[Federal Register Volume 61, Number 83 (Monday, April 29, 1996)]
[Proposed Rules]
[Pages 18866-18898]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10125]




[[Page 18865]]


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Part III





Department of Transportation





_______________________________________________________________________



Federal Highway Administration



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49 CFR Part 361, et al.



Rules of Practice for Motor Carrier Proceedings, Investigations, 
Disqualifications and Penalties; Proposed Rule

Federal Register / Vol. 61, No. 83 / Monday, April 29, 1996 / 
Proposed Rules

[[Page 18866]]



DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

49 CFR Parts 361, 362, 363, 364, 385, 386 and 391

[FHWA Docket No. MC-96-18]
RIN 2125-AD64


Rules of Practice for Motor Carrier Proceedings; Investigations; 
Disqualifications and Penalties

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice of proposed rulemaking (NPRM); request for comments.

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SUMMARY: The FHWA proposes to amend its rules of practice for motor 
carrier safety, hazardous materials, and other enforcement proceedings, 
motor carrier safety rating procedures, driver qualification 
proceedings, and its schedule of penalties for violations of the 
Federal Motor Carrier Safety Regulations and the Hazardous Materials 
Regulations. The FHWA further proposes to add provisions on 
investigative authority and procedures and general motor carrier 
responsibilities. These rules would increase the efficiency of the 
practices, consolidate existing administrative review procedures, 
enhance due process and the awareness of the public and regulated 
community, and accommodate recent programmatic changes. The rules would 
apply to all motor carriers, other business entities, and individuals 
involved in motor carrier safety and hazardous materials administrative 
actions and proceedings with the FHWA after the effective date of the 
final rule.

DATES: Comments must be received on or before July 29, 1996.

ADDRESSES: Submit written, signed comments to FHWA Docket No. MC-96-18, 
FHWA, Office of the Chief Counsel, HCC-10, Room 4232, 400 Seventh 
Street SW., Washington, DC 20590. All comments received will be 
available for examination at the above address from 8:30 a.m. to 3:30 
p.m., e.t., Monday through Friday, except Federal holidays. Those 
desiring notification of receipt of comments must include a self-
addressed, stamped postcard/envelope.

FOR FURTHER INFORMATION CONTACT:
Paul Brennan, Office of the Chief Counsel, (202) 366-0834, Federal 
Highway Administration, 400 Seventh Street SW., Washington, DC 20590. 
Office hours are from 7:45 a.m. to 4:15 p.m., e.t., Monday through 
Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION: 

Introduction

    This rulemaking includes the first comprehensive rewrite of the 
FHWA's rules of practice for motor carrier administrative proceedings 
since 1985. It is the forerunner of a comprehensive revision of the 
Federal Motor Carrier Safety Regulations (FMCSR) anticipated to follow 
the completion of a zero-based review of those regulations presently 
underway in the agency. These proposed regulations would appear in 
previously unused chapters of that portion of the Code of Federal 
Regulations reserved for the FMCSR, thus leaving ample room for the 
future revisions. The current rules of practice for safety enforcement 
and driver qualification proceedings, found in 49 CFR part 386 and in 
Sec. 391.47, would be replaced by new part 363. New part 361 restates, 
explains and expands upon statutory authority, administrative 
enforcement powers, and general responsibilities. New part 364 is the 
first general treatment of penalties for violations of safety rules 
provided in regulatory form. The amendments embodied in these three 
proposed parts are based on the FHWA's experience enforcing the motor 
carrier safety regulations through part 386. It is intended that the 
new procedures would make administrative actions and proceedings more 
efficient while enhancing the guarantee of due process to carriers, 
individuals, and other entities by substantially increasing awareness 
of the consequences of noncompliance with commercial motor vehicle 
safety and hazardous materials regulations.
    New part 362 would replace current part 385, which provides 
administrative review procedures within the safety ratings process. 
Safety ratings continue to gain in relative importance in the entire 
safety program in response to legislative mandate, as a part of agency 
programmatic changes, and in the significance attached to the ratings 
by the industry itself. Updated procedures will allow for better 
accommodation of these interests. Parts 385 and 386 would be deleted 
and reserved for future use.
    This rulemaking preamble will first briefly discuss the current 
statutory background. Each proposed part is then analyzed by describing 
some of the antecedents of any corresponding current procedures, 
followed by a section-by-section analysis of the proposed rules. 
Finally, the proposed rules themselves appear.

Statutory Background

    Congress has delegated certain powers to regulate interstate 
commerce to the Department of Transportation in numerous pieces of 
legislation, most notably in the Department of Transportation Act (DOT 
Act), section 6, Pub. L. 85-670, 80 Stat. 931 (1966). Section 55 of the 
DOT Act transferred the authority of the Interstate Commerce Commission 
(ICC) to regulate the qualifications and maximum hours of service of 
employees, the safety of operations, and the equipment of motor 
carriers in interstate commerce to the Federal Highway Administration 
(the agency), an operating administration of the DOT. 49 U.S.C. 104. 
This authority, first granted to the ICC in the Motor Carrier Act of 
1935, Pub. L. 74-255, 49 Stat. 543, now appears in 49 U.S.C. Chapter 
315. The regulations issued under this authority became known as the 
Federal Motor Carrier Safety Regulations (FMCSRs), appearing generally 
at 49 CFR parts 390-399. The administrative powers to enforce Chapter 
315 were also transferred from the ICC to the DOT in 1966, and appear 
in 49 U.S.C. Chapter 5.
    The Motor Carrier Safety Act of 1984 (1984 Act), Pub. L. 98-554, 98 
Stat. 2832, restated, for the first time, the interstate safety 
authority in terms of particular classes of commercial motor vehicles 
(CMV). These statutory classes coincided identically with the 
definition of CMV adopted by the agency in the existing FMCSRs issued 
under the Motor Carrier Act of 1935. The 1984 Act is codified at 49 
U.S.C. Chapter 311, Subchapter III. These two largely overlapping 
statutes, i.e., Chapters 311 and 315, serve as parallel and 
complementary authorities for issuance of safety regulations for motor 
carriers and commercial motor vehicles operating in interstate 
commerce.
    It should be noted that both chapters define interstate commerce as 
trade, traffic, or transportation in the United States which is between 
a place in a state and a place outside of such state or is between two 
places in the same state through another state or place outside the 
state. The DOT and the ICC interpret as within this jurisdiction 
transportation wholly within a state which is part of a continuing 
through movement of property or passengers across state lines. This 
``crossing state lines'' definition represents a delegation of less 
than the full power possessed by Congress to regulate interstate 
commerce. A more complete delegation is found in other laws in which 
all trade, traffic, and transportation affecting interstate commerce is 
deemed

[[Page 18867]]

interstate commerce regardless of its direct connection with a movement 
of goods across state lines.
    For example, the Commercial Motor Vehicle Safety Act of 1986 
(CMVSA), Pub. L. 99-570, 100 Stat. 3 207-170, 49 U.S.C. chapter 313) 
applies to trade, traffic, and transportation on public highways wholly 
within a state as affecting interstate commerce because such trade, 
traffic and transportation intermingles with cross-border movements and 
therefore affects interstate commerce. The CMVSA established a national 
commercial driver's license program (CDL) for all drivers of CMVs, 
which were defined to exclude certain smaller vehicles covered under 
the 1984 Act and longstanding FHWA regulations, unless the agency 
determined that it was appropriate to include them. The FHWA did 
restrict the CDL program to larger vehicles. At the same time, the 
CMVSA extended jurisdictional coverage to drivers in commerce that had 
previously been considered entirely intrastate and thus beyond the 
jurisdictional reaches of the earlier acts. This was a major departure 
from the traditional, ICC-inherited zone of jurisdiction based on the 
origin and destination of the cargo being transported. The distinction 
can be seen most readily in drug testing requirements, which were 
initially issued by DOT 1989 under its parallel general safety 
authority in sections 31502 and 31136. Congress enacted specific drug 
and alcohol testing statutory requirements in 1991 by amending the 
CMVSA (49 U.S.C. 31306). This action had the effect of expanding the 
reach of testing from drivers of vehicles carrying interstate cargo to 
drivers of any vehicles meeting the definition of ``commercial motor 
vehicle'' provided in the CMVSA, which, by their very nature, affect 
interstate commerce.
    The Hazardous Materials Transportation Uniform Safety Act of 1990 
(HMTUSA) Pub. L. 101-615, 104 Stat. 3244, replacing the Hazardous 
Materials Transportation Act (HMTA), Pub. L. 93-633, 88 Stat. 2156 
(1975) required the DOT to issue regulations for the safe 
transportation of hazardous materials in inter- and intrastate 
commerce. 49 U.S.C. Chapter 51. The Research and Special Programs 
Administration (RSPA) of DOT issues the Hazardous Materials Regulations 
(HMR), which provide standards on the classification, packaging, 
handling, and registration of hazardous materials. The FHWA enforces 
the HMR in relation to the transportation of hazardous materials by 
highway.
    The Motor Carrier Act of 1980, Pub. L. 96-296, 94 Stat. 793, and 
the Bus Regulatory Reform Act of 1982, Pub. L. 97-261, 96 Stat. 1121, 
established requirements for minimum levels of insurance for for-hire 
interstate motor carriers and all carriers of certain hazardous 
materials in inter- and intrastate commerce. 49 U.S.C. 31138-31139.
    The Intermodal Safe Container Act of 1992, Pub.L. 102-548, 106 
Stat. 3646, established weight certification requirements for tenderors 
and carriers of intermodal containers. 49 U.S.C. Chapter 59.
    The various acts authorize the enforcement of the FMCSRs and HMRs 
and provide both civil and criminal penalties for violations. In 
practice, when circumstances dictate that an enforcement action be 
instituted, civil penalties are more commonly sought than criminal 
sanctions. The administrative rules proposed in this rulemaking apply, 
among other things, to the administrative adjudication of civil 
penalties assessed for violations of the FMCSR and the HMR.

Analysis

Part 361: Administrative

    As proposed, this part sets forth the authority granted to the 
agency to enforce the commercial motor vehicle safety regulations--the 
FMCSRs and HMRs. It also describes the practices followed by the agency 
in exercising this authority and prescribes certain responsibilities 
imposed by these authorities upon motor carriers and others subject to 
these acts.
Background
    Except for a somewhat obscure provision in appendix B to chapter 
III, subchapter B of the CFR, the authority for the agency's inspection 
and other administrative powers appears only in statute (see, e.g., 49 
U.S.C. 501-525, 31133, and 5121). Standards and practices for the 
agency's training materials, policy guidance, and internal manuals 
which are available to the public, but only upon request. Including 
these standards and practices in the regulations would provide one 
convenient and authoritative reference source for all regulatees and 
put them on notice of what may be expected from Federal enforcement 
officials as well as what is expected of the regulated community.
    Detailed intra-agency delegations of motor carrier safety-related 
functions at one time appeared in 49 CFR 301.60, but were removed in 
1988 following a significant reorganization of the motor carrier safety 
functions and anticipated republication of the regulations under new 
authority. 53 FR 2035 (January 26, 1988). Specific delegations of 
authority from the Administrator to the Office of Motor Carriers now 
appear only in FHWA organizational documents.

Section-by-Section Analysis

Section 361.101  Purpose

    This part would spell out the authority and procedures used by the 
FHWA to conduct investigations and other enforcement activities related 
to commercial motor vehicle safety, and the corresponding obligations 
of the regulated industry. Its purpose is to inform the public of the 
agency's role, to increase awareness of and compliance with the safety 
regulations, and to facilitate public contact with FHWA officials 
enforcing the regulations.

361.102  Authority and Delegations

    The first sentence of paragraph (a) would list the chapters of 
title 49, U.S. Code, in which Congress has conferred on the Secretary 
of Transportation the authority to regulate commercial motor vehicle 
safety. Many sections of these chapters are cited throughout this 
document. One statutory provision which is not mentioned again is 42 
U.S.C. 4917, which gives the Secretary the authority to enforce 
Environmental Protection Agency standards for the limitation of noise 
emissions resulting from the operation of motor carriers engaged in 
interstate commerce. The regulations implementing this provision appear 
in part 325, and would not be amended in this rulemaking.
    The second sentence of paragraph (a) would specify the 
administrative powers the FHWA may employ in carrying out its 
regulatory authority. The intention of this sentence would be to allow 
application of all of these powers in the enforcement of each relevant 
regulatory chapter (i.e., 49 U.S.C. chs. 51, 59, 311, 313, and 315). 
The powers specified are virtually identical to those listed in title 
49 U.S.C. 5121 and 31133, which are to be used in the enforcement of 
chapters 51 and 311, respectively. The administrative powers to enforce 
chapter 315 are provided in chapter 5 (see 49 U.S.C. 501(b)). Because 
the jurisdiction of chapters 311 and 315 are identical as applied by 
the FHWA, with 49 U.S.C. 31136 and 31502 routinely cited as parallel 
authority for safety regulations, the administrative powers available 
to enforce chapter 315 may also be said to be coextensive with those 
under chapter 311.

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    The authority to investigate violations of chapter 313, the 
commercial driver's license program, including drug and alcohol 
testing, appears in 49 U.S.C. 322 and 31317. (See 12018(a) of the CMVSA 
of 1986, in which the FHWA is granted the power to issue such 
regulations as may be necessary to carry out the chapter). It is under 
this authority that the administrative powers in 49 U.S.C. 31133 and 
chapter 5 would be applied in this rule to enforcement of chapter 313. 
Similar authority to enforce chapter 59 may be found in 49 U.S.C. 5907.
    Paragraphs (b) and (c) would restate the delegation of these 
authorities within the Department of Transportation from the Secretary 
to FHWA officials in the field who routinely contact motor carriers. 
The delegations are broad in order to allow flexibility. The term 
``agency'' is used wherever possible when referring to FHWA officials. 
The exact delegations from the Secretary of Transportation which have 
been made to the Federal Highway Administration appear in 49 CFR 1.48. 
Further delegations within the FHWA appear in FHWA organizational 
documents (generally FHWA Order 1-1) available for review at FHWA 
regional offices. See 49 CFR part 301. All of these subdelegations of 
powers delegated to the Secretary of Transportation are within the 
agency's discretion and are carefully designed to comport with 
principles of fairness, due process, and efficiency.
    Paragraph (d) would restate the delegation of authority to the 
States which is provided in 49 U.S.C. 31134. Because States are 
partners with the Federal Government in enforcing motor carrier safety 
laws, it is important to reemphasize that nothing in this part would 
preempt States from enforcing State law. Other parts of the regulations 
do, however, provide standards for the preemption of State laws. See 49 
CFR part 355; part 397, subpart E; and Sec. 382.109.

