulatory 

Identification Number (RIN) for this 

rule. All comments received will be 

posted without change to http:// 

dms.dot.gov, including any personal 

information provided. For detailed 

instructions on submitting comments 

and additional information on the 

rulemaking process, see the ‘‘Public 

Participation’’ heading of the 

SUPPLEMENTARY INFORMATION section of 

this document. For a summary of DOT’s 

Privacy Act Statement or information on 

how to obtain a complete copy of DOT’s 

Privacy Act Statement please see the 

‘‘Privacy Act’’ heading under 

Rulemaking Analyses and Notices. 

Docket: For access to the docket to 

read background documents or 

comments received, go to 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 am and 5 

pm, Monday through Friday, except 

Federal Holidays. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Arturo H. Ramirez, (202) 366–8088, 

Chief, Enforcement and Compliance 

Division, Federal Motor Carrier Safety 

Administration (MC–ECE), 400 Seventh 

Street, SW., Washington, DC 20590– 

0001. Office hours are from 7:45 a.m. to 

4:15 p.m., ET, Monday through Friday, 

except Federal holidays. 

SUPPLEMENTARY INFORMATION: 

Public Participation: The DMS is 

available 24 hours each day, 365 days 

each year. You can get electronic 

submission and retrieval help and 

guidelines under the ‘‘help’’ section of 

the DMS web site. If you want us to 

notify you of receiving your comments, 

please include a self-addressed, 

stamped envelope or postcard or print 

the acknowledgement page that appears 

after submitting comments on-line. 

Comments received after the comment 

closing date will be included in the 

docket, and we will consider late 

comments to the extent practicable. 

FMCSA may, however, issue a final rule 

at any time after the close of the 

comment period. 

Legal Basis for the Rule 

Title 49 U.S.C. 31144 requires the 

Secretary of Transportation (Secretary) 

to determine whether an owner or 

operator is fit to operate safely. Section 

210 of the Motor Carrier Safety 

Improvement Act of 1999 [Public Law 

106–159, 113 Stat. 1764, December 9, 

1999] (MCSIA) added § 31144(g) 1

directing the Secretary to establish 

regulations to require each owner and 

operator granted new operating 

authority to undergo a safety review 

within 18 months of starting operations. 

In issuing these regulations, the 

Secretary was required to: (1) Establish 

the elements of the safety review, 

including basic safety management 

controls; (2) consider their effects on 

small businesses; and (3) consider 

establishing alternate locations where 

such reviews may be conducted for the 

convenience of small businesses. The 

Secretary was also required to phase in 

the new entrant safety review 

requirements in a manner that takes into 

account the availability of certified 

motor carrier safety auditors. Congress 

mandated increased oversight of new 

entrants because studies indicated these 

operators had a much higher rate of 

non-compliance with basic safety 

management requirements and were 

subject to less oversight than established 

operators. 

In addition to expanding the 

Secretary’s authority under § 31144, 

Section 210 of MCSIA was a specific 

statutory directive consistent with the 

more general pre-existing legal authority 

provided by the Motor Carrier Safety 


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Federal Register / Vol. 71, No. 245 / Thursday, December 21, 2006 / Proposed Rules 76731 

Act of 1984 (the 1984 Act) [49 U.S.C. 

App. 2505 (1988)], which requires the 

Secretary to prescribe regulations on 

commercial motor vehicle safety. The 

regulations required by the 1984 Act 

must prescribe minimum safety 

standards for commercial motor 

vehicles (CMVs). At a minimum, the 

regulations shall ensure: (1) CMVs are 

maintained, equipped, loaded, and 

operated safely; (2) the responsibilities 

imposed on operators of CMVs do not 

impair their ability to operate the 

vehicles safely; (3) the physical 

condition of operators of CMVs is 

adequate to enable them to operate the 

vehicles safely; and (4) the operation of 

CMVs does not have a deleterious effect 

on the physical condition of the 

operators (49 U.S.C. 31136(a)). 

This NPRM proposes changes to the 

New Entrant Safety Assurance Process 

to improve the agency’s ability to 

identify at-risk new entrant motor 

carriers through screening and ensure 

deficiencies are corrected before 

granting them permanent registration. 

As such, it implements the § 31136(a)(1) 

mandate that FMCSA regulations ensure 

CMVs are maintained and operated 

safely. It does not propose any new 

operational responsibilities on drivers 

pursuant to §§ 31136(a)(2)–(4). 

Regulatory History 

In response to the MCSIA statutory 

mandate, on May 13, 2002, FMCSA 

published an interim final rule (IFR) 

titled New Entrant Safety Assurance 

Process (67 FR 31978), which became 

effective January 1, 2003. Although 

operating authority has generally been 

construed in the past to mean 

registration of for-hire carriers subject to 

the jurisdiction transferred from the 

former Interstate Commerce 

Commission following enactment of the 

ICC Termination Act of 1995 [Public 

Law 104–88, 109 Stat. 888, December 

29, 1995] (ICCTA), FMCSA interpreted 

Section 210 of MCSIA as extending this 

concept to all carriers subject to Federal 

safety jurisdiction (see 67 FR 31979, 

May 13, 2002). For this reason, FMCSA 

applied the New Entrant Safety 

Assurance Process to all domestic and 

Canada-domiciled new entrants, 

regardless of whether they needed to 

register with FMCSA under 49 U.S.C. 

13901. Mexico-domiciled new entrants 

are covered under a separate application 

process and safety monitoring system 

(see 67 FR 12652, 67 FR 12701, and 67 

FR 12757 published March 19, 2002). 

Under the current New Entrant Safety 

Assurance Process, FMCSA provides 

applicants with an application package 

including, upon request, educational 

and technical assistance materials. The 

applicant must complete the 

application, including Form MCS–

150A—Safety Certification for 

Application for USDOT Number, which 

requires the carrier to certify procedures 

are in place for basic safety management 

controls. Following completion of the 

application forms, FMCSA registers the 

new entrant and assigns a United States 

Department of Transportation (USDOT) 

Number. For-hire motor carriers, unless 

providing transportation exempt from 

ICCTA registration requirements, also 

are required to obtain FMCSA operating 

authority under 49 U.S.C. 13902, prior 

to commencing operations. The new 

entrant safety monitoring period begins 

when FMCSA issues the new entrant 

provisional registration via a USDOT 

Number and continues for 18 months. 

To maintain its provisional registration, 

a new entrant must comply with all 

FMCSA regulations and applicable 

hazardous materials regulations. 

Within the first 18 months of a new 

entrant’s operation, FMCSA will 

conduct a safety audit (SA) of the 

carrier’s operations to educate the 

carrier on compliance with the Federal 

Motor Carrier Safety Regulations 

(FMCSRs) and Hazardous Materials 

Regulations (HMRs) and to determine if 

the carrier is exercising basic safety 

management controls as defined in 49 

CFR 385.3. An SA is not a compliance 

review. It does not result in a safety 

rating. These terms are defined in 

§ 385.3. 

During the SA, FMCSA gathers 

information by reviewing the carrier’s 

compliance with ‘‘acute’’ and ‘‘critical’’

provisions of the FMCSRs and 

applicable HMRs. Acute regulations are 

those where the consequences of noncompliance are so severe as to require 

immediate corrective actions by a motor 

carrier, regardless of the overall basic 

safety management controls of the motor 

carrier (e.g., allowing a driver with a 

suspended license to operate a vehicle). 

Critical regulations are defined as those 

where noncompliance relates to 

management or operational controls and 

are indicative of breakdowns in a 

carrier’s management controls (e.g., 

allowing a driver to operate a vehicle 

before his/her medical exam). Parts of 

the FMCSRs and HMRs having similar 

characteristics are combined together 

into six regulatory areas called 

‘‘factors.’’ The SA scoring evaluates 

each of the following factors and 

determines the adequacy of the carrier’s 

safety management controls based on 

this evaluation. The six factors are: 

Factor 1—General: Parts 387 and 390. 

Factor 2—Driver: Parts 382, 383, and 

391. 

Factor 3—Operational: Parts 392 and 

395. 

Factor 4—Vehicle: Parts 393 and 396 

and inspection data for the last 12 

months. 

Factor 5—Hazardous Materials: Parts 

171, 177, 180 and 397. 

Factor 6—Accident: Recordable 

Accident Rate per Million Miles. 

For each instance of noncompliance 

with an acute regulation, 1.5 points are 

assessed against the carrier. For each 

instance of noncompliance with a 

critical regulation, 1 point is assessed. 

For factors 1–5, if the combined 

violations of acute and critical 

regulations for each factor are equal to 

three or more points, the carrier is 

determined not to have basic safety 

management controls for that individual 

factor. If the recordable accident rate 

(factor 6) is greater than 1.7 recordable 

accidents per million miles for an urban 

carrier (1.5 for all other carriers), the 

carrier is determined to have inadequate 

basic safety management controls (i.e., 

the carrier fails the factor). If the 

carrier’s accident rate is anywhere 

between zero and 1.5 (1.7 for urban 

carriers), the carrier is considered to 

have adequate safety management 

controls in factor 6. A new entrant fails 

the SA if it fails three or more separate 

factors. Currently, FMCSA is studying a 

new approach to assessing the severity 

of violations as part of its announced 

CSA 2010 initiative (69 FR 51748). This 

initiative may ultimately replace the 

‘‘acute and critical’’ methodology 

described here. 

If the SA discloses the new entrant’s 

basic safety management controls are 

adequate, the carrier retains the new 

entrant registration and continues to be 

monitored until the end of the 18-month 

period. FMCSA will grant permanent 

registration only if the new entrant 

successfully completes the monitoring 

period. If the basic safety management 

controls are inadequate, the new entrant 

is given an opportunity to correct the 

deficiencies. To provide that 

opportunity, FMCSA notifies the new 

entrant that unless the deficiencies are 

remedied, the registration will be 

revoked in 45 days (for carriers using 

passenger vehicles with a capacity to 

transport 16 or more passengers or 

vehicles transporting hazardous 

materials as defined under 49 CFR 

§ 383.5) or 60 days (for all other new 

entrants). FMCSA may extend the 

compliance period if it determines the 

new entrant is making a good faith effort 

to remedy the problems. If, within the 

45 or 60 days, the new entrant fails to 

respond to the notice or fails to correct 

the deficiencies, FMCSA issues an outVerDate Aug<31>2005 14:38 Dec 20, 2006 Jkt 211001 PO 00000 Frm 00003 Fmt 4701 Sfmt 4702 E:\FR\FM\21DEP2.SGM 21DEP2

cprice-sewell on PROD1PC66 with PROPOSALS2
76732 Federal Register / Vol. 71, No. 245 / Thursday, December 21, 2006 / Proposed Rules 

of-service order prohibiting further 

operations in interstate commerce and 

revokes the new entrant registration. 

Discussion of the Proposed Rule 

FMCSA decided to publish an NPRM 

rather than a final rule because today’s 

action proposes substantive changes to 

the May 13, 2002 IFR. These proposals 

would benefit from further notice and 

comment before promulgation as a final 

rule. Following is a discussion of these 

proposed changes. 

Strengthening the Safety Audit 

In FY 2000, FMCSA published a 

report titled ‘‘Analysis of New Entrant 

Motor Carrier Safety Performance and 

Compliance Using SafeStat,’’ which 

compared the safety performance of new 

entrant carriers to that of experienced 

carriers. A copy of the report is in the 

docket for this rule. The report 

indicated new entrant carriers had 

significantly higher crash involvement 

than experienced carriers. New entrant 

carriers had significantly worse driver 

safety compliance and performance 

compared to experienced carriers. To a 

lesser degree, new entrant carrier 

vehicle safety compliance and 

performance were also worse than for 

experienced carriers. For these reasons, 

FMCSA intends to ensure all new 

entrant carriers have basic safety 

programs and controls in place before 

granting permanent registration. 

In response to comments to the 2002 

IFR (see the section below titled 

‘‘Discussion of Comments’’), as well as 

feedback from FMCSA field staff and 

State partners administering the New 

Entrant Safety Assurance Process, the 

Administrator convened an internal 

working group in the summer of 2003 to 

review and improve the process. The 

working group identified 11 regulatory 

violations which reflect a clear lack of 

basic safety management controls yet 

are not properly weighted by the 

existing SA. Under the current system, 

a new entrant could commit one of 

these 11 violations and still pass the SA. 

The group recommended that FMCSA 

strengthen the SA pass/fail criteria to 

give more appropriate weight to these 

11 basic safety management 

requirements and clarify several vague 

regulatory requirements. 

Based on this recommendation, 

FMCSA proposes that committing any 

one of the following 11 regulatory 

violations would result in an automatic 

failure of the SA: 

1. § 382.115(a)/§ 382.115(b)—Failing 

to implement an alcohol and/or 

controlled substances testing program 

(domestic and foreign motor carriers, 

respectively). 

2. § 382.211—Using a driver who has 

refused to submit to an alcohol or 

controlled substances test required 

under part 382. 

3. § 382.215—Using a driver known to 

have tested positive for a controlled 

substance. 

4. § 383.37(a)—Knowingly allowing, 

requiring, permitting, or authorizing an 

employee with a commercial driver’s 

license which is suspended, revoked, or 

canceled by a State or who is 

disqualified to operate a commercial 

motor vehicle. 

5. § 383.51(a)—Knowingly allowing, 

requiring, permitting, or authorizing a 

driver to drive who is disqualified to 

drive a commercial motor vehicle. 

6. § 387.7(a)—Operating a motor 

vehicle without having in effect the 

required minimum levels of financial 

responsibility coverage. 

7. § 391.15(a)—Using a disqualified 

driver. 

8. § 391.11(b)(4)—Using a physically 

unqualified driver. 

9. § 395.8(a)—Failing to require a 

driver to make a record of duty status. 

10. § 396.9(c)(2)—Requiring or 

permitting the operation of a 

commercial motor vehicle declared 

‘‘out-of-service’’ before repairs are made. 

11. § 396.17(a)—Using a commercial 

motor vehicle not periodically 

inspected. 

The agency believes carriers 

committing these violations do not have 

the basic safety management controls in 

place to safely operate in interstate 

commerce. The working group 

identified, and FMCSA accepted, these 

11 infractions because they are so basic 

to ensuring safety that no carrier should 

be allowed to operate if any of these 

violations are found and not corrected. 

For example, implementation of an 

alcohol and controlled substances 

testing program is a fundamental 

requirement for any interstate carrier. A 

carrier that has implemented a program 

to ensure its drivers do not operate after 

testing positive for drugs or alcohol will 

reduce the risk of that carrier/driver 

being involved in a fatal accident. 

Allowing drivers who refuse to submit 

to drug or alcohol testing to drive 

indicates the carrier does not have an 

effective drug and alcohol testing 

program. Similarly, only qualified 

drivers should be permitted to drive. A 

carrier does not exercise sufficient 

safety management controls if it uses 

drivers who are disqualified from 

operating a CMV, physically 

unqualified, or who have had their 

commercial driver’s license suspended, 

revoked, or canceled. 

Additionally, the primary mission of 

the agency is to reduce crashes, injuries 

and fatalities involving large trucks and 

buses. For this mission to succeed, 

carriers must operate safe vehicles. To 

accomplish this, vehicles must be 

periodically inspected and kept in safe 

operating condition. Therefore, a new 

entrant would fail the safety audit if it 

does not inspect its vehicles 

periodically or operates any vehicle 

declared out-of-service before making 

the required repairs. 

Further, driver fatigue has been 

identified as a contributing factor in 

many CMV crashes. To achieve the 

highest level of safety, carriers must 

have a system to safeguard the public 

against fatigued drivers by ensuring 

their drivers adhere to the agency’s 

hours-of-service limitations. Hours-ofservice violations comprise the largest 

percentage of driver out-of-service 

violations at the roadside. One effective 

safety management control for 

preventing fatigued drivers from 

operating a CMV is to have in place a 

system requiring drivers to submit 

records of duty status or other records, 

as appropriate. This recordkeeping 

requirement is fundamental to an 

effective driver monitoring system. 

Finally, the agency believes it is 

essential for the traveling public to 

receive adequate compensation for 

personal injuries or property damage 

caused by CMVs operating on the 

highways. Therefore, carriers lacking 

required minimum financial 

responsibility would not be permitted to 

operate. 

FMCSA emphasizes that the purpose 

of the proposed revision is to improve 

the safety management of new entrants, 

not to remove them from operations. 

The agency believes the regulations 

identified above are evidence of 

whether a new entrant has a systemic 

program to ensure it has the basic safety 

management controls to operate in 

interstate commerce. 

As discussed above, when a new 

entrant fails an audit, even for one of the 

automatic failures described above, it 

will be afforded due process and given 

time to correct its failures and improve 

its safety management controls. This 

proposal emphasizes FMCSA’s 

commitment to highway safety and 

would allow the agency to ensure new 

entrants are not permitted to operate 

without first correcting serious 

deficiencies in a timely manner. 

FMCSA believes it is incumbent upon 

all new entrant carriers to be informed 

about, and familiar with, the FMCSRs 

prior to receiving a safety audit. To this 

end, FMCSA provides outreach and 

educational materials to carriers to help 

them prepare for the audit. Carriers 

discovered to have committed one of the 


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Federal Register / Vol. 71, No. 245 / Thursday, December 21, 2006 / Proposed Rules 76733 

11 violations identified above, after 

having been informed of the need to 

comply prior to receiving permanent 

registration, and found to have not 

corrected the deficiency, will not be 

permitted to continue to operate. 

Establishing these 11 violations as 

grounds for failing the safety audit 

would promote public safety by 

encouraging new entrants to correct 

serious deficiencies in their safety 

management controls and reducing the 

number of potentially unsafe carriers 

operating on the nation’s highways. 

It should be noted that most of these 

11 regulations correspond to 

requirements necessary for Mexicodomiciled long-haul carriers to obtain 

authority to operate in the United 

States, as established by Congress under 

Section 350(a)(1)(B) of the Fiscal Year 

2002 DOT Appropriations Act [Public 

Law 107–87, Title III, sec. 350, 115 Stat. 

864, Dec. 18, 2001]. The requirements 

applicable to Mexico-domiciled longhaul carriers are: 

• Verification of a controlled 

substances and alcohol testing program 

consistent with 49 CFR part 40; 

• Verification of a carrier’s system of 

compliance with hours-of-service rules, 

including hours-of-service records; 

• Verification of proof of financial 

responsibility; 

• An evaluation of that motor 

carrier’s safety inspection, maintenance, 

and repair facilities or management 

systems, including verification of 

records of periodic vehicle inspections; 

and 

• Verification of drivers’

qualifications, including a required 

commercial driver’s license. 

Expedited Action 

Under existing § 385.307(a), having 

‘‘an accident rate or driver or vehicle 

violation rate that is higher than the 

industry average for similar motor 

carrier operations’ triggers an expedited 

SA or compliance review of the new 

entrant. (The reference to a ‘‘driver or 

vehicle violation rate’’ is an error and 

should read ‘‘driver or vehicle out-ofservice rate.’’) The agency proposes to 

replace the abbreviated expedited action 

provisions under § 385.307(a) with the 

same ‘‘Expedited Action’’ provisions 

applicable to Mexico-domiciled carriers 

under § 385.105. As the agency stated in 

proposing the expedited action 

provisions for Mexico-domiciled 

carriers, we believe these violations 

pose the greatest threat to public safety 

and raise serious questions about a 

carrier’s willingness and ability to 

conduct safe operations. See 66 FR 

22416 (May 3, 2001). In addition to 

identifying potentially unsafe new 

entrant carriers, expanding the 

expedited action provisions would also 

make the treatment of Mexico-domiciled 

new entrants and all other new entrants 

more uniform. 

This change would improve the New 

Entrant Safety Assurance Process by 

tightening scrutiny of new entrants 

before and after the safety audit. New 

entrants discovered with these 

violations could be identified during a 

roadside inspection or by any other 

means even if the agency had not yet 

conducted a safety audit. 

Discovery of certain violations during 

a roadside inspection or by any other 

means would subject the new entrant to 

expedited action. If the carrier had not 

already submitted to an audit, the 

carrier would be flagged for review as 

soon as practicable. If the carrier already 

had submitted to an audit before 

discovery of an ‘‘expedited action 

violation,’’ FMCSA would send the 

carrier a letter requesting evidence of 

corrective action within 30 days of the 

notice or the carrier’s registration would 

be revoked. Additionally, if FMCSA 

determined the violation warranted a 

more thorough review of the carrier’s 

operation, the agency would schedule a 

compliance review. The following 

actions would trigger expedited action 

against the motor carrier: 

• Using a driver who does not have 

a valid commercial driver’s license. 

• Operating vehicles that have been 

placed out-of-service for violations of 

the Federal Motor Carrier Safety 

Regulations or compatible State laws 

and regulations without taking 

necessary corrective action. 

• Being involved in, through action or 

omission, a hazardous materials 

incident involving—

• A highway route controlled 

quantity of certain radioactive 

materials (Class 7). 

• Any quantity of certain explosives 

(Class 1, Division 1.1, 1.2, or 1.3). 

• Any quantity of certain poison 

inhalation hazard materials (Zone A 

or B). 

• Being involved in, through action or 

omission, two or more hazardous 

materials incidents involving hazardous 

materials other than those listed above. 

• Using a driver who tests positive for 

controlled substances or alcohol or who 

refuses to submit to required drug or 

alcohol tests. 

• Operating a motor vehicle that is 

not insured as required. 

• Having a driver or vehicle out-ofservice rate of 50 percent or more based 

on at least three inspections within a 

consecutive 90-day period. 

The last item above would replace the 

‘‘vehicle or driver violation rate that is 

higher than the industry average for 

similar motor carrier operations’’

requirement under § 385.307. From an 

operational standpoint, the ‘‘50 percent 

or more threshold’’ would provide for 

more effective and efficient monitoring 

of new entrant performance because it is 

a non-subjective and easily measured 

rate. 

