[Federal Register Volume 63, Number 138 (Monday, July 20, 1998)]
[Proposed Rules]
[Pages 38788-38791]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-19294]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

49 CFR Part 385

[FHWA Docket No. FHWA-98-3639]
RIN 2125-AE37


Safety Fitness Procedures

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Advance notice of proposed rulemaking (ANPRM); request for 
comments.

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SUMMARY: On November 6, 1997, the FHWA published a final rule 
incorporating the safety fitness rating methodology (SFRM) into 49 CFR 
385 as appendix B. In that document the FHWA identified its ultimate 
goal as creating a more performance-based means of determining the 
fitness of carriers to conduct commercial motor vehicle (CMV) 
operations in interstate commerce. The final rule announced that the 
FHWA would publish an ANPRM shortly which would request comments on the 
future evolution of a rating system that could be used both in making 
safety fitness determinations and meeting the demands of shippers, 
insurers and other present and potential users interested in evaluating 
motor carrier performance. Since the final rule, legislation was 
enacted that substantially heightens the importance of unsatisfactory 
ratings. Accordingly, at this time the FHWA is seeking comments and 
supporting data on what issues should be considered in constructing a 
rating system for the future.

DATES: Comments must be received on or before September 18, 1998.

ADDRESSES: Submit written, signed comments to the docket number that 
appears in the heading of this document to the Docket Clerk, U.S. DOT 
Dockets, Room PL-401, 400 Seventh Street, SW., Washington, DC 20590. 
All comments received will be available for examination at the above 
address between 10 a.m. and 5 p.m., e.t., Monday through Friday, except 
Federal holidays. Those desiring notification of receipt of comments 
must include a self-addressed, stamped envelope or postcard.

FOR FURTHER INFORMATION CONTACT: Mr. William C. Hill, Office of Motor 
Carrier Research and Standards, (202) 366-4009, or Mr. Charles Medalen, 
Office of the Chief Counsel, (202) 366-1354, Federal Highway 
Administration, 400 Seventh Street, SW., Washington, D.C. 20590, Office 
hours are from 7:45 a.m. to 4:15 p.m., e.t., Monday through Friday, 
except Federal Holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access

    Internet users can access all comments received by the U.S. DOT 
Dockets, Room PL-401, by using the universal resource locator (URL):
http://dms.dot.gov. It is available 24 hours each day, 365 days each 
year. Please follow the instructions online for more information and 
help.
    An electronic copy of this document may be downloaded using a modem 
and suitable communications software from the Federal Register 
Electronic Bulletin Board Service at (202) 512-1661. Internet users may 
reach the Federal Register's home page at: <a href="http://www.nara.gov/nara/
fedreg">http://www.nara.gov/nara/
fedreg</a> and the Government Printing Office's database at: <a href="http//
www.access.gpo.gov/su__docs">http//
www.access.gpo.gov/su__docs</a>.

Background

    Safety ratings for interstate motor carriers have been in use by 
the Department of Transportation (DOT) since 1966 when Congress 
transferred the responsibility for regulating motor carrier safety to 
the Department from the Interstate Commerce Commission (ICC). Congress 
delegated the authority to regulate qualifications and maximum hours-
of-service of drivers, and the safety of operations and equipment of 
motor carriers in interstate commerce to the FHWA, an operating 
administration of the DOT. Pub. L. 89-670, Sec. 6(f)(3)(B), Oct. 15, 
1966, 80 Stat. 940, repealed and recodified by Pub. L. 97-449, Jan. 12, 
1983, 96 Stat. 2415, 49 U.S.C. 104(c). Section 215 of the Motor Carrier 
Safety Act (MCSA) of 1984 (Pub. L. 98-554, 98 Stat. 2844, 49 U.S.C. 
31144) required the Secretary of Transportation to prescribe by 
regulation procedures for determining the safety fitness of owners and 
operators of CMVs in interstate commerce, including those seeking new 
or additional operating authority from the ICC. It also stated that 
``rules adopted under this section shall supersede all Federal rules 
regarding safety fitness and safety rating of motor carriers in effect 
on the date of enactment of this Act.'' The final rule implementing the 
new safety fitness procedures mandated by the MCSA of 1984 became 
effective in 1989 (53 FR 50968, Dec. 19, 1988, 49 CFR Part 385). The 
procedures and rating methodology implementing the 1989 final rule were 
recently modified in a rulemaking concluding in a final rule issued on 
November 6, 1997, (62 FR 60035). This action was necessitated by a 
ruling of the U.S. Court of Appeals for the D.C. Circuit in MST Express 
et al. v. Department of Transportation (FHWA), 108 F.3d 401 (D.C. Cir. 
1997), to the effect that the rating methodology had not been adopted 
through notice and comment rulemaking as required by the Administrative 
Procedure Act (5 U.S.C. 553).
    In the Transportation Efficiency Act for the 21st Century (TEA-21), 
Pub. L. 105-178, enacted June 9, 1998, Congress amended 49 U.S.C. 31144 
to prohibit transportation of any property in interstate commerce by 
motor carriers with unsatisfactory ratings, and provides such carriers 
60 days within which to improve the rating (extendable another 60 days) 
before the prohibition takes effect. This provision will be 
incorporated into the current regulations in a subsequent rulemaking.