Section 361.103  Inspection and Investigation

    With the exception of paragraph (e), this section would detail the 
scope of the FHWA power to conduct on-site inspections or, as they are 
more commonly called, compliance reviews, one of the administrative 
powers listed in the previous section. It would be reemphasized in 
paragraph (a) that this power applies in carrying out all of the listed 
commercial motor vehicle safety chapters of the U.S. Code. The language 
on the conduct of on-site inspection and copying of records and 
equipment is taken from 49 U.S.C. 504(c) and 5121(c), with the added 
proviso that such inspections take place at reasonable times, a 
fundamental requirement of the law relating to administrative searches. 
Reasonable times would be further explained in paragraph (c) as the 
regular working hours of the carrier and certain other times in 
particular circumstances.
    Consistent with 49 U.S.C. 504, the on-site inspection powers would 
apply only to motor carriers and other regulated entities, such as 
hazardous materials shippers and tenderors of intermodal containers. 
The term ``motor carrier'' is broadly defined in 49 CFR 390.5 as 
including a carrier's agents, officers, and representatives. In 
contrast, the other investigatory administrative powers, such as the 
power to issue subpoenas, require production of records, and take 
depositions, would apply to any entity so long as the administrative 
action is related to an authorized safety investigation. Thus, an 
entity perhaps not directly regulated by the FHWA, such as a trucking 
service company, a non-hazardous materials shipper, or a medical 
examiner, which possesses information related to an investigation of a 
violation of the safety regulations by a motor carrier would be 
required to produce records of that information upon request, 
enforceable through administrative subpoena and subsequent court order.
    No distinction among regulated and other entities in application of 
any of the administrative powers, including on-site inspections, 
appears in 49 U.S.C. 31133(a). The proposed regulatory approach, 
however, is consistent with 49 U.S.C. 502 and 504 and the long-standing 
practice of the FHWA.
    Proposed paragraph (b) restates two general principles of 
administrative law regarding the scope of investigations, questions 
about which have arisen in the past during the course of inspections. 
First, any records related to an investigation may be inspected, 
regardless of whether or not the FHWA requires the records to be 
maintained under its regulatory authority. Second, as part of an 
inspection and investigation, FHWA officials may question carrier 
officials and employees.
    The last sentence of paragraph (b) would incorporate the carrier's 
right of accompaniment during an inspection, as provided in 49 U.S.C. 
31133(b). This means the carrier or its representative must be given 
the opportunity to accompany the investigator during the inspection of 
records and equipment. The invitation does not have to be accepted, but 
it must be offered. Paragraph (d) is modeled on provisions in other 
agencies' regulations. It is proposed that an employer's consent to 
allow entry on its business premises of an agency official for purposes 
of conducting an investigation may not be conditioned on the outcome of 
the investigation or any resulting enforcement actions.
    An agency official denied entry by an employer would not attempt to 
force entry. The right of access for inspection of records and 
equipment and administrative subpoenas are enforceable through a civil 
action in U.S. District Court for an appropriate order and such other 
relief as may be necessary and proper under the circumstances pursuant 
to proposed Sec. 304.302 (derived from 49 U.S.C. 507).
    Paragraph (e) would restate 49 U.S.C. 505(a) and would be included 
because it is related to the scope of investigations. Given the fluid 
nature of the motor carrier industry, reviewing lease arrangements may 
be essential in determining legal responsibility for compliance with 
the safety regulations. Paragraph (f) would detail the confidentiality 
of investigatory reports.

Section 361.104  Definitions

    To avoid repetition, the definitions provided in Sec. 390.5 are 
also applicable to this rule. The few additional definitions necessary 
for this rule are provided.

Section 361.105  Employer Obligations

    Paragraph (a) would simply restate the responsibility of motor 
carriers and other persons to comply with applicable safety 
regulations. 49 U.S.C. 31135. Paragraph (b) would establish the duty of 
persons to post notices of violations when required by the FHWA. See 49 
U.S.C. 521(b)(3). In addition, reasonable standards for posting such 
notices are proposed. Paragraph (c) would inform the public that safety 
regulations published in the Federal Register are available for review 
in FHWA offices.
    Paragraph (c) also proposes to require that employers maintain a 
copy of applicable safety regulations and make it available to 
employees upon request. It has long been a requirement that employers 
assure compliance by their employees of the safety regulations (see 49 
CFR 390.11). This obligation could not be met without ready access to 
the governing regulations. 49 U.S.C. 31502 authorizes the Secretary to 
prescribe requirements for the ``safety of operation and the 
equipment'' of motor carriers and the practical mandate to maintain an 
accessible source of knowledge of the requirements is clearly within 
this authority. The FHWA does not consider this an increased paperwork 
burden because printed copies of the regulations are readily available 
from a number of sources in addition to the

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Government Printing Office at little or no cost.
    Paragraphs (d) through (e) would reiterate the on-site inspection 
process from the point of view of the person being investigated.

Section 361.106  Vehicle Inspection

    Although the FHWA does not generally focus its enforcement efforts 
on safety equipment inspections of CMVs on the roadside, this section 
would mirror 49 U.S.C. 31142, which provides the authority to conduct 
such inspections. Vehicles may also be inspected at a motor carrier's 
terminal. See 49 U.S.C. 504(c).

Section 361.107  Complaints

    Little in this proposed section goes beyond the statutory language. 
Paragraphs (a) through (e) would be a mixture of 49 U.S.C. 506(b) and 
31143(a), which set forth the FHWA's procedure and obligations in 
responding to complaints of violations of the safety regulations lodged 
by members of the public. The only addition to the statutes is the 
second sentence of paragraph (b), which would clarify what constitutes 
a nonfrivolous complaint. Proposed paragraphs (f) through (g) repeat 
the prohibitions in 49 U.S.C. 31105(a) on retaliation against employees 
who file complaints alleging violations of the safety regulations. 
Because of the numerous questions which the FHWA regularly receives in 
this area, paragraph (h) would inform the public that the prohibitions 
are enforced by the Department of Labor and cites the relevant 
regulations.

Section 361.108  Administrative Subpoenas

    The administrative subpoena power would be elaborated, as 
authorized in 49 U.S.C. 502(d).

Section 361.109  Depositions and Production of Records

    Two more administrative powers would be elaborated, as authorized 
in 49 U.S.C. 502 (e) and (f).

Part 362: Safety Ratings

    This part would set forth the standards and procedures applicable 
to the determination of a motor carrier's safety fitness and the 
issuance of a safety rating by the FHWA.

Background

    Section 215 of the 1984 Act, enacted on October 30, 1984 (now 
codified at 49 U.S.C. 31144), required the Secretary of Transportation 
to establish a procedure to determine the safety fitness of owners and 
operators of commercial motor vehicles in interstate commerce. Even 
before the statutory mandate, the FHWA had been providing safety 
fitness information to the Interstate Commerce Commission since 1967, 
and had developed a rating system for motor carriers. Following the 
1984 Act, the FHWA published an NPRM on June 25, 1986 (51 FR 23088), 
and issued a final rule on December 19, 1988, with an effective date of 
January 18, 1989 (53 FR 50961). The regulations are codified at 49 CFR 
part 385. The regulations were amended by the interim final rule 
published on August 16, 1991 (56 FR 40801) to implement the provisions 
of the Motor Carrier Safety Act of 1990 (MCSA of 1990) (section 15 of 
the Sanitary Food Transportation Act of 1990, Pub. L. 101-500, 104 
Stat. 1218) which prohibits a motor carrier that receives an 
``unsatisfactory'' safety rating from operating commercial motor 
vehicles to transport certain hazardous materials or more than 15 
passengers.
    The regulations established a ``safety fitness standard'' which the 
FHWA uses for assigning motor carrier safety ratings of 
``satisfactory,'' ``conditional,'' or ``unsatisfactory.'' The safety 
ratings are used to prioritize motor carriers for review and focus 
enforcement resources on carriers with the most serious compliance 
problems. The safety ratings had routinely been made available to the 
ICC for consideration of operating authority applications and self-
insurance, and have been available to the Department of Defense in the 
selection of carriers to transport hazardous materials and passengers, 
to other governmental and private industry shippers for carrier 
selection purposes, to insurance companies to assist in risk 
determinations and to the public upon request.
    The current rule also prescribes procedures for administrative 
review of the rating based on factual disputes, and for requested 
changes in safety ratings based upon evidence that corrective actions 
have been taken to bring the motor carrier into compliance with the 
safety fitness standard.
    Since the adoption of the safety rating regulations, the process 
has been the subject of occasional dispute. To some, the method used in 
determining a safety rating is abstract and confusing, especially when 
determined at the same time as, but not necessarily in conjunction 
with, the decision whether or not to initiate enforcement actions. The 
existence of both ``unsatisfactory'' and ``conditional'' ratings, 
moreover, has resulted in unintended significance being given to the 
``conditional'' rating. Since it is less than a ``satisfactory'' 
rating, some shippers and others comparing the performance of various 
carriers may give the ``conditional'' ratings an overlay negative 
connotation not intended by the agency. Some motor carriers, on the 
other hand, equate the satisfactory rating with a level of excellence 
unintended by the agency and inconsistent with the general meaning of 
the term ``satisfactory,'' i.e., adequate.
    Other motor carriers have argued that a rating may be based on 
alleged violations of the regulations discovered during on-site audits 
but not fully documented. It may then become difficult to contest these 
violations in an administrative proceeding challenging the rating. In 
practice, the FHWA has addressed this concern by taking a second 
investigative look at disputed violations.
    Although the FHWA believes that current procedures satisfy the due 
process provisions of the Administrative Procedure Act, 5 U.S.C. 551 et 
seq., there is room for improvement and greater efficiency. The 
situation took on added significance with the enactment of the Motor 
Carrier Safety Act of 1990 and its requirement that motor carriers that 
receive an ``unsatisfactory'' safety rating be prohibited from 
operating commercial motor vehicles to transport hazardous materials 
and passengers. This prohibition, which becomes effective 45 days after 
receipt of an ``unsatisfactory'' safety rating, would clearly affect a 
motor carrier's ability to stay in business. In light of these 
concerns, and to improve the objectivity of the information on which 
ratings are based, the FHWA has already made several adjustments to the 
safety rating methodology and has heightened its responsiveness to 
carriers exposed to serious consequences following ratings.
    Full compliance with all of the safety and hazardous materials 
regulations should certainly be the objective of all responsible motor 
carriers. At a minimum, however, a motor carrier must have managerial 
control over the critical functions of its operations that reflect on 
safety, i.e., it must have an effective system to assure compliance 
with the regulations. A negative rating is, of course avoided through 
full compliance. It is also avoided by adopting reliable measures to 
assure that the motor carrier's employees know what is required by the 
regulations, have the opportunity to achieve full compliance, and do 
not violate those regulations.
    In reviewing a motor carrier's operations for rating purposes, the 
FHWA places more emphasis on compliance with those regulations that 
have the greatest immediate and direct

[[Page 18870]]

impact on safety. In evaluating the several factors that comprise the 
rating, violations of those regulations will have a greater effect on 
the overall rating. The FHWA has been using the concepts of ``acute'' 
and ``critical'' regulations to carry out this purpose. The term 
``acute'' refers to regulatory requirements the violations of which 
would create an immediate risk to persons or property, e.g., using a 
driver after he has tested positive for alcohol. The term critical 
refers to those regulatory requirements the violation of which, if 
occurring in patterns, would indicate a breakdown in effective control 
over essential safety functions, e.g., using drivers beyond their 
allowable driving or duty hours. These concepts would now be codified 
if this proposal becomes final.
    It is also being proposed that the safety ratings be reduced to 
only one category, eliminating both the ``satisfactory'' and 
``conditional'' safety rating categories. Conditions may be attached to 
the avoidance of an ``unsatisfactory'' rating, but they would not place 
the motor carrier in a rating category from which negative assumptions 
may be drawn. This raises some additional questions to be resolved in 
the final rule, e.g., whether and how best to describe those carriers 
which are not rated ``unsatisfactory'' and what should be done with the 
ratings of those carriers currently rated ``conditional.''
    The FHWA believes that Congress has expressed its will in the MCSA 
of 1990 (49 U.S.C. 5113) and in subsequent oversight reports that 
severe consequences should attach to an ``unsatisfactory'' rating. 
Although the language in that provision employs the terms 
``satisfactory'' and ``conditional,'' no particular significance is 
attributed to those terms other than they are an improvement from the 
``unsatisfactory'' classification. This proposal reflects the FHWA's 
continuing intention to focus on the ``unsatisfactory'' category and 
assure that before carriers are assigned such a rating, it is indeed a 
reflection of demonstrably poor compliance or performance. If the 
unsatisfactory safety rating is to be considered tantamount to a 
determination that the carrier assigned such a rating should not to be 
operating commercial motor vehicles in interstate commerce without 
appropriate corrective measures, then such a carrier should be well 
below average and the percentage of carriers earning such a rating 
ought to be relatively small. The information used to assign such a 
rating should be put to a more strenuous test before consequences 
attach.
    The FHWA is, therefore, also proposing to give motor carriers 
advance notice of unsatisfactory ratings so that any challenges to the 
ratings can be resolved before the rating takes effect. In addition, 
expedited procedures for the review of unsatisfactory ratings are 
proposed for carriers when their ability to stay in business might be 
affected by such a rating. Finally, the FHWA is also proposing to 
recognize a practice that has been evolving over the last few years by 
affording some discretionary relief to motor carriers adversely 
affected by ratings that are able to demonstrate a willingness to 
comply and accept conditions designed to improve their safety 
management systems and practices.
    It must be recognized that the FHWA will never be able to complete 
an individual on-premises compliance review of every motor carrier in 
existence. More and more, the information obtained from State accident 
reports and reports generated by the 2 million roadside inspections 
conducted each year is being used to identify carriers that may be 
experiencing safety or compliance problems and therefore pose potential 
safety risks. (As prescribed in current regulations, this information 
is also factored into a carrier's rating.) Complaints are also 
indications of the possible existence of compliance problems, and there 
is a statutory duty to investigate nonfrivolous complaints. As the 
amount and reliability of external information grows, the absence of 
negative indicators becomes a more reliable premise for refraining from 
individual, on-site compliance reviews. Moreover, a ``satisfactory'' 
rating produced by a compliance review is only a current assessment of 
a motor carrier's level of compliance, and its significance obviously 
diminishes with time.
    In a one-category rating system, therefore, an ``unsatisfactory'' 
rating is definitely a negative finding, which is likely to have 
adverse impacts on the motor carrier's business opportunities. The 
remaining group of carriers that are not rated ``unsatisfactory'' would 
be comprised of those carriers with existing ``satisfactory'' or 
``conditional'' ratings (which may be dated) and other carriers that 
are not rated (this would be the largest group). The latter subgroup of 
unrated carriers would be comprised both of carriers that survive 
future compliance reviews without receiving an ``unsatisfactory'' 
rating and those that have not been subject to on-premises compliance 
reviews. In this proposal, we would not use any terminology to describe 
carriers that are not rated ``unsatisfactory,'' so that no connotation, 
positive or negative, would attach. If readers are particularly opposed 
to this approach, the FHWA is interested in receiving comments on the 
use of categories and the proper terminology to be applied to them.
    In this proposal, the FHWA would be prescribing the immediate 
termination of ``satisfactory'' and ``conditional'' ratings. This would 
have no impact on carriers presently holding such ratings as they would 
not be grouped in the unsatisfactory category. The FHWA is also 
particularly interested in comments on this issue.
    In recent times, the FHWA has considered programs that would 
provide incentives to those carriers that demonstrate exceptional 
performance and compliance. Nothing in this proposal should be 
interpreted to mean that we have abandoned such concepts. The agency 
will continue to work with other organizations and associations, such 
as the Commercial Vehicle Safety Alliance, to develop the potential of 
using positive incentives to promote compliance.
    Finally, the safety rating is only one means of promoting 
compliance with the safety regulations. The FHWA will continue to 
employ selective compliance and enforcement measures in the form of 
inspections, investigations, civil penalty assessments and criminal 
prosecutions. These will be driven, for the most part, by performance 
indicators and complaints. We will also continue to rely heavily on the 
partnership developed with State safety enforcement agencies through 
the Motor Carrier Safety Assistance Program. Enforcement actions are 
considered an effective tool to promote compliance and penalties will 
be imposed for violations of the safety regulations when circumstances 
warrant, regardless of the carrier's rating. This recognizes that many 
otherwise satisfactory motor carriers will tolerate violations of the 
regulations from time to time, or will get careless in their management 
practices designed to detect and eliminate violations. Enforcement is 
appropriate in such situations without necessarily affecting a 
carrier's overall rating.
    This following section-by-section analysis explains these changes 
in more detail.