Applicability of Proposed Requirements 

to Current New Entrants 

The changes in today’s notice of 

proposed rulemaking, if promulgated as 

a final rule, would apply to motor 

carriers still subject to the current new 

entrant safety monitoring process on the 

final rule’s effective date. Assuming all 

changes are adopted, these new entrants 

would be subject to expedited 

enforcement action for committing any 

of the seven violations or actions 

identified under the section ‘‘Expedited 

Action.’’ If a current new entrant has not 

had a safety audit prior to the final rule 

effective date, it would be audited in 

accordance with the safety audit 

procedures adopted in the final rule, 

including the applicable 11 automatic 

failure factors identified under the 

section ‘‘Strengthening the Safety 

Audit.’’ However, the automatic failure 

factors would not be retroactively 

applied to safety audits completed prior 

to the final rule’s effective date. The 

safety audit outcomes determined prior 

to the final rule’s effective date would 

remain unchanged by the final rule. 

Form MCS–150A—Safety Certification 

for Application for USDOT Number 

The purpose of the MCS–150A is for 

a new entrant to certify it has a system 

in place to ensure compliance with the 

FMCSRs and applicable HMRs. 

However, based on the SAs conducted 

to date, FMCSA has found many new 

entrants certified on the MCS–150A 

they are knowledgeable about the 

FMCSRs and applicable HMRs and have 

in place the safety management controls 

necessary to conduct interstate 

operations, but are not, in fact, in 

compliance with the FMCSRs and 

applicable HMRs. Therefore, while the 

intent of the MCS–150A is valid, in 

practice it fails. Consequently, FMCSA 

is proposing to eliminate the form. 

Conforming amendments are proposed 

to eliminate mention of the MCS–150A 

throughout the regulations. 

Timing of Administrative Reviews 

The administrative review provisions 

in current § 385.327 are ambiguous with 

respect to the time during which a 

carrier is allowed to file a request for 

administrative review and when it must 

file a request for administrative review, 


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76734 Federal Register / Vol. 71, No. 245 / Thursday, December 21, 2006 / Proposed Rules 

if it wants the review to be completed 

before its registration is revoked. 

FMCSA is proposing to revise the 

section to clarify that, if a new entrant 

disagrees with the findings of an SA, the 

new entrant must file a request for an 

administrative review within 90 days of 

the date of the notice of audit failure or 

within 90 days of the notice of its 

corrective action being insufficient. 

However, if a new entrant wants a 

decision before the revocation takes 

effect, the new entrant must file a 

request for review within 15 days of the 

date of the notice of audit failure. 

Requests filed after 15 days will be 

considered, but it is possible the 

revocation would take effect before the 

administrative review process is 

completed, even if the new entrant 

eventually prevails and its registration 

is restored. 

‘‘Chameleon’’ Carriers 

The agency is concerned about 

carriers attempting to evade 

enforcement actions and/or out-ofservice orders issued against them by reregistering as new entrants and 

operating as different entities under new 

USDOT Numbers. We call these entities 

‘‘chameleon’’ carriers. 

Such a carrier might attempt to 

conceal its former identity by leaving 

blank the response to items 16 and 17 

on the ‘‘Motor Carrier Identification 

Number—Application for USDOT 

Number’’ (Form MCS–150). Items 16 

and 17 of the MCS–150 request the 

carrier’s USDOT Number or MC or MX 

Number. In other cases, the carrier may 

attempt to hide the fact that its USDOT 

Number is revoked by falsifying the 

response to item 28 on the MCS–150, 

which asks whether the carrier’s 

USDOT Number registration is currently 

revoked by FMCSA, and if so, requires 

the carrier to list this number. Item 30 

on the MCS–150 requires the carrier to 

certify the information provided on the 

MCS–150 is true, correct and complete. 

Unfortunately, some carriers 

deliberately fail to disclose information 

regarding their history in order to evade 

civil penalties assessed against the 

company or to circumvent out-of-service 

orders and other operational restrictions 

by obtaining new USDOT Numbers. 

Often these chameleon carriers go 

undetected until the agency conducts an 

SA or compliance review. 

The agency is committed to ensuring 

only safe carriers are permitted to 

continue operating on our nation’s 

highway. FMCSA has the authority to 

correct, modify, or revoke new entrant 

registration issued inadvertently, or 

obtained by fraud, misrepresentation or 

other wrongful means. Proposed 

§ 385.306 clarifies what action may be 

taken against any carrier not providing 

truthful and complete information on its 

MCS–150. 

If a carrier obtains a new USDOT 

Number after being ordered to cease 

operations based on a failed safety 

audit, prior Unsatisfactory rating, failure 

to pay a civil penalty or any other 

reason, and the information is 

discovered after the carrier received 

another USDOT Number, the agency 

will revoke the carrier’s new registration 

and may also take additional 

enforcement action against the carrier. If 

a carrier obtains a new USDOT Number, 

but was not subject to an outstanding 

order to cease operations under a 

previous number, the agency may 

determine the new USDOT Number 

should not be revoked and, instead, link 

the history of the two companies by 

identifying in our database the new 

USDOT Number as the primary active 

number. The old USDOT Number 

would be listed in the database as one 

under which the carrier has also done 

business, and its safety history, 

including enforcement actions against 

the carrier, would be imputed to the 

new entity. 

A carrier that ceased interstate 

operations and wishes to reapply should 

submit an updated MCS–150 and list its 

old USDOT Number when applying. 

The agency would reactivate the 

USDOT Number upon approval of the 

application. 

Reapplication Process 

Current § 385.329(a) states a new 

entrant whose new entrant registration 

has been revoked and whose operations 

have been placed out-of-service must 

wait 30 days after the revocation date to 

reapply. Current § 385.329(b) states the 

motor carrier will be required to initiate 

the application process ‘‘from the 

beginning,’’ demonstrate it has corrected 

the deficiencies resulting in revocation, 

and otherwise ensure it has adequate 

basic safety management controls. Some 

have interpreted ‘‘from the beginning’’

to mean the carrier must resubmit all 

documents submitted when the new 

entrant initially applied for new entrant 

registration and, if the application is 

accepted, undergo another SA and 

receive a new USDOT Number. The 

agency proposes to address the 

reapplication issue by establishing two 

separate procedures based upon what 

caused the revocation. 

Under proposed § 385.329(b), a new 

entrant whose registration is revoked for 

failing the safety audit would reapply by 

submitting an updated Form MCS–150 

and providing evidence of corrective 

action (which FMCSA would review for 

adequacy). If FMCSA concludes the reapplicant has taken adequate corrective 

action, it would grant the application 

and the re-applicant would not be 

subject to a second SA. The carrier 

would remain a new entrant, retain the 

same USDOT Number and continue to 

be monitored for 18 months from the 

date the new application is approved. 

For-hire motor carriers must also 

reapply for operating authority under 49 

U.S.C. § 13902, if their operating 

authority was revoked. 

If FMCSA revokes a new entrant’s 

registration because it refused to submit 

to an audit, the new entrant would be 

required to submit an updated MCS–

150, retain the same USDOT Number, 

and submit to an SA as soon as 

practicable once the new application is 

approved. FMCSA intends to flag these 

carriers so they will receive an SA as 

soon as practicable once they reenter the 

program. In all instances, a carrier 

reapplying for new entrant authority 

would be prohibited from operating in 

interstate commerce until its new 

application is approved. As in the case 

above, a new 18-month monitoring 

period would start upon approval of the 

new application. 

To retain historical information on a 

revoked new entrant’s past performance, 

FMCSA would require the new entrant 

to retain the same USDOT Number 

when reapplying for registration. This is 

consistent with what FMCSA has done 

in the past and is currently doing 

whenever a carrier is placed out-ofservice and subsequently remedies 

whatever deficiencies resulted in the 

out-of-service order. 

Household Goods 

Currently, the SA does not evaluate 

compliance with FMCSA’s household 

goods (HHG) regulations (49 CFR part 

375). In order to strengthen its oversight 

of the HHG industry, FMCSA is 

proposing to include questions 

regarding HHG requirements in the 

audit. Because the HHG requirements 

are not safety related, however, FMCSA 

would not count the answers toward the 

pass/fail determination. Instead, any 

violations found would be enforced 

through other means (e.g., a compliance 

review). 

Americans With Disabilities Act 

The SA also does not evaluate 

compliance by passenger carriers with 

the Americans with Disabilities Act of 

1990 [Public Law 101–336, 104 Stat. 

327, July 26, 1990] (ADA). DOT 

regulations at 49 CFR part 37 prohibit 

discrimination against individuals with 

disabilities in the provision of 

transportation services, and require 


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2Under existing FMCSA regulations, most of the 

FMCSRs do not apply to the transportation of 

passengers in such vehicles within a 75 air-mile 

radius of the driver’s work reporting location, or 

when the carrier is not directly compensated. See 

49 CFR § 390.3(f)(6). However, section 4136 of 

SAFETEA–LU eliminated the 75 air-mile distance 

limitation. Therefore, all carriers transporting 

passengers in CMVs designed to carry between 9 

and 15 passengers will be subject to the new entrant 

requirements, provided such carriers are directly 

compensated. In a separate rulemaking, § 390.3(f)(6) 

will be amended to achieve consistency with this 

statutory change. 

3 In the Matter of Cross-Border Trucking Services, 

Secretariat File No. USA–MEX–98–2008–01, Final 

Panel, (February 6, 2001). 

certain vehicles to be readily accessible 

to and usable by such individuals. In 

order to strengthen its oversight over 

ADA issues, FMCSA is proposing to 

include questions regarding ADA 

compliance in audits of new entrant 

passenger carriers. As with violations of 

the HHG requirements, FMCSA would 

not count the answers toward the pass/ 

fail determination. Instead, any 

violations found would be enforced by 

forwarding apparent violations to the 

U.S. Department of Justice or, if the 

carrier is a recipient of DOT financial 

assistance, through DOT administrative 

enforcement action. 

Other Changes 

Today’s proposal would amend 

§ 385.319, which concerns the new 

entrant’s responsibilities for remedying 

deficient safety management practices 

discovered during the safety audit. It 

adds an additional category of passenger 

carriers to the description of which 

carriers must remedy deficiencies 

within 45 days of notification by 

FMCSA—new entrants that haul 

passengers in a vehicle used or designed 

to transport between 9 and 15 

passengers for compensation.2 The 

corrective action periods in § 385.319(c) 

were modeled after the 45- and 60-day 

effective dates of Unsatisfactory safety 

ratings in 49 CFR 385.11. Section 385.11 

subjects all motor carriers transporting 

passengers by CMV to the 45-day 

requirement, including CMVs designed 

to transport between 9 and 15 

passengers for compensation. The May 

2002 IFR inadvertently failed to apply 

the 45-day requirement to small vehicle 

passenger carriers, subjecting them 

instead to the 60-day period applicable 

to property carriers not hauling 

hazardous materials requiring 

placarding. We propose to amend 

§ 385.319(c), as well as §§ 385.323, 

385.325, and 385.327 to make them 

consistent with § 385.11. Section 

385.319 has also been rewritten to cross 

reference the definition of CMVs 

relating to hazardous materials carriers 

in 49 CFR 390.5 for purposes of 

consistency. 

Current § 385.337(a) states: ‘‘The 

initial refusal to permit an SA to be 

performed may subject the new entrant 

to the penalty provisions in 49 U.S.C. 

§ 521(b)(2)(A).’’ The term ‘‘initial’’

before the word ‘‘refusal’’ unnecessarily 

limits FMCSA’s ability to impose 

penalties against recalcitrant carriers. 

Therefore, FMCSA is proposing to 

remove the word ‘‘initial’’ before the 

word ‘‘refusal’’; this change would 

permit FMCSA to consider any refusal 

as a basis for imposing penalties. 

The New Entrant Safety Assurance 

Process and Non-North AmericaDomiciled Motor Carriers 

Congress ratified the Central 

American Free Trade Agreement in the 

summer of 2005. In preparation for 

implementation of this treaty, FMCSA 

examined the agency’s programs to 

ensure that any CMVs entering the 

United States from Central American 

countries were operating safely. Central 

American motor carriers, and indeed 

any motor carrier from a country other 

than the United States, Canada, or 

Mexico (non-North America-domiciled 

motor carriers), are not covered by 

FMCSA’s existing New Entrant 

oversight programs. There are 64 

carriers from Central American 

countries that have registered with the 

agency to operate CMVs in the United 

States. 

The registered Central American 

carriers are domiciled in Guatemala, El 

Salvador, Belize, Honduras, Panama, 

and Nicaragua. The average vehicle fleet 

size for these carriers is one or two 

tractor-trailers. Sixty-three of the 64 

carriers classified their operations as 

private motor carriers of property. A 

single carrier listed its operation type as 

private motor carrier of passengers 

(business). Most of the Central 

American carriers contracted with the 

same processing agent located in 

Brownsville, Texas, to file the USDOT 

Number application with FMCSA. Each 

of the carriers, including the passenger 

carrier, listed general freight or motor 

vehicles as its cargo type. 

FMCSA has considered several 

options for a safety monitoring process 

for non-North America-domiciled motor 

carriers, including (1) subjecting them to 

the safety monitoring process for 

Mexico-domiciled carriers; (2) 

subjecting them to the New Entrant 

Safety Assurance Process for U.S. and 

Canada-domiciled carriers; or (3) 

developing an alternate oversight 

program compatible with existing 

regulatory authority. 

The safety monitoring system for 

Mexico-domiciled carriers is based 

upon standards set out in the NAFTA 

Arbitral Panel Report 3 dated February 

6, 2001, and the provisions of Section 

350 of the FY 2002 Department of 

Transportation Appropriations Act. The 

NAFTA Arbitral Panel (the Panel) noted 

that: (1) The United States is not 

required to treat applications from 

Mexico-domiciled trucking firms in 

exactly the same manner as applications 

from U.S. or Canadian firms, as long as 

they are reviewed on a case by case 

basis; and (2) given the different 

enforcement mechanisms in place in the 

United States and Mexico, it may be 

justifiable for the United States to 

address legitimate safety concerns 

through different methods of ensuring 

compliance with the U.S. regulatory 

regime. Similarly, the Panel found it 

may not be unreasonable for the United 

States to implement different 

procedures with respect to service 

providers from another NAFTA country 

if necessary to ensure compliance with 

its own local standards by these service 

providers. 

Mexico’s motor carrier safety 

regulatory system lacks several of the 

components that are central to the U.S. 

system. As the Panel found, the U.S. is 

responsible for the safe operation of 

motor carriers within U.S. territory, 

regardless of the carriers’ country of 

origin, and FMCSA believes we must 

ensure each carrier is safe to protect 

U.S. highway users. The safety 

monitoring process for Mexicodomiciled carriers provides FMCSA 

with the necessary level of assurance, in 

a manner consistent with the Panel’s 

findings, and the relevant provisions of 

NAFTA. It ensures that Mexican motor 

carriers seeking U.S. operating authority 

are capable of complying with the U.S. 

safety regulatory regime. 

The New Entrant Safety Assurance 

Process for U.S. and Canada-domiciled 

carriers is based upon an in-depth 

understanding of the safety systems in 

each country and a long history of crossborder truck and bus operations. 

Because FMCSA lacks understanding 

and experience with the safety systems 

of Central American and other nonNorth American countries, the agency 

deems it appropriate to adopt an 

alternate method of overseeing the 

compliance and safety of non-North 

America-domiciled-motor carriers. The 

alternate oversight method for nonNorth America-domiciled motor carriers 

is similar to FMCSA’s oversight program 

for Mexico-domiciled motor carriers. It 

also is consistent with sec. 210(a) of 

MCSIA because it would require a safety 


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76736 Federal Register / Vol. 71, No. 245 / Thursday, December 21, 2006 / Proposed Rules 

review of a new entrant non-North 

America-domiciled motor carrier within 

the first 18 months of operations. 

FMCSA would implement the minimum 

requirements provision of sec. 210(b) for 

these carriers through Form OP–

1(NNA). Because sec. 210(a) of MCSIA 

requires the Secretary to issue 

regulations mandating safety reviews of 

all new entrant carriers, today’s action 

proposes such regulations for non-North 

America-domiciled motor carriers. Due 

to FMCSA’s lack of knowledge 

regarding the safety regimes of their 

home countries (as opposed to Canada 

and Mexico), FMCSA will use 

experience gained through the alternate 

oversight safety monitoring system to 

determine whether further regulatory 

changes may be appropriate in the 

future. The agency requests information 

on the safety systems of Central 

American and other non-North 

American countries. 

Monitoring the Safety of Existing NonNorth America-Domiciled Motor 

Carriers 

FMCSA will educate, review and 

monitor the 64 registered non-North 

America-domiciled motor carriers and 

any additional non-North American 

carriers issued a USDOT Number prior 

to the effective date of any final rule 

promulgated for today’s notice of 

proposed rulemaking. Compliance 

reviews will be conducted within three 

months on all existing non-North 

America-domiciled motor carriers to 

assess their compliance with U.S. 

regulations. With respect to additional 

non-North America-domiciled carriers 

that register with FMCSA before the 

effective date of any final rule 

promulgated for today’s notice of 

proposed rulemaking, FMCSA will (1) 

manually review each application for 

USDOT Number (Form MCS–150) filed 

by non-North America-domiciled motor 

carriers to ensure they are complete and 

accurate; and (2) conduct a compliance 

review of these carriers within 6–12 

months of issuing a USDOT Number 

registration and/or operating authority. 

FMCSA will monitor all non-North 

America-domiciled motor carriers for 

violations of the 11 regulations that the 

agency considers as minimum standards 

for safe operations (the same violations 

proposed as automatic failure factors in 

this NPRM) and conduct an expedited 

compliance review of any non-North 

America-domiciled motor carrier when 

a violation of these regulations is 

discovered. While the consequences of 

undergoing a compliance review and 

failing a new entrant safety audit may be 

somewhat different (civil penalties, a 

safety rating, and perhaps an operations 

out-of-service order resulting from a 

compliance review compared to 

proposed revocation of new entrant 

operating authority resulting from a new 

entrant safety audit), FMCSA believes 

conducting a compliance review is an 

equivalent level of oversight due to its 

comprehensive nature, the resultant 

safety rating for the carrier, and the 

possibility of civil penalties. In 

addition, non-North America-domiciled 

motor carriers would be subject to the 

same cross-border inspections as 

Mexico-domiciled carriers. Vehicles 

operated by non-North Americadomiciled motor carriers will be subject 

to the same inspection standards as 

other CMVs entering or operating within 

the United States and will be inspected 

at the U.S.-Mexico international border 

unless displaying a valid safety decal. 

Through the agency’s process of 

gathering information on non-North 

America-domiciled motor carriers, 

another group of carriers from Central 

America has been identified. This group 

of carriers allegedly drives or flies 

drivers into interior States to purchase 

used tractor/trailers, school buses, farm 

equipment, and other vehicles. These 

vehicles are transported to Central 

America through the United States and 

Mexico without proper registration, 

insurance or licensing. This migration of 

exports from the United States is 

funneled primarily through one 

location—the Los Indios Port of Entry to 

Mexico. 

To address this situation, FMCSA will 

initially educate southbound non-North 

America-domiciled motor carriers by 

providing warnings and informing them 

of the requirements for complying with 

the Federal Motor Carrier Safety 

Regulations. Following the educational 

period, FMCSA will perform periodic 

compliance strike force activities 

targeting non-registered southbound 

traffic at the Los Indios Port of Entry to 

Mexico. Non-compliant carriers will 

receive enforcement action ranging from 

roadside inspection citations to placing 

drivers and vehicles out of service, if 

warranted. FMCSA requests comments 

on this alternate oversight system for 

non-North America-domiciled motor 

carriers. 

Proposed Registration and Safety 

Monitoring Process for Non-North 

America-Domiciled Motor Carriers 

Applying for a USDOT Number 

Today’s action proposes regulations 

governing the registration and safety 

monitoring of new entrant non-North 

America-domiciled motor carriers. The 

proposals are discussed as follows: 

A. Proposed Application Process for 

Non-North America-Domiciled Motor 

Carriers 

B. Proposed New Form—OP–1(NNA) for 

Non-North America-Domiciled Motor 

Carriers Requesting New Entrant 

Registration 

C. Proposed Safety Monitoring System 

for Non-North America-Domiciled 

Motor Carriers. 

A. Proposed Application Process for 

Non-North America-Domiciled Motor 

Carriers 

FMCSA proposes to add a new 

subpart H to part 385 to address the 

specific requirements of the application 

process for all non-North Americadomiciled motor carriers applying for a 

USDOT Number. First, proposed 

§ 385.601 explains that subpart H would 

apply to any non-North Americadomiciled motor carrier that wants to 

operate within the United States to 

provide transportation of property or 

passengers in interstate commerce. 

Proposed § 385.603 requires these 

applicants to file—

• Proposed Form OP–1(NNA)—

Application for U.S. Department of 

Transportation (USDOT) Registration by 

Non-North America-Domiciled Motor 

Carriers, 

• Form MCS–150—Motor Carrier 

Identification Report, and 

• A notification of the means used to 

designate process agents. 

The application would need to be 

filled out in English and be complete to 

be considered. Information on obtaining 

applications is also provided. 

Proposed Form OP–1(NNA) would 

serve the dual purpose as being an 

application for new entrant registration 

(for all non-North America-domiciled 

carriers) and operating authority (for forhire carriers subject to the requirements 

of 49 CFR part 365). Together with the 

MCS–150, the OP–1(NNA) would 

provide a more complete picture of the 

carrier’s operational characteristics as 

well as its safety compliance and other 

key information than could be obtained 

through either form alone. 

FMCSA would not impose a 

registration fee for new entrant 

registration unless the applicant also 

requires operating authority under part 

365, for which an application fee is 

charged. Under FMCSA’s current 

regulations, a non-North Americadomiciled for-hire carrier of non-exempt 

commodities must submit Form OP–1 

and pay a $300 application fee. 