Safety Rating System

    A safety fitness rating system was first used by the FHWA to 
provide safety information to the ICC to assist in screening applicants 
seeking operating authority. It evolved into a means to identify motor 
carriers most likely to benefit from on-site compliance reviews (CRs). 
Presently, safety ratings are made available to anyone upon request. 
Shippers, including governmental agencies, use the ratings in making 
carrier selections and insurers use them in making decisions regarding 
coverage.
    Safety ratings are developed in part through an on-site CR of a 
motor carrier's records, operations and, when available, equipment. The 
review is used to assess whether a commercial motor carrier's safety 
management controls are functioning effectively to ensure acceptable 
compliance with Sec. 385.5, safety fitness standard. Safety rating 
factors are used in determining a safety rating. Four rating factors 
relate to the regulatory requirements of the Federal Motor Carrier 
Safety Regulations (FMCSRs) (general, driver, operational, vehicle) and 
one to the Hazardous Materials Regulations

[[Page 38789]]

(HMR), if applicable. The carrier's accident rate is the remaining 
factor. The rating factors are given equal weight, and one of three 
safety ratings can be assigned: satisfactory, conditional, or 
unsatisfactory. This process also identifies motor carriers needing 
improvement in their compliance with the FMCSRs and HMRs. Motor 
carriers rated unsatisfactory generally receive a higher priority for 
future compliance and enforcement efforts.

Statutory Prohibitions

    In 1991, following a mandate in the MCSA of 1990 (Pub. L. 101-500, 
Sec. 15(b)(1), 104 Stat. 1218, 49 U.S.C. 5113), the FHWA promulgated 
Sec. 385.13 which prohibits motor carriers of hazardous materials (in 
quantities requiring placarding) and passenger carriers transporting 
more than 15 passengers including the driver from operating with an 
unsatisfactory safety rating unless the rating is improved within 45 
days.
    The prohibition against transportation of passengers or hazardous 
materials was significant because it applied serious statutory 
consequences to an unsatisfactory rating and limited the motor 
carrier's ability to operate in interstate commerce. With this change, 
Congress equated the unsatisfactory rating with unsafe operations. The 
MCSA of 1990 also prohibited Federal agencies from using motor carriers 
with an unsatisfactory rating to transport hazardous materials in a 
quantity requiring placarding or more than 15 passengers.
    Section 4009 of the TEA-21 now gives most carriers found by the 
FHWA to be unfit a grace period 60 days. Those unable to improve their 
fitness determination during that period will have to halt trucking 
operations on the 61st day. However, passenger and hazardous materials 
carriers found to be unfit remain subject to a 45-day grace period 
before shutting down. A rule to implement TEA-21 will be proposed 
later.
    In the November 6, 1997, final rule, the FHWA included an amendment 
which gives all motor carriers (not just those subject to operational 
prohibitions) a 45-day grace period before a less-than-satisfactory 
rating takes effect. Under the new procedures, motor carriers receive a 
Notice of Proposed Rating when the rating would be less than 
satisfactory. The notice informs the carrier of the reasons for the 
unsatisfactory or conditional rating and that it will take effect in 45 
days. It also advises the carrier of its procedural options under Part 
385. During the exit interview at the conclusion of the CR, the motor 
carrier also is informed of the safety violations discovered and is 
advised how improvements can be made.