Section-by-Section Analysis

Section 362.101  Purpose

    This section would identify the scope and purpose of the part. The 
definitions section of part 385 would be removed as unnecessary.

[[Page 18871]]

Section 362.102  Motor Carrier Identification Report

    This requirement is presently found at Sec. 385.21, and provides 
that interstate and foreign carriers must file a Motor Carrier 
Identification Report, Form MCS-150 (copy provided in the appendix), 
within 90 days of beginning operations. This is essential to an 
accurate motor carrier census and relates to the assignment of a DOT 
identification number. It also assists the FHWA in scheduling reviews 
of unrated motor carriers. Since this is a continuing requirement, the 
provision in the current rule requiring the filing of the report within 
90 days of the effective date of the rule has been eliminated.

Section 362.103  Safety Fitness--Standard and Factors

    The safety fitness standard in the current Sec. 385.5 and the 
factors in Sec. 385.7 would be clarified, simplified and combined into 
one section. This proposal also elaborates on the factors used to 
determine the rating and codifies the practice of placing special 
emphasis on compliance with ``acute'' and ``critical'' regulations.

Section 362.104  Determination of Safety Fitness--Safety Ratings

    The current 49 CFR 385.9 would be amended to define the one safety 
rating that may be issued by the FHWA (``unsatisfactory''), and to 
describe what constitutes such rating. For example, a carrier would be 
issued an unsatisfactory rating if it is determined that the carrier 
does not have adequate safety management controls in place to ensure 
compliance with the safety fitness standards and factors prescribed in 
proposed Sec. 362.103, and which has resulted in one or more of the 
specific occurrences listed in Sec. 362.103(b)(1) (i) through (x). In 
addition, this section provides that an ``unsatisfactory'' safety 
rating may be avoided based on conditions, such as compliance with 
specific provisions of the safety or hazardous materials regulations, 
the requirements of a compliance order or settlement agreement, or 
notices to abate, which may be imposed at the time the proposed safety 
rating is issued.
    This requirement is not intended to replace the current 
``conditional'' safety rating. Rather, it is intended to provide the 
agency with flexibility to promote compliance with the regulations by 
obtaining the correction of deficiencies in specific areas of a 
carrier's operations without calling the motor carrier's entire safety 
fitness into question. The conditions upon which it would avoid 
``unsatisfactory'' would be known by the motor carrier and the agency. 
No separate status would attach to the rating, nor would the existence 
or the nature of the conditions be routinely available to the public 
under Sec. 362.110. The motor carrier could correct deficiencies 
without having its ability to stay in business negatively affected, as 
is generally the case with the current ``conditional'' safety rating.

Section 362.105  Unsatisfactory Rated Motor Carriers--Prohibition on 
Transportation of Hazardous Materials and Passengers; Ineligibility for 
Federal Contracts

    This section would incorporate and clarify the existing 
prohibitions and penalties listed in section 49 CFR 385.13 that are 
applicable to motor carriers that receive a safety rating of 
unsatisfactory. The listing of applicable penalty statutes would be 
replaced with a reference to the penalty provisions listed in appendix 
A to part 386 of this chapter (Part 364 in this proposal). Finally, the 
references to the 45-day period during which a motor carrier must 
improve the safety rating would be removed and incorporated into the 
procedures for obtaining review of the rating (new Sec. 362.108, see 
description below).

Section 362.106  Notification of a Safety Rating

    This section would clarify and incorporate the rating notification 
requirements of the current Sec. 385.11, and establish the concept of a 
proposed safety rating of unsatisfactory. A proposed safety rating of 
unsatisfactory would become the motor carrier's final safety rating 45 
days after the date the notice of proposed safety rating is received by 
the motor carrier, unless the carrier petitions for a review or obtains 
relief pursuant to proposed Sec. 362.108 (see below). This proposed 
rating incorporates the requirement in the MCSA of 1990 that a motor 
carrier receiving an unsatisfactory safety rating be given 45 days to 
improve its rating before the Act's prohibition of hazardous materials 
and passengers transportation takes effect. It would also eliminate a 
distinction between carriers based on type of operation by applying the 
concept of the proposed rating to all unsatisfactory findings and would 
afford all carriers the opportunity to be heard during that period and 
to improve the rating before consequences attach. This section also 
would provide that a proposed safety rating would not be made routinely 
available to the public until it becomes final. This would ensure that 
a proposed safety rating of unsatisfactory will not affect a motor 
carrier's business before the carrier is given the opportunity to 
improve or challenge its proposed rating.
    The FHWA recognizes that the assignment of a negative safety rating 
often has graver consequences for the rated motor carrier than any 
civil penalties that might be sought for individual violations 
considered in the compilation of the rating. Several prohibitions 
attach to the assignment of an unsatisfactory rating and decisions are 
made daily by shippers and insurers on the basis of safety ratings. 
This is a primary purpose of the rating as conceived by Congress and 
implemented by the agency. For this reason, the agency treats the 
rating as a valuable compliance and enforcement measure and provides an 
administrative proceeding to afford the ratee with the opportunity to 
be heard before the rating is made known. The FHWA believes that 
withholding information about a proposed rating from the public is 
consistent with the Freedom of Information Act, which provides an 
exemption from required release of information compiled for law 
enforcement purposes (Exemption 7). The exemption applies because (a) a 
law enforcement proceeding would be pending, i.e. the determination of 
the motor carrier's safety fitness; and (b) the premature release of a 
proposed rating could reasonably be expected to cause harm in that the 
consequences would attach before a final decision was made. Since the 
purpose of providing the administrative proceeding is to prevent 
unintended consequences from inchoate determinations, release of 
proposed ratings to shippers and insurers who may very well act on the 
information could easily frustrate that purpose. It could also increase 
demand for expedited adjudication which could adversely impact an 
orderly consideration of all relevant issues. Moreover, the length of 
time between a proposed rating and a final rating is finite and would 
rarely exceed 45 days. The FHWA also recognizes that release of a 
proposed rating may be unavoidable under some circumstances, but it 
would be the agency's intent that routine release under Sec. 362.110 
would not occur.

Section 362.107  Change to Safety Rating Based on Corrective Actions

    This section would continue the remedy presently available in 
Sec. 385.17 by allowing for a change in an unsatisfactory rating to be 
requested both within the 45 days the rating remains in a proposed 
status and at any time after the rating becomes final. The

[[Page 18872]]

filing of a petition for change of a proposed rating would not stay 
this 45-day period, but if the FHWA cannot make a determination within 
the 45-day period and the motor carrier has submitted evidence that 
corrective actions have been taken, the period may be extended for up 
to an additional 10 days. This would allow the agency to prioritize 
requests based on the consequences a particular carrier may face from 
an adverse rating. This section would also provide for a higher level 
agency review of a denial of a request for a rating change. In cases 
where the resulting unsatisfactory rating causes an out-of-service 
order to be issued, an expedited review by the Associate Administrator 
would also be available.

Section 362.108  Administrative Review

    This section would consolidate, clarify, and revise the existing 
procedures in Secs. 385.15 and 385.17 dealing with petitions for review 
of safety ratings. The section would establish a single procedure 
applicable to reviews of proposed safety ratings of unsatisfactory and 
of denials of requests for changes in ratings under Sec. 362.106. 
Petitions for reviews of safety ratings of unsatisfactory under this 
section would be similar to the procedures in the present Sec. 385.15 
applicable to reviews by the Director, Office of Motor Carrier Field 
Operations, in cases where there are factual or procedural disputes to 
be resolved. A motor carrier receiving notice of a proposed safety 
rating of unsatisfactory would still have the option of requesting a 
change in the rating based on corrective actions taken. This section 
would provide a carrier selecting that action with the additional 
opportunity to petition for review if it believes the rating or the 
denial of a change was based on errors of procedure or fact.
    The existing 90-day filing deadline for petitions under this 
section would be reduced to 45 days for consistency and finality. When 
the procedure applies to proposed safety ratings of unsatisfactory, the 
request for review must be submitted during the 45-day period before 
the proposed rating becomes final. This section would maintain the 
current statutory requirement that the FHWA complete the review within 
30 days in cases where the petition is filed by a motor carrier subject 
to the hazardous materials and passenger prohibition in Sec. 362.105.
    The petitioner would be required to submit with its petition all 
arguments and information it desires to be considered on review. In 
most cases, the Director, Office of Field Operations, will complete the 
review and render a decision on the basis of the written submission. 
The Director would have the discretion to request additional 
information or to call a conference. If it is determined that the motor 
carrier operations still fail to meet the safety fitness standard, the 
motor carrier would be provided with written notification that its 
petition has been denied and that the proposed safety rating of 
unsatisfactory is final. Except as provided below, the decision of the 
Director, Office of Motor Carrier Field Operations, would become the 
final agency action. Because the unsatisfactory rating generates an 
out-of-service order for a passenger or hazardous materials carrier, 
such motor carrier would have the right to an expedited administrative 
review of this decision by the Associate Administrator for Motor 
Carriers in accordance with 5 U.S.C. 554 and corresponding procedures 
are proposed in part 363. This is a new review procedure proposed to 
better guarantee due process of law. The expedited review, if timely 
requested, would be provided within 10 days from the date of the notice 
of denial of the initial review petition. The Associate Administrator 
may refer the petition for review for a hearing before an Administrator 
Law Judge (ALJ). The Associate Administrator or ALJ may stay any safety 
rating during the pendency of the expedited administrative review.

Section 362.109  Temporary Relief From Rating

    This section would provide a means to grant temporary relief to a 
motor carrier from dire consequences of an unsatisfactory rating upon a 
showing of willingness to adopt necessary changes in safety management 
polices and practices and to make good faith efforts to improve safety 
performance. The temporary relief would be entirely discretionary on 
the part of the Regional Director, in the case of a petition for change 
in the rating, and the Director of the Office of Field Operations, in 
the case of an initial administrative review. The exercise of 
discretion by these officials is not reviewable as every carrier 
affected by a proposed rating or final rating is provided with ample 
opportunity for administrative review in this Part. This provision 
merely institutionalizes a practice that has been growing in the recent 
past whereby a rating is ``conditionally rescinded,'' to allow a motor 
carrier to demonstrate its improved practices in order to earn a better 
rating. If a motor carrier is forced to cease operating because of an 
unsatisfactory rating, it presumably would be unable to gather any 
experience with improved systems that would convince a reviewer that it 
had indeed committed itself to safety compliance. The proposed 
procedure would require the motor carrier to operate under a consent 
order for a period not to exceed 60 days at the conclusion of which a 
final rating would be assigned.

Section 362.110  Safety Fitness Information

    This section would incorporate the requirements of the current 
Sec. 385.19. The section has been clarified to make clear that the 
information would also be made available to State agencies.

Part 363: Enforcement Proceedings

    The goal of this proposal is to improve the current rules of 
procedure for motor carrier enforcement proceedings. Mindful that this 
must also have been the goal each of the numerous times the rules have 
been amended since their inception in 1969, the task has been 
approached deliberately. To open the process to new ideas, various 
external sources have been consulted, notably the Model Adjudication 
Rules of the Administrative Conference of the United States (December 
1993) and various procedural rules of other Federal agencies. On the 
other hand, in recognition of the importance of the historical context 
of the rules, the predecessors of the current rules, and their 
extensive amendments, were reviewed in hopes of identifying 
shortcomings and determining the underlying rationale for certain 
provisions which may now seem unnecessary, unclear, or unavailing.
    This review reveals that even the first incarnation of motor 
carrier procedural rules by the FHWA, spare though they may have been, 
were not created in a vacuum, but were largely based on practices and 
procedures of the Interstate Commerce Commission from whence the FHWA 
inherited its motor carrier safety functions. Each subsequent amendment 
was believed to be necessary to address programmatic or statutory 
changes or to increase efficiency and fairness. And each amendment or 
wholesale revision was built on the foundation of previous rules. This 
effort is no different, notwithstanding the recourse to model rules.
    Because of the importance of past practice in understanding both 
the current system and needed changes, and because such a history has 
not been compiled elsewhere, a fairly extensive examination of previous 
rules is offered.

[[Page 18873]]

The proposed rules will then be explained in this context.