Conforming amendments are proposed 

to §§ 365.101 and 365.105 to clarify that 

a non-North America-domiciled motor 

carrier would request operating 

authority by using Form OP–1(NNA) 


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4Applications by for-hire carriers subject to part 

365 would also be subject to a 10-day protest 

period. In such cases, a USDOT Number would not 

be issued until after the protest period has elapsed 

and any protests filed have been denied. 

5Mexico-domiciled private carriers are subject to 

the same financial responsibility filing 

requirements as U.S. for-hire carriers pursuant to 49 

U.S.C. 13902(g). 

and consequently be subject to the 

application fee. 

Form MCS–150 would be used to 

obtain a USDOT Number. Conforming 

amendments have been made to 

proposed § 390.19 to require a nonNorth America-domiciled motor carrier 

to file the MCS–150 before beginning 

operations within the United States and 

to submit an updated form every 24 

months after issuance of a USDOT 

Number. 

Form BOC–3. The non-North 

America-domiciled motor carrier 

additionally would be required to notify 

the agency regarding designation of 

process agents by either: (1) Submission 

in the application package of Form 

BOC–3—Designation of Agents-Motor 

Carriers, Brokers and Freight 

Forwarders, or (2) a letter stating that 

the applicant will use a process agent 

that will submit the Form BOC–3 

electronically. 

Proposed § 385.605 would require a 

non-North America-domiciled carrier to 

use only drivers who possess a valid 

commercial driver’s license and to 

subject those drivers to drug and alcohol 

testing as required under 49 CFR part 

382. Acceptable commercial driver’s 

licenses would include: (1) A CDL, (2) 

Canadian commercial driver’s license or 

(3) a Licencia de Federal de Conductor 

issued by Mexico. FMCSA believes the 

CDL and corresponding drug and 

alcohol testing requirements are 

justified because drivers’ licenses issued 

by the various non-North American 

countries may not meet FMCSA 

standards or State licensing standards 

regarding commercial motor vehicles 

not requiring a CDL. 

In proposed § 385.607, FMCSA 

explains how the agency would process 

an application for new entrant 

registration filed by a non-North 

America-domiciled motor carrier. To the 

extent practicable, the agency would 

validate the accuracy of information and 

certifications with data in its databases, 

and the databases of the governments of 

the country where the carrier’s principal 

place of business is located. FMCSA 

would not grant new entrant registration 

unless the carrier passes a preauthorization safety audit (discussed 

later in this section). The criteria 

governing the pre-authorization safety 

audit are fully explained in a new 

Appendix to part 385, subpart H, which 

is modeled after the pre-authorization 

safety audit for certain Mexicodomiciled carriers. 

After completing the preauthorization safety audit, FMCSA 

would issue a USDOT Number if the 

applicant passes the audit.4 However, 

the applicant will not be authorized to, 

and must not, begin operating within 

the United States unless it has filed 

evidence of financial responsibility 

pursuant to 49 CFR part 387 and 

designated a process agent. 

The proposed Appendix to 49 CFR 

part 385, subpart H, sets forth criteria 

governing the pre-authorization safety 

audit. During the pre-authorization 

safety audit, FMCSA would validate the 

accuracy of information provided in the 

application and determine whether the 

carrier has basic safety management 

controls necessary to ensure safe 

operations. FMCSA would gather 

information by reviewing a motor 

carrier’s compliance with ‘‘acute’’ and 

‘‘critical’’ regulations in the FMCSRs 

and HMRs. As stated under the 

discussion of the New Entrant Safety 

Assurance Process for U.S. and Canadadomiciled carriers, FMCSA is studying 

a new approach to assessing the severity 

of violations as part of its announced 

CSA 2010 initiative. This initiative may 

ultimately replace the ‘‘acute and 

critical’’ methodology described in the 

Appendix to part 385, subpart H. 

Conforming amendments are 

proposed for §§ 387.7 and 387.31 to 

require all non-North Americadomiciled motor carriers—private and 

for-hire—to maintain and file evidence 

of financial responsibility with the 

agency as a condition of registration. 

FMCSA believes conditioning 

registration upon receipt of evidence of 

financial responsibility is appropriate 

for all non-North America-domiciled 

motor carriers because the financial 

responsibility standards within their 

countries of domicile may not meet U.S. 

Federal and State requirements. Section 

4120 of The Safe, Accountable, Flexible, 

Efficient Transportation Equity Act: A 

Legacy for Users (SAFETEA–LU) [Pub. 

L. 109–59, 119 Stat. 1762, August 10, 

2005] created new Sections 31138(c)(4) 

and 31139(c) in title 49 of the U.S. Code, 

authorizing FMCSA to require filing of 

evidence of financial responsibility by 

private property and passenger motor 

carriers under its jurisdiction. However, 

only those private motor carriers 

domiciled in non-North American 

countries would be subject to financial 

responsibility filing requirements under 

this proposal. FMCSA plans to address 

the issue of extending financial 

responsibility requirements to U.S. and 

Canada-domiciled private motor carriers 

in a separate rulemaking.5

The new entrant registration would 

not become permanent unless the 

carrier successfully completes the 

proposed 18-month safety monitoring 

system proposed under new subpart I to 

part 385. Successful completion of the 

safety monitoring system includes 

having each CMV operated in the 

United States pass a North American 

Standard commercial motor vehicle 

inspection every 90 days (as indicated 

by issuance of a valid safety decal for 

each of these vehicles) and obtaining a 

Satisfactory safety rating as a result of 

the required compliance review. 

Under proposed § 385.609, the 

applicant must notify FMCSA within 45 

days of any changes or corrections to 

certain key information in the Form OP–

1(NNA) or the Form BOC–3—the form 

used to designate a process agent. 

Failure to do so would be grounds for 

revocation or suspension of its new 

entrant registration. 

B. Proposed New Form—OP–1(NNA) for 

Non-North America-Domiciled Motor 

Carriers Requesting New Entrant 

Registration 

Proposed Form OP–1(NNA) and its 

instructions are based extensively on 

the OP–1(MX) form with certain 

modifications applicable to non-North 

America-domiciled applicants. 

Proposed Section I of the form solicits 

information about the applicant’s name, 

address, official representative, and 

form of business. Proposed Section IA 

would require the applicant to disclose 

any existing operations in the United 

States, including whether it had 

previously applied for a USDOT 

Number. Proposed Section II solicits 

information about any relationships or 

affiliations with other entities registered 

with FMCSA or its predecessor 

agencies. This information would help 

FMCSA verify the applicant’s domicile 

in a non-North American country and 

determine whether the applicant holds 

similar registration in its country of 

domicile. Information regarding 

registration with the applicant’s country 

of domicile would enable FMCSA to 

confirm motor carrier safety issues with 

its licensing authority. 

Under proposed Section III of the 

form, the applicant would identify the 

type(s) of registration requested. FMCSA 

would require a separate filing fee for 

each type of registration requested. 

Section 4303(f) of SAFETEA-LU 


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76738 Federal Register / Vol. 71, No. 245 / Thursday, December 21, 2006 / Proposed Rules 

imposed a January 1, 2007, deadline for 

the agency to modify carrier 

registrations for non-exempt for-hire 

motor carriers under 49 U.S.C. chapter 

139 to eliminate distinctions between 

common and contract carriers. 

Accordingly, FMCSA has removed the 

common and contract carrier 

designations from the description of 

types of registration under proposed 

Section III and modified the proposed 

instructions for Section III to explain 

which for-hire registrations require a 

registration fee. 

Proposed Section IV notifies the 

applicant of financial responsibility 

requirements. Consistent with long-haul 

Mexico-domiciled new entrants, all 

non-North America-domiciled 

applicants (private and for-hire) would 

be required to file evidence of financial 

responsibility with the agency as a 

condition of registration. FMCSA also 

proposes making the cargo insurance 

requirement for non-North Americadomiciled motor carriers consistent 

with what was proposed in the Unified 

Registration System NPRM (70 FR 

28990 published May 19, 2005). The 

May 19, 2005, NPRM proposes that only 

household goods carriers must maintain 

and file evidence of cargo insurance 

with the agency. FMCSA would modify 

proposed Form OP–1(NNA) if the 

Unified Registration System final rule 

results in different cargo insurance 

requirements. 

Under proposed Section V, the 

applicant would certify and substantiate 

that it has a system in place to ensure 

compliance with applicable 

requirements covering driver 

qualifications, hours of service, drug 

and alcohol testing, vehicle condition, 

accident monitoring, and hazardous 

material transportation. Substantiation 

would be in the form of narrative 

responses describing how the applicant 

will monitor hours of service, how it 

will maintain an accident register and 

how it will monitor accidents. FMCSA 

would also require that the applicant 

include the names of individuals in 

charge of its safety program and drug 

and alcohol testing and identify specific 

locations where the applicant maintains 

current FMCSRs. Information obtained 

under Section V would enable FMCSA 

to evaluate, upon initial application, the 

safety compliance program of the 

applicant. FMCSA would reject an 

application that could not offer a 

specific, unambiguous plan to ensure 

compliance. 

Proposed Section VI of the form 

would include new registration 

requirements for motor carriers of 

household goods created under Section 

4204 of SAFETEA–LU. Section 4204 

amended 49 U.S.C. 13902(a) to require 

such an applicant to: (1) Provide 

evidence of participation in an 

arbitration program and a copy of its 

notice to shippers about the availability 

of binding arbitration; (2) identify its 

tariff and provide a copy of the notice 

of the availability of the tariff for 

inspection; (3) certify it has read, and is 

willing to comply with all U.S. Federal 

laws regarding consumer protection, 

estimating, consumers’ rights and 

responsibilities, and options for limiting 

liability for loss and damage; and (4) 

disclose certain financial, operational 

and familial relationship with any other 

entity involved in the transportation of 

household goods within 3 years of the 

proposed date of registration. 

Proposed Section VII would require 

the applicant to specify the scope of 

registration, indicating intended 

principal border crossing points. 

Under proposed Section VIII, the 

applicant would be required to make 

specific certifications regarding 

compliance with laws of the United 

States. The applicant would need to 

affirm its willingness and ability to 

provide the proposed service and to 

comply with all pertinent statutory and 

regulatory requirements. Certifications 

under proposed Section VIII would 

remind the applicant of statutory and 

regulatory responsibilities which, if 

neglected or violated, might subject the 

applicant to disciplinary or corrective 

action by FMCSA. The applicant would 

need to confirm its understanding that 

its process agent is deemed its official 

representative within the United States 

for receipt of filings and notices relating 

to the administrative and judicial 

process in connection with enforcement 

of Federal statutes and regulations. 

Finally, the applicant would need to 

certify that it is not currently 

disqualified from operating a 

commercial motor vehicle in the United 

States. 

Proposed Section IX, the final section 

of the form, includes the applicant’s 

oath attesting to the accuracy and 

truthfulness of application responses 

and certification of compliance with 

certain U.S. Federal and State laws 

regarding distribution or possession of 

controlled substances. 

C. Proposed Safety Monitoring System 

for Non-North America-Domiciled 

Motor Carriers 

Today’s action proposes a new 

subpart I to part 385 covering the 

proposed safety monitoring system for 

non-North America-domiciled new 

entrants. 

Proposed § 385.701 defines the 

following terms used in new subpart I 

to part 385: 

(1) Compliance review has the same 

meaning as in 49 CFR § 385.3. 

(2) New entrant registration is the 

provisional registration under 49 CFR 

part 385, subpart H that FMCSA grants 

to a non-North America-domiciled 

motor carrier to provide interstate 

transportation within the United States. 

It will be revoked if the registrant is not 

assigned a Satisfactory safety rating 

following a compliance review 

conducted during the safety monitoring 

period established in subpart I. 

(3) Non-North America-domiciled 

motor carrier means a motor carrier of 

property or passengers whose principal 

place of business is located in a country 

other than the United States, Canada or 

Mexico. 

Proposed § 385.703 describes 

elements of the safety monitoring 

system for non-North Americadomiciled new entrant motor carriers. 

The safety monitoring system would 

include roadside monitoring and a 

compliance review within 18 months of 

receiving a USDOT Number. 

Additionally, the non-North Americadomiciled carrier would be required—

throughout the 18-month safety 

monitoring period and for three years 

after its new entrant registration 

becomes permanent—to display on each 

CMV in its fleet that is operated within 

the United States, a valid safety 

inspection decal. The safety inspection 

decal would only be valid for three 

months. 

Under proposed § 385.705, a nonNorth America-domiciled motor carrier 

found in violation of the seven listed 

serious violations or infractions would 

be subject to expedited enforcement 

action. Such actions would include an 

expedited compliance review or, in the 

alternative, a demand that the carrier 

demonstrate in writing that it has taken 

immediate corrective action. The 

proposed infractions parallel those 

proposed for U.S. and Canadadomiciled motor carriers and those 

already applicable to Mexico-domiciled 

carriers. The section clarifies what 

constitutes a valid commercial driver’s 

license. The type of action taken by 

FMCSA in response to any violations 

would depend upon the specific 

circumstances of the violations. 

Proposed § 385.705(b) warns that 

failure to respond to a request for a 

written response demonstrating 

corrective action within 30 days would 

result in suspension of new entrant 

registration until the required showing 

of corrective action is made. 


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6 If a carrier’s USDOT Number was revoked and 

reinstated under the provisions of proposed 

§ 385.713, the 18-month period would run from the 

date of reinstatement. 

Proposed § 385.705(c) emphasizes 

that a carrier that successfully responds 

to a demand for corrective action under 

this section still would need to undergo 

a compliance review during the 18- 

month safety monitoring period if it had 

not already done so. 

Under proposed § 385.707, FMCSA 

explains potential outcomes of the 

compliance review—a Satisfactory, 

Conditional, or Unsatisfactory rating—

and FMCSA follow-up actions in 

response to each rating. The proposed 

section would require the compliance 

review to be conducted consistent with 

existing FMCSA safety fitness 

evaluation procedures under 49 CFR 

part 385, Appendix B. These are the 

same criteria in use for U.S., Canada and 

Mexico-domiciled carriers. 

FMCSA sets forth under proposed 

§ 385.709 the specific time frames for 

suspension and revocation of new 

entrant registration. We believe the 

proposed procedures strike an 

appropriate balance between the need to 

protect the public from potentially 

unsafe carriers and preservation of the 

carrier’s due process rights. 

Proposed § 385.711 sets forth 

procedures for requesting administrative 

review of the agency’s safety rating or its 

decision to suspend or revoke new 

entrant registration. The request must 

explain the error it believes FMCSA 

committed and a list of all factual and 

procedural issues in dispute. In 

addition, the carrier must include any 

information or documents that support 

its argument. Following the 

administrative review, which would be 

conducted by the FMCSA Associate 

Administrator for Enforcement and 

Program Delivery, the agency would 

notify the carrier of its decision. This 

decision would constitute the agency’s 

final action. Administrative review 

would be completed in no more than 10 

days after the request is received. 

Under proposed § 385.713, a nonNorth America-domiciled carrier whose 

registration has been revoked would be 

prohibited from re-applying for new 

entrant registration for at least 30 days 

after the date of revocation. When 

reapplying, the non-North Americadomiciled motor carrier again would be 

required to pass a pre-authorization 

safety audit. The carrier would need to 

demonstrate to the FMCSA’s satisfaction 

that it has corrected the deficiencies that 

resulted in revocation of its registration 

and that it otherwise has effectively 

functioning basic safety management 

systems in place. If the application is 

approved, the carrier’s USDOT 

Number—linked to its previous safety 

record—would be reactivated; a new 

USDOT Number would not be issued. In 

this way, the agency could maintain a 

complete safety record of the non-North 

America-domiciled motor carrier. 

Proposed § 385.715 provides that the 

safety monitoring period for non-North 

America-domiciled motor carriers 

would last for at least 18 months from 

the date it was issued a USDOT 

Number.6 If, at the conclusion of the 

18-month safety monitoring period, the 

carrier has received a Satisfactory safety 

rating and is not currently under a 

notice from FMCSA to remedy 

deficiencies in its basic safety 

management practices, the carrier’s 

registration would become permanent. 

If the carrier is under a notice to 

remedy deficiencies in its basic safety 

management practices, the safety 

monitoring period would be extended—

and its new entrant designation would 

continue—until FMCSA determines the 

carrier is complying with the Federal 

safety regulations or revokes its 

registration under § 385.709. 

If FMCSA is unable to conduct a 

compliance review within the 18-month 

period, proposed § 385.715(c) would 

extend the safety monitoring period 

until such time as the agency completes 

and evaluates a review. 

Proposed § 385.717 emphasizes that 

the non-North America-domiciled motor 

carrier also would be subject to the same 

general safety fitness procedures in 49 

CFR part 385, subpart A, and to 

compliance and enforcement 

procedures applicable to all carriers 

regulated by the FMCSA. 

Proposed § 390.19 explains filing 

procedures for the MCS–150 in greater 

detail and would subject non-North 

America-domiciled motor carriers to the 

biennial update requirement. 

Additionally, § 390.19(h)(2) proposes a 

technical correction documenting the 

existing requirement for a Mexicodomiciled long-haul motor carrier to 

successfully complete a preauthorization safety audit prior to being 

issued a USDOT Number. 

Discussion of Comments 

FMCSA received 29 responses to the 

IFR from 19 commenters. The 

commenters were five trade 

associations, four safety consultants, 

two public interest groups, three private 

citizens, a State police department, a 

safety enforcement organization, an 

occupational health private practice, a 

union, and a professional association. 

Five commenters made multiple 

submissions. 

General Comments. In general, the 

comments were supportive of the new 

entrant requirements in the IFR. The 

American Trucking Associations (ATA), 

American Society of Safety Engineers 

(ASSE), Commercial Vehicle Safety 

Alliance (CVSA), Consolidated Safety 

Systems (CSS), Daecher Consulting 

Group, Inc. (Daecher), the Independent 

Truckers and Drivers Association 

(ITDA), the National Private Truck 

Council (NPTC), the Indiana State 

Police, Schroeder & Associates, the 

International Brotherhood of Teamsters 

(IBT) and Tran Services generally 

supported the IFR and offered 

comments to improve the rulemaking. 

The Canadian Trucking Alliance (CTA) 

supported the IFR to the extent it 

applies equally to Canada- and U.S.- 

domiciled carriers. CVSA stated the 

SA—if properly implemented and 

accompanied by CDL reforms, 

technology and increased traffic 

enforcement—will have a dramatic and 

measurable impact on safety. CVSA 

submitted a petition to delay the 

implementation of the New Entrant 

Safety Assurance Process until States 

receive adequate funding and after 

certain procedural issues relating to the 

process are resolved. 

Several commenters opposed the IFR 

for various reasons. Advocates for 

Highway and Automobile Safety 

(AHAS) and Public Citizen opposed the 

agency’s decision to publish an IFR 

instead of a notice of proposed 

rulemaking. Both urged the agency to 

permit full public involvement in the 

New Entrant Safety Assurance Process 

rulemaking. AHAS indicated the quality 

of FMCSA regulatory drafting and 

publication would be improved by 

providing sufficient documentation of 

agency reasoning and decisions in its 

final regulations. Public Citizen stated 

the New Entrant Safety Assurance 

Process is rooted in self-reporting and 

devoid of meaningful oversight. 

According to Public Citizen, only an 

extremely negligent new entrant would 

be denied operating authority under this 

process. Public Citizen urged the agency 

to: 

• Permit full public involvement in 

the New Entrant rulemaking. 

• Eliminate from the process all 

requirements for uncorroborated selfreporting. 

• Make a proficiency examination, 

and third-party, in-person verification of 

regulatory compliance and knowledge, 

prerequisites for granting operating 

authority. 

• Develop a plan that assures the SA 

will be conducted within an 18-month 

time period. 


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• Establish stricter penalties for 

noncompliant motor carriers. 

The Transportation Lawyers 

Association (TLA) commented the IFR 

fails to meet the statutory requirement 

of ensuring a carrier is knowledgeable 

about its safety responsibilities prior to 

commencing operations. ‘‘FMCSA 

proposes nothing in this proceeding that 

will reduce the ‘safety learning curve’

before a new carrier begins operating.’’

TLA contended that safety certifications 

and educational and technical 

assistance materials have been used by 

the agency for many years and have 

already proven inadequate. 

FMCSA Response: In a letter dated 

April 11, 2003, the agency denied the 

CVSA petition to delay implementation 

of the New Entrant Safety Assurance 

Process until January 2004 and 

addressed CVSA concerns, including 

those related to adequate State funding 

for implementing the new entrant 

process, adequate training for State and 

Federal personnel charged with 

conducting safety audits, and 

recognition of Canadian and current 

State new entrant programs. A copy of 

the letter is in the docket to this rule. 

In developing this proposal, FMCSA 

fully considered all comments to the 

May 2002 IFR and has adopted some of 

the recommendations. In response to 

complaints about self-certifications, this 

NPRM would eliminate the Form MCS–

150A because safety audits have 

confirmed carrier certifications on the 

MCS–150A and findings at the carrier’s 

place of business are not always 

consistent (See the ‘‘Form MCS–150A’’

subheading). Later in this section under 

applicable subject headings, the agency 

addresses specific concerns from AHAS, 

TLA and Public Citizen regarding the 

use of proficiency examinations (see the 

‘‘Proficiency Examinations’’

subheading) and plans to improve the 

educational and technical assistance 

(ETA) materials by including 

information on how to comply with the 

regulations (see the ‘‘ETA Materials’’

subheading). The rule provides 

additional details about the scoring 

methodology and how the agency 

intends to strengthen the New Entrant 

Safety Assurance Process under the 

previous section titled ‘‘Discussion of 

the Proposed Rule’’ under the 

‘‘Strengthening the Safety Audit’’

subheading. 