Other Uses of Ratings

    As the safety rating system has evolved, the assignment of ratings 
has taken on new importance to the public, particularly shippers and 
insurance companies. The changing use and public perception of the 
ratings provide the impetus for this rulemaking. Over time, the 
reliance on the safety ratings to make important business decisions 
regarding which carriers to use or which to insure has continued to 
grow. The ability of the agency to maintain current ratings for all 
motor carriers has not. Experience over the last eight years 
illustrates the impracticality of attempting to rate all carriers in an 
industry with high company turnover. The motor carrier industry has 
also grown at a prodigious rate, especially since 1980. For example, in 
1979, the year before deregulation, for-hire carriers holding 
interstate authority from the ICC numbered under 20,000. Today that 
group, which probably has the greatest demand for safety fitness 
determinations, comprises nearly 80,000 registrants. The OMC census, 
which includes private carriers and compensated carriers previously 
exempt from ICC regulation, contains well over 400,000 companies.
    Completing on-site rating reviews, bringing enforcement actions 
against high-risk carriers, doing legislatively mandated complaint 
investigations requiring on-site carrier reviews, and responding to 
individual requests from motor carriers that need a satisfactory rating 
for business purposes or that object to the ratings they have received, 
all serve to contribute to a high demand the agency is not able to 
fulfill with current resources.

New Demands

    The Congress directed the FHWA in Sec. 4003 of the Intermodal 
Surface Transportation Efficiency Act of 1991 (ISTEA), Pub. L. 102-240, 
105 Stat. 1914, 2144, to establish information systems containing 
safety fitness data, including roadside inspections and out-of-service 
orders for State commercial motor vehicle registrants (49 U.S.C. 
31106). The Congress further directed the Department to demonstrate 
methods of linking a carrier's safety fitness to vehicle registration 
and to determine the types of sanctions and limitations which may be 
imposed to ensure the safety fitness of the registrant. That 
demonstration project, formerly known as the Commercial Vehicle 
Information System (CVIS), developed a new methodology to prioritize 
motor carriers for on-site reviews and monitor their safety 
performance. It is now called the Performance and Registration 
Information System Management (PRISM). The FHWA is planning to issue a 
Notice of Proposed Rulemaking in the near future which will set forth 
mechanisms to encourage carriers to improve their safety performance 
and enhance the FHWA's ability to focus resources on poor performers, 
i.e., those carriers over-involved in crashes or presenting the 
greatest potential for crashes.

SAFESTAT

    The demonstration project also produced a new safety risk 
assessment model, the Motor Carrier Safety Status Measuring System or 
SAFESTAT, which varies significantly from the current SFRM, because it 
makes extensive use of performance data and assesses carrier 
performance over time. A safety rating is static and does not change, 
even though actual performance may improve or decline, until a new CR 
is performed. In contrast, SAFESTAT uses all available safety 
performance data to continuously assess the safety status of carriers 
and generate a safety indicator. The indicator is a preliminary ranking 
of carriers relative to their peers and is designed to identify those 
carriers presenting potential risks that require additional attention. 
In SAFESTAT, the results of a CR contribute additional data elements to 
be considered along with safety performance data, such as accident 
rates, roadside vehicle inspections, driver performance, and 
enforcement actions. Other data elements, such as driver moving 
violations, will be added to the model as they become more generally 
available. SAFESTAT evaluates all data elements on the basis of 
severity and time. For example, more weight is given to a fatal or 
serious injury crash than a tow-away crash and recent crashes are 
weighted more heavily than crashes occurring in the past. The CR 
remains as an integral part of SAFESTAT, and is used to gather safety 
data that cannot be obtained at the roadside. SAFESTAT represents 
another method of assessing carrier safety, but at present it is not a 
substitute for the current safety fitness rating process.

Third-party Ratings

    Because of the increasing demand for safety fitness evaluations and 
the realization that present resources are not likely to grow 
dramatically, the FHWA is exploring the feasibility of using

[[Page 38790]]

third-party contractors to increase the pool of safety information 
available. This is authorized by Sec. 4006 of TEA-21. Private rating 
services could be used to meet the public demand for additional safety 
information upon which to base business decisions. Federal resources 
would be freed up to pursue corrective measures against poorly 
performing carriers.
    The U.S. Army's Military Traffic Management Command currently uses 
third-party services to assess the safety fitness of motor carriers 
under contract to the military. Private services could operate much 
like those already providing consumer credit histories, significantly 
increasing the availability of and access to relevant safety 
information. The FHWA and the industry could join in a partnership to 
set the standards for the conduct of safety fitness reviews, the use of 
safety information, and other aspects of such a system. A large data 
bank could be created into which safety information generated by 
Federal, State and private sources would be deposited. So long as 
shippers, insurers, and other stakeholders insisted on making decisions 
about the use of motor carriers based, at least in part, on their 
safety records, the demand for such a service would expand. Motor 
carriers interested in marketing their services would inevitably need 
to have a good safety rating to remain competitive. The FHWA is 
particularly interested in the feasibility of such a system.