Background

    The current rules are the legacy of two distinct strains of 
administrative procedures of the ICC. Until 1966, the ICC had the sole 
responsibility on the Federal level for regulating motor carrier 
safety. In addition to its pervasive regulation of interstate routes, 
rates and services through a comprehensive system of certificates of 
authority to operate, the ICC also established standards for the safety 
of operation of motor carriers. Interstate Commerce Act, sec. 104, 24 
Stat. 379, (1887); added ch. 498, 49 Stat. 546 (1935). Most of the 
safety standards were enforced through a rather onerous process 
involving numerous formal steps--opening an investigation, 
investigation, record production and depositions, proceedings before 
the full Commission, compliance orders, and, if it came to that, the 
withdrawal of operating authority.
    In addition, the ICC had limited authority under section 222(h) of 
the Interstate Commerce Act to levy civil, monetary penalties against 
carriers for failure to keep records, file reports, or respond to 
questions posed by the ICC, so-called recordkeeping violations. Acts of 
fraud, misrepresentation, false statements, and intentional violations 
of nonrecordkeeping requirements in the FMCSRs were punishable solely 
as criminal offenses in Federal court, or through the formal process 
relating to operating authority. The section 222(h) recordkeeping 
violations subject to monetary penalties were enforced by the ICC in 
civil actions in the United States District Courts in the event 
informal administrative procedures to resolve such actions were 
unsuccessful.
    The two separate enforcement tracks were carried over to the FHWA 
after the ICC's safety functions were transferred to DOT. In 1969, the 
FHWA issued rules of practice for motor carrier proceedings which 
crystallized the dichotomy. 34 FR 936 (January 22, 1969). Part 385 of 
title 49 CFR was entitled ``Collection and Compromise of Claims for 
Forfeiture under Section 222(h) of the Interstate Commerce Act.'' Part 
386 provided ``The Rules of Practice for Motor Carrier Safety 
Proceedings under section 204(c) of the Interstate Commerce Act.''
    Part 385 was very brief, providing requirements for claim notices 
and settlement agreements. Respondents were instructed that they should 
respond to the claim and should state whether they wished to discuss 
payment. A response was not mandatory. Section 222(h) claims that did 
not result in a settlement or to which there was no response were 
enforced through litigation in U.S. District Court. Mirroring the ICC 
situation, no administrative procedure was provided to resolve the 
claims.
    As the FHWA's version of the ICC's formal process, part 386 was 
considerably more involved than part 385 and established the framework 
for the current rules of procedures.
    All proceedings under part 386 alleging safety violations began 
with issuance of a notice of investigation (NOI) to a motor carrier, a 
procedural relic of the cumbersome ICC process. Under 49 U.S.C. 506, an 
order to compel compliance could not be issued without an NOI and an 
``opportunity for a proceeding.'' The Federal Highway Administrator 
assigned to a hearing examiner all NOIs properly contested by the 
carrier in the form provided in the rule. After a hearing, the hearing 
examiner issued an order disposing of the proceedings, which was 
reviewable by the Administrator on his/her own motion or that of a 
party. The proceedings could also be disposed of by issuance of a 
consent order pursuant to the agreement of the parties. Improperly 
contested or unanswered NOIs could result in unilateral issuance of a 
final order by the Administrator. For the most part, the orders 
directed the carrier to comply with the safety regulations it was 
already duty bound to follow.
    For enforcement of orders against regulated carriers, the FHWA had 
to petition the ICC to open its own investigation into the carrier's 
operating authority, thus bringing the matter back to that cumbersome 
process. Moreover, a revocation proceeding by the ICC would generally 
not be commenced without a showing that an FHWA order had been 
violated.
    In 1977, the FHWA made the first extensive revisions to these 
procedural rules. 42 FR 18076 (April 5, 1977). Part 385 was repealed 
and its settlement procedures incorporated into part 386. The 
respondent's statement of desire to discuss payment of the amount of 
the claim became mandatory and an occasional source of confusion or, at 
least, an excuse not to file a proper response. It is not difficult to 
see that a statement expressing a willingness to settle could be seen 
by the uninitiated as a quasi admission of culpability at odds with a 
statement contesting the allegations of the claim. Some respondents 
merely stated they wished to discuss settlement and failed to file a 
reply consistent with the rules, thereby risking waiver of the right to 
contest the claim, waiver of the right to a hearing, or worse, default. 
This situation was exacerbated by regulatory changes in action taken by 
the FHWA upon a failure to reply.
    In the interest of uniformity, the scope of Part 386 was expanded 
in 1977 to include monetary penalty actions arising under section 
222(h) of the ICC Act (formerly processed under part 385) and the HMTA 
and to include driver qualification determinations. Unfortunately for 
uniformity, the standards for these proceedings varied in particulars. 
For example, the commencement of proceedings was trifurcated into 
issuances of claim letters for civil penalties, letters of 
disqualification or determinations for driver qualifications, and NOIs 
for violations of other safety rules. Significantly, monetary penalty 
assessments were now, for the first time, subject to an extensive 
administrative process.
    In terms of procedures, no longer would all properly contested 
matters result in a hearing. Instead, ``to expedite the decisionmaking 
process and to reduce the number of unnecessary hearings,'' the 
Associate Administrator (AA) for Safety, rather than the Federal 
Highway Administrator, would only assign matters with material factual 
issues in dispute to a hearing officer. If no hearing was requested in 
the reply, the AA could simply issue a final order based on the 
evidence and arguments submitted.
    When no reply was received at all, the outcome varied by the type 
of proceeding. If a driver failed to reply in accordance with the rules 
to a letter or determination of disqualification in a driver 
qualification proceeding, the letter or determination automatically 
became the final order of the Associate Administrator 30 days later. In 
contrast, no such automatic procedure existed when no reply at all was 
made to claim letters or NOIs. The AA still had to issue a final order, 
although it could be done sua sponte.
    Also added to part 386 were pre-trial procedures on discovery and 
motion practice designed to expedite the proceedings and clarify 
procedural points which had arisen under the 1969 rules.
    Minor revisions were made to the rules later in 1977, based on 
comments received from the public and six months of practice. 42 FR 
53965 (October 4, 1977). Most significant among the changes, a motion 
by a party was required before the AA could issue a final order where 
no reply was made to the NOI or claim letter. In addition, discovery 
and amendment of pleadings were expanded to situations in which a

[[Page 18874]]

matter was not assigned for a hearing but decided by the AA based on 
the pleadings. Finally, for matters under the HMTA only, an option was 
added whereby a respondent could reply to a claim or NOI with a notice 
to submit evidence, rather than request a hearing, and then submit the 
evidence at a later date.
    In 1985, the rules were again comprehensively amended. 50 FR 40304 
(October 2, 1985). The precipitating factors were again statutory 
changes and internal reorganization. Pursuant to the Motor Carrier 
Safety Act of 1984 and amendments to the HMTA, the rule contained 
provisions for the FHWA to seek to enjoin in U.S. District Court 
carrier actions in violation of the FMCSRs and HMRs and to order out-
of-service all carrier operations constituting an imminent hazard to 
safety.
    A section on judicial appeal of final orders was also added to the 
rule consistent with the 1984 Act. This became important because the 
1984 Act authorized the FHWA, for the first time, to assess civil, 
monetary penalties for non-recordkeeping violations of the FMCSRs. 
Prior to the 1984 Act, monetary penalties could only be assessed for 
violations of the HMRs and recordkeeping requirements in section 222(h) 
of the ICC Act and the FMCSR. The 1984 Act expressly made all penalty 
assessments subject to the notice and hearing requirements of the 
Administrative Procedure Act. Thus, the reach and depth of the FHWA's 
civil penalty authority was greatly expanded, and the procedural rules 
were amended to reflect this new authority and responsibility.
    In terms of procedure, however, the basic trichotomy of the 1977 
rules was continued--driver qualification, civil penalty, and NOI 
proceedings. Despite the sudden predominance of civil penalties in 
terms of the safety program generally, and, specifically, of the 
relative number of administrative proceedings, the civil penalty 
procedures were little changed from the 1977 rules, which, in turn, 
were largely based on the old ICC NOI procedures. Although these 
procedures met the requirement in the 1984 Act to comply with the 
Administrative Procedure Act, they perhaps did not offer the clearest 
and most efficient method of resolving the new influx of cases.
    The civil penalty procedures were amended, however, in several 
minor ways relevant to this discussion. First, similar to the earlier 
provisions for driver qualification proceedings, the failure to reply 
to a claim letter automatically resulted in the letter becoming the 
final order of the Associate Administrator for the newly organized 
Office of Motor Carriers (AA) without a separate order having to be 
issued upon the motion of a party. Unlike the qualification section, 
however, this seemingly applied only to a complete failure to reply, 
and not merely a failure to reply in the form provided in the rule. For 
NOIs, nothing changed in this regard. Final orders continued to be 
issued by the AA only upon motion of a party. Second, the procedure for 
notice of intent to submit evidence without a hearing was extended from 
hazardous materials cases to all civil penalty proceedings. Third, 
Administrative Law Judges formally replaced hearing officers as 
arbiters, although this had been the practice for some time. Fourth, 
the discovery and hearing procedure sections were made more detailed to 
closer approximate the Federal Rules of Civil Procedure (title 28, 
U.S.C.).
    The important results of the 1985 amendments were the expansion of 
civil penalty authority and the addition of out-of-service order 
authority. These two developments further marginalized the venerable 
NOI process. In practice, civil penalty proceedings came to greatly 
overshadow the cumbersome NOI proceedings. Instead of having to endure 
a long administrative process possibly resulting in an order to comply 
with regulations with which a carrier was already bound to comply, and 
which could only be enforced through intervention in ICC proceedings, 
another long process, direct administrative action could be taken 
against the carrier in the form of financial penalty. If a carrier 
persisted in a state of noncompliance, it could now be directly ordered 
out of service as an imminent hazard. An NOI-based order to comply with 
the regulations paled in comparison with these new powers.
    The next revision of the rules made only technical amendments. 53 
FR 2035 (January 26, 1988). Added to the authorities and scope sections 
in part 386 were references to the CMVSA of 1986 (49 U.S.C. Chapter 
313), in order to implement the CMVSA-based civil and criminal 
penalties added to 49 U.S.C. 521(b). The Administrative Law Judge's 
power to dismiss matters referred by the AA for a hearing was made 
explicit. And the rather detailed delegations of authority from the 
Administrator to various positions within the Office of Motor Carriers 
were removed from the regulations and placed in the FHWA Organization 
Manual,\1\ consistent with an agency-wide trend to maximize 
flexibility.
---------------------------------------------------------------------------

    \1\ FHWA Orders 1-1, Part I, Chapter 7, Motor Carrier Safety, is 
available for inspection and copying as provided at 49 CFR part 7, 
appendix D.
---------------------------------------------------------------------------

    A small change was made to the rules on December 19, 1988 (53 FR 
50961). The FHWA clarified that an out-of-service order designed to 
eliminate an imminent hazard applied immediately, pending an 
opportunity for review within 10 days.
    More extensive amendments were made in 1991. 56 FR 10183 (March 11, 
1991); NPRM, 55 FR 11224 (March 27, 1990). A new subpart G spelled out 
the statutory civil penalty assessment criteria and specified the four 
types of FHWA orders the violation of which could lead to additional 
penalties. The four types of orders were notice to abate, notice to 
post, final order, and out-of-service order. New appendix A to part 386 
established a penalty schedule ranging from $500 to $10,000 for 
violations of such orders. These amendments implemented a provision of 
the 1984 Act (49 U.S.C. 521(b)(7)).
    Another 1991 amendment added a ``new'' order to the AA's 
enforcement arsenal--the compliance order, last heard from in ICC 
proceedings predating the formation of the DOT. See Sec. 386.21. The 
compliance order attempted to give meaning to the largely moribund NOI 
process, the procedures for which nevertheless remained in the 
regulations. The compliance order became the name of the final order 
issued by the AA in an NOI proceeding in which a consent order could 
not be achieved. A compliance order could go beyond the NOI in that it 
could direct a carrier to ``take reasonable measures beyond the 
requirements of the regulations, in the time and manner specified, to 
assure future compliance.'' The order warned that failure to take those 
measures would constitute a violation of a final order of the AA, 
subjecting the carrier to the additional penalties of appendix A and an 
out-of-service order if the carrier's operations constituted an 
imminent hazard to safety. In practice, it is not common for a 
compliance order to be issued directing a carrier to take compliance 
measures beyond those required in the safety regulations, but such 
measures may be dictated by the circumstances. The rule allows 
challenges to the reasonableness of these measures. In order to 
expedite the use of NOIs, the NOI and civil penalty procedures were 
merged into Sec. 386.14, though the differences in default standards, 
discussed above, remained. The combination of NOIs and civil penalty

[[Page 18875]]

claims into a single administrative proceeding has been permitted since 
the 1985 rules.
    In practice, it is common for NOIs and notices of claims to be both 
combined or issued separately at the same time in parallel proceedings, 
on those occasions when NOIs are used. The primary use of the NOI is as 
a warning that further violations of the same regulations could 
constitute an imminent hazard and lead to an out-of-service order, as 
provided in Sec. 386.21(c).
    The 1991 rulemaking made two further amendments worth mentioning. 
First, settlement agreements were amended to require a statement that 
failure to pay in accordance with the agreement resulted in the 
original claim amount becoming due and payable immediately. Second, a 
provision was added to the out-of-service procedure allowing a vehicle 
in transit at the time it is ordered out of service to proceed to its 
immediate destination. Both of these concepts are incorporated in the 
proposed rules.

Section-by-Section Analysis

Subpart A--Civil Penalty Proceedings

Section 363.101  Nature of Proceeding

    Civil penalty proceedings would be defined broadly as 
administrative proceedings in which the FHWA seeks payment of a fine or 
orders a motor carrier, individual, or other regulated entity, the 
``respondent,'' to take some action. Civil penalty proceedings are 
based on violations of the FMCSRs or HMRs, which must be established 
administratively by final order of the agency. Civil penalty 
proceedings would include all motor carrier safety, hazardous materials 
and intermodal container administrative enforcement proceedings by the 
FHWA, other than those involving driver qualification and safety 
ratings. For example, proceedings resulting from issuance of an out-of-
service order are civil penalty proceedings.
    Driver qualification procedures are proposed in subpart B of this 
part. Safety ratings are issued and may generally be contested in 
accordance with proposed part 302. However, when the safety rating has 
the effect of placing a carrier out of service, the carrier is offered 
the same opportunity for an expedited hearing as is available to a 
carrier subject to a direct out-of-service order.
    The notice of investigation (NOI) procedure, the resurfaced, ICC-
originated process which allows for a finding of violations but 
provides no penalties, would finally be laid to rest. Any orders, 
findings, notices, or warnings the NOI procedure may have allowed would 
be incorporated into the civil penalty process. The use of one set of 
procedures for all claims arising from a single set of violations 
should result in clearer standards and greater efficiency, and would 
eliminate parallel proceedings arising from an NOI and a monetary claim 
based on a single set of violations.
    The procedures are designed to comport with the Administrative 
Procedure Act and principles of due process. The proposed rules ensure 
that persons are adequately notified of the violations they are alleged 
to have committed and of their right to the opportunity to be heard by 
the agency, and, in the appropriate circumstances, to a hearing before 
an Administrative Law Judge.

Section 363.102  Notice of Violation (Complaint)

    A Notice of Violation setting forth the allegations of the claim of 
the agency against the respondent would begin a proceeding. Paragraphs 
(a) and (b) propose the minimum information to be included in the 
notice. The only item which is not a restatement of part 386 is the 
reply form at paragraph (a)(5), which will be discussed below. To 
ensure that respondents are notified of the agency's claim, paragraph 
(c) would specify as the form of service to be used in issuing the 
notice one which utilizes a return receipt. This requirement is 
consistent with current practice.

Section 363.103  Form Reply to Notice of Violation

    It is proposed to include with each notice of violation a reply 
form on which the respondent is asked to check off its intended 
response to the claim. The respondent may check only one option on the 
reply form. The choices are to: (1) Pay the penalty, (2) discuss 
settlement, and (3) contest the claim. If (2) is chosen, respondent 
retains the right to contest the claim or pay the penalty at a later 
date, as detailed below. For the first time, replies may be sent by 
telefax, although respondent retains the burden to prove it has made a 
timely reply. If no reply form (or payment or answer to the claim) is 
served on the agency within 15 days, the notice of violation becomes 
the final order, the violations are established as alleged, and the 
respondent waives the right to contest the claim.
    The intent of these provisions is to increase the efficiency of the 
notice of claim process currently provided in part 386. Providing one 
or two time periods in which to respond to claims and disqualification 
determinations would be simpler than the 3 or 4 periods currently 
provided in part 386. Though it adds a step, the reply form is designed 
to provide a clear starting point to the process and to obtain a clear 
and simple statement from the respondent of its intentions with regard 
to the claim. Cases involving respondents that do not reply can be 
processed expeditiously.
    On the other hand, the reply form would add flexibility. The agency 
can easily amend the claim to reflect any changed circumstances 
discovered as a result of settlement negotiations. Respondents would 
avoid generating perhaps lengthy and involved replies on the record, 
only to resolve the matter later outside formal channels.
    Because of the immediate severity of an out-of-service order, and 
the consequent reduction in the time period to resolve contested 
issues, no reply form is sent along with an out-of-service order. See 
Sec. 363.110.

Section 363.104  Special Procedures for Out-of-Service Orders

    This section is largely a restatement of what presently appears in 
Sec. 386.72(b)(1), but would add a requirement for personal service, a 
reference to the penalty for noncompliance, and a provision for 
expedited adjudication under proposed Sec. 363.110. The authority 
summarily to order a motor carrier to cease all or parts of its 
operations because violations of the FMCS are creating an imminent 
hazard is found at 49 U.S.C. 521(b)(5)(A).

Section 363.105  Payment of the Claim

    This is the first, and obviously simplest, resolution to a notice 
of violation assessing a monetary penalty. Because payment terminates 
the proceeding, it may be made with or without filing the reply form. 
However, if payment is chosen on the reply form, but is not made to the 
agency within the time to reply, the notice becomes the final agency 
order as if the respondent failed to reply. Paragraph (a) would provide 
that payment may be made at any time in the course of the proceeding 
before issuance of a final order. If it takes the form of a settlement 
agreement, however, it must be done in accordance with Sec. 363.106. Of 
course, payment of the monetary claim might not terminate the 
proceeding if some other order is also being sought.
    Paragraph (c) makes it clear that payment of the claim is 
tantamount to a final order finding the facts of the violations as 
alleged in the notice, unless the parties expressly agree in writing to 
treat the violations otherwise. This is important because certain 
future agency enforcement actions may be

[[Page 18876]]

based on, and certain consequences may flow from, prior and continued 
violations of the safety regulations.