Timing of the SA and 18-month 

monitoring period. Several commenters 

took issue with the timing of the SA and 

the 18-month monitoring period. ASSE 

stated that the 18-month period is too 

long, Daecher contended that a 6-month 

period would be adequate, and 

Schroeder & Associates believed the 

best time to conduct an audit is within 

6 to 9 months of beginning operations. 

Only CSS agreed that an 18-month 

period may be necessary to effectively 

evaluate a carrier from a regulatory 

perspective because it affords the carrier 

an opportunity to execute certain 

requirements. The Indiana State Police 

recommended having a certified 

FMCSA representative conduct the SA 

within 30 days of issuance of the 

USDOT Number and CVSA advocated a 

face-to-face meeting with the new 

entrant at the time of the application. 

FMCSA Response: As noted above, 49 

U.S.C. 31144(g)(1) requires FMCSA to 

establish an 18-month period within 

which new entrant safety reviews must 

be conducted. Furthermore, as a 

practical matter, FMCSA believes 

carriers will not have sufficient records 

to allow the agency to review and 

evaluate the adequacy of a carrier’s 

basic safety management controls until 

the carrier has been operating for 

approximately 3 months. 

Scope of the Audit. Some commenters 

took issue with the SA itself and 

recommended broadening the scope of 

the audit to address more than just 

compliance issues. ATA recommended 

including such topics as employee 

hiring, bonus and incentive programs, 

employee training, quality control and 

safety meetings. CVSA recommended 

including a CVSA Level 1 or Level 5 

inspection on as many of the carrier’s 

vehicles as possible. 

FMCSA Response: FMCSA proposes 

broadening the scope of the audit to 

include additional areas over which it 

has jurisdiction, such as operating 

authority, and household goods and 

ADA regulatory compliance. However, 

as noted previously, only safety-related 

questions would count toward the pass/ 

fail determination. The agency also 

proposes to strengthen the audit by 

making specific violations, such as 

operating without a required CDL, result 

in automatic failure of the audit. 

Currently, the SA involves a Level 1 or 

5 inspection of a sample of the carrier’s 

vehicles. If there are insufficient 

vehicles on site at the time of the audit, 

the auditor completes the audit and 

documents why he/she was unable to 

conduct the inspections. 

Safety Audit and Corrective Actions. 

Public Citizen opposed having a new 

entrant self-certify regarding corrective 

action for deficiencies revealed during 

the SA and asserted FMCSA should 

require in-person verification of 

corrective action. The Teamsters urged 

the agency to immediately suspend any 

new entrant found to be lacking basic 

safety management controls during the 

SA until it has demonstrated corrective 

action to the satisfaction of FMCSA. The 

Indiana State Police urged FMCSA to 

place both the vehicle and driver out-ofservice until corrective action is taken if 

a carrier is found to be operating 

without USDOT new entrant 

registration. 

FMCSA Response: The current 

regulations under § 385.319 provide that 

FMCSA must notify a carrier of any 

inadequacies found during an SA and 

advise the carrier what actions it must 

take to remedy the inadequacies to 

avoid having its registration revoked. 

The carrier must submit written 

evidence of corrections taken, and 

FMCSA reserves the right to determine 

whether they are adequate. FMCSA is 

required to provide the carrier with 

official notice of the deficiencies and 

the opportunity to correct them. The 

carrier must respond with more than a 

self-certifying statement. For example, 

acceptable demonstration of corrective 

action for a carrier found to not have a 

drug and alcohol testing program would 

be evidence documenting membership 

in a consortium. Under § 385.325, if a 

carrier does not demonstrate corrective 

action acceptable to FMCSA, the agency 

would revoke its new entrant 

registration and issue an out-of-service 

order. If the carrier is found to be 

operating a CMV in violation of an outof-service order, under § 385.331, it 

might be fined up to $11,000 per 

violation in accordance with 49 U.S.C. 

521(b)(2)(A) and 49 CFR part 386, 

Appendix B (a)(3). 

Form MCS–150A. Several commenters 

encouraged FMCSA to eliminate the 

MCS–150A. ATA contended that many 

of the certification statements on the 

form are already collected on the 

registration application and suggested 

we retain and incorporate certification 

statements 18 and 19 into the MCS–150. 

ITDA urged FMCSA to require each new 

applicant to provide a written plan 

demonstrating the applicant’s 

knowledge of motor carrier safety 

regulations and its ability to safely 

operate a trucking business. Public 

Citizen regarded the certifications on 

the MCS–150A as uncorroborated 

declarations by the applicant. 

FMCSA Response: FMCSA agrees the 

MCS–150A is not producing the 

intended results. FMCSA’s review of the 

New Entrant Safety Assurance Process 

has verified many new entrants are 

falsely certifying to having safety 

management controls when they are not 

actually in place. The agency proposes 

to eliminate Form MCS–150A. 

Proficiency Examination. Several 

commenters opposed FMCSA’s decision 

to not require a proficiency examination 

for new entrants. AHAS argued the IFR 


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does not adequately consider the use of 

a proficiency examination to measure 

new entrant safety. CSS supported the 

use of a proficiency examination as a 

component of the New Entrant Safety 

Assurance Process and offered to 

discuss its current program with the 

Department of Defense (DOD) and 

associated procedures with FMCSA. 

CVSA stated that in addition to using 

enhanced, comprehensive educational 

and technical assistance materials, 

FMCSA should administer a proficiency 

examination to measure a new entrant’s 

knowledge of Federal motor carrier 

safety standards. According to CVSA, a 

new entrant’s self-certification alone is 

insufficient proof of adequate systems to 

assure compliance with the FMCSRs. 

Daecher asserted that giving ETA 

materials to a carrier does not ensure the 

carrier will read and understand the 

information. It encouraged FMCSA to 

use a proficiency examination to ensure 

the carrier has knowledge of the 

regulations and related safety 

information. Public Citizen urged the 

agency to make a proficiency 

examination a prerequisite for receiving 

operating authority. According to Public 

Citizen, the examination would be a far 

more comprehensive evaluation of 

regulatory knowledge than certifications 

made on the MCS–150A. 

FMCSA Response: The agency 

believes the planned enhancements to 

the ETA materials, as discussed in 

greater detail below, would provide 

most carriers with sufficient 

understanding of applicable regulations 

and assistance on how to comply with 

the applicable FMCSRs and HMRs and 

that a proficiency examination is not 

necessary. However, the agency 

recognizes knowledge alone does not 

ensure a carrier is in satisfactory 

compliance with the regulations. Only a 

review of the carrier’s records and 

systems could demonstrate such 

compliance. 

ETA Materials. Several commenters 

addressed the subject of educational and 

technical materials for new entrants. 

AHAS and ATA complained FMCSA 

has not provided an opportunity for 

public review and comment on those 

educational and technical assistance 

materials new entrant carriers will 

receive. They suggested the agency 

place the ETA materials in the 

rulemaking docket or direct readers to 

where on the agency web site they can 

be obtained. CTA recommended 

revising the ETA materials to generally 

and clearly acknowledge distinctions 

between U.S. and Canadian rules. 

According to CTA, this would warn new 

entrants that rules can, and do, vary 

depending on the jurisdiction in which 

one operates. ITDA urged FMCSA to 

establish a process that encourages a 

new entrant to seek information and 

guidance and makes that information 

and guidance easily accessible. A 

private citizen recommended classroom 

instruction for new entrants. 

FMCSA Response: FMCSA agrees the 

ETA materials need to be updated to 

better inform new entrants about 

regulatory requirements and how to 

comply fully with the requirements. The 

ETA materials are an integral 

component of the entire New Entrant 

Safety Assurance Process. One of the 

reasons stated in the March 2002 IFR for 

not initiating a proficiency exam was 

FMCSA’s belief that the educational and 

technical assistance provided to new 

entrants would ensure they understood 

the applicable safety regulations. 

However, it is apparent many new 

entrants are not fully compliant and one 

of the reasons is because the ETA 

materials are not as comprehensive as 

they need to be. FMCSA plans to review 

all ETA materials provided to new 

entrants and improve the quality, 

content, and format of the material. 

The agency believes enhanced ETA 

materials, including a new entrant 

safety assurance compact disc, would 

substantially increase a new entrant’s 

awareness of carrier responsibilities 

before beginning operations and would, 

to a great extent, make them proficient 

in those requirements. FMCSA further 

believes the anticipated benefits of the 

enhanced ETA materials more than 

justify associated agency costs. FMCSA 

has determined the contents of these 

materials are not subject to notice and 

comment because they do not establish 

standards or procedures, but will place 

a copy of the updated ETA materials in 

the docket to this rule for inspection 

upon completion. 

Safety Monitoring During the 18- 

month Period. ATA requested specific 

details about how the agency intends to 

monitor new entrants during the 18- 

month period. Section 385.307(a) states: 

‘‘[t]he new entrant’s roadside safety 

performance will be closely monitored 

to ensure the new entrant has basic 

safety management controls that are 

operating effectively.’’ ATA believed 

this is insufficient information 

concerning how the agency will monitor 

new entrants during the 18-month 

period. CSS and CVSA supported 

development of a unique registration 

and USDOT Number to identify new 

entrants that have not yet passed the 

SA. 

FMCSA Response: FMCSA would 

continue to monitor a new entrant’s onroad performance using agency 

information systems and roadside 

inspections. Although the agency does 

not identify a new entrant that has not 

yet passed an SA by assigning a unique 

USDOT Number, FMCSA is able to 

target such new entrants for an SA or 

roadside inspection using information 

systems such as SafeStat, the Inspection 

Selection System (ISS) and the Motor 

Carrier Management Information System 

(MCMIS). 

Safety Audit. Other commenters 

stated FMCSA should disclose the SA 

Evaluation Criteria, Forms, and 

Monitoring Procedures. Both ATA and 

AHAS requested the SA evaluation 

criteria be placed in the rulemaking 

docket for review and comment, and 

complained that FMCSA has not 

disclosed the criteria by which a new 

entrant will be evaluated. 

FMCSA Response: Appendix A to 49 

CFR part 385 explains the SA evaluation 

criteria, including the source of the data 

and how FMCSA determines whether a 

new entrant has basic safety 

management controls. 

Reciprocity. CTA urged FMCSA to 

exempt from the SA audit requirement 

Canada-domiciled new entrant carriers 

that have undergone a provincial facility 

audit during the 18-month monitoring 

period. 

FMCSA Response: Although FMCSA 

is engaged in ongoing discussion with 

its Canadian partners concerning the 

New Entrant Safety Assurance Process, 

today’s rulemaking is not proposing an 

exemption for a Canada-domiciled new 

entrant carrier that has passed a 

provincial facility audit for several 

reasons. First, 49 U.S.C. 31144(g)(1) 

specifies the regulation must require 

each new entrant to undergo the safety 

review (audit) within the first 18 

months of beginning operations. The 

statutory language provides no authority 

to exempt new entrants, including 

Canada-domiciled carriers that have 

successfully undergone a provincial 

facility audit, from the SA. Furthermore, 

the Canadian provincial facility audit 

fails to address all of the elements of the 

new entrant SA. For example, Canada 

does not require a carrier to have a 

controlled substance and alcohol testing 

program for its drivers. FMCSA could 

verify a Canada-domiciled carrier is 

aware of, and in compliance with, the 

agency’s controlled substances and 

alcohol testing requirements only by 

conducting a new entrant SA under part 

385. Moreover, § 31148(b) requires the 

SA to be conducted by: (1) A motor 

carrier safety auditor certified under 

FMCSA regulations or (2) a Federal or 

State employee who on the date of the 

enactment of § 31148(b) was qualified to 

perform such an audit or review. 


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Canadian provincial officials may not 

meet these qualifications. 

Alternate Locations for Audits. The 

IFR also requested comments on the 

advisability of conducting some SAs at 

alternate locations. ATA agreed the use 

of locations other than the carrier’s 

place of business for the SA may be 

beneficial, but recommended that 

alternate location scheduling remain 

optional and used at the discretion of 

the motor carrier scheduled for the 

audit. CVSA commented that the 

primary value of the SA is the 

personalized evaluation and education 

provided by the safety professional and 

did not believe an adequate audit could 

be conducted in a group setting. CVSA 

supported conducting the SA on-site at 

the new entrant’s place of business. CSS 

also opposed the use of alternate 

locations for the SA. Although 

acknowledging there are obvious 

economies associated with this 

approach, CSS contended that the 

effectiveness and desired results would 

be significantly reduced, particularly if 

the primary focus of the SA is to assess 

the new entrant’s safety management 

controls. Public Citizen acknowledged 

that conducting multiple audits 

simultaneously might expedite the 

number of audits conducted and ease 

agency backlog. However, Public Citizen 

contends a new entrant may be reluctant 

to fully participate in the process for 

fear of exposing potential vulnerabilities 

to its competitors. Another commenter 

stated that effective group audits are not 

possible because carrier operational 

types are so varied. Tran Services 

applauded the use of alternate locations 

to simultaneously provide educational 

and technical assistance to multiple 

new entrant carriers, but opposed 

conducting SAs in such a setting. The 

new entrant would need to bring along 

too many records, and FMCSA may be 

unable to provide an individual carrier 

the individual attention necessary to 

determine if the carrier is in 

compliance. 

FMCSA Response: FMCSA has 

carefully considered the feasibility of 

conducting group audits. The agency 

believes group audits may present an 

excellent opportunity to simultaneously 

provide many new entrants with 

educational and technical assistance in 

a classroom setting while auditing the 

systems and records of individual new 

entrants in a private, one-on-one setting. 

However, experience has shown group 

audits are only beneficial in select 

situations, depending on many factors 

including, but not limited to, the 

number of new entrants within the 

given geographical area. For this reason, 

FMCSA conducts group audits only in 

those areas where practicable. 

Currently, an SA provides education 

and technical assistance to a motor 

carrier that has recently begun 

operations. In addition, the SA provides 

FMCSA with the opportunity to ensure 

the carrier’s compliance with applicable 

Federal safety regulations. Normally, an 

SA would take from 2 to 4 hours to 

complete. Unlike the in-depth 

compliance review for motor carriers 

that are not in the new entrant program, 

the SA focuses on education. By 

conducting these audits at the carrier’s 

place of business rather than in a 

classroom setting, auditors gain a 

broader perspective of the company’s 

structure and level of compliance with 

Federal safety regulations. 

Use of Private Contractors to Conduct 

Safety Audits. The IFR requested 

comments on whether private 

contractors certified by FMCSA should 

conduct SAs. AHAS, ASSE, ATA, 

CVSA, CSS, Daecher, The Indiana State 

Police, Public Citizen, Schroeder & 

Associates, and Tran Services supported 

the use of qualified, private contractors 

to conduct SAs. AHAS asserted that use 

of private contractors would ‘‘provide 

an opportunity to boost the annual 

numbers and percentages of motor 

carriers that are inspected and audited 

for safety adequacy.’’ AHAS 

acknowledged that substantial 

safeguards must be built in order to 

avoid the possibility of fraud and other 

abuses. 

According to ASSE, a certified safety 

professional (CSP) with appropriate 

transportation experience would be well 

qualified to perform the audits without 

further designation. ASSE 

recommended the final rule allow the 

use of private auditors who must be 

accredited by either the Council on 

Engineering and Scientific Specialties 

Board or the National Commission on 

Certifying Agency (NCCA), two 

nationally recognized independent 

accrediting bodies overseeing 

professional safety designations for 

safety, health and environmental 

professionals who are qualified to 

perform audits such as the new entrant 

SA. 

ATA recommended that private 

contractors receive the same training as 

Federal and State investigators and use 

identical audit and data collection 

techniques. ATA asserted that industry 

support of the use of private contractors 

is contingent upon strict oversight of 

their work. ATA urged FMCSA to 

address the use of private contractors for 

SAs in a notice outlining proposed 

contractor training, auditing procedures 

and software, and how the Government 

will measure program effectiveness. 

CSS believed that its own experiences 

in conducting inspections for DOD 

support its position that ‘‘there are 

many well trained and qualified 

transportation safety professionals in 

the private sector.’’

Indiana State Police supported the use 

of FMCSA-certified private contractors 

to conduct abbreviated SAs before the 

carrier begins operations. Indiana 

asserted these contractors could provide 

the basic educational and technical 

guidance in a classroom setting when 

the USDOT Number would be granted. 

Indiana stated the private contractor 

could bill the new entrant for these 

services, resulting in a cost savings to 

FMCSA. 

Schroeder & Associates supported the 

use of private contractors and suggested 

adopting the expertise levels described 

in FMCSA’s March 19, 2002, IFR titled 

Certification of Safety Auditors, Safety 

Investigators, and Safety Inspectors (67 

FR 12775) as the standard for such 

contractors. Schroeder suggested that 

FMCSA certify individuals, not 

companies, for conducting the SAs. 

They also suggested that the agency 

could model the certification for private 

contractors after the former Interstate 

Commerce Commission Practitioner 

certification process, including 

minimum education and employment 

standards and a comprehensive 8-hour 

essay examination. Schroeder further 

recommended that the FMCSA SA 

course be accessible to non-government 

personnel with a waiver for those who 

successfully test out of the course. 

Lastly, they recommended FMCSA 

require private contractors to conduct a 

minimum of 12 inspections annually to 

maintain certification. 

Tran Services asserted Federal, State 

and private contractors should be 

identically certified to ensure 

uniformity. Tran Services, and other 

private companies, already provide 

safety services, including ‘‘mock DOT 

audits’’ to help companies achieve and 

maintain compliance. ITDA opposed the 

use of private contractor inspectors, and 

stated that only Federal and State 

inspectors should conduct the SA at this 

time. ITDA believes that only after the 

New Entrant Safety Assurance Process 

is fully implemented and there is 

sufficient experience with the process 

should FMCSA consider the use of 

private contractor inspectors. 

The IBT interpreted sec. 211 of 

MCSIA as prohibiting the use of a 

private contractor to grant operating 

authority to a carrier and that the SA 

falls within that prohibition. IBT stated 

the SA is an integral part of the 


cprice-sewell on PROD1PC66 with PROPOSALS2
Federal Register / Vol. 71, No. 245 / Thursday, December 21, 2006 / Proposed Rules 76743 

7OMB, Circular A–4, September 2003, page 15. 

Available online at http://www.whitehouse.gov/ 

omb/circulars/a004/a-4.pdf. 

procedure for obtaining permanent 

operating authority, and is a 

precondition for such authority. IBT 

contended that SAs are so closely linked 

with the grant of permanent operating 

authority that allowing private 

contractors to conduct SAs would be a 

de facto impermissible delegation of 

authority. 

Due to the anticipated strain on 

Federal and State enforcement 

resources, CVSA recommended the 

agency use private contractors to 

conduct SAs. CVSA argued, given their 

limited resources, Federal and State 

officials should not weaken efforts to 

conduct compliance reviews, roadside 

inspections, and traffic enforcement to 

implement the New Entrant Safety 

Assurance Process. CVSA made the 

following specific recommendations 

regarding the use of private contractors: 

• Use only properly trained and 

certified individuals; 

• Exclude the results of private 

contractor audits when determining a 

carrier’s safety rating or for enforcement 

purposes; and 

• Prohibit private contractors from 

conducting roadside inspections. 

CVSA also recommended FMCSA 

conduct a multi-State, private contractor 

pilot program modeled after Canada’s 

third-party auditor pilot program. 

Daecher believed FMCSA should 

exclusively use qualified private 

auditors to conduct the SAs because it 

is a more easily managed and cost 

effective option. According to Daecher, 

current FMCSA resources are 

insufficient to handle the anticipated 

number of new entrants; opting not to 

use private contractors would be 

detrimental to the New Entrant Safety 

Assurance Process and prohibit review 

of each new entrant within the 18- 

month monitoring period. Daecher 

recommended establishing a 

certification program for private 

contractors to conduct both safety audits 

and compliance reviews. 

FMCSA Response: Annually, 

approximately 48,000 motor carriers 

register with FMCSA to become new 

entrants. Federal and State compliance 

officers are able to conduct SAs on 

many of these carriers, but not all of 

them. To increase the number of new 

entrants inspected and monitored for 

safety compliance under the New 

Entrant Safety Assurance Process, 

FMCSA has been using private 

contractors to conduct safety audits 

since January 2004. 

FMCSA has built into its contracts 

with private contractors effective 

safeguards against fraud and other 

abuses. The contractors are required to 

follow the same policies and procedures 

followed by Federal and State safety 

auditors. In addition, FMCSA closely 

monitors the activities of private 

contractors by obtaining monthly 

activity reports and reviewing their 

internal administrative procedures. 

FMCSA is requiring all individuals 

performing a privately contracted safety 

audit to be certified following the same 

guidelines applicable to Federal and 

State safety auditors. They must meet 

the same minimum qualifications as 

Federal and State safety auditors, 

including certain education and 

experience requirements, as well as 

testing through the FMCSA 

International Training Division located 

in Arlington, VA. Private contractors 

must also pass the same proficiency 

exams given to Federal and State safety 

auditors and renew their certification 

annually. The maintenance of 

certification requirement currently 

includes performing a minimum of 24 

SAs each year. 

Completed SAs performed by private 

contractors receive the same scrutiny as 

those performed by Federal and State 

auditors. Although private contractors 

perform SAs, the results of any audit are 

not final until reviewed by FMCSA, 

thus ensuring Federal oversight of the 

program. 

Since the SA does not result in a 

safety rating for the motor carrier being 

audited, private contractor SAs are not 

used to determine a carrier’s safety 

rating. A safety rating is only issued 

upon completion of a compliance 

review. Compliance reviews are only 

conducted by Federal or State personnel 

and cannot be performed by a private 

contractor. 

FMCSA agrees that private industry 

offers many trained and qualified 

individuals who can be utilized to 

ensure public safety. The agency 

acknowledges the strain brought to bear 

upon Federal and State resources due to 

the large number of incoming new 

entrant motor carriers annually 

registering with FMCSA and hopes to 

mitigate the situation by continuing to 

use private contractors. 