General Discussion

    Since its adoption, the safety rating process has been the subject 
of much confusion, controversy, and dispute. Although the FHWA had 
preferred to use the process as a means of targeting scarce enforcement 
and oversight resources, its use in making value judgments about the 
quality of motor carriers has increasingly been perceived as a primary 
function.
    In a Notice of Proposed Rulemaking issued April 29, 1996, (61 FR 
18870), the FHWA discussed the potential for the unsatisfactory rating 
to become the equivalent of a judgment that the motor carrier is unfit 
to operate in interstate commerce and to take on the aspect of a 
debarment in fact, if not in law. The statutory prohibition against the 
transportation of passengers or hazardous materials by a motor carrier 
with an unsatisfactory rating is now, with the enactment of TEA-21, to 
apply to all transportation of property. Most governmental shippers 
consider the unsatisfactory rating a disqualifier, and many other 
shippers treat it the same way. This is consistent with the FHWA's 
belief that unsatisfactory carriers should be well below the average 
and that the percentage of carriers earning such a rating ought to be 
small. The unsatisfactory rating has become and will remain a judgment 
that a carrier should discontinue operations until it can demonstrate a 
commitment to maintain adequate safety practices. That judgment must be 
correctly determined and fairly applied. In our system, a guilty 
judgment follows the opportunity to be heard, and the notice procedure 
adopted in the November 6, 1997, final rule should afford that 
opportunity.
    In view of recent developments regarding the current safety fitness 
rating process and methodology and the obvious limitations on the 
availability of resources required to maintain a safety fitness 
evaluation process at the level many in the public and perhaps even the 
Congress expect, the FHWA is asking for comments and suggestions for 
changes through the following questions. In answering the questions, if 
possible, please provide any statistical information or empirical 
evidence to support your comments.

General

    1. What do you believe should be the principal ingredients of a 
rating system? What kind of a rating system would best suit your needs? 
Why?
    2. What benefits do you expect to gain from a rating system? What 
business decisions do you presently base on carrier ratings?
    3. Are there differences in the way ratings should be used? (e.g., 
by FHWA? By shippers? By others?).
    4. If ratings must impact the continued operations of rated 
carriers, what is the appropriate threshold for determining that a 
carrier is unsatisfactory, meaning ``unfit to operate''?

Tiered System

    5. Should the FHWA continue to maintain the three ratings: 
satisfactory, conditional, or unsatisfactory? If yes, what benefits do 
your perceive in maintaining the three ratings?
    6. What should be the highest tier in such a system, and what 
should it connote?
    7. How long should any rating last?
    8. Do you see any benefit to a single rating system by the FHWA 
which would be concerned only with unsatisfactory carriers that would 
have to improve or cease operating?

Criteria

    9. Should such ratings be determined entirely by objective 
(performance-based) criteria? Why?
    10. What data elements best reveal the safety performance of the 
motor carrier and should receive consideration in future safety fitness 
determinations?
    11. How should regulatory compliance be treated in safety fitness 
determinations? Which regulations are most important in evaluating 
safety fitness?
    12. How should poor compliance be reconciled with good safety 
experience? Should a motor carrier be rated unsatisfactory even if it 
has a low accident rate?

Data Sources

    13. Do you believe there is presently sufficient data available to 
make judgments about a motor carrier's ability to stay in business?
    14. Should carriers be grouped by similarity of operations? By 
size?

Third-party System

    15. Are there significant benefits to be derived from a third-party 
on-site review system for evaluating motor carriers? What do you 
perceive them to be?
    16. If a third-party review system were to start up, what should be 
the Federal role in such a system?
    17. Could and should a private third-party review system coexist 
with a Federal system? What would be their respective roles? What 
relationships should there be, if any, between coexisting Federal and 
private review systems?
    18. What should be the effect of the third-party rating on the 
carrier's operation? What kind of review procedures would be required?
    19. Should the information from third-party on-site reviews become 
a part of the FHWA data base? How should such information be treated?
    20. Should a third-party reviewer have direct access to FHWA's data 
base to a greater extent than such information is presently available 
to the public?
    21. Should there be standards for third-party reviews, including 
the identification of the relevant data elements to be employed for 
evaluative purposes? How should such standards be developed?