Section 363.106  Settlement of Civil Penalty Claims; Generally

    Settlement may occur at any time in the process including after the 
termination of negotiations under Sec. 363.107 and during a hearing. 
Settlement procedures have been a key feature of the FHWA civil penalty 
process since their inception in 1969. Settlement of alleged violations 
before resort to a final formal adjudication is efficient and promotes 
the partnership of the FHWA and its regulated entities directed toward 
safer commercial motor vehicle transportation.
    The content of settlement agreements would not be substantively 
altered from that required in part 386. As civil penalty proceedings 
are not limited in this proposed rule to monetary claims, so may 
settlement agreements resolve the terms of other orders sought against 
respondent by the agency. Thus, the consent order procedure in part 
386, which provided for issuance by the agency of such other orders, 
and which could include settlement agreements resolving monetary claims 
anyway, is no longer necessary.
    It should be noted that settlement agreements will contain a 
finding that certain violations did, in fact, occur. Settlement 
agreements should not be necessary in cases in which full payment of 
the claim is made and no other orders are sought or terms placed on 
respondent. Full payment automatically results in a finding of the 
violations as alleged in the notice.
    Paragraph (d) involves the situation in which partial payment is 
made by a respondent, with or without an accompanying unilateral 
expression of the respondent's intent in offering the payment. The 
FHWA's acceptance of partial payment, as indicated by cashing a check, 
for instance, in no way should be interpreted as settlement of the 
claim or as forgiving the remainder of the claim. All settlement 
agreements must be in the form provided in paragraph (b).
    Paragraph (e) would allow execution of settlement agreement during 
the course of administrative proceedings, upon the consent of parties 
and without the approval of the AA.

Section 363.107  Settlement Negotiations

    In contrast to the general requirements in the preceding section 
applying in all instances of settlements, this section would establish 
procedures when the settlement negotiations option is chosen by the 
respondent on the form reply. Respondents would retain the opportunity 
to convert the proceeding into a contested claim at any point in the 
negotiation process. They could do this by requesting an administrative 
adjudication and filing an answer to the notice of violation. For its 
part, the agency could discontinue negotiations it feels are not 
proving fruitful by sending the respondent a final notice of violation.
    Paragraph (d) proposes a 90-day limit on this initial negotiation 
process. If a settlement agreement is not reached within 90 days, the 
agency may issue a final notice of violation to the respondent. The 
purpose of this provision is to keep the administrative case moving 
toward resolution. As justice delayed is justice denied, so does a 
delayed penalty reduce its effectiveness. Under current practice, some 
cases in which a respondent has indicated a willingness to settle have 
a tendency to languish when agreement cannot be readily reached. This 
provision should help to avoid consequent case backlogs and should 
actually promote settlement as it pushes the case along the track 
toward resolution. In accordance with Sec. 363.106, a settlement may be 
reached at any point in the civil penalty process, including in 
contested claims being administratively adjudicated.
    Paragraph (e) would establish the procedures when a final notice of 
violation is sent to a respondent after negotiations have been 
expressly terminated by one of the parties or 90 days have passed 
without settlement. For flexibility, the final notice may simply 
incorporate the original notice of violation. For efficiency, if the 
negotiations have revealed, for example, that one of the claimed 
violations did not occur, the final notice may be amended deleting that 
charge. The procedures for replying to the final notice similarly would 
incorporate those for immediately contesting the original claim. At 
this point, after negotiations have indicated that the parties cannot 
agree on resolution of the claim and that it is indeed contested, the 
respondent would have no choice but to answer the notice in writing.

Section 363.108  Request for an Administrative Adjudication

    This section proposes procedures for contested claims. The 
procedures would apply when the ``contest the claim'' option is chosen 
on the reply form or when the settlement option is chosen but 
settlement is not reached. A contested claim would be resolved in an 
administrative proceeding adjudicated by a neutral third party provided 
by the agency. Depending on the choice of the respondent and the 
existence of material factual issues in dispute, the third party may be 
the Associate Administrator (AA) or an Administrative Law Judge (ALJ). 
The AA would decide whether or not a case will be referred to an ALJ.
    Paragraph (a) would provide a respondent 28 days from receipt of 
the notice of violation to serve a written answer on the agency 
contesting the claim. If the answer is responding to an original notice 
of violation this means that the respondent would be required to send 
the agency the reply form in 15 days and the written answer within 
another 13 days after that. Of course, respondent may choose to file an 
answer within 15 days of the notice of violation, in which case a reply 
form would be unnecessary. As with the reply form, the answer may be 
served on the agency by telefax.
    The content of the answer in paragraph (c) would be similar to that 
currently required in replies under Part 386. Paragraph (c)(3) would 
clarify that referral to an ALJ may not be available in all instances 
where it is requested, but only where there are factual issues in 
dispute. Part 386 presently states this concept in terms of an oral 
hearing, i.e., an oral hearing is only available for cases with factual 
issues. Questions sometimes arise when contested claims without factual 
issues are decided by the AA without referral to an ALJ, much less an 
oral hearing, even though a hearing was requested. Though 
Sec. 386.16(b) clearly gives the AA this power, as provided by the 1977 
amendments, the section on content of replies does not reflect it. The 
proposed rule clearly states the agency's intent that the opportunity 
for a hearing does not mean that all contested matters are referred to 
an ALJ for a hearing. Finally, consistent with the standard in Part 
386, failure to request referral to an ALJ would result in a waiver of 
the right to opportunity for it.
    The provision in part 386 allowing the respondent to file a notice 
of intent to submit evidence without an oral hearing, with its own 
array of deadlines, would be eliminated as unnecessary. Paragraph 
(c)(3) would simply give the respondent the option of requesting 
referral to an ALJ or not. For tactical or efficiency reasons, a 
respondent may very well wish the AA, instead of an ALJ, to resolve its 
contested claim, even where factual issues are present. (See, however, 
discussion under Sec. 363.109).
    If the respondent fails to answer the claim, paragraph (d) would 
provide that the notice of violation becomes the final agency order in 
the same manner as

[[Page 18877]]

when the reply form was not served on the agency. Moreover, merely 
choosing an administrative adjudication on the reply form without 
filing an answer would also be deemed a failure to answer.
    If the notice is answered, but not in the form provided in this 
section, the respondent may be found in default in the discretion of 
the AA or ALJ. Default would have the same effect as a failure to 
answer. In both situations, the ALJ or AA would issue a final order 
without inquiry as to the charged violations.
    These provisions would clearly assign the power to determine the 
adequacy of the answer in various situations. Findings of default and 
failure to answer, and resulting Final Order finding of the violations 
as alleged, would support any subsequent collection actions taken by 
the agency.

Section 363.109  Procedures in Administrative Adjudications

    All contested claims would be transmitted to the AA to either 
decide or refer to an ALJ for decision. Only the AA could determine 
whether or not there are factual issues in dispute and assign an ALJ to 
resolve a contested claim, unless the AA expressly requests the ALJ to 
make that determination. Assigning to an ALJ only those cases with 
apparent or potential factual issues has been a feature of the rules 
since 1977, and has been upheld in litigation on numerous occasions as 
complying both with the Administrative Procedure Act and due process 
principles. Issues of efficiency and adjudicative economy dictate that 
this standard continue in effect.
    The first sentence of subsection (b) proposes that if there are 
facts in dispute and respondent has requested referral, the AA must 
refer the matter to an ALJ. Subsection (c) proposes to provide the AA 
with the discretion to decide the matter in two circumstances: (1) 
Where referral is requested but there are no factual issues, and (2) 
where referral is not requested.
    There may be another situation between these two poles, however. If 
respondent has not requested referral, but the AA nevertheless believes 
referral would be beneficial to resolve a factual or other issue, 
should the AA have such discretion? May respondents be required to 
participate in possibly costly adjudication even though respondent is 
comfortable with potentially ``lesser'' process? The second sentence of 
subsection (b) would allow referral in those instances in the 
discretion of the AA. The FHWA requests comments on this issue.
    Subsections (d) and (e) would accomplish in two short statements 
and one reference what the procedures have attempted over the years to 
do by detail. The Federal Rules of Civil Procedure, the approximation 
of which served as justification for the ever expanding standards in 
part 386 on discovery and motion practice, are incorporated into the 
civil penalty process, thereby eliminating the need for virtually all 
of subpart D to part 386. The AA and ALJ may suspend or adapt the 
Federal rules as appropriate, in conformance with the Administrative 
Procedure Act.
    Subsections (f) and (g) would authorize the ALJ to employ 
appropriate process, including alternative dispute resolution. 
Subsection (h) would set minimal standards for appearance of 
representatives of respondents in administrative proceedings.
    Subsection (i) would provide that the parties in an administrative 
adjudication may withdraw the matter under certain circumstances. 
Withdrawal by a party, or by the consent of the parties, would 
terminate the jurisdiction of the ALJ.

Section 363.110  Expedited Review by Associate Administrator

    This section proposes expedited procedures for administrative 
review of out-of-service orders or unsatisfactory safety ratings after 
review by the Director of the Office of Field Operations. Subsection 
(c) would reduce the time to conduct an entire administrative 
adjudication to 10 days because subsection (b) provides that the out-
of-service order shall remain in effect pending resolution of the 
contested claim. This last provision has been a part of the regulations 
since the 1985 amendments added the out-of-service procedure. The FHWA 
believes that it complies with intent of Congress in the 1984 Act. The 
rest of subsection (b) would restate the ``immediate destination'' 
exception which was added to part 386 in the 1991 amendments. In the 
interest of uniformity, subsection (d) would incorporate the procedures 
in Sec. 363.109.

Sections 363.111 Through 363.116

    With few exceptions, these sections would incorporate the 
provisions of subpart E of part 386, on decisions and appeals, into the 
new rule without substantive change. Section 386.66, which set a one 
year period before considering motions for modification of orders, 
would not be carried over. There would be no minimum time for an order 
to be in effect before it may be rescinded or modified by order of the 
AA or ALJ. Any such motions may be made pursuant to Sec. 363.109(e).
    For the sake of clarity, Sec. 363.114 would add a sentence to what 
is now in Sec. 386.67, liberally interpreting 49 U.S.C. 521(b)(8) to 
allow judicial review for contested claims resulting in a final agency 
order, but not for those claims that are resolved through settlement 
agreement or in which respondent failed to answer or defaulted. The 
statute provides that judicial review is only available after a 
hearing. The FHWA believes its interpretation is appropriate because 
these proposed rules provide for resolution of contested claims in an 
administrative adjudication without a formal reply. Of course, 
ultimately the courts must interpret the statute to determine their 
scope of review.
    The grounds for review of an ALJ's decision by the Associate 
Administrator would be explained in somewhat greater detail in 49 CFR 
363.111(b) than current 49 CFR 386.62.

Subpart B--Driver Qualification Proceedings

Section 363.201  Nature of the Proceeding

    Driver qualification (DQ) proceedings are the means by which the 
agency adjudicates challenges to its determinations concerning a 
driver's qualifications to operate a CMW.

Section 363.202  Commencement of Proceedings

    DQ proceedings would begin with a notice of determination or letter 
of disqualification, which may be sent to a driver unilaterally by the 
agency, in resolution of a conflict of medical evaluations under 
Sec. 363.204 (formerly Sec. 391.47), or to notify the driver of the 
consequences of a conviction for certain driving offenses.

Section 363.203  Answer

    The content of an answer is proposed. A failure to answer would 
result in the notice of determination or letter of disqualification 
becoming the final order of the agency automatically in the same manner 
as a failure to answer a notice of violation in a civil penalty 
proceeding. Thus, the three different standards for failure to reply 
under Part 386 are condensed into one under this proposed rule.

Section 363.204  Special Proceeding for Resolution of Conflicts of 
Medical Evaluation

    This section, because it is entirely procedural in nature, would be 
moved from its present location in Sec. 391.47 and remain relatively 
unchanged. A change is proposed as to the status of drivers

[[Page 18878]]

during the pendency of this special proceeding and is discussed under 
Sec. 363.205, below.

Section 363.205  Driver's Qualification Status Pending Proceedings

    Two different statuses are possible under current provisions. A 
driver is either physically qualified or unqualified. This section 
would clarify the driver's status during proceedings based on the 
circumstances that brought about the proceedings. It would also change 
current Sec. 391.47, which requires that a driver be considered 
unqualified while any conflict of medical opinion is being resolved. 
Although the agency operated in the past on a presumption that, in the 
interest of safety, the driver was unqualified, such a result is not 
required in all cases. It is likely, moreover, that this presumption 
inhibited drivers from seeking resolution through the FHWA, which has 
primary authority to make qualification determinations for drivers in 
interstate commerce.
    After consultations with the Department of Labor and the Equal 
Employment Opportunity Commission, which have responsibilities for 
implementing the anti-discrimination provisions of the Rehabilitation 
Act, 29 U.S.C. 701 et seq., and the Americans with Disabilities Act, 42 
U.S.C. 12101 et seq., respectively, the change in status is being 
proposed. The changes would allow the driver's status, supported by at 
least one medical opinion, to remain qualified during the pendency of 
driver qualification proceedings with respect to the driver's employer 
if the conflict arose during the term of employment. However, if a 
driver involved in a conflict is not currently employed, e.g., an 
applicant, the driver, would be deemed unqualified with respect to a 
potential employer with which the driver's status is in conflict.

Section 363.206  Administrative Adjudication

    The procedures for agency action on answers to notices of 
determination would track those for administrative adjudication of 
contested civil penalty claims. The civil penalty administrative 
procedures would be incorporated by reference.

Subpart C--General Provisions

Section 363.301  Applicability

    These general provisions would apply to this part and part 362 on 
safety ratings.

Section 363.302  Computation of Time

    The time computation standards would be largely unchanged from 
Sec. 386.32 (a) and (b). Those provisions in that section which 
currently allow the addition of five days to specified time periods to 
account for use of the U.S. Postal Service in serving documents, 
Sec. 386.32(c) (1) and (3), would not be carried over to the proposed 
rule. Instead, the proposed rule would provide that service is complete 
upon mailing so that the date of the postmark would control.

Section 363.303  Service

    A general definition of service would be added to the regulations. 
A certificate of service would be required to accompany all documents 
served in an administrative proceeding, except the agency's notice and 
the respondent's form reply, which occur before a matter is contested. 
A service list will be provided in the agency's notice, which will 
establish the persons who must be served with documents. Whereas 
Sec. 386.31 states these certificate and list requirements in terms of 
pleadings and motions, this section would make it clear that service 
requirements apply early in administrative proceedings, before any 
assignment of an ALJ.

Section 363.304  Extension of Time

    This section would be carried over from part 386, with the added 
provision that an extension of time may be effected pursuant to mutual 
consent of the parties.

Section 363.305  Administrative Law Judge

    This section would enumerate the powers of the ALJs, as well as the 
limitations on that power. It would also provide for the 
disqualification of ALJs. The provisions on limitations and 
disqualification are modeled after the procedural regulations of the 
Federal Aviation Administration. See 14 CFR 13.205 (b) and (c).