Rulemaking Analyses and Notices 

Executive Order 12866 (Regulatory 

Planning and Review) and DOT 

Regulatory Policies and Procedures 

FMCSA has preliminarily determined 

this proposed rule is a significant 

regulatory action within the meaning of 

Executive Order 12866 and the U.S. 

Department of Transportation’s 

regulatory policies and procedures 

(DOT Order 2100.5 dated May 22, 1980; 

44 FR 11034, February 26, 1979). While 

the costs of this NPRM would not 

exceed the $100 million annual 

threshold as defined in Executive Order 

12866, FMCSA believes the subject of 

new entrant motor carrier requirements 

generates considerable public interest 

and therefore is significant. FMCSA has 

analyzed the costs and benefits, as 

discussed below, and has preliminarily 

determined this proposed rule would 

not be economically significant. This 

NPRM has been reviewed by the Office 

of Management and Budget (OMB). 

A number of studies, some of which 

were sponsored by FMCSA or its 

predecessor agency, have evaluated the 

safety experience of new entrants. While 

the studies differ in emphasis and some 

particulars, they all demonstrate new 

entrants have higher crash rates than 

more established carriers and are less 

likely to comply with Federal 

regulations. 

As explained previously, this 

rulemaking makes a number of revisions 

to how the agency monitors and 

evaluates new entrant motor carriers 

operating in the United States, and how 

these carriers apply for authority. The 

rulemaking also establishes procedures 

for the oversight of non-North American 

motor carriers. Only a very small 

number of non-North American carriers 

are currently operating in the United 

States, and we do not expect this 

number to grow appreciably in the 

future. 

OMB guidance states that the agency’s 

analyses should ‘‘focus on benefits and 

costs that accrue to citizens and 

residents of the United States.’’ 7 The 

analysis of costs is based on the total 

number of new entrants registering with 

FMCSA. This rule would impose costs 

on a small number of Canada-domiciled 

and non-North America-domiciled 

motor carriers operating in the United 

States. The difference between 

including and excluding non-North 

America-domiciled carriers is 

imperceptible after rounding. To obtain 

cost estimates for the U.S.-domiciled 

motor carriers, one should reduce the 

estimates presented by 3.5 percent. Most 

of the foreign carriers involved are 

domiciled in Canada. 

The costs associated with the 

FMCSRs, HMRs, or the New Entrant 

Safety Assurance Process IFR should 

not be counted as a cost of this NPRM 

because these costs were already 

counted when the various measures 

were first promulgated. Thus, there are 

no societal costs associated with the 

proposed changes. We are not proposing 

any substantive changes to the 


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8These estimates were derived from data 

contained in the Motor Carrier Management 

Information System (MCMIS). 

9See the Bureau of Labor Statistics Web site 

http://www.bls.gov/oes/2003/may/oes_11Ma.htm 

dated May 2003. 

10Based on Revised Costs of Large Truck- and 

Bus-Involved Crashes, by Eduard Zaloshnja, Ted 

Miller, and Rebecca Spicer (National Technical 

Information Service, Springfield, VA), 2002. 

11 Volpe Center, Analysis of New Entrant Motor 

Carriers Safety Performance and Compliance Using 

SafeStat, March 2000, pp. 3–2, 3–7, and 5–4. 

12For economic evaluations in the Department of 

Transportation, the value of a statistical life is to be 

$3.0 million. However, since there cannot be 

fractional fatal crashes, we round up to one. 

13 (19,559 ¥ 253) * (47,535/33,787) = 27,162. 

14Not all non-compliant carriers will be replaced 

by other new entrants. It is possible that carriers 

already in operation will absorb freight or 

passengers previously transported by firms placed 

out of service. Although it is possible existing 

operational regulatory requirements; 

motor carriers, including new entrants, 

are already required to comply with 

these regulations. Therefore, this 

proposal would not place any new 

substantive burdens upon new entrants 

or any other entity. Rather, as explained 

above, the proposed changes would 

make the enforcement of existing 

requirements more rigorous. Any motor 

carrier already complying with the 

FMCSRs and HMRs would not face any 

change in practices. This proposal 

would include modest administrative 

costs for carriers to become aware of the 

new consequences for failing to comply 

with existing requirements. 

Between 1995 and 2002, an average of 

47,535 8 new entrants began operations 

annually. We assumed this number 

would remain constant. As noted above, 

this NPRM would not impose any new 

operational requirements on new 

entrants. The only truly new cost 

involved would be the cost to motor 

carriers of becoming aware of new 

requirements when this NPRM is 

promulgated as a final rule. We assumed 

it would take an extra hour for the 

appropriate motor carrier official of each 

new entrant to study the new 

requirements and discern how to best 

comply with them. Using Bureau of 

Labor Statistics 9 (BLS) estimates for 

hourly wages for Transportation 

Managers of $33.50 and 31.5 percent 

employment benefits, we obtain an 

hourly compensation of $44.05. 

Assuming learning the new audit 

consequences takes an hour per firm, we 

estimate a cost of $2.1 million annually. 

As noted above, this NPRM proposes 

eliminating the Form MCS–150A 

because of its ineffectiveness in 

ensuring an understanding of required 

basic safety management controls. We 

assume the elimination of this form 

would save new entrants 10 minutes 

each. Using a clerical wage of $14 per 

hour, this provision would save new 

entrants $111,000 annually. The net 

administrative cost of this proposed rule 

to new entrants is thus $2.0 million per 

year. 

Alternative Analysis 

We do not believe this proposed rule 

would impose significant costs or 

benefits other than those intended and 

counted in the IFR. As explained 

previously, this proposed rule would 

not introduce any new requirements. 

All carriers, including new entrants, 

already are required to comply with the 

FMCSRs and applicable HMRs, 

including all the standards that would 

be checked during the safety audit. 

Therefore, the costs and benefits of the 

audit should not be ascribed to this 

NPRM; these costs and benefits were 

included when these regulations were 

initially promulgated, so including them 

now would be double counting. 

However, we did attempt to measure 

these costs and benefits. While they are 

not properly part of this proposed rule, 

the information may prove useful for 

decision makers. This section therefore 

provides an alternate description of the 

impact of this proposal. 

We calculated the number of crashes 

that must be avoided to make this 

proposed rule cost beneficial, meaning 

the benefits would exceed the costs. We 

first converted crashes into dollar values 

to allow for comparison with the cost 

figures, based on work by Zaloshnja et 

al. They estimated the cost of an average 

police-reported crash involving trucks 

with a gross vehicle weight rating of 

more than 10,000 pounds was $59,153 

in 2000 dollars.10 FMCSA adjusted this 

figure to 2004 dollars based on the Gross 

Domestic Product Deflator, which yields 

a value of $65,183. 

New entrant carriers are involved in 

more crashes than more experienced 

carriers. According to a 2000 Volpe 

study, new entrants (defined as motor 

carriers registered for less than 2 years) 

were more frequently assessed to have 

Safety Evaluation Area scores in the 

worst quartile.11 In fact, new entrants 

were about twice as likely to have an 

Accident SEA score of 75 or above. 

Therefore, Volpe concludes, SafeStat 

results show new entrants to have 

significantly lower levels of safety 

compliance and performance. The 

overall motor carrier crash rate from 

MCMIS is 0.75 crashes per million 

vehicle miles of travel (MVMT), while 

the new entrant crash rate is 25 percent 

higher, 0.94 per MVMT. 

The net cost of this proposed rule is 

$2.0 million per year. For this proposed 

rule to be cost beneficial, it would have 

to deter 31 crashes ($2.0 million/ 

$65,183), or one fatal crash.12

Alternative Costs Associated With 

Proposed Changes to Safety Audit 

Scoring System 

As of October 2004, 33,787 new 

entrant SAs had been completed. Only 

253 of new entrants audited under the 

program failed the SA under the 

existing scoring criteria, which is only 

0.75 percent of those receiving an SA. 

Had the list of proposed automatic 

failure criteria been incorporated into 

our regulations at the time these audits 

were conducted, 19,559 of the audited 

carriers would have failed, almost 58 

percent of those audited. Therefore, the 

proposed scoring change would have 

resulted in an additional 19,306 new 

entrant carriers failing the audit (19,559 

¥ 253 = 19,306). On an annual basis, 

this translates to 27,162 carriers failing 

the audit under the new criteria if there 

is no change in carrier behavior.13

However, it is unlikely the number of 

carriers that would fail the audit or 

whose new entrant authority would be 

revoked would be this large. The cost of 

not correcting violations of the 11 

automatic failure provisions is currently 

low. New entrants cited for one of these 

violations are not placed out of service. 

In fact, it is possible for new entrants to 

continue operating for some time before 

remedying their violations. This 

proposal would dramatically raise the 

cost of failing to comply with these 

provisions, with violators possibly 

losing their authority and being placed 

out of business. Raising the cost of not 

correcting a violation, therefore, would 

encourage new entrants to comply with 

the regulatory requirements, either 

before they are audited or after they fail 

the audit. 

We believe new entrants would be 

sensitive to the increased cost of 

violations and would respond 

accordingly. We assume half of the new 

entrants that would otherwise be put 

out of service instead would adjust their 

practices and behavior to comply with 

the regulations. We assume of the 

27,162 new entrants failing one or more 

of the automatic failure criteria, 13,581 

would be placed out of service, and 

13,581 would make whatever changes 

are necessary to continue operations. 

These costs are now discussed in turn. 

Alternative Cost of Replacing New 

Entrants 14

As discussed in footnote 14, we 

assume that non-compliant carriers will 


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carriers may be able to operate more efficiently by 

increasing existing load factors, they may also have 

to divert vehicles and drivers from other loads or 

buy/hire new ones to provide the service. To 

provide a conservative estimate, we assume the cost 

of these resources will be mostly the same whether 

the loads are carried by existing carriers expanding 

or transferring capacity or by new entrants coming 

into the market to meet this demand. The only 

differences would be registration and licensing 

costs. We assume that there is no possibility that 

the replacing firm is the non-compliant firm 

repackaged as a new firm. Without this illegal 

practice, the replacing firm would either be a 

completely new motor carrier or an existing motor 

carrier expanding its operation. Since there is not 

a big difference, we choose to report the larger of 

the two cost possibilities. 

be replaced by other new entrants. 

These replacement new entrants could 

purchase equipment from out-of-service 

carriers, so the cost of equipment and 

facilities is a transfer between entities. 

The absolute costs of starting these new 

firms would include fees for 

application, licensing, registration, 

surveying potential markets, 

advertisements, training, and 

transactions costs for transferring assets. 

Our all-inclusive estimate for these costs 

is $4,000 per carrier replaced in this 

fashion. Therefore, replacing the 13,581 

carriers that would be placed out of 

service would yield a total cost of $54.3 

million annually. 

Alternative Cost for New Entrants That 

Adjust 

As discussed above, the costs and 

benefits of complying with the FMCSRs 

and HMRs (if applicable) are not 

attributable to this proposal since we are 

not proposing to change existing 

operational requirements. However, this 

evaluation also includes an estimate of 

costs and benefits assuming these were 

new requirements. These estimates are 

presented to assist decision makers in 

considering the impacts of this 

proposal. While these estimates do not 

represent the real costs of this proposal, 

they illustrate possible impacts of this 

proposal. 

New entrants that change their 

practices and remain in service would 

also face some costs. The cost of coming 

into compliance would vary, depending 

on a number of factors, including the 

size of the new entrant and the specific 

regulation (or regulations) violated. We 

conservatively assume the average cost 

for carriers failing one of the 11 

automatic failure criteria but desiring to 

continue operations would be $1,000. 

Therefore, the total cost for these 13,581 

new entrants would be approximately 

$13.6 million. 

The maximum cost of this proposed 

rule is estimated at approximately $67.9 

million per year ($54.3 million + $13.6 

million). The ten-year undiscounted 

cost would be almost $679 million, 

while the discounted cost would be 

$477 million. 

Alternative Benefits 

The theoretical benefits accrue from 

removing the least safe carriers from the 

road and replacing them with safer 

carriers. This change would result in a 

difference in expected crashes. Using 

the Compliance Review Impact 

Assessment Model, we assumed each 

failing new entrant removed and 

replaced would have had a crash rate of 

1.13 crashes per million vehicle miles 

traveled (MVMT), which is 50 percent 

higher than the crash rate for 

established motor carriers. According to 

MCMIS, new entrants average 400,000 

VMT per year. We assume freight that 

had been carried by closed carriers 

would be carried by replacement new 

entrants. According to MCMIS, new 

entrants have an overall crash rate of 

0.94 crashes per MVMT. Therefore, 

closing unsafe carriers results in a 17 

percent reduction in the per million 

mile crash rate ((1.13–0.94)/1.13). 

We estimate new entrants eventually 

placed out of service or required to 

modify their operations are currently 

involved in approximately 11,200 

baseline crashes annually. This is the 

sum of two calculations. For carriers 

that would be placed out of service, the 

calculation is the sum of 13,581 new 

entrants times 400,000 miles per new 

entrant times 1.13 crashes per MVMT. 

The calculation is similar for new 

entrants that continue operations, 

except their crash rate is 0.94 crashes 

per MVMT. 

Closing 13,581 carriers would result 

in almost 1,020 fewer crashes in the first 

year, 967 in the second year (since 5 

percent of the closed carriers would 

have gone out of business in any case), 

and fewer each succeeding year. 

However, an additional 13,581 carriers 

would be closed in each succeeding 

year, so the total crashes deterred by 

closing carriers increases over the 

analysis period as the reduction caused 

by the 5 percent business failure rate 

would be more than offset by the 

additional carriers closed each year. 

Over 10 years, more than 48,000 crashes 

would be deterred by placing unsafe 

carriers out of service. 

The SAs also would reduce crashes 

among those new entrants allowed to 

continue operations after coming into 

compliance. Over 10 years, almost 5,700 

crashes would be deterred from carriers 

that take action to remedy violations. 

For both classes of carriers, the SAs 

would result in 54,000 fewer crashes 

over 10 years. 

As noted above, the average cost of a 

motor-carrier-involved crash is $65,183. 

By deterring 54,000 crashes, this 

proposed rule thus would yield a 10- 

year savings of $3.5 billion 

undiscounted. At a 7 percent discount 

rate, this would translate into a benefit 

of $2.3 billion. Most of these benefits 

would come from the crash reduction of 

closed carriers. This benefit would 

greatly exceed the costs described 

previously. The discounted ten-year net 

benefit of this NPRM would be $1.8 

billion, and the benefit cost ratio would 

be 4.8 to 1. 

Paperwork Reduction Act 

Under the Paperwork Reduction Act 

of 1995 (PRA) (44 U.S.C. § 3501, et seq.), 

Federal agencies must obtain approval 

from OMB for each collection of 

information they conduct, sponsor, or 

require through regulations. FMCSA has 

determined there are three currently 

approved information collections that 

would be affected by this NPRM: (1) 

OMB Control No. 2126–0013 titled 

‘‘Motor Carrier Identification Report’’

(FMCSA Forms MCS–150, MCS–150A, 

and MCS–150B), approved at 74,896 

burden hours through July 31, 2007; (2) 

OMB Control No. 2126–0015 titled 

‘‘Designation of Agents, Motor Carriers, 

Brokers and Freight Forwarders 

(FMCSA Form BOC–3) approved at 

5,000 burden hours through April 30, 

2008; and (3) OMB Control No 2126–

0016 titled ‘‘Licensing Applications for 

Motor Carrier Operating Authority’’

(FMCSA Forms OP–1, OP–1 (FF), OP–

1 (MX) and OP–1 (P), approved at 

55,738 burden hours through August 31, 

2008. Table 1 depicts the current and 

proposed burden hours associated with 

the information collections. 


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76746 Federal Register / Vol. 71, No. 245 / Thursday, December 21, 2006 / Proposed Rules 

TABLE 1.—CURRENT AND PROPOSED INFORMATION COLLECTION BURDENS

OMB approval No. 

Burden hours 

currently 

approved 

Burden hours 

proposed Change 

2126–0013 ................................................................................................................................... 74,896 66,977 –7,919 

2126–0015 ................................................................................................................................... 5,000 5,002 2 

2126–0016 ................................................................................................................................... 55,738 55,786 48 

Net Change .......................................................................................................................... ........................ ........................ ¥7,869 

The following is an explanation of 

how each of the information collections 

shown above would be affected by this 

proposal. 

OMB Control No. 2126–0013. This 

NPRM would eliminate the requirement 

for new entrants to complete the Form 

MCS–150A (Safety Certification for 

Applications for USDOT Number) 

because it does not provide the 

certification intended. Proposed 

amendments to 49 CFR part 385, 

subpart E—Hazardous Materials Safety 

Permits would remove references to the 

MCS–150A and would not impact the 

MCS–150B in any way. The estimated 

annual paperwork burden for this 

information collection would be 66,977 

hours [74,896 currently approved 

annual burden hours ¥ 7,923 (47,535 

new entrants × 10 minutes/60 minutes 

to complete the MCS–150A form) + 4 

(12 non-America-domiciled motor 

carriers × 20 minutes/60 minutes to 

complete the Form MCS–150) = 66,977]. 

OMB Control No. 2126–0015. The 

non-North America-domiciled motor 

carriers would also be required to notify 

the agency regarding designation of 

process agents by either: (1) submission 

in the application package of Form 

BOC–3 (Designation of Agents, Motor 

Carriers, Brokers and Freight 

Forwarders), or (2) a letter stating that 

the applicant will use a process agent 

that will submit the Form BOC–3 

electronically. The estimated annual 

paperwork burden for this information 

collections would be 5,002 hours [5,000 

currently approved annual burden 

hours + 2 hours (12 new entrant nonNorth America-domiciled motor carriers 

× 10 minutes/60 minutes to complete 

Form BOC–3) = 5,002 hours]. 

OMB Control No. 2126–0016. The 

proposed rule would create a new Form 

OP–1(NNA) titled ‘‘Application for U.S. 

Department of Transportation (USDOT) 

Registration by Non-North AmericaDomiciled Motor Carriers.’’ A non-North 

America-domiciled motor carrier is one 

whose principal place of business is 

located in a country other than the 

United States, Canada or Mexico. These 

entities would use the OP–1(NNA) 

when requesting either a USDOT new 

entrant registration as a private or 

exempt for-hire carrier or operating 

authority as a non-exempt for-hire 

carrier. The estimated annual 

paperwork burden for this information 

collection would be 55,786 hours 

[55,738 currently approved annual 

burden hours + 48 hours (12 new 

entrant non-North America-domiciled 

motor carriers × 4 hours to complete 

Form OP–1(NNA)) = 55,786 hours]. 

The proposals in this NPRM, affecting 

three currently-approved information 

collections, would result in a net 

decrease of 7,869 burden hours in the 

agency’s information collection budget. 

FMCSA requests comments on: (1) 

whether the collection of information is 

necessary or useful for the agency to 

meet its goal of reducing truck crashes, 

(2) the accuracy of the estimated 

information collection burden; (3) ways 

to enhance the quality, utility, and 

clarity of the information collected; and 

(4) ways to minimize the information 

collection burden on respondents, 

including the use of automated 

collection techniques or other forms of 

information technology. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA), 

as amended by the Small Business 

Regulatory Enforcement and Fairness 

Act (SBREFA), requires Federal agencies 

to analyze the impact of rulemakings on 

small entities, unless the agency 

certifies the proposed rule will not have 

a significant economic impact on a 

substantial number of small entities. 

FMCSA believes these proposals do not 

meet the threshold values for requiring 

a full-blown regulatory flexibility 

analysis. Nonetheless, because of the 

public interest in these proposals, we 

have prepared a regulatory analysis and 

placed a copy in the docket to this 

NPRM. The initial regulatory flexibility 

analysis (IRFA) for the proposed rule is 

set forth below. 

(1) A description of the reasons why 

action by the agency is being 

considered. FMCSA implemented the 

New Entrant Safety Assurance Process 

in January 2003. Under the program, a 

carrier receives new entrant registration 

and must undergo an 18-month 

monitoring period, including an SA. 

During the audit, FMCSA verifies the 

carrier has in place basic safety 

management controls and identifies any 

areas needing correction. A new entrant 

is granted permanent registration only 

after successfully completing the SA 

and the 18-month monitoring period. 

The agency received numerous 

comments to the May 2002 IFR 

announcing the New Entrant Safety 

Assurance Process, including 

recommendations for improvement and 

alternatives to the program. By late 

summer 2003, the agency and its State 

partners had collected sufficient data 

and had sufficient experience 

administering the program to assess its 

effectiveness. The Administrator formed 

a working group comprised of field and 

Headquarters staff to conduct a program 

review. This group identified several 

key improvements to clarify, strengthen 

and correct the new entrant regulations. 

Today’s action proposes measures to 

make the New Entrant Safety Assurance 

Process better. It also proposes a 

separate new entrant application 

procedure and safety oversight program 

for non-North America-domiciled motor 

carriers. 

(2) A succinct statement of the 

objectives of, and legal basis for, the 

proposed rule. Section 210 of MCSIA 

required the Secretary of Transportation 

to establish regulations specifying 

minimum requirements for motor 

carriers seeking to operate in interstate 

commerce for the first time to ensure 

such carriers are knowledgeable about 

applicable Federal motor carrier safety 

standards. MCSIA also directed the 

Secretary to require, by regulation, that 

each motor carrier granted new 

operating authority undergo an SA 

within the first 18 months of operations. 

MCSIA also required the Secretary to 

establish the elements of the safety 

review, including basic safety 

management controls, to consider the 

effect the regulations would have on 

small businesses and to consider 

establishing alternate locations where 

the review may be conducted for the 

convenience of the small businesses. 


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An IFR, with request for comments, 

was published May 13, 2002, and 

became effective January 1, 2003. The 

IFR established new minimum 

requirements for all applicant motor 

carriers domiciled in the United States 

and Canada seeking to operate in 

interstate commerce. Under the IFR, all 

new entrants, regardless of whether they 

need to register with FMCSA under 49 

U.S.C. 13901, are required to complete 

a Form MCS–150A—Safety Certification 

for Applications for USDOT Number. 