Rulemaking Analyses and Notices

    All comments received before the close of business on the comment 
closing date indicated above will be considered and will be available 
for examination in the docket room at the above address. Comments 
received after

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the comment closing date will be filed in the docket and will be 
considered to the extent practicable, but the FHWA may issue an NPRM at 
any time after the close of the comment period. In addition to late 
comments, the FHWA will also continue to file, in the docket, relevant 
information that becomes available after the comment closing date, and 
interested persons should continue to examine the docket for new 
material.

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

    The FHWA has determined that this document does not contain a 
significant regulatory action under Executive Order 12866. The FHWA 
does not know what direction this rulemaking will take, however, it 
does not expect that this rulemaking will be inconsistent with any 
other agency actions or materially alter the budgetary impact of any 
entitlements, grants, user fees, or loan programs. The FHWA anticipates 
that the costs of any rulemaking action that might be implemented in 
response to comments received would be no greater than the motor 
carrier's current costs of complying with the regulatory requirements. 
At this preliminary stage, we do not anticipate that any regulatory 
action taken in response to comments introduced here would be of 
sufficient economic magnitude to warrant a full regulatory evaluation.

Regulatory Flexibility Act

    Although this document does not include any specific proposal at 
this time, the FHWA believes this action will not lead to a proposed 
rule that would have a significant economic impact on a substantial 
number of small motor carriers.
    To meet the requirements of the Regulatory Flexibility Act (5 
U.S.C. 601-612), however, the FHWA would evaluate the effects on small 
entities of any rule promulgated in subsequent phases of this 
proceeding. Therefore, the agency is particularly interested in 
comments from small entities on whether there are impacts from this 
action and how those impacts may be minimized.

Unfunded Mandates Reform Act of 1995

    The FHWA will analyze any proposed rule to determine whether it 
would result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year, as required by the Unfunded Mandates 
Reform Act of 1995 (2 U.S.C. 1532).

Executive Order 12612 (Federalism Assessment)

    The FHWA will analyze any proposed rule using the principles and 
criteria contained in Executive Order 12612 to determine whether the 
proposal would have sufficient federalism implications to warrant the 
preparation of a federalism assessment. The FHWA does not expect that 
any action developed in response to comments introduced here would 
infringe upon the State's ability to discharge traditional State 
governmental functions because interstate commerce, which is the 
subject of these regulations regarding interstate operations, has 
traditionally been governed by Federal laws.

Executive Order 12372 (Intergovernmental Review)

    Catalog of Federal Domestic Assistance Program Number 20.217, Motor 
Carrier Safety. The regulations implementing Executive Order 12372 
regarding intergovernmental consultation on Federal programs and 
activities do not apply to this program.

Paperwork Reduction Act

    The FHWA does not anticipate that any rulemaking action implemented 
in subsequent phases of this proceeding would result in changes in the 
collection of information requirements that are currently approved. The 
FHWA does not foresee the likelihood of increased paperwork burdens 
because what is being considered in this action is an evaluative 
process to determine, in part, how regulated motor carriers are 
complying with existing regulations. Should revisions to the safety 
assessment and rating system be proposed in this proceeding, however, 
the agency will evaluate carefully the information collection 
implications of such revisions under the Paperwork Reduction Act of 
1995, 44 U.S.C. 3501-3520.

National Environmental Policy Act

    The agency will analyze any action implemented in subsequent phases 
of this proceeding for the purposes of the National Environmental 
Policy Act of 1969 (42 U.S.C. 4321-4347) to determine whether the 
action would affect the quality of the environment.

Regulation Identification Number

    A regulation identification number (RIN) is assigned to each 
regulatory action listed in the Unified Agenda of Federal Regulations. 
The Regulatory Information Service Center publishes the Unified Agenda 
in April and October of each year. The RIN contained in the heading of 
this document can be used to cross reference this action with the 
Unified Agenda.

List of Subjects in 49 CFR Part 385

    Highway safety, Highways and roads, Motor carriers, Motor vehicle 
safety, and Safety fitness procedures.

    Issued on: July 10, 1998.
Kenneth R. Wykle,
Federal Highway Administrator.
[FR Doc. 98-19294 Filed 7-17-98; 8:45 am]
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