Section 363.306  Certification of Documents

    This section would provide good faith standards for the filing of 
documents in administrative proceedings. Sanctions are also proposed 
for the ALJ or AA to impose if the standards are not met. This section 
is based on 14 CFR 13.207.

Section 363.307  Interlocutory Appeals

    This section, based on 14 CFR 13.219, would provide standards and 
procedures for interlocutory appeals to the AA of matters before the 
ALJ.

Part 364: Violations, Penalties, and Collections

Background

    Much of the penalty information in this part appears in the U.S. 
Code and, until now, has not appeared in published regulations. One 
exception is appendix A to part 386 on penalties for violations of 
agency notices and orders, which was published in 1991. Other 
exceptions are the driver disqualification periods in 49 CFR 383.51 and 
391.15 and the special penalties for violations of out-of-service 
orders in Sec. 383.53, all of which were required to be published by 
the CMVSA of 1986 and subsequent amendments.

Section-by-Section Analysis

Subpart A--General

Section 364.101  Purpose

    The purpose of this proposed subpart is to inform the public of the 
standards for assessment and collection of penalties for violations of 
the FMCSRs and HMRs.

Section 364.102  Policy

    This section would serve as a general summary of the part. 
Subsection (a) would state the general policy that penalties serve as a 
tool to obtain compliance with the regulations. Generally, the 
enforcement program is but a part, albeit significant, of the mission 
of the Office of Motor Carriers to reduce highway accidents and 
injuries by increasing compliance with safety regulations. Most 
carriers, drivers, and other entities choose to comply with the 
regulations willingly. Various educational and other compliance 
programs are available to assist them. For those carriers who 
intentionally refuse to comply with or carelessly ignore the 
regulations, however, enforcement may become necessary.
    Subsection (b) would list the statutory penalty criteria used by 
the FHWA to assess penalty amounts. These factors would be explained in 
depth in Sec. 364.104. The last sentence would inform respondents that 
information developed in an administrative adjudication may affect the 
amount of penalty ultimately ordered. Subsection (c) would express the 
notion that good faith efforts to achieve compliance will be taken into 
account in assessing penalties or settling claims. Subsection (e) would 
apply concepts of comity and resource allocation in stating that it is 
within the discretion of the agency not to act to enforce violations of 
the safety regulations when another governmental entity has already 
imposed appropriate penalties for the same violations.

[[Page 18879]]

Subpart B--Civil Penalties

Section 364.201  Types of Violation and Maximum Monetary Penalties

    The penalty amounts in this section would be listed by the type of 
violation and would track the structures of the relevant statues.
    Subsection (a) would refer to violations of parts 382 and 390-399 
of the FMCSRs and is based on the penalty structure in 49 U.S.C. 
521(b)(2)(A), part of the 1984 Act. The penalty structure is 
incorporated into the enforcement scheme for violations of Part 382 
drug and alcohol testing requirements in 49 CFR 382.507, as authorized 
by 49 U.S.C. 31306, 31317, and 322(a).
    The statutory description of violation types would be augmented in 
places by language from the legislative history of the 1984 Act, 
especially the description in proposed Sec. 364.201(a)(2) of what 
constitutes a serious pattern of violations. See S. Rep. No. 424, 98th 
Cong., 2d Sess. 10-13 (1984). The definition of a serious pattern would 
be further elucidated by the agency's interpretation. The 
interpretation in Sec. 364.201(a)(1) of a ``knowing'' recordkeeping 
violation as including violations occurring where the means to verify 
the incorrect records existed is based on published decisions of ALJs 
in civil penalty proceedings. See In the Matter of Trinity 
Transportation, Inc., 55 FR 43291 (October 26, 1990); for other 
decisions, see Federal Register notices beginning at 55 FR 43264; 55 FR 
2924 (January 29, 1990); 57 FR 29710 (June 26, 1992); 58 FR 16916 
(March 31, 1993); 58 FR 62450 (November 26, 1993). Various examples of 
types of violations are also proposed in the section.
    Subsection (b) would list violations and amounts pertaining to 
commercial driver's licenses and is based on 49 U.S.C. 521(b)(2)(B).
    Paragraph (1) of subsection (c), on the penalty amount for failing 
to maintain minimum levels of financial responsibility, is based on 49 
U.S.C. 31138-31139. Paragraph (2) would state the rebuttable 
presumption that lack of proof of insurance indicates lack of 
insurance. It also states the current enforcement practice which allows 
rebuttal of that presumption upon presentation of proof within 10 days. 
Though the statute makes no distinction in penalties, allowing a 
$10,000 maximum for all violations, paragraph (3) would provide that 
mere failure to present proof of insurance, where the insurance 
actually exists, is a separate recordkeeping offense, subject to a much 
smaller penalty than the failure to have the insurance.
    Proposed subsection (d), on violations of the HMRs, is based on 49 
U.S.C. 5123. Subsection (e) would represent the current appendix A to 
part 386, on violations of notices and orders.

Section 364.202  Civil Penalty Assessment Factors

    This section would further explain the penalty assessment criteria 
listed in Sec. 364.102(b). The criteria are statutory and found in 49 
U.S.C. 5123(c) and 521(b)(2)(C). The criteria would be categorized as 
involving either the violation or the violator. The proposed 
explanation of each factor is based on the agency's reasonable 
interpretation of the statute in light of current agency practice. 
Particular attention should be paid to the factor proposed in paragraph 
(2) of subsection (b), history of prior offenses, which may be used by 
the agency to determine if a carrier's operations constitute an 
imminent hazard to safety subject to an out-of-service order. Proposed 
subsection (c) is a reminder that the application of the factors in a 
particular case may be used in a decision to pursue means of 
enforcement other than monetary penalties.

Subpart C--Criminal Penalties and Other Sanctions

Section 364.301  Criminal Penalties

    Criminal penalties are rarely pursued by the Federal government of 
violations of commercial motor vehicle safety regulations. Since 
passage of the 1984 Act, the object of the great majority of safety 
enforcement cases has been compliance with the regulations through the 
assessment of monetary penalties. Other civil penalties, such as out-
of-service orders, have also gained in importance since 1984. The 
commercial motor vehicle safety program is administrative in the first 
instance. Generally, commercial motor vehicle transportation is a 
highly regulated industry, with safety as an important part of the 
overall regulatory scheme. International Brotherhood of Teamsters v. 
U.S. DOT, 932 F.2d 1292, 1300 (9th Cir. 1991). The FHWA's regulatory 
program is not converted into a criminal law enforcement scheme merely 
because the government also retains certain parallel criminal penalty 
authority.
    The advantage to this structure is that the agency can take direct 
administrative action against violators, when necessary, supported by 
the authority to enforce agency orders in court. Before the 1984 Act, 
the agency had only limited civil and criminal penalty authority which 
could not be enforced directly by the agency in Federal court. In 
practice, these cases generally did not receive very high priority in 
the hierarchy of demands placed upon many United States Attorneys and 
the courts. This regrettable situation was largely ameliorated with the 
expanded civil penalty authority of the 1984 Act. This section would 
serve as notice, however, that the criminal penalty authority still 
exists. In fact it was enhanced in the 1984 Act. Subsection (e) would 
notify the public that willful violations may be referred to the 
Department of Justice for possible criminal enforcement.

Section 364.302  Injunctions

    This proposed section is intended to notify the public of the 
authority of the FHWA to bring civil actions in U.S. District Court to 
enforce many of its safety regulations and orders, and, in the case of 
the transportation of hazardous materials, to eliminate an imminent 
hazard to safety. It is based on 49 U.S.C. 507 and 5122. In practice, 
the form of relief sought is usually injunctive, typically an order to 
a motor carrier to cease operations, although the statutes allow all 
appropriate or necessary relief, including punitive damages.
    It is important to note that the regulations and orders which may 
be enforced in this way are somewhat limited, and do not include all of 
the safety regulations which have been discussed in this document. 
Hazardous materials regulations and orders may be enforced, and 
imminent hazards eliminated, pursuant to 49 U.S.C. 5122. For most, but 
not all, CMV safety violations not involving hazardous materials, 49 
U.S.C. 507 authorizes enforcement actions. But 49 U.S.C. 507 
specifically excepts violations of the financial responsibility 
requirements for motor carriers, found in 49 U.S.C. 31138 and 31139, 
from the authority to enforce directly through civil action. This is 
unlike the statutory section authorizing the use of administrative 
powers (49 U.S.C. 31133), which contains no such exclusion and thus 
does apply to enforcement of financial responsibility requirements.
    Neither chapter 313, on the CDL program, nor chapter 59, on 
Intermodal Safe Container Transportation, contain any express 
provisions for injunctive relief, nor are those chapters mentioned at 
all in 49 U.S.C. 507. Therefore, those chapters are not included in 
this section articulating the statutory authority for injunctive 
relief.
    Finally, the authority to seek an injunction directly in court (49 
U.S.C. 507) should be distinguished from the

[[Page 18880]]

authority to administratively order a vehicle, employee, or employer to 
cease operations which pose an imminent hazard to safety (49 U.S.C. 
521(b)(5)(A)). The latter process contemplates an administrative 
proceeding before any attempts at enforcement in court. This ``out-of-
service order'' procedure is discussed in subsections (c) and (d), and 
may be used to enforce CDL and intermodal container violations.

Section 364.303  Driver Disqualifications

    This section would be a restatement of disqualification periods 
applicable to drivers who commit certain violations. These 
disqualification sanctions also appear in Secs. 383.51 and 391.15. 
Drivers are also unqualified for any period in which they fail to meet 
the qualification requirements of part 391.

Subpart D--Monetary Penalty Collections

Section 364.401  Payment

    Payment is demanded upon issuance of a final order imposing a 
monetary penalty and generally due and payable within 30 days 
thereafter. Unless judicial review is sought, the penalty amount is 
subject to the accrual of interest after the date specified in the 
final order.

Section 364.402  Collections

    This section would provide that monies due and payable will be 
collected pursuant to the Federal debt collection regulations. If 
administrative actions fail to result in payment, the matter will be 
referred to the Department of Justice for collection in a civil action 
filed in U.S. District Court. 49 U.S.C. 521(b)(4), 5123(d), 
31138(d)(4), 31139(f)(4).

Removal of Parts 385 and 386

    Because this rulemaking is a comprehensive revision of safety 
ratings and enforcement case procedures, it is proposed to remove and 
reserve parts 385 and 386 from the Code of Federal Regulations.

Removal and Reservation of Section 391.47

    Because the procedure for resolution of medical conflicts would be 
revised and relocated in subpart B of part 303, it is proposed to 
remove and reserve Sec. 391.47 of 49 CFR part 391.

Rulemaking Analyses and Notices

Executive Order 12866 (Federal Regulation) and DOT Regulatory Policies 
and Procedures

    FHWA has determined that this action is not a significant 
regulatory action within the meaning of Executive Order 12866 or 
significant within the meaning of Department of Transportation 
regulatory policies and procedures. The proposals contained in this 
document would not result in an annual effect on the economy of $100 
million or more, or lead to a major increase in costs or prices, or 
have significant adverse effects on the United States economy. This 
proposal would augment, replace or amend existing procedures and 
practices. Any economic consequences flowing from the procedures in the 
proposal are primarily mandated by statute. A regulatory evaluation is 
not required because of the ministerial nature of this action.

Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.), the agency has evaluated the effects of this NPRM on small 
entities. No economic impacts of this rulemaking are foreseen as the 
rule would impose no additional substantive burdens that are not 
already required by the regulations to which these procedural rules 
would serve as the adjective law. Therefore, the FHWA certifies that 
this proposed rule would not have a significant economic impact on a 
substantial number of small entities.

Executive Order 12612 (Federalism Assessment)

    This action has been analyzed in accordance with the principles and 
criteria contained in Executive Order 12612. The rules proposed herein 
in no way preempt State authority or jurisdiction, nor do they 
establish any conflicts with existing State role in the regulation and 
enforcement of commercial motor vehicle safety. It has therefore been 
determined that the NPRM does not have sufficient federalism 
implications to warrant the preparation of a federalism assessment.

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 of Federal programs and 
activities apply to this program.

Paperwork Reduction Act

    This proposed rule does not contain a collection of information 
requirement for purposes of the Paperwork Reduction Act of 1980. 44 
U.S.C. 3501 et seq.

National Environmental Policy Act

    The agency has analyzed this action for purposes of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and has 
determined that the proposed rule would not have any effect on 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 Parts 361, 362, 363, 364, 385, 386, and 391

    Administrative procedures, Commercial motor vehicle safety, 
Highways and roads, Highway safety, Motor carriers.

    Issued on: April 18, 1996.
Rodney E. Slater,
Federal Highway Administrator.
    In consideration of the foregoing, the FHWA proposes to amend title 
49, CFR, subtitle B, chapter III, by removing and reserving parts 385 
and 386, and by adding parts 361, 362, 363, and 364 as set forth below:
    1. Chapter III is amended by adding parts 361, 362, 363, and 364 to 
read as follows:

PART 361--ADMINISTRATIVE ENFORCEMENT

Sec.
361.101  Purpose.
361.102  Authority and delegation.
361.103  Inspection and investigation.
361.104  Definitions.
361.105  Employer obligations.
361.106  Vehicle/driver inspection.
361.107  Complaints.
361.108  Administrative subpoenas.
361.109  Depositions and production of records.

    Authority: 49 U.S.C. 104, 307, chapters 5, 51, 59, 311, 313, and 
315.


Sec. 361.101  Purpose.

    This part:
    (a) Restates the authority of the Department of Transportation 
(DOT) to regulate and investigate persons, property, equipment, and 
records relating to commercial motor vehicle transportation, intermodal 
safe container transportation, and the highway transportation of 
hazardous materials;

[[Page 18881]]

    (b) Describes certain obligations and rights of motor carriers and 
other entities subject to DOT regulations; and
    (c) Identifies the DOT officials authorized to enforce motor 
carrier and hazardous materials regulations.


Sec. 361.102  Authority and delegation.

    (a) The authority of the Secretary of Transportation to regulate 
and investigate commercial motor vehicle safety, including motor 
carriers, commercial motor vehicles and drivers, and the highway 
transportation of hazardous materials, is codified in 49 U.S.C. 
Chapters 5, 51, 59, 311, 313, and 315, and 42 U.S.C. 4917. In carrying 
out the provisions of these chapters, the Secretary may conduct 
inspections and investigations, compile statistics, make reports, issue 
subpoenas, require the production of records and property, take 
depositions, hold hearings, prescribe recordkeeping and reporting 
requirements, conduct or make contracts for studies, development, 
testing evaluation and training, and perform other acts the Secretary 
considers appropriate.
    (b) The authority of the Secretary listed in paragraph (a) of this 
section has been delegated to the Federal Highway Administrator (49 
U.S.C. 104(c); 49 CFR 1.48), and is codified in 49 CFR part 325 (Noise 
Control), the Federal Motor Carrier Safety Regulations (FMCSRs) (49 CFR 
Parts 350-399) and relevant portions of the Hazardous Materials 
Regulations (HMRs) (primarily 49 CFR Parts 171-173, 177-178, and 180). 
The Federal Highway Administrator has delegated the authority to 
enforce the FMCSRs and the HMRs to the Associate Administrator for 
Motor Carriers.
    (c) The Associate Administrator for Motor Carriers has retained the 
authority to approve operating procedures for investigations under this 
part, including inspections, and has delegated to subordinate managers, 
supervisors, and field personnel, hereinafter ``special agents,'' the 
authority to perform such investigations.
    (d) The Administrator may delegate to a State which is receiving a 
grant under 49 U.S.C. 31102 such functions respecting the enforcement 
(including investigations) of the provisions of this subchapter and 
regulations issued herein as the Administrator determines appropriate. 
Nothing in this part shall preempt the authority of any State to 
conduct investigations, initiate enforcement proceedings, or otherwise 
implement applicable provisions of State law with respect to motor 
carrier safety.