Additionally, during the initial 18- 

month period of operations, FMCSA 

would evaluate the new entrant’s safety 

management practices through an SA 

and monitor its on-road performance 

prior to granting the new entrant 

permanent registration. The objective of 

this NPRM is to enhance the safety of 

new entrants and thereby reduce the 

number of crashes which involve these 

carriers. 

(3) A description of and, where 

feasible, an estimate of the number of 

small entities to which the proposed 

rule would apply. The trucking 

industry, and to a lesser extent the bus 

industry, is populated by several very 

large firms and many small firms. We 

believe most motor carriers start small. 

The proposed rule would cover all U.S. 

and Canada-domiciled carriers and a 

very small number of motor carriers 

domiciled outside of North America. 

FMCSA estimated in the regulatory 

evaluation accompanying this proposal 

that an average of 47,535 motor carriers 

entered the industry each year from 

1995–2002 seeking interstate authority. 

Roughly 23,400 of these new entrants 

are estimated to be non-exempt for-hire 

carriers that must register under 49 

U.S.C. 13901, 20,300 are estimated to be 

exempt for-hire and private carriers not 

subject to § 13901, and the roughly 

3,800 remaining new registrants are of 

other types (including 1,922 brokers/ 

freight forwarders, 1,200 Mexicodomiciled commercial zone carriers, 

and 664 other carriers). These estimates 

were derived from data contained in the 

Motor Carrier Management Information 

System (MCMIS). 

The Regulatory Flexibility Act 

requires Federal agencies to analyze the 

impact of proposed and final rules on 

small entities. Small Business 

Administration (SBA) regulations (13 

CFR part 121) define a ‘‘small entity’’ in 

the motor carrier industry by average 

annual receipts, which are currently set 

at $23.5 million per firm. FMCSA 

estimated based upon the 1997 

Economic Census (U.S. Census Bureau), 

North American Industrial 

Classification System (NAICS) Code 484 

‘‘Truck Transportation’’ segments, the 

number of small trucking entities 

potentially affected by our proposed 

rules. There are 100,048 for-hire 

trucking firms within NAICS Code 484. 

Of these, 75,491, or roughly 75 percent, 

had annual receipts of less than $21.5 

million. While SBA has changed its size 

definitions, updated data is not yet 

available. Therefore, this analysis uses 

the old definition. The actual percent of 

small businesses is probably somewhat 

greater than our estimate, but the 

difference is not likely to be significant. 

Because FMCSA does not have annual 

sales data on private carriers, the agency 

assumed the revenue and operations 

characteristics of the private new 

entrant firms would be similar to those 

of new entrant for-hire carriers. Using 

these assumptions, the agency estimates 

almost 35,651 of the total 47,535 new 

entrants (or 75 percent) are considered 

small entities. This assumption is 

generally consistent with an alternative, 

industry-based approach used to 

estimate the number of small trucking 

firms, where size is defined by the 

number of power units (i.e., tractors or 

single-unit trucks) owned or leased by 

motor carriers. Also, MCMIS data 

indicate 80 percent of new entrant 

motor carriers within the industry 

owned or leased six or fewer power 

units. 

(4) A description of the proposed 

reporting, recordkeeping and other 

compliance requirements of the 

proposed rule, including an estimate of 

the classes of small entities which 

would be subject to the requirements 

and the type of professional skills 

necessary for preparation of the report 

or record. Except for a small number of 

non-North America-domiciled motor 

carriers, this proposed rule would 

impose no additional reporting, 

recordkeeping, or other compliance 

requirement beyond those currently 

required of all motor carriers. This 

proposed rule would change the 

consequences for violating certain 

existing safety rules. Indeed, this 

proposed rule eliminates one form, the 

MC–150A, integrating a few of the data 

elements from the MC–150A into Form 

MC–150. Therefore, there will be one 

less form for motor carriers to complete. 

(5) An identification, to the extent 

practicable, of all Federal rules, which 

may duplicate, overlap, or conflict with 

the proposed rule. FMCSA is not aware 

of any areas where this proposed rule 

would duplicate, overlap, or conflict 

with any other Federal rules. However, 

under a separate rulemaking (a notice of 

proposed rulemaking titled Unified 

Registration System published in the 

May 19, 2005, Federal Register at 70 FR 

28989), the agency is proposing to unify 

three of its information systems for 

motor carriers into a single, on-line 

replacement system. The ‘‘replacement 

system’’ NPRM proposes a more 

streamlined registration process. The 

USDOT Number registration process for 

new entrants would be included in the 

replacement system NPRM. 

The replacement system rulemaking 

is a very complex undertaking and 

would address the USDOT Number, 

financial responsibility and commercial 

aspects of registration; it only touches 

on ministerial aspects of the New 

Entrant Safety Assurance Process. 

Today’s proposed rule covers the 

complete New Entrant Safety Assurance 

Process, not just registration. It is for 

these reasons the agency is pursuing 

these efforts in separate rulemakings. 

The agency would address any impacts 

to administrative elements of the New 

Entrant Safety Assurance Process when 

the proposed rule announcing the 

replacement system is promulgated as a 

final rule. 

Accordingly, FMCSA preliminarily 

determines the proposed action 

discussed in this document would not 

have a significant economic impact on 

a substantial number of small entities. 

Privacy Impact Analysis 

FMCSA conducted a privacy impact 

assessment of this proposed rule as 

required by Section 522(a)(5) of the FY 

2005 Omnibus Appropriations Act, Pub. 

L. 108–447, 118 Stat. 3268 (Dec. 8, 2004) 

[set out as a note to 5 U.S.C. § 552a]. The 

assessment considers any impacts of the 

proposed rule on the privacy of 

information in an identifiable form and 

related matters. The entire privacy 

impact assessment is available in the 

docket for this proposal. 

Unfunded Mandates Reform Act 

This proposed rule would not impose 

a Federal mandate resulting in the net 

expenditures by State, local, or tribal 

governments, in the aggregate, or by the 

private sector, of $120.7 million or more 

in any one year. 2 U.S.C. 1531, et seq. 

National Environmental Policy Act 

FMCSA has analyzed this proposed 

rule for the purpose of the National 

Environmental Policy Act of 1969 

(NEPA) (42 U.S.C. 4321, et seq.) and has 

determined under the agency’s National 

Environmental Policy Act Implementing 

Procedures, FMCSA Order 5610.1C 

(published at 69 FR 9680, March 1, 

2004, with an effective date of 

March 30, 2004) this proposed action is 

categorically excluded under Appendix 

2, paragraph 6.f of the Order from 

further environmental documentation. 

That categorical exclusion relates to 


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establishing regulations implementing 

the following activities, whether 

performed by FMCSA or by States 

pursuant to the Motor Carrier Safety 

Assistance Program (MCSAP), which 

provides financial assistance to States to 

reduce the number and severity of 

crashes and hazardous materials 

incidents involving commercial motor 

vehicles: (1) Driver/vehicle inspections; 

(2) traffic enforcement; (3) safety audits; 

(4) compliance reviews; (5) public 

education and awareness; and (6) data 

collection; and provides reimbursement 

for the expenses listed under paragraphs 

6.d(i) through 6.d(v). This action 

proposes amendments to the New 

Entrant Safety Assurance Process for 

carriers newly registering to operate in 

interstate commerce. The agency 

believes the proposed action would 

include no extraordinary circumstances 

having any effect on the quality of the 

environment. 

FMCSA has also analyzed this 

proposal under section 176(c) of the 

Clean Air Act (CAA), as amended (42 

U.S.C. 7401 et seq.), and implementing 

regulations promulgated by the 

Environmental Protection Agency. We 

performed a conformity analysis of the 

CAA according to the procedures 

outlined in appendix 14 of FMCSA 

Order 5610.1C. This proposed rule 

would not result in any emissions 

increase, nor would it have any 

potential to result in emissions above 

the general conformity rule’s de minimis 

emission threshold levels. Moreover, it 

is reasonably foreseeable the proposed 

rule change would not increase total 

CMV mileage, change the routing of 

CMVs, change how CMVs operate, or 

change the CMV fleet-mix of motor 

carriers. This proposed action would 

revise the program for assuring the 

safety of new entrant motor carriers. 

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 13045 (Protection of 

Children) 

We have analyzed this proposed rule 

under Executive Order 13045, 

‘‘Protection of Children from 

Environmental Health Risks and Safety 

Risks.’’ This proposed rule does not 

concern a risk to environmental health 

or safety that would disproportionately 

affect children. 

Executive Order 12630 (Taking of 

Private Property) 

This proposed rule would not effect a 

taking of private property or otherwise 

have taking implications under 

Executive Order 12630, Governmental 

Actions and Interference with 

Constitutionally Protected Property 

Rights. 

Executive Order 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 preliminarily 

determined this proposed action would 

not have a substantial direct effect or 

sufficient federalism implications on 

States, limiting the policymaking 

discretion of the States. Nothing in this 

document would directly preempt any 

State law or regulation. It would not 

impose additional costs or burdens on 

the States. This proposed action would 

not have a significant effect on the 

States’ ability to execute traditional 

State governmental functions. To the 

extent that States incur costs for 

conducting these SAs, they would be 

reimbursed 100 percent with Federal 

funds under MCSAP. 

Executive Order 12372 

(Intergovernmental Review) 

The regulations implementing 

Executive Order 12372 regarding 

intergovernmental consultation on 

Federal programs and activities do not 

apply to this program. 

Executive Order 13211 (Energy Supply, 

Distribution, or Use) 

This proposed action is not a 

significant energy action within the 

meaning of section 4(b) of the Executive 

Order because it is not economically 

significant and is not likely to have a 

significant adverse effect on the supply, 

distribution, or use of energy. 

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 (Volume 

65, Number 70; Pages 19477–78) or you 

may visit http://dms.dot.gov. 

List of Subjects 

49 CFR Part 365 

Administrative practice and 

procedure, Brokers, Buses, Freight 

forwarders, Motor carriers, Moving of 

household goods, Reporting and 

recordkeeping requirements. 

49 CFR Part 385 

Administrative practice and 

procedure, Highway safety, Motor 

carriers, Motor vehicle safety, Reporting 

and recordkeeping requirements. 

49 CFR Part 387 

Buses, Freight, Freight forwarders, 

Hazardous materials transportation, 

Highway safety, Insurance, 

Intergovernmental relations, Motor 

carriers, Motor vehicle safety, Moving of 

household goods, Penalties, Reporting 

and recordkeeping requirements, Surety 

bonds. 

49 CFR Part 390 

Highway safety, Intermodal 

transportation, Motor carriers, Motor 

vehicle safety, reporting and 

recordkeeping requirements. 

For the reasons stated in the 

preamble, the Federal Motor Carrier 

Safety Administration proposes to 

amend title 49, Code of Federal 

Regulations, chapter III, subchapter B as 

set forth below: 

PART 365—RULES GOVERNING 

APPLICATIONS FOR OPERATING 

AUTHORITY 

1. The authority citation for part 365 

continues to read as follows: 

Authority: 5 U.S.C. 553 and 559; 16 U.S.C. 

1456; 49 U.S.C. 13101, 13301, 13901–13906, 

14708, 31138, and 31144; 49 CFR 1.73. 

2. Amend § 365.101 by adding a new 

paragraph (i) to read as follows: 

§ 365.101 Applications governed by these 

rules. 

* * * * * 

(i) Applications for non-North 

America-domiciled motor carriers to 

operate in foreign commerce as for-hire 

motor carriers of property and 

passengers within the United States. 

3. Amend § 365.105 by revising 

paragraph (a) to read as follows: 

§ 365.105 Starting the application process: 

Form OP–1. 

(a) All applicants must file the 

appropriate form in the OP–1 series, 

effective [effective date of final rule]. 

Form OP–1 for motor property carriers 

and brokers of general freight and 

household goods; Form OP–1(P) for 

motor passenger carriers; Form OP–

1(FF) for freight forwarders of 


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household goods; Form OP–1(MX) for 

Mexico-domiciled motor property 

carriers, including household goods and 

motor passenger carriers; and Form OP–

1(NNA) for non-North Americadomiciled motor property and motor 

passenger carriers. A separate filing fee 

in the amount set forth at 49 CFR 

360.3(f)(1) is required for each type of 

authority sought in each transportation 

mode. 

* * * * * 

PART 385—SAFETY FITNESS 

PROCEDURES 

4. The authority citation 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. 

§ 385.305 [Amended] 

5. Amend § 385.305 to remove 

paragraph (b)(3) and to redesignate 

paragraph (b)(4) as (b)(3). 

6. Add § 385.306 to subpart D to read 

as follows: 

§ 385.306 What are the consequences of 

furnishing misleading information or 

making a false statement in connection with 

the registration process? 

A carrier that furnishes false or 

misleading information, or conceals 

material information in connection with 

the registration process, is subject to the 

following actions: 

(a) Revocation of registration. 

(b) Assessment of the civil and/or 

criminal penalties prescribed in 49 

U.S.C. 521 and 49 U.S.C. chapter 149. 

7. Amend § 385.307 to revise 

paragraph (a) to read as follows: 

§ 385.307 What happens after a motor 

carrier begins operations as a new entrant? 

* * * * * 

(a) The new entrant’s roadside safety 

performance will be closely monitored 

to ensure the new entrant has basic 

safety management controls that are 

operating effectively. 

* * * * * 

8. Add § 385.308 to subpart D to read 

as follows: 

§ 385.308 What will cause an expedited 

action? 

(a) A new entrant that commits any of 

the following actions, identified through 

roadside inspections or by any other 

means, may be subjected to an 

expedited safety audit or a compliance 

review or may be required to submit a 

written response demonstrating 

corrective action: 

(1) Using drivers to operate a 

commercial motor vehicle as defined 

under § 383.5 without a valid 

commercial driver’s license. An invalid 

commercial driver’s license includes 

one that is falsified, revoked, expired, or 

missing a required endorsement. 

(2) Operating vehicles that have been 

placed out of service for violations of 

the Federal Motor Carrier Safety 

Regulations or compatible State laws 

and regulations without taking 

necessary corrective action. 

(3) Involvement in a hazardous 

materials incident, due to carrier act or 

omission, involving any of the 

following: 

(i) A highway route controlled 

quantity of a Class 7 (radioactive) 

material as defined in § 173.403 of this 

title. 

(ii) Any quantity of a Class 1, Division 

1.1, 1.2, or 1.3 explosive as defined in 

§ 173.50 of this title. 

(iii) Any quantity of a poison 

inhalation hazard Zone A or B material 

as defined in §§ 173.115, 173.132, or 

173.133 of this title. 

(4) Involvement in two or more 

hazardous materials incidents, due to 

carrier act or omission, involving any 

hazardous material not identified in 

paragraph (a)(3) of this section and 

defined in chapter I of this title. 

(5) Using a driver who tests positive 

for controlled substances or alcohol or 

who refuses to submit to required 

controlled substances or alcohol tests. 

(6) Operating a motor vehicle that is 

not insured as required by part 387 of 

this chapter. 

(7) Having a driver or vehicle out-ofservice rate of 50 percent or more based 

upon at least three inspections 

occurring within a consecutive 90-day 

period. 

(b) If a new entrant that commits any 

of the actions listed in paragraph (a) of 

this section: 

(1) Has not had a safety audit or 

compliance review, FMCSA will 

schedule the new entrant for a safety 

audit as soon as practicable. 

(2) Has had a safety audit or 

compliance review, FMCSA will send 

the new entrant a notice advising it to 

submit evidence of corrective action 

within 30 days of the service date of the 

notice. 

(c) FMCSA may schedule a 

compliance review of a new entrant that 

commits any of the actions listed in 

paragraph (a) of this section at any time 

if it determines the violation warrants a 

thorough review of the new entrant’s 

operation. 

(d) Failure to respond within 30 days 

of the notice to an agency demand for 

a written response demonstrating 

corrective action will result in the 

revocation of the new entrant’s 

registration. 

9. Revise § 385.319 to read as follows: 

§ 385.319 What happens after completion 

of the safety audit? 

(a) Upon completion of the safety 

audit, the auditor will review the 

findings with the new entrant. 

(b) Pass. If FMCSA determines the 

safety audit discloses the new entrant 

has adequate basic safety management 

controls, the agency will provide the 

new entrant written notice as soon as 

practicable, but not later than 45 days 

after completion of the safety audit, that 

it has adequate basic safety management 

controls. The new entrant’s safety 

performance will continue to be closely 

monitored for the remainder of the 18- 

month period of new entrant 

registration. 

(c) Fail. If FMCSA determines the 

safety audit discloses the new entrant’s 

basic safety management controls are 

inadequate, the agency will provide the 

new entrant written notice, as soon as 

practicable, but not later than 45 days 

after the completion of the safety audit, 

that its USDOT new entrant registration 

will be revoked and its operations 

placed out-of-service unless it takes the 

actions specified in the notice to remedy 

its safety management practices. 

(1) 60-day corrective action 

requirement. All new entrants, except 

those specified in paragraph (c)(2) of 

this section, must take the specified 

actions to remedy inadequate safety 

management practices within 60 days of 

the date of the notice. 

(2) 45-day corrective action 

requirement. The new entrants listed 

below must take the specified actions to 

remedy inadequate safety management 

practices within 45 days of the date of 

the notice: 

(i) A new entrant that transports 

passengers in a CMV designed or used 

to transport between 9 and 15 

passengers (including the driver) for 

direct compensation. 

(ii) A new entrant that transports 

passengers in a CMV designed or used 

to transport more than 15 passengers 

(including the driver). 

(iii) A new entrant that transports 

hazardous materials in a CMV as 

defined in paragraph (4) of the 

definition of a ‘‘Commercial Motor 

Vehicle’’ in § 390.5 of this subchapter. 

10. Revise § 385.321 to read as 

follows: 


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§ 385.321 What failures of safety 

management practices disclosed by the 

safety audit will result in a notice to a new 

entrant that its DOT new entrant registration 

will be revoked? 

(a) General. The failures of safety 

management practices consist of a lack 

of basic safety management controls as 

described in Appendix A of this part or 

failure to comply with one or more of 

the regulations set forth in paragraph (b) 

of this section and will result in a notice 

to a new entrant that its DOT new 

entrant registration will be revoked. 

(b) Automatic failure of the audit. A 

new entrant will automatically fail the 

safety audit if found in violation of any 

one of the following 11 regulations: 

(1) § 382.115(a) or (b)—Failing to 

implement an alcohol and/or controlled 

substances testing program (domestic 

and foreign motor carriers, respectively). 

(2) § 382.211—Using a driver who has 

refused to submit to an alcohol or 

controlled substances test required 

under part 382. 

(3) § 382.215—Using a driver known 

to have tested positive for a controlled 

substance. 

(4) § 383.37(a)—Knowingly allowing, 

requiring, permitting, or authorizing an 

employee with a commercial driver’s 

license which is suspended, revoked, or 

canceled by a State or who is 

disqualified to operate a commercial 

motor vehicle. 

(5) § 383.51(a)—Knowingly allowing, 

requiring, permitting, or authorizing a 

driver who is disqualified to drive a 

commercial motor vehicle. 

(6) § 387.7(a)—Operating a motor 

vehicle without having in effect the 

required minimum levels of financial 

responsibility coverage. 

(7) § 391.15(a)—Using a disqualified 

driver. 

(8) § 391.11(b)(4)—Using a physically 

unqualified driver. 

(9) § 395.8(a)—Failing to require a 

driver to make a record of duty status. 

(10) § 396.9(c)(2)—Requiring or 

permitting the operation of a motor 

vehicle declared ‘‘out-of-service’’ before 

repairs are made. 

(11) § 396.17(a)—Using a commercial 

motor vehicle not periodically 

inspected. 

11. Revise § 385.323 to read as 

follows: 

§ 385.323 May FMCSA extend the period 

under § 385.319(c) for a new entrant to take 

corrective action to remedy its safety 

management practices? 

(a) FMCSA may extend the 60-day 

period in § 385.319(c)(1) for up to an 

additional 60 days provided FMCSA 

determines the new entrant is making a 

good faith effort to remedy its safety 

management practices. 

(b) FMCSA may extend the 45-day 

period in § 385.319(c)(2) for up to 10 

days if the new entrant has submitted 

evidence that corrective actions have 

been taken pursuant to § 385.319(c) and 

the agency needs additional time to 

determine the adequacy of the 

corrective action. 

12. Amend § 385.325 to revise 

paragraph (b) to read as follows: 

§ 385.325 What happens after a new 

entrant has been notified under § 385.319(c) 

to take corrective action to remedy its 

safety management practices? 

(a) * * * 

(b) If a new entrant, after being 

notified that it is required to take 

corrective action to improve its safety 

management practices, fails to submit a 

written response demonstrating 

corrective action acceptable to FMCSA 

within the time specified in § 385.319, 

including any extension of that period 

authorized under § 385.323, FMCSA 

will revoke its new entrant registration 

and issue an out-of-service order 

effective on: 

(1) Day 61 from the notice date for 

new entrants subject to § 385.319(c)(1). 

(2) Day 46 from the notice date for 

new entrants subject to § 385.319(c)(2). 

(3) If an extension has been granted 

under § 385.323, the day following the 

expiration of the extension date. 

* * * * * 

13. Revise § 385.327 to read as 

follows: 

§ 385.327 May a new entrant request an 

administrative review of a determination of 

a failed safety audit? 

(a) If a new entrant receives a notice 

under § 385.319(c) that its new entrant 

registration will be revoked, it may 

request FMCSA to conduct an 

administrative review if it believes 

FMCSA has committed an error in 

determining that its basic safety 

management controls are inadequate. 

The request must: 

(1) Be made to the Field 

Administrator of the appropriate 

FMCSA Service Center. 

(2) Explain the error the new entrant 

believes FMCSA committed in its 

determination. 