Sec. 361.103  Inspection and investigation.

    The FHWA may begin an investigation on its own initiative or on a 
complaint.
    (a) Upon a display of official DOT credentials, special agents may 
enter without delay at reasonable times any place of business, 
property, equipment, or commercial motor vehicle of a person subject to 
the provisions of 49 U.S.C. Chapters 5, 51, 59, 311, 313, and 315, and 
42 U.S.C. 4917. Special agents may take the following actions:
    (1) Inspect the equipment and property of a motor carrier or other 
person on the premises of the motor carrier, or the equipment of the 
motor carrier at any other location, and inspect any commercial motor 
vehicle of the motor carrier whether or not in operation; and
    (2) Inspect and copy any record of--
    (i) A carrier, lessor, association, or other person subject to the 
provisions of 49 U.S.C. Chapters 5, 51, 59, 311, 313, and 315, and 42 
U.S.C. 4917; and
    (ii) A person controlling, controlled by, or under common control 
with a carrier, if the agent considers inspection relevant to that 
person's relation to, or transaction with, that carrier.
    (3) Inspect and copy records, property, and equipment related to 
manufacturing, fabricating, marking, maintaining, reconditioning, 
repairing, testing, or distributing a package or a container for use by 
a person transporting hazardous material by commercial motor vehicle, 
and to the highway transportation of hazardous materials.
    (b) Special agents may inspect and copy any record related to an 
investigation, whether or not it is required to be maintained by 
Federal Highway Administration (FHWA) regulations or orders. Special 
agents may ask any employer, owner, operator, agent, employee, or other 
person for information necessary to carry out their statutory and 
regulatory functions. Special agents shall offer the employer or other 
person subject to the investigation a right of accompaniment during an 
inspection and shall notify the person of the general purpose for which 
the information is sought.
    (c) Reasonable times for inspections are the regular working hours 
of the motor carrier or other person, or other times agreed to by the 
carrier or other person, required by exigent circumstances, or 
authorized by any court of the United States. If the person operates 
twenty-four hours per day, reasonable time means whenever authorized 
agents can obtain access to records necessary to conduct an inspection, 
and a representative of the person can exercise the right of 
accompaniment.
    (d) The right of a special agent to enter upon the premises of any 
person, inspect vehicles, examine records, or interview any person 
shall not imply or be conditioned upon a waiver of any cause of action, 
claim, order or penalty.
    (e) The Associate Administrator may require a motor carrier to file 
with the FHWA a copy of any lease agreement or other business 
arrangement that is related to transportation safety.
    (f) Information received in an investigation, including the 
identity of the person investigated and any other person who provides 
information during the investigation, may be kept confidential under 
the investigatory file exception, or other appropriate exception, to 
the public disclosure requirements of 5 U.S.C. 552.


Sec. 361.104  Definitions.

    Words or phrases defined in 49 CFR 383.5 and 390.5 of this 
subchapter apply in parts 361-364. In addition--
    Abate or abatement means to discontinue regulatory violations by 
refraining from or taking actions, identified in a notice, to correct 
noncompliance.
    Administrative law judge means an administrative law judge 
appointed pursuant to the provisions of 5 U.S.C. 3105.
    Associate Administrator means the Associate Administrator for Motor 
Carriers or an authorized delegate of that official.
    Federal Motor Carrier Safety Regulations (FMCSRs) means safety 
regulations issued by the Federal Highway Administration under the 
authority provided in 49 U.S.C. 104(c) or delegated by the Secretary of 
Transportation in 49 CFR 1.48, and set forth in subchapter B of this 
chapter.
    Hazardous Materials Regulations (HMR) means safety regulations 
issued by the Research and Special Programs Administration under 
authority delegated by the Secretary of Transportation in 49 CFR 1.53, 
and set forth in subchapter C of chapter I of this title.
    Respondent means a party against whom relief is sought or claim is 
made.
    Special agent means an individual employed by the Federal Highway 
Administration and empowered by the Secretary through delegations of 
authority to perform the activities referred to in Sec. 361.103.


Sec. 361.105  Employer obligations.

    (a) An employer, employee, and other person shall comply with 
applicable commercial motor vehicle safety regulations.

[[Page 18882]]

    (b) A violator shall post all notices of violation which have 
become final, as required by any notice issued by a special agent. Such 
notices shall be posted by the employer in each motor carrier's places 
of employment in a conspicuous place or places where notices to 
employees are customarily posted. Each employer shall insure that such 
notices are not altered, defaced, or covered by other materials.
    (c) All regulations on commercial motor vehicle safety and 
hazardous materials safety are published in the Federal Register, 
codified in the Code of Federal Regulations, and available for review 
and copying at the Regional Offices of the Federal Highway 
Administration. An employer shall maintain current copies of applicable 
regulations, and shall make them available for inspection to any 
employee upon request.
    (d) After proper identification of a special agent through the 
display of credentials, and an explanation of the purpose of the 
investigation, a person shall, upon the request of the special agent, 
provide access to:
    (1) The records requested to be reviewed;
    (2) Employees of the person to be interviewed; and
    (3) Any equipment or property used in the transportation of persons 
or property or to ensure compliance with the Federal Motor Carrier 
Safety Regulations and the Hazardous Materials Regulations.
    (e) The request for the production of records or access to 
employees or equipment may be made at the initiation of the 
investigation or at any time thereafter.


Sec. 361.106   Vehicle/driver inspection.

    Upon the instruction of a duly authorized Federal, State or local 
enforcement official, each commercial motor vehicle used in interstate 
commerce shall be subject to an inspection of all safety equipment and 
operating conditions required under the Federal Motor Carrier Safety 
Regulations and Hazardous Materials Regulations. Each driver of such 
vehicle shall also be subject to an inspection by such enforcement 
officials of all documents required to be maintained by that driver 
under those regulations.


Sec. 361.107   Complaints.

    (a) A person, including a governmental authority, may file with the 
Associate Administrator a complaint concerning an alleged violation of 
this chapter. The complaint must state the facts that are alleged to 
constitute a violation. Any office of the FHWA's Office of Motor 
Carriers will accept a written complaint. For a listing of FHWA 
Regional Offices see Sec. 390.27 of this subchapter. There are also 
Office of Motor Carrier facilities located in each State and listed in 
local telephone directories.
    (b) The Associate Administrator shall timely investigate any 
nonfrivolous written complaint alleging that a substantial violation of 
any regulation issued under this chapter is occurring or has occurred 
within the preceding 60 days. Nonfrivolous written complaints are 
allegations of violations of applicable safety regulations containing 
sufficient descriptive detail and knowledge of events to create a 
reasonable suspicion that the violations occurred or are occurring. 
Substantial violation in this context means the same as a pattern of 
serious violations or a substantial health and safety violation, as 
those terms are defined in part 364 of this subchapter, or patterns of 
record falsification that evidences an intent to avoid detection of 
such violations.
    (c) The Associate Administrator may dismiss a complaint determined 
not to state reasonable grounds for investigation and need not conduct 
separate investigations of duplicative complaints.
    (d) The complainant shall be timely notified of findings resulting 
from an investigation or of dismissal of a complaint.
    (e) The agency shall not disclose the identity of complainants 
without their consent unless it is determined that such disclosure is 
necessary to prosecute a violation. If disclosure becomes necessary, 
the Associate Administrator shall take every practical measure within 
his authority to assure that the complainant is not subject to 
harassment, intimidation, disciplinary action, discrimination, or 
financial loss as a result of such disclosure.
    (f) No motor carrier or other employer subject to the regulations 
in this chapter shall discharge, discipline, or in any manner 
discriminate against any employee with respect to the employee's 
compensation, terms, conditions, or privileges of employment because 
such employee (or any person acting pursuant to a request of such 
employee) has filed any complaint or instituted or caused to be 
instituted any proceeding relating to a violation of a commercial motor 
vehicle safety rule, regulation, standard, or order, or has testified 
or is about to testify in any such proceeding.
    (g) No motor carrier or other employer subject to the regulations 
in this chapter shall discharge, discipline, or in any manner 
discriminate against an employee with respect to the employee's 
compensation, terms, conditions, or privileges of employment for 
refusing to operate a vehicle when such operation constitutes a 
violation of any Federal rules, regulations, standards, or orders 
applicable to commercial motor vehicle safety or health, or because of 
the employee's reasonable apprehension of serious injury to himself or 
the public due to the unsafe condition of such equipment. The unsafe 
conditions causing the employee's apprehension of injury must be of 
such nature that a reasonable person, under the circumstances then 
confronting the employee, would conclude that there is a bona fide 
danger of an accident, injury, or serious impairment of health, 
resulting from the unsafe condition. In order to qualify for protection 
under this section, the employee must have sought from his employer, 
and have been unable to obtain, correction of the unsafe condition.
    (h) Violations of paragraphs (f) and (g) of this section are 
subject to enforcement by the Occupational Safety and Health 
Administration (OSHA) of the Department of Labor. The proper steps for 
an employee to follow when pursuing their rights under these paragraphs 
are found in 49 U.S.C. 31105(b) and 29 CFR part 1978.


Sec. 361.108   Administrative subpoenas.

    (a) The Associate Administrator may subpoena witnesses and records 
related to a proceeding or investigation from a place in the United 
States to the designated place of the proceeding or investigation.
    (b) If a person fails to comply with a subpoena, the Associate 
Administrator may file a civil action in the district court of the 
United States in which the proceeding or investigation is being 
conducted to enforce the subpoena. The court may punish a refusal to 
obey an order of the court to comply with a subpoena.
    (c) A motor carrier not complying with a subpoena of the Associate 
Administrator to appear, testify, or produce records is subject to a 
fine of at least $100 but not more than $5,000, and imprisonment of not 
more than one year.


Sec. 361.109  Depositions and production of records.

    (a) In any proceeding, compliance review, or investigation, the 
Associate Administrator may take testimony of a witness by deposition 
and may order the witness to produce records. If a witness refuses to 
be deposed or to produce records under this section, the

[[Page 18883]]

Associate Administrator may subpoena the witness to appear for a 
deposition, produce the records, or both.
    (b) A deposition may be taken before a judge of a court of the 
United States, a United States magistrate, a clerk of a district court, 
or a chancellor, justice, or judge of a supreme or superior court, 
mayor or chief magistrate of a city, judge of a county court, or court 
of common pleas of any State, or a notary public who is not counsel or 
attorney of a party or interested in the proceeding or investigation.
    (c) Notice must be given in writing to the person being deposed in 
accordance with the Federal Rules of Civil Procedure. The notice shall 
state the name of the witness and the time and place of taking the 
deposition.
    (d) The testimony of a person deposed under this section shall be 
taken under oath. The person taking the deposition shall prepare, or 
cause to be prepared, a transcript of the testimony taken. The 
transcript shall be subscribed by the deponent, unless signature is 
waived.
    (e) The testimony of a witness who is in a foreign country may be 
taken by deposition before an officer or person designated by the 
Associate Administrator or agreed on by the parties by written 
stipulation filed with the Associate Administrator. The deposition 
shall be promptly filed with the Associate Administrator.
    (f) Each witness summoned before the Associate Administrator or 
whose deposition is taken under this section and the individual taking 
the deposition are entitled to the same fees and mileage paid for those 
services in the courts of the United States.

PART 362--SAFETY RATINGS

Sec.
362.101  Purpose.
362.102  Motor Carrier Identification Report.
362.103  Safety fitness--standards and factors.
362.104  Determination of safety fitness--safety ratings.
362.105  Unsatisfactory rated motor carrier--prohibition on 
transportation of hazardous materials and passengers; ineligibility 
for Federal contracts.
362.106  Notification of a safety rating.
362.107  Change to safety rating based on corrective actions.
362.108  Administrative review.
362.109  Temporary relief from rating.
362.110  Safety fitness information.

Appendix to Part 362--Form MCS-150, Motor Carrier Identification Report

    Authority: 49 U.S.C. 104, 504, 521(b)(5)(A), 31144, and 31502; 
49 CFR 1.48.


Sec. 362.101  Purpose.

    (a) This part establishes standards and procedures applicable to 
motor carrier identification, the determination of a motor carrier's 
safety fitness and the issuance of a safety rating by the FHWA. This 
part also notes the restrictions applicable to unsatisfactory rated 
motor carriers, provides for availability of safety fitness 
information, and includes procedures for administrative review of 
safety ratings.
    (b) The procedures set forth in 49 CFR part 363, subpart C also 
apply to this part.


Sec. 362.102  Motor Carrier Identification Report.

    (a) All motor carriers currently conducting operations in 
interstate or foreign commerce shall file a Motor Carrier 
Identification Report, Form MCS-150 (see appendix to this part), within 
90 days after beginning operations.
    (b) The Motor Carrier Identification Report, Form MCS-150, is 
available from all FHWA region and division motor carrier safety 
offices nationwide and from the FHWA Office of Motor Carrier 
Information and Analysis, 400 Seventh Street, SW., Washington, DC 
20590.
    (c) The completed Motor Carrier Identification Report, Form MCS-
150, shall be filed with the FHWA, Office of Information and Analysis, 
400 Seventh Street, SW., Washington, DC 20590.


Sec. 362.103  Safety fitness--standards and factors.

    (a) To meet safety fitness standards, a motor carrier must 
demonstrate through its performance that it has adequate safety 
management controls in place to ensure compliance with applicable 
safety and hazardous materials regulations and to facilitate the safe 
movement of property and passengers by highway.
    (b) The information obtained from reviews, investigations, roadside 
inspections, and other available performance data is used to assess a 
motor carrier's safety fitness in the context of the following factors:
    (1) The adequacy of safety management controls. Safety management 
controls are those systems, programs, practices and procedures 
implemented by a motor carrier to ensure regulatory compliance and 
reduce the safety risks associated with:
    (i) Commercial driver's license violations (49 CFR part 383), 
including controlled substances and alcohol testing violations (49 CFR 
part 382):
    (ii) Inadequate levels of financial responsibility (49 CFR part 
387);
    (iii) The failure to record and track accidents and incidents. (49 
CFR part 390).
    (iv) The use of unqualified drivers (49 CFR part 391);
    (v) Improper use and driving of motor vehicles (49 CFR part 392);
    (vi) Unsafe vehicles operating on the highways (49 CFR part 393);
    (vii) The use of fatigued drivers (49 CFR part 395);
    (viii) Inadequate inspection, repair, and maintenance of vehicles 
(49 CFR part 396);
    (ix) Transportation and routing of hazardous materials (49 CFR part 
397); and
    (x) Violations of hazardous materials regulations (49 CFR parts 
107-177, 180).
    (2) Frequency and severity of violations of applicable safety and 
hazardous materials regulations and orders, including violations of 
compatible state regulations and orders.
    (3) Number and frequency of driver/vehicle violations resulting in 
driver/vehicle being placed out of service.
    (4) Frequency of accidents and hazardous materials incidents, 
including: The recordable accident rate per million miles; the 
recordable preventable accident rate per million miles; other accident 
indicators; and whether these accident and incident indicators have 
improved or deteriorated over time.
    (c) In considering violations referred to in paragraph (b)(2) of 
this section, particular attention is given to violations of 
regulations that are critical or acute. These terms as used in this 
paragraph to denote the seriousness of regulatory requirements are 
defined as follows:
    (1) Critical regulation--violations of which, if occurring in 
patterns, reflect a breakdown of management control directly related to 
essential safety functions. A pattern is evident when violations are 
occurring at a rate in excess of 10 percent. Examples of violations of 
critical regulations are using drivers to operate commercial motor 
vehicles after they have exceeded the allowable driving time or on-duty 
time.
    (2) Acute regulation--violations of which are so severe as to 
require immediate correction, and by themselves reflect negatively on 
the motor carrier's ability to manage safety compliance, regardless of 
its overall safety posture. An example of a violation of an acute 
regulation is allowing a driver to operate after the drivers has tested 
positive for alcohol have exceeded the allowable driving time or on-
duty time.