(3) Include a list of all factual and 

procedural issues in dispute and any 

information or documents that support 

the new entrant’s argument. 

(b) FMCSA may request that the new 

entrant submit additional data and 

attend a conference to discuss the 

issue(s) in dispute. If the new entrant 

does not attend the conference or does 

not submit the requested data, FMCSA 

may dismiss the new entrant’s request 

for review. 

(c) A new entrant must submit a 

request for an administrative review 

within one of the following time 

periods: 

(1) If it does not submit evidence of 

corrective action under § 385.319(c), 

within 90 days after the date it is 

notified that its basic safety 

management controls are inadequate. 

(2) If it submits evidence of corrective 

action under § 385.319(c), within 90 

days after the date it is notified that its 

corrective action is insufficient and its 

basic safety management controls 

remain inadequate. 

(d) If a new entrant wants to assure 

that FMCSA will be able to issue a final 

written decision before the prohibitions 

outlined in § 385.325(c) take effect, the 

new entrant must submit its request no 

later than 15 days from the date of the 

notice that its basic safety management 

controls are inadequate. Failure to 

submit the request within this 15-day 

period may result in revocation of new 

entrant authority and issuance of an outof-service order before completion of 

administrative review. 

(e) FMCSA will complete its review 

and notify the new entrant in writing of 

its decision within: 

(1) 45 days after receiving a request 

for review from a new entrant that is 

subject to § 385.319(c)(1). 

(2) 30 days after receiving a request 

for review from a new entrant that is 

subject to § 385.319(c)(2). 

(f) The Field Administrator’s decision 

constitutes the final agency action. 

(g) Notwithstanding this subpart, a 

new entrant is subject to the suspension 

and revocation provisions of 49 U.S.C. 

13905 for violations of DOT regulations 

governing motor carrier operations. 

14. Revise § 385.329 to read as 

follows: 

§ 385.329 May a new entrant that has had 

its DOT new entrant registration revoked 

and its operations placed out of service 

reapply? 

(a) A new entrant whose DOT new 

entrant registration has been revoked, 

and whose operations have been placed 

out of service by FMCSA, may reapply 

for new entrant authority no sooner than 

30 days after the date of revocation. 

(b) If the DOT new entrant registration 

was revoked because of a failed safety 

audit, the new entrant must do all of the 

following: 

(1) Submit an updated MCS–150. 

(2) Submit evidence that it has 

corrected the deficiencies that resulted 

in revocation of its registration and will 

otherwise ensure that it will have basic 

safety management controls in effect. 

(3) Begin the 18-month new entrant 

monitoring cycle again as of the date the 

re-filed application is approved. 


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(c) If the DOT new entrant registration 

was revoked because FMCSA found that 

the new entrant had failed to submit to 

a safety audit, it must do all of the 

following: 

(1) Submit an updated MCS–150. 

(2) Begin the 18-month new entrant 

monitoring cycle again as of the date the 

re-filed application is approved. 

(3) Submit to a safety audit upon 

request. 

(d) If the new entrant is a for-hire 

carrier subject to the registration 

provisions under 49 U.S.C. 13901 and 

also has had its operating authority 

revoked, it must re-apply for operating 

authority as set forth in part 365 of this 

title. 

15. Revise § 385.331 to read as 

follows: 

§ 385.331 What happens if a new entrant 

operates a CMV after having been issued an 

order placing its interstate operations out of 

service? 

A new entrant that operates a CMV in 

violation of an out-of-service order is 

subject to the penalty provisions in 

U.S.C. 521(b)(2)(A) for each offense as 

adjusted for inflation by 49 CFR part 

386, Appendix B. 

16. Amend § 385.337 to revise 

paragraph (a) to read as follows: 

§ 385.337 What happens if a new entrant 

refuses to permit a safety audit to be 

performed on its operations? 

(a) If a new entrant refuses to permit 

a safety audit to be performed on its 

operations, FMCSA will provide the 

carrier with written notice that its 

registration will be revoked and its 

operations placed out of service unless 

the new entrant agrees in writing, 

within 10 days from the service date of 

the notice, to permit the safety audit to 

be performed. The refusal to permit a 

safety audit to be performed may subject 

the new entrant to the penalty 

provisions of 49 U.S.C. 521(b)(2)(A), as 

adjusted for inflation by 49 CFR part 

386 Appendix B. 

* * * * * 

17. Amend § 385.405 to revise 

paragraph (a) to read as follows: 

§ 385.405 How does a motor carrier apply 

for a safety permit? 

(a) Application form(s). (1) To apply 

for a new safety permit or renewal of the 

safety permit, a motor carrier must 

complete and submit Form MCS–150B, 

Combined Motor Carrier Identification 

Report and HM Permit Application. 

(2) The Form MCS–150B will also 

satisfy the requirements for obtaining 

and renewing a USDOT Number; there 

is no need to complete Form MCS–150, 

Motor Carrier Identification Report. 

* * * * * 

18. Amend § 385.421 by revising 

paragraph (a)(2) to read as follows: 

§ 385.421 Under what circumstances will a 

safety permit be subject to revocation or 

suspension by FMCSA? 

(a) * * * 

(2) A motor carrier provides any false 

or misleading information on its 

application (Form MCS–150B) or as part 

of updated information it is providing 

on Form MCS–150B (see § 385.405(d)). 

* * * * * 

19. Amend part 385 by adding a new 

subpart H consisting of new §§ 385.601 

through 385.609 and an Appendix to 

subpart H to read as follows: 

Subpart H—Special Rules for New Entrant 

Non-North America-Domiciled Carriers 

Sec. 

385.601 Scope of rules. 

385.603 Application. 

385.605 New entrant registration driver’s 

license and drug and alcohol testing 

requirements. 

385.607 FMCSA action on the application. 

385.609 Requirement to notify FMCSA of 

change in applicant information. 

Appendix to Subpart H of Part 385—

Explanation of Pre-Authorization Safety 

Audit Evaluation Criteria for Non-North 

America-Domiciled Motor Carriers 

Subpart H—Special Rules for New 

Entrant Non-North America-Domiciled 

Carriers 

§ 385.601 Scope of rules. 

The rules in this subpart govern the 

application by a non-North Americadomiciled motor carrier to provide 

transportation of property and 

passengers in interstate commerce in the 

United States. 

§ 385.603 Application. 

(a) Each applicant applying under this 

subpart must submit an application that 

consists of: 

(1) Form OP–1(NNA)—Application 

for U.S. Department of Transportation 

(USDOT) Registration by Non-North 

America-Domiciled Motor Carriers; 

(2) Form MCS–150—Motor Carrier 

Identification Report; and 

(3) A notification of the means used 

to designate process agents, either by 

submission in the application package 

of Form BOC–3—Designation of AgentsMotor Carriers, Brokers and Freight 

Forwarders or a letter stating that the 

applicant will use a process agent 

service that will submit the Form 

BOC–3 electronically. 

(b) The Federal Motor Carrier Safety 

Administration (FMCSA) will only 

process an application if it meets the 

following conditions: 

(1) The application must be 

completed in English; 

(2) The information supplied must be 

accurate, complete, and include all 

required supporting documents and 

applicable certifications in accordance 

with the instructions to Form 

OP–1(NNA), Form MCS–150 and Form 

BOC–3; and 

(3) The application must be signed by 

the applicant. 

(c) An applicant must submit the 

application to the address provided in 

Form OP–1(NNA). 

(d) An applicant may obtain the 

application forms from any FMCSA 

Division Office or download them from 

the FMCSA Web site at: http:// 

www.fmcsa.dot.gov/forms/forms.htm. 

§ 385.605 New entrant registration driver’s 

license and drug and alcohol testing 

requirements. 

(a) A non-North America-domiciled 

motor carrier must use only drivers who 

possess a valid commercial driver’s 

license—a CDL, Canadian Commercial 

Driver’s License, or Mexican Licencia de 

Federal de Conductor—to operate its 

vehicles in the United States. 

(b) A non-North America-domiciled 

motor carrier must subject each of the 

drivers described in paragraph (a) of this 

section to drug and alcohol testing as 

prescribed under part 382 of this 

subchapter. 

§ 385.607 FMCSA action on the 

application. 

(a) FMCSA will review and act on 

each application submitted under this 

subpart in accordance with the 

procedures set out in this part. 

(b) FMCSA will validate the accuracy 

of information and certifications 

provided in the application by checking, 

to the extent available, data maintained 

in databases of the governments of the 

country where the carrier’s principal 

place of business is located and the 

United States. 

(c) Pre-authorization safety audit. 

Every non-North America-domiciled 

motor carrier that applies under this 

part must satisfactorily complete an 

FMCSA-administered safety audit 

before FMCSA will grant new entrant 

registration to operate in the United 

States. The safety audit is a review by 

FMCSA of the carrier’s written 

procedures and records to validate the 

accuracy of information and 

certifications provided in the 

application and determine whether the 

carrier has established or exercises the 

basic safety management controls 

necessary to ensure safe operations. 

FMCSA will evaluate the results of the 

safety audit using the criteria in the 

Appendix to this subpart. 

(d) Applications of non-North 

America-domiciled motor carriers 


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requesting for-hire operating authority 

under part 365 of this chapter may be 

protested under § 365.109(b). Such 

carriers will be granted new entrant 

registration after successful completion 

of the pre-authorization safety audit and 

the expiration of the protest period, 

provided the application is not 

protested. If a protest to the application 

is filed with FMCSA, new entrant 

registration will be granted only if 

FMCSA denies or rejects the protest. 

(e) If FMCSA grants new entrant 

registration to the applicant, it will 

assign a distinctive USDOT Number that 

identifies the motor carrier as 

authorized to operate in the United 

States. In order to initiate operations in 

the United States, a non-North Americadomiciled motor carrier with new 

entrant registration must: 

(1) Have its surety or insurance 

provider file proof of financial 

responsibility in the form of certificates 

of insurance, surety bonds, and 

endorsements, as required by 

§ 387.7(e)(2), § 387.31(e)(2) and 

§ 387.301 of this subchapter, as 

applicable; and 

(2) File a hard copy of, or have its 

process agent(s) electronically submit, 

Form BOC–3—Designation of Agents—

Motor Carriers, Brokers and Freight 

Forwarders, as required by part 366 of 

this subchapter. 

(f) A non-North America-domiciled 

motor carrier must comply with all 

provisions of the safety monitoring 

system in part 385, subpart I of this 

subchapter, including successfully 

passing North American Standard 

commercial motor vehicle inspections at 

least every 90 days and having safety 

decals affixed to each commercial motor 

vehicle operated in the United States as 

required by § 385.703(c) of this 

subchapter. 

(g) FMCSA may remove a non-North 

America-domiciled carrier’s new entrant 

designation no earlier than 18 months 

after the date its USDOT Number is 

issued and only after successful 

completion to the satisfaction of FMCSA 

of the safety monitoring system for nonNorth America-domiciled carriers set 

out in part 385, subpart I of this 

subchapter. Successful completion 

includes obtaining a Satisfactory safety 

rating as the result of a compliance 

review. 

§ 385.609 Requirement to notify FMCSA of 

change in applicant information. 

(a)(1) A motor carrier subject to this 

subpart must notify FMCSA of any 

changes or corrections to the 

information the Form BOC–3—

Designation of Agents—Motor Carriers, 

Brokers and Freight Forwarders that 

occur during the application process or 

after having been granted new entrant 

registration. 

(2) A motor carrier subject to this 

subpart must notify FMCSA of any 

changes or corrections to the 

information in Sections I, IA or II of 

Form OP–1(NNA)—Application for U.S. 

Department of Transportation (USDOT) 

Registration by Non-North AmericaDomiciled Motor Carriers that occurs 

during the application process or after 

having been granted new entrant 

registration. 

(3) A motor carrier must notify 

FMCSA in writing within 45 days of the 

change or correction to information 

under subparagraphs (a)(1) or (a)(2) of 

this section. 

(b) If a motor carrier fails to comply 

with paragraph (a) of this section, 

FMCSA may suspend or revoke its new 

entrant registration until it meets those 

requirements. 

Appendix to Subpart H of Part 385— 

Explanation of Pre-Authorization 

Safety Audit Evaluation Criteria for 

Non-North America-Domiciled Motor 

Carriers 

I. General 

(a) FMCSA will perform a safety audit of 

each non-North America-domiciled motor 

carrier before granting the carrier new entrant 

registration to operate within the United 

States. 

(b) FMCSA will conduct the safety audit at 

a location specified by the FMCSA. All 

records and documents must be made 

available for examination within 48 hours 

after a request is made. Saturdays, Sundays, 

and Federal holidays are excluded from the 

computation of the 48-hour period. 

(c) The safety audit will include: 

(1) Verification of available performance 

data and safety management programs; 

(2) Verification of a controlled substances 

and alcohol testing program consistent with 

part 40 of this title; 

(3) Verification of the carrier’s system of 

compliance with hours-of-service rules in 

part 395 of this subchapter, including 

recordkeeping and retention; 

(4) Verification of proof of financial 

responsibility; 

(5) Review of available data concerning the 

carrier’s safety history, and other information 

necessary to determine the carrier’s 

preparedness to comply with the Federal 

Motor Carrier Safety Regulations, parts 382 

through 399 of this subchapter, and the 

Federal Hazardous Material Regulations, 

parts 171 through 180 of this title; 

(6) Inspection of available commercial 

motor vehicles to be used under new entrant 

registration, if any of these vehicles have not 

received a decal required by § 385.703(c) of 

this subchapter; 

(7) Evaluation of the carrier’s safety 

inspection, maintenance, and repair facilities 

or management systems, including 

verification of records of periodic vehicle 

inspections; 

(8) Verification of drivers’ qualifications, 

including confirmation of the validity of the 

CDL, Canadian Commercial Driver’s License, 

or Mexican Licencia de Federal de 

Conductor, as applicable, of each driver the 

carrier intends to assign to operate under its 

new entrant registration; and 

(9) An interview of carrier officials to 

review safety management controls and 

evaluate any written safety oversight policies 

and practices. 

(d) To successfully complete the safety 

audit, a non-North America-domiciled motor 

carrier must demonstrate to FMCSA that it 

has the required elements in paragraphs 

(c)(2), (3), (4), (7), and (8) above and other 

basic safety management controls in place 

which function adequately to ensure 

minimum acceptable compliance with the 

applicable safety requirements. FMCSA 

developed ‘‘safety audit evaluation criteria,’’

which uses data from the safety audit and 

roadside inspections to determine that each 

applicant for new entrant registration has 

basic safety management controls in place. 

(e) The safety audit evaluation process 

developed by FMCSA is used to: 

(1) Evaluate basic safety management 

controls and determine if each non-North 

America-domiciled carrier and each driver is 

able to operate safely in the United States; 

and 

(2) Identify motor carriers and drivers who 

are having safety problems and need 

improvement in their compliance with the 

FMCSRs and the HMRs, before FMCSA 

issues new entrant registration to operate 

within the United States. 

II. Source of the Data for the Safety Audit 

Evaluation Criteria 

(a) The FMCSA’s evaluation criteria are 

built upon the operational tool known as the 

safety audit. FMCSA developed this tool to 

assist auditors and investigators in assessing 

the adequacy of a non-North Americadomiciled carrier’s basic safety management 

controls. 

(b) The safety audit is a review of a nonNorth America-domiciled motor carrier’s 

operation and is used to: 

(1) Determine if a carrier has the basic 

safety management controls required by 49 

U.S.C. 31144; and 

(2) In the event that a carrier is found not 

to be in compliance with applicable FMCSRs 

and HMRs, the safety audit can be used to 

educate the carrier on how to comply with 

U.S. safety rules. 

(c) Documents such as those contained in 

driver qualification files, records of duty 

status, vehicle maintenance records, and 

other records are reviewed for compliance 

with the FMCSRs and HMRs. Violations are 

cited on the safety audit. Performance-based 

information, when available, is utilized to 

evaluate the carrier’s compliance with the 

vehicle regulations. Recordable accident 

information is also collected. 

III. Overall Determination of the Carrier’s 

Basic Safety Management Controls 

(a) The carrier will not receive new entrant 

registration if FMCSA cannot: 

(1) Verify a controlled substances and 

alcohol testing program consistent with part 

40 of this title; 


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(2) Verify a system of compliance with the 

hours-of-service rules of this subchapter, 

including recordkeeping and retention; 

(3) Verify proof of financial responsibility; 

(4) Verify records of periodic vehicle 

inspections; and 

(5) Verify the qualifications of each driver 

the carrier intends to assign to operate 

commercial motor vehicles in the United 

States, as required by parts 383 and 391 of 

this subchapter, including confirming the 

validity of each driver’s CDL, Canadian 

Commercial Driver’s License, or Mexican 

Licencia de Federal de Conductor, as 

appropriate. 

(b) If FMCSA confirms each item under 

III(a)(1) through (5) above, the carrier will 

receive new entrant registration, unless 

FMCSA finds the carrier has inadequate basic 

safety management controls in at least three 

separate factors described in part IV below. 

If FMCSA makes such a determination, the 

carrier’s application for new entrant 

registration will be denied. 

IV. Evaluation of Regulatory Compliance 

(a) During the safety audit, FMCSA gathers 

information by reviewing a motor carrier’s 

compliance with ‘‘acute’’ and ‘‘critical’’

regulations of the FMCSRs and HMRs. 

(b) Acute regulations are those where 

noncompliance is so severe as to require 

immediate corrective actions by a motor 

carrier regardless of the overall basic safety 

management controls of the motor carrier. 

(c) Critical regulations are those where 

noncompliance relates to management and/or 

operational controls. These are indicative of 

breakdowns in a carrier’s management 

controls. 

(d) The list of the acute and critical 

regulations, which are used in determining if 

a carrier has basic safety management 

controls in place, is included in Appendix B, 

VII, List of Acute and Critical Regulations to 

part 385 of this subchapter. 

(e) Noncompliance with acute and critical 

regulations are indicators of inadequate 

safety management controls and usually 

higher than average accident rates. 

(f) Parts of the FMCSRs and the HMRs 

having similar characteristics are combined 

together into six regulatory areas called 

‘‘factors.’’ The regulatory factors, evaluated 

on the adequacy of the carrier’s safety 

management controls, are: 

(1) Factor 1—General: Parts 387 and 390; 

(2) Factor 2—Driver: Parts 382, 383 and 

391; 

(3) Factor 3—Operational: Parts 392 and 

395; 

(4) Factor 4—Vehicle: Parts 393, 396 and 

inspection data for the last 12 months; 

(5) Factor 5—Hazardous Materials: Parts 

171, 177, 180 and 397; and 

(6) Factor 6—Accident: Recordable 

Accident Rate per Million Miles. 

(g) For each instance of noncompliance 

with an acute regulation, 1.5 points will be 

assessed. 

(h) For each instance of noncompliance 

with a critical regulation, 1 point will be 

assessed. 

(i) Vehicle Factor. (1) When at least three 

vehicle inspections are recorded in the Motor 

Carrier Management Information System 

(MCMIS) during the twelve months before 

the safety audit or performed at the time of 

the review, the Vehicle Factor (part 396) will 

be evaluated on the basis of the Out-ofService (OOS) rates and noncompliance with 

acute and critical regulations. The results of 

the review of the OOS rate will affect the 

Vehicle Factor as follows: 

(i) If the motor carrier has had at least three 

roadside inspections in the twelve months 

before the safety audit, and the vehicle OOS 

rate is 34 percent or higher, one point will 

be assessed against the carrier. That point 

will be added to any other points assessed for 

discovered noncompliance with acute and 

critical regulations of part 396 to determine 

the carrier’s level of safety management 

control for that factor. 

(ii) If the motor carrier’s vehicle OOS rate 

is less than 34 percent, or if there are less 

than three inspections, the determination of 

the carrier’s level of safety management 

controls will only be based on discovered 

noncompliance with the acute and critical 

regulations of part 396. 

(2) Over two million inspections occur on 

the roadside each year in the United States. 

This vehicle inspection information is 

retained in the MCMIS and is integral to 

evaluating motor carriers’ ability to 

successfully maintain their vehicles, thus 

preventing them from being placed OOS 

during roadside inspections. Each safety 

audit will continue to have the requirements 

of part 396, Inspection, Repair, and 

Maintenance, reviewed as indicated by the 

above explanation. 

(j) Accident Factor. (1) In addition to the 

five regulatory factors, a sixth factor is 

included in the process to address the 

accident history of the motor carrier. This 

factor is the recordable accident rate, which 

the carrier has experienced during the past 

12 months. Recordable accident, as defined 

in 49 CFR 390.5, means an accident 

involving a commercial motor vehicle 

operating on a public road in interstate or 

intrastate commerce which results in a 

fatality; a bodily injury to a person who, as 

a result of the injury, immediately receives 

medical treatment away from the scene of the 

accident; or one or more motor vehicles 

incurring disabling damage as a result of the 

accident requiring the motor vehicle to be 

transported away from the scene by a tow 

truck or other motor vehicle. 

(2) Experience has shown that urban 

carriers, those motor carriers operating 

entirely within a radius of less than 100 air 

miles (normally urban areas), have a higher 

exposure to accident situations because of 

their environment and normally have higher 

accident rates. 

(3) The recordable accident rate will be 

used in determining the carrier’s basic safety 

management controls in Factor 6, Accident. 

It will be used only when a carrier incurs two 

or more recordable accidents within the 12 

months before the safety audit. An urban 

carrier (a carrier operating entirely within a 

radius of 100 air miles) with a recordable rate 

per million miles greater than 1.7 will be 

deemed to have inadequate basic safety 

management controls for the accident factor. 

All other carriers with a recordable accident 

rate per million miles greater than 1.5 will be 

deemed to have inadequate basic safety 

management controls for the accident factor. 

The rates are the result of roughly doubling 

the United States national average accident 

rate in Fiscal Years 1994, 1995, and 1996. 

(4) FMCSA will continue to consider 

preventability when a new entrant contests 

the evaluation of the accident factor by 

presenting compelling evidence that the 

recordable rate is not a fair means of 

evaluating its accident factor. Preventability 

will be determined according to the 

following standard: ‘‘If a driver, who 

exercises normal judgment and foresight, 

could have foreseen the possibility of the 

accident that in fact occurred, and avoided it 

by taking steps within his/her control which 

would not have risked causing another kind 

of mishap, the accident was preventable.’’

(k) Factor Ratings 

(1) The following table shows the five 

regulatory factors, parts of the FMCSRs and 

HMRs associated with each factor, and the 

accident factor. Each carrier’s level of basic 

safety management controls with each factor 

is determined as follows: 

(i) Factor 1—General: Parts 390 and 387; 

(ii) Factor 2—Driver: Parts 382, 383, and 

391; 

(iii) Factor 3—Operational: Parts 392 and 

395; 

(iv) Factor 4—Vehicle: Parts 393, 396 and 

the Out of Service Rate; 

(v) Factor 5—Hazardous Materials: Part 

171, 177, 180 and 397; and 

(vi) Factor 6—Accident: Recordable 

Accident Rate per Million Miles; 

(2) For paragraphs IV (k)(1)(i) through (v) 

(Factors 1 through 5), if the combined 

violations of acute and or critical regulations 

for each factor is equal to three or more 

points, the carrier is determined not to have 

basic safety management controls for that 

individual factor. 

(3) For paragraphs IV (k)(1)(vi), if the 

recordable accident rate is greater than 1.7 

recordable accidents per million miles for an 

urban carrier (1.5 for all other carriers), the 

carrier is determined to have inadequate 

basic safety management controls. 

(l) Notwithstanding FMCSA verification of 

the items listed in part III (a)(1) through (5) 

above, if the safety audit determines the 

carrier has inadequate basic safety 

management controls in at least three 

separate factors described in part III, the 

carrier’s application for new entrant 

registration will be denied. For example, 

FMCSA evaluates a carrier finding: 

(1) One instance of noncompliance with a 

critical regulation in part 387 scoring one 

point for Factor 1; 

(2) Two instances of noncompliance with 

acute regulations in part 382 scoring three 

points for Factor 2; 

(3) Three instances of noncompliance with 

critical regulations in part 396 scoring three 

points for Factor 4; and 

(4) Three instances of noncompliance with 

acute regulations in parts 171 and 397 

scoring four and one-half (4.5) points for 

Factor 5. 

Under this example, the carrier will not 

receive new entrant registration because it 

scored three or more points for Factors 2, 4, 

and 5 and FMCSA determined the carrier had 


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inadequate basic safety management controls 

in at least three separate factors. 

20. Amend part 385 by adding a new 

Subpart I consisting of new §§ 385.701 

through 385.717 to read as follows: 

Subpart I—Safety Monitoring System for 

Non-North America-Domiciled Carriers 

Sec. 

385.701 Definitions. 

385.703 Safety monitoring system. 

385.705 Expedited action. 

385.707 The compliance review. 

385.709 Suspension and revocation of nonNorth America-domiciled carrier 

registration. 

385.711 Administrative review. 

385.713 Reapplying for new entrant 

registration. 

385.715 Duration of safety monitoring 

system. 

385.717 Applicability of safety fitness and 

enforcement procedures. 

Subpart I—Safety Monitoring System 

for Non-North American Carriers 

§ 385.701 Definitions. 

Compliance review means a 

compliance review as defined in § 385.3 

of this part. 

New entrant registration means the 

provisional registration under part 385, 

subpart H of this subchapter that 

FMCSA grants to a non-North Americadomiciled motor carrier to provide 

interstate transportation within the 

United States. It will be revoked if the 

registrant is not assigned a Satisfactory 

safety rating following a compliance 

review conducted during the safety 

monitoring period established in this 

subpart. 

Non-North America-domiciled motor 

carrier means a motor carrier of 

property or passengers whose principal 

place of business is located in a country 

other than the United States, Canada or 

Mexico. 

§ 385.703 Safety monitoring system. 

(a) General. Each non-North Americadomiciled carrier new entrant will be 

subject to an oversight program to 

monitor its compliance with applicable 

Federal Motor Carrier Safety 

Regulations (FMCSRs), Federal Motor 

Vehicle Safety Standards (FMVSSs), and 

Hazardous Materials Regulations 

(HMRs). 

(b) Roadside monitoring. Each nonNorth America-domiciled carrier new 

entrant will be subject to intensified 

monitoring through frequent roadside 

inspections. 

(c) Safety decal. Each non-North 

America-domiciled carrier must have on 

every commercial motor vehicle it 

operates in the United States a current 

decal attesting to a satisfactory North 

American Standard Commercial Vehicle 

inspection by a certified FMCSA or 

State inspector pursuant to 49 CFR 

§ 350.201(k). This requirement applies 

during the new entrant operating period 

and for three years after the carrier’s 

registration becomes permanent 

following removal of its new entrant 

designation. 

(d) Compliance review. FMCSA will 

conduct a compliance review on a nonNorth America-domiciled carrier within 

18 months after FMCSA issues the 

carrier a USDOT Number. 

§ 385.705 Expedited action. 

(a) A non-North America-domiciled 

motor carrier committing any of the 

following actions identified through 

roadside inspections, or by any other 

means, may be subjected to an 

expedited compliance review, or may be 

required to submit a written response 

demonstrating corrective action: 

(1) Using drivers not possessing, or 

operating without, a valid CDL, 

Canadian Commercial Driver’s License, 

or Mexican Licencia Federal de 

Conductor. An invalid commercial 

driver’s license includes one that is 

falsified, revoked, expired, or missing a 

required endorsement. 

(2) Operating vehicles that have been 

placed out of service for violations of 

the Federal Motor Carrier safety 

regulations without taking the necessary 

corrective action. 

(3) Involvement in, due to carrier act 

or omission, a hazardous materials 

incident within the United States 

involving: 

(i) A highway route controlled 

quantity of a Class 7 (radioactive) 

material as defined in § 173.403 of this 

title; 

(ii) Any quantity of a Class 1, Division 

1.1, 1.2, or 1.3 explosive as defined in 

§ 173.50 of this title; or 

(iii) Any quantity of a poison 

inhalation hazard Zone A or B material 

as defined in §§ 173.115, 173.132, or 

173.133 of this title. 

(4) Involvement in, due to carrier act 

or omission, two or more hazardous 

material incidents occurring within the 

United States and involving any 

hazardous material not listed in 

paragraph (a)(3) of this section and 

defined in chapter I of this title. 

(5) Using a driver who tests positive 

for controlled substances or alcohol or 

who refuses to submit to required 

controlled substances or alcohol tests. 

(6) Operating within the United States 

a motor vehicle that is not insured as 

required by part 387 of this chapter. 

(7) Having a driver or vehicle out-ofservice rate of 50 percent or more based 

upon at least three inspections 

occurring within a consecutive 90-day 

period. 

(b) Failure to respond to an agency 

demand for a written response 

demonstrating corrective action within 

30 days will result in the suspension of 

the carrier’s new entrant registration 

until the required showing of corrective 

action is submitted to the FMCSA. 

(c) A satisfactory response to a written 

demand for corrective action does not 

excuse a carrier from the requirement 

that it undergo a compliance review 

during the new entrant registration 

period. 

§ 385.707 The compliance review. 

(a) The criteria used in a compliance 

review to determine whether a nonNorth America-domiciled new entrant 

exercises the necessary basic safety 

management controls are specified in 

Appendix B to this part. 

(b) Satisfactory Rating. If FMCSA 

assigns a non-North America-domiciled 

carrier a Satisfactory rating following a 

compliance review conducted under 

this subpart, FMCSA will provide the 

carrier written notice as soon as 

practicable, but not later than 45 days 

after the completion of the compliance 

review. The carrier’s registration will 

remain in provisional status and its onhighway performance will continue to 

be closely monitored for the remainder 

of the 18-month new entrant registration 

period. 

(c) Conditional Rating. If FMCSA 

assigns a non-North America-domiciled 

carrier a Conditional rating following a 

compliance review conducted under 

this subpart, it will initiate a revocation 

proceeding in accordance with 

§ 385.709 of this subpart. The carrier’s 

new entrant registration will not be 

suspended prior to the conclusion of the 

revocation proceeding. 

(d) Unsatisfactory Rating. If FMCSA 

assigns a non-North America-domiciled 

carrier an Unsatisfactory rating 

following a compliance review 

conducted under this subpart, it will 

initiate a suspension and revocation 

proceeding in accordance with 

§ 385.709 of this subpart. 

§ 385.709 Suspension and revocation of 

non-North America-domiciled carrier 

registration. 

(a) If a carrier is assigned an 

‘‘Unsatisfactory’’ safety rating following 

a compliance review conducted under 

this subpart, FMCSA will provide the 

carrier written notice, as soon as 

practicable, that its registration will be 

suspended effective 15 days from the 

service date of the notice unless the 

carrier demonstrates, within 10 days of 

the service date of the notice, that the 


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compliance review contains material 

error. 

(b) For purposes of this section, 

material error is a mistake or series of 

mistakes that resulted in an erroneous 

safety rating. 

(c) If the carrier demonstrates that the 

compliance review contained material 

error, its new entrant registration will 

not be suspended. If the carrier fails to 

show a material error in the compliance 

review, FMCSA will issue an Order: 

(1) Suspending the carrier’s new 

entrant registration and requiring it to 

immediately cease all further operations 

in the United States; and 

(2) Notifying the carrier that its new 

entrant registration will be revoked 

unless it presents evidence of necessary 

corrective action within 30 days from 

the service date of the Order. 

(d) If a carrier is assigned a 

‘‘Conditional’’ rating following a 

compliance review conducted under 

this subpart, the provisions of 

paragraphs (a) through (c) of this section 

will apply, except that its new entrant 

registration will not be suspended under 

paragraph (c)(1) of this section. 

(e) If a carrier subject to this subpart 

fails to provide the necessary 

documents for a compliance review 

upon reasonable request, or fails to 

submit evidence of the necessary 

corrective action as required by 

§ 385.705 of this subpart, FMCSA will 

provide the carrier with written notice, 

as soon as practicable, that its new 

entrant registration will be suspended 

15 days from the service date of the 

notice unless it provides all necessary 

documents or information. This 

suspension will remain in effect until 

the necessary documents or information 

are produced and: 

(1) The carrier is rated Satisfactory 

after a compliance review; or 

(2) FMCSA determines, following 

review of the carrier’s response to a 

demand for corrective action under 

§ 385.705, that the carrier has taken the 

necessary corrective action. 

(f) If a carrier commits any of the 

actions specified in § 385.705(a) of this 

subpart after the removal of a 

suspension issued under this section, 

the suspension will be automatically 

reinstated. FMCSA will issue an Order 

requiring the carrier to cease further 

operations in the United States and 

demonstrate, within 15 days from the 

service date of the Order, that it did not 

commit the alleged action(s). If the 

carrier fails to demonstrate that it did 

not commit the action(s), FMCSA will 

issue an Order revoking its new entrant 

registration. 

(g) If FMCSA receives credible 

evidence that a carrier has operated in 

violation of a suspension order issued 

under this section, it will issue an Order 

requiring the carrier to show cause, 

within 10 days of the service date of the 

Order, why its new entrant registration 

should not be revoked. If the carrier fails 

to make the necessary showing, FMCSA 

will revoke its registration. 

(h) If a non-North America-domiciled 

motor carrier operates a commercial 

motor vehicle in violation of a 

suspension or out-of-service order, it is 

subject to the penalty provisions in 49 

U.S.C. 521(b)(2)(A), as adjusted by 

inflation, not to exceed amounts for 

each offense under part 386, Appendix 

B of this subchapter. 

(i) Notwithstanding any provision of 

this subpart, a carrier subject to this 

subpart is also subject to the suspension 

and revocation provisions of 49 U.S.C. 

13905 for repeated violations of DOT 

regulations governing its motor carrier 

operations. 

§ 385.711 Administrative review. 

(a) A non-North America-domiciled 

motor carrier may request FMCSA to 

conduct an administrative review if it 

believes FMCSA has committed an error 

in assigning a safety rating or 

suspending or revoking the carrier’s 

new entrant registration under this 

subpart. 

(b) The carrier must submit its request 

in writing, in English, to the Associate 

Administrator for Enforcement and 

Program Delivery, Federal Motor Carrier 

Safety Administration, 400 Seventh 

Street, SW., Washington DC 20590. 

(c) The carrier’s request must explain 

the error it believes FMCSA committed 

in assigning the safety rating or 

suspending or revoking the carrier’s 

new entrant registration and include 

any information or documents that 

support its argument. 

(d) FMCSA will complete its 

administrative review no later than 10 

days after the carrier submits its request 

for review. The Associate 

Administrator’s decision will constitute 

the final agency action. 

§ 385.713 Reapplying for new entrant 

registration. 

(a) A non-North America-domiciled 

motor carrier whose provisional new 

entrant registration has been revoked 

may reapply for new entrant registration 

no sooner than 30 days after the date of 

revocation. 

(b) The non-North America-domiciled 

motor carrier will be required to initiate 

the application process from the 

beginning. The carrier will be required 

to demonstrate how it has corrected the 

deficiencies that resulted in revocation 

of its registration and how it will ensure 

that it will have adequate basic safety 

management controls. It will also have 

to undergo a pre-authorization safety 

audit. 

§ 385.715 Duration of safety monitoring 

system. 

(a) Each non-North Americadomiciled carrier subject to this subpart 

will remain in the safety monitoring 

system for at least 18 months from the 

date FMCSA issues its new entrant 

registration, except as provided in 

paragraphs (c) and (d) of this section. 

(b) If, at the end of this 18-month 

period, the carrier’s most recent safety 

rating was Satisfactory and no 

additional enforcement or safety 

improvement actions are pending under 

this subpart, the non-North Americadomiciled carrier’s new entrant 

registration will become permanent. 

(c) If, at the end of this 18-month 

period, FMCSA has not been able to 

conduct a compliance review, the 

carrier will remain in the safety 

monitoring system until a compliance 

review is conducted. If the results of the 

compliance review are satisfactory, the 

carrier’s new entrant registration will 

become permanent. 

(d) If, at the end of this 18-month 

period, the carrier’s new entrant 

registration is suspended under 

§ 385.709(a) of this subpart, the carrier 

will remain in the safety monitoring 

system until FMCSA either: 

(1) Determines that the carrier has 

taken corrective action; or 

(2) Completes measures to revoke the 

carrier’s new entrant registration under 

§ 385.709(c) of this subpart. 

§ 385.717 Applicability of safety fitness 

and enforcement procedures. 

At all times during which a non-North 

America-domiciled motor carrier is 

subject to the safety monitoring system 

in this subpart, it is also subject to the 

general safety fitness procedures 

established in subpart A of this part and 

to compliance and enforcement 

procedures applicable to all carriers 

regulated by the FMCSA. 

21. Amend Appendix A to part 385, 

section III to add new paragraph (i) to 

read as follows: 

Appendix A to Part 385—Explanation 

of Safety Audit Evaluation Criteria 

* * * * * 

III. Determining if the Carrier Has Basic 

Safety Management Controls 

* * * * * 

(i) FMCSA also gathers information on 

compliance with applicable household goods 

and Americans with Disabilities Act of 1990 

requirements, but failure to comply with 

these requirements does not affect the 


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determination of the adequacy of basic safety 

management controls. 

* * * * * 

PART 387—MINIMUM LEVELS OF 

FINANCIAL RESPONSIBILITY FOR 

MOTOR CARRIERS 

22. The authority citation for part 387 

continues to read as follows: 

Authority: 49 U.S.C. 13101, 13301, 13906, 

14701, 31138, and 31139; and 49 CFR 1.73. 

23. Amend § 387.7 by revising 

paragraph (e) to read as follows: 

§ 387.7 Financial responsibility required. 

* * * * * 

(e)(1) The proof of minimum levels of 

financial responsibility required by this 

section shall be considered public 

information and be produced for review 

upon reasonable request by a member of 

the public. 

(2) In addition to maintaining proof of 

financial responsibility as required by 

subparagraph (d) of this section, nonNorth America-domiciled private and 

for-hire motor carriers shall file 

evidence of financial responsibility with 

FMCSA in accordance with the 

requirements of subpart C of this part. 

* * * * * 

24. Amend § 387.31 by revising 

paragraph (e) to read as follows: 

§ 387.31 Financial responsibility required. 

* * * * * 

(e)(1) The proof of minimum levels of 

financial responsibility required by this 

section shall be considered public 

information and be produced for review 

upon reasonable request by a member of 

the public. 

(2) In addition to maintaining proof of 

financial responsibility as required by 

subparagraph (d) of this section, nonNorth America-domiciled private and 

for-hire motor carriers shall file 

evidence of financial responsibility with 

FMCSA in accordance with the 

requirements of subpart C of this part. 

* * * * * 

PART 390—FEDERAL MOTOR 

CARRIER SAFETY REGULATIONS; 

GENERAL 

25. 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. 

26. Revise § 390.19 to read as follows: 

§ 390.19 Motor carrier identification report. 

(a) Applicability. Each motor carrier 

must file the Form MCS–150 or Form 

MCS–150B with FMCSA as follows: 

(1) A U.S., Canada-, Mexico-, or nonNorth America-domiciled motor carrier 

conducting operations in interstate 

commerce must file a Motor Carrier 

Identification Report, Form MCS–150. 

(2) A motor carrier conducting 

operations in intrastate commerce and 

requiring a Safety Permit under 49 CFR 

part 385, subpart E of this chapter must 

file the Combined Motor Carrier 

Identification Report and HM Permit 

Application, Form MCS–150B. 

(b) Filing schedule. Each motor carrier 

must file the appropriate form under 

paragraph (a) of this section at the 

following times: 

(1) Before it begins operations; and 

(2) Every 24 months, according to the 

following schedule: 

USDOT Number 

ending in Must file by last day of 

1 ......................... January. 

2 ......................... February. 

3 ......................... March. 

4 ......................... April. 

5 ......................... May. 

6 ......................... June. 

7 ......................... July. 

8 ......................... August. 

9 ......................... September. 

0 ......................... October. 

(3) If the next-to-last digit of its 

USDOT Number is odd, the motor 

carrier shall file its update in every oddnumbered calendar year. If the next-tolast digit of the USDOT Number is even, 

the motor carrier shall file its update in 

every even-numbered calendar year. 

(c) Availability of forms. The forms 

described under paragraph (a) of this 

section and complete instructions are 

available from the FMCSA Web site at 

http://www.fmcsa.dot.gov for (Keyword 

‘‘MCS–150,’’ or ‘‘MCS–150B’’) from all 

FMCSA Service Centers and Division 

offices nationwide; or by calling 1–800–

832–5660. 

(d) Where to file. The required form 

under paragraph (a) of this section must 

be filed with FMCSA Office of 

Information Management. The form may 

be filed electronically according to the 

instructions at the agency’s web site, or 

it may be sent to Federal Motor Carrier 

Safety Administration, Office of 

Information Technology, MC–RIO, 400 

Seventh Street, SW, Washington, DC 

20590. 

(e) Special instructions for for-hire 

motor carriers. A for-hire motor carrier 

should submit the Form MCS–150, or 

Form MCS–150B, along with its 

application for operating authority 

(Form OP–1, OP–1(MX), OP–1(NNA) or 

OP–2), to the appropriate address 

referenced on that form, or may submit 

it electronically or by mail separately to 

the address mentioned in paragraph (d) 

of this section. 

(f) Only the legal name or a single 

trade name of the motor carrier may be 

used on the forms under paragraph (a) 

of this section (Form MCS–150 or MCS–

150B). 

(g) A motor carrier that fails to file the 

form required under paragraph (a) of 

this section, or furnishes misleading 

information or makes false statements 

upon the form, is subject to the 

penalties prescribed in 49 U.S.C. 

521(b)(2)(B). 

(h)(1) Upon receipt and processing of 

the form described in paragraph (a) of 

this section, FMCSA will issue the 

motor carrier an identification number 

(USDOT Number). 

(2) The following applicants must 

additionally pass a pre-authorization 

safety audit as described below before 

being issued a USDOT Number: 

(i) A Mexico-domiciled motor carrier 

seeking to provide transportation of 

property or passengers in interstate 

commerce between Mexico and points 

in the United States beyond the 

municipalities and commercial zones 

along the United States-Mexico 

international border must pass the preauthorization safety audit under 

§ 365.507 of this subchapter. The agency 

will not issue a USDOT Number until 

expiration of the protest period 

provided in § 365.115 of this subchapter 

or—if a protest is received—after 

FMCSA denies or rejects the protest. 

(ii) A non-North America-domiciled 

motor carrier seeking to provide 

transportation of property or passengers 

in interstate commerce within the 

United States must pass the preauthorization safety audit under 

§ 385.607(c) of this subchapter. If the 

carrier also requests operating authority 

under part 365 of this chapter, the 

agency will not issue a USDOT Number 

until expiration of the protest period 

or—if a protest is received—after 

FMCSA denies or rejects the protest. 

(3) The motor carrier must display the 

number on each self-propelled CMV, as 

defined in § 390.5, along with the 

additional information required by 

§ 390.21. 

(i) A motor carrier that registers its 

vehicles in a State that participates in 

the Performance and Registration 

Information Systems Management 

(PRISM) program (authorized under 

section 4004 of the Transportation 

Equity Act for the 21st Century [(Pub. L. 

105–178, 112 Stat. 107]) is exempt from 

the requirements of this section, 


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provided it files all the required 

information with the appropriate State 

office. 

Issued on: December 11, 2006. 

John H. Hill, 

Administrator. 

Note: The following form will not appear 

in the Code of Federal Regulations. 

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[FR Doc. 06–9759 Filed 12–20–06; 8:45 am] 

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