Sec. 362.104  Determination of safety fitness--safety ratings.

    (a) Following a review of a motor carrier, the degree to which the

[[Page 18884]]

operations of the motor carrier are consistent with the safety fitness 
standards and factors set forth in Sec. 362.103 determines whether the 
following rating will be assigned:
    (1) Unsatisfactory--an unsatisfactory safety rating means a failure 
by a motor carrier to have adequate safety management controls in place 
to prevent involvement in crashes by its vehicles and drivers, 
evidenced by higher than normal accident rates, or to ensure compliance 
with the applicable safety standards, regulations and orders, as 
evidenced by inordinate ratios of violations detected in on-site 
reviews or roadside inspections associated with the factors listed in 
Sec. 362.103(b).
    (2) [Reserved]
    (b) An otherwise unsatisfactory safety rating may be deferred, 
suspended or otherwise avoided if conditions imposed as a result of a 
review of a motor carrier's operation and performance are met, which 
would include compliance with specific provisions of the safety or 
hazardous materials regulations, the requirements of an order or 
notices to abate, or other commitments to improve compliance and 
performance. The conditions may be imposed in lieu of an unsatisfactory 
rating, and failure of the conditions may result in the immediate 
assignment of an unsatisfactory rating.


Sec. 362.105  Unsatisfactory rated motor carriers--prohibition on 
transportation of hazardous materials and passengers; ineligibility for 
Federal contracts.

    (a) A motor carrier rated unsatisfactory is prohibited from 
operating a commercial motor vehicle to transport--
    (1) Hazardous materials for which vehicle placarding is required 
pursuant to part 172 of Chapter I of this title; or
    (2) More than 15 passengers, including the driver.
    (b) A motor carrier subject to the provisions of paragraph (a) of 
this section is ineligible to contract or subcontract with any Federal 
agency for transportation of the property or passengers referred to in 
paragraphs (a)(1) and (a)(2) of this section.
    (c) Penalties. When it is known that the carrier transports the 
property or passengers referred to in paragraphs (a)(1) and (a)(2) of 
this section, an order will be issued placing those operations out of 
service. Any motor carrier that operates commercial motor vehicles in 
violation of this section will be subject to the penalty provisions 
listed in part 364 of this chapter.


Sec. 362.106  Notification of a safety rating.

    (a) Written notification of the safety rating will be provided to a 
motor carrier as soon as practicable after assignment of the rating.
    (b) Before a safety rating of unsatisfactory is assigned to any 
motor carrier, the FHWA will issue a notice of proposed safety rating. 
The notice of proposed safety rating will list the deficiencies 
discovered during the review of the motor carrier's operations, for 
which corrective actions must be taken.
    (c) A notice of a proposed safety rating of unsatisfactory will 
indicate that, if the unsatisfactory rating becomes final, the motor 
carrier will be subject to the provisions of Sec. 362.105, which 
prohibit motor carriers rated unsatisfactory from transporting 
hazardous materials or passengers, and other consequences that may 
result from such rating.
    (d) A proposed safety rating will not be made available to the 
public under Sec. 362.110.
    (e) Except as provided in Sec. 362.107, a proposed safety rating 
issued pursuant to paragraph (b) of this section will become the motor 
carrier's final safety rating 45 days after the date the notice of 
proposed safety rating is received by the motor carrier.


Sec. 362.107  Change to safety rating based on corrective actions.

    (a) Within the 45-day period specified in Sec. 362.106(e), or at 
any time after a rating has become final, a motor carrier may request a 
change to a proposed or final safety rating based on evidence that 
corrective actions have been taken and that its operations currently 
meet the safety standards and factors specified in Sec. 362.102.
    (b) A request for a change to a safety rating must be made, in 
writing, to the Regional Director, Office of Motor Carriers, for the 
FHWA Region in which the carrier maintains its principal place of 
business, and must include a written description of corrective actions 
taken and other documentation that may be relied upon as a basis for 
the requested change to the proposed rating.
    (c) The final determination on the request for change will be based 
upon the documentation submitted and any additional investigation 
deemed necessary.
    (d) The filing of a request for change to a proposed rating under 
this section does not stay the 45-day period established in 
Sec. 362.106(e), after which a proposed safety rating becomes final. If 
the motor carrier has submitted evidence that corrective actions have 
been taken pursuant to this section and a final determination cannot be 
made within the 45-day period, the period of the proposed safety rating 
may be extended for up to 10 days at the discretion of the Regional 
Director.
    (e) If it is determined that the motor carrier has taken the 
corrective actions required and that its operations currently meet the 
safety standards and factors specified in Sec. 362.103, the motor 
carrier will be provided with written notification that the proposed 
unsatisfactory rating will not be assigned, or, if already assigned, 
rescinded.
    (f) If it is determined that the motor carrier has not taken all 
the corrective actions required or that its operations still fail to 
meet the safety standards and factors specified in Sec. 362.103, the 
motor carrier shall be provided with written notification that its 
request has been denied and that the proposed safety rating of 
unsatisfactory will become final pursuant to Sec. 362.106(e), or that 
an unsatisfactory safety rating currently in effect will not be change.
    (g) Any motor carrier whose request for change is denied pursuant 
to paragraph (f) of this section may petition for administrative review 
pursuant to Sec. 362.108 within 45 days of the denial of the request 
for rating change. If the unsatisfactory rating has become final, it 
shall remain in effect during the period of any administrative review 
unless stayed by the reviewing official.


Sec. 362.108  Administrative review.

    (a) Within the 45-day notice period provided in Sec. 362.106(e), or 
within 45 days after denial of a request for a change in rating as 
provided in Sec. 362.107(g), the motor carrier may petition the FHWA 
for administrative review of a proposed or final safety rating by 
submitting a written request to the Director, Office of Motor Carrier 
Field Operations, 400 Seventh Street, SW., Washington, DC 20590.
    (b) The petition must state why the proposed safety rating is 
believed to be in error and list all factual and procedural issues in 
dispute. The petition may be accompanied by any information or 
documents the motor carrier is relying upon as the basis for its 
petition.
    (c) The Director, Office of Motor Carrier Field Operations, may 
request the petitioner to submit additional data and attend a 
conference to discuss the safety rating. Failure to provide the 
information requested or attend the conference may result in dismissal 
of the petition.
    (d) The petitioner shall be notified in writing of the decision on 
administrative review. The notification will occur within 30 days after 
receipt

[[Page 18885]]

of a petition from a hazardous materials or passenger motor carrier.
    (e) If the decision on administrative review results in a final 
rating of unsatisfactory for a hazardous materials or passenger motor 
carrier, the decision shall be accompanied by an appropriate out-of-
service order and provide for an expedited agency appeal of such 
decision pursuant to Secs. 363.108 and 363.110 of this subchapter.
    (f) All other decisions on administrative review of ratings 
constitute final agency action. Thereafter, improvement in the rating 
may be obtained under Sec. 362.107.


Sec. 362.109  Temporary relief from rating.

    (a) Proposed rating. At any time before a proposed unsatisfactory 
rating becomes final, the Regional Director in the region wherein the 
motor carrier maintains its principal place of business for safety 
purposes may temporarily suspend the proposed rating for a period up to 
60 days; provided: the motor carrier consents in writing to an order 
directing compliance with conditions designed to assure that the safety 
fitness standard will be met and satisfactory performance will be 
achieved. The temporary suspension is discretionary with the Regional 
Director after consideration of circumstances satisfying that official 
that a good faith effort by the motor carrier will be made and that 
this effort is reasonably certain to bring about compliance. The 
consent order must contain a provision that the temporary recision will 
be withdrawn and the proposed unsatisfactory rating will become final 
upon a failure of one or more of the conditions in the order. If a 
satisfactory level of compliance is achieved after the period covered 
by the consent order, the Regional Director may withdraw the proposed 
unsatisfactory rating, which action may or may not be subject to 
prescribed conditions.
    (b) Final rating. The Director of the Office of Field Operations, 
or other official designated by the Associate Administrator, may 
temporarily suspend a final rating of unsatisfactory under the same 
conditions set forth in paragraph (a) of this section.


Sec. 363.110  Safety fitness information.

    (a) Final ratings will be made available to other Federal and State 
agencies in writing, telephonically or by remote computer access.
    (b) The final safety rating assigned to a motor carrier will be 
made available to the public upon request. Any person requesting the 
assigned rating of a motor carrier shall provide the FHWA with the 
motor carrier's name, principal office address, and, if known, the DOT 
number or the ICC docket number, if any.
    (c) Requests shall be addressed to the Office of Motor Carrier 
Information Management and Analysis, HIA-1, Federal Highway 
Administration, 400 Seventh Street, SW., Washington, DC 20590.
    (d) Oral requests by telephone will be given an oral response.

Appendix to Part 362--Form MCS-150.Motor Carrier Identification Report

(Approved by OMB under control number 2125-0544)

BILLING CODE 4910-22-M

[[Page 18886]]

[GRAPHIC] [TIFF OMITTED] TP29AP96.006



BILLING CODE 4910-22-C

[[Page 18887]]

Notice

    The Form MCS-150, Motor Carrier Identification Report, must be 
filed by all motor carriers operating in interstate or foreign 
commerce. A new motor carrier must file Form MCS-150 within 90 days 
after beginning operations. Exception: A motor carrier that has 
received written notification of a safety rating from the Federal 
Highway Administration (FHWA) need not file the report. To mail, 
fold the completed report so that the self-addressed postage paid 
panel is on the outside. This report is required by 49 CFR Part 385 
and authorized by 49 U.S.C. 504 (1982 & Supp. III 1985).
    The public reporting burden for this collection of information 
on the Form MCS-150 is estimated by the FHWA to average 20 minutes. 
If you wish to comment on the accuracy of the estimate or make 
suggestions for reducing this burden, please direct your comments to 
the Office of Management and Budget and the FHWA at the following 
addresses:

Office of Management and Budget, Paperwork Reduction Project, 
Washington, DC 20503

    and

Federal Highway Administration, OMC Field Operations, HFO-10, 400 
7th Street, SW., Washington, DC 20590

Instructions for Completing the Motor Carrier Identification Report 
(MCS-150)

(Please Print or Type All Information)

    1. Enter the legal name of the business entity (i.e., 
corporation, partnership, or individual) that owns/controls the 
motor carrier/shipper operation.
    2. If the business entity is operating under a name other than 
that in Block 1, (i.e., ``trade name'') enter that name. Otherwise, 
leave blank.
    3. Enter the principal place of business street address (where 
all safety records are maintained).
    4. Enter mailing address if different from the physical address, 
otherwise leave bank. Also, applies to #7, #8, #12-#14.
    5. Enter the city where the principal place of business is 
located.
    6. If a Mexican motor carrier or shipper, enter the Mexican 
neighborhood or barrio where the principal place of business is 
located.
    7. Enter the city corresponding with the mailing address.
    8. If a Mexican motor carrier or shipper, enter the Mexican 
neighborhood or barrio corresponding with the mailing address.
    9. Enter the name of the county in which the principal place of 
business is located.
    10. Enter the two-letter postal abbreviation for the State, or 
the name of the Canadian Province or Mexican State, in which the 
principal place of business is located.
    11. Enter the zip code number corresponding with the street 
address.
    12. Enter the name of the county corresponding with the mailing 
address.
    13. Enter the two-letter postal abbreviation for the State, or 
the name of the Canadian Province or Mexican State, corresponding 
with the mailing address.
    14. Enter the ZIP code number corresponding with the mailing 
address.
    15. Enter the telephone number, including area code, of the 
principal place of business.
    16. Enter the identification number assigned to your motor 
carrier operation by the U.S. Department of Transportation, if 
known. Otherwise, enter ``N/A.''
    17. Enter the motor carrier ``MC'' or ``MX'' number under which 
the Interstate Commerce Commission (ICC) issued your operating 
authority, if appropriate. Otherwise, enter ``N/A.''
    18. Enter the employer identification number (EIN #) or social 
security number (SSN #) assigned to your motor carrier operation by 
the Internal Revenue Service.
    19. Circle the appropriate type of carrier operation.

A. Interstate.
B. Intrastate, transporting hazardous materials (49 CFR 100-180).
C. Intrastate, NOT transporting hazardous materials.

    Interstate--transportation of persons or property across State 
lines, including international boundaries, or wholly within one 
State as part of a through movement that originates or terminates in 
another State or country.
    Intrastate--transportation of persons or property wholly within 
one State.
    20. Circle the appropriate type of shipper operation.

A. Interstate
B. Intrastate
Interstate & Intrastate--See #19 above.

    21. Enter the carrier's total mileage for the past calendar 
year.
    22. Circle appropriate classification. Circle all that apply. If 
``L. Other'' is circled, enter the type of operation in the space 
provided.

A. Authorized For Hire
B. Exempt For Hire
C. Private (Property)
D. Private Passengers (Business)
E. Private Passengers (Non-Business)
F. Migrant
G. U.S. Mail
H. Federal Government
I. State Government
J. Local Government
K. Indian Tribe
L. Other

    Authorized For Hire--transportation for compensation as a common 
or contract carrier of property, owned by others, or passengers 
under the provisions of the ICC.
    Exempt For Hire--transportation for compensation of property or 
passengers exempt from the economic regulation by the ICC.
    Private (Property)--means a person who provides transportation 
of property by commercial motor vehicle and is not a for-hire motor 
carrier.
    Private Passengers (Business)--a private motor carrier engaged 
in the interstate transportation of passengers which is provided in 
the furtherance of a commercial enterprise and is not available to 
the public at large (e.g., bands).
    Private Passengers (Non-Business)--a private motor carrier 
involved in the interstate transportation of passengers that does 
not otherwise meet the definition of a private motor carrier of 
passengers (business) (e.g., church buses).
    Migrant--interstate transportation, including a contract 
carrier, but not a common carrier of 3 or more migrant workers to or 
from their employment by any motor vehicle other than a passenger 
automobile or station wagon.
    U.S. Mail--transportation of U.S. Mail under contract with the 
U.S. Postal Service.
    Federal Government--transportation of property or passengers by 
a U.S. Federal Government agency.
    State Government--transportation of property or passengers by a 
U.S. State Government agency.
    Local Government--transportation of property or passengers by a 
local municipality.
    Indian Tribe--transportation of property or passengers by a 
Indian tribal government.
    Other--transportation of property or passengers by some other 
operation classification not described by any of the above.
    23. Circle all the letters of the types of cargo you usually 
transport. If ``Z. Other'' is circled, enter the name of the 
commodity in the space provided.
    24. Circle all the letters of the types of hazardous materials 
(HM) you transport/ship. In the columns before the HM types, either 
circle C for carrier of HM or S for a shipper of HM. In the columns 
following the HM types, either circle T if the HM is transported in 
cargo tanks or P if the HM is transported in other packages (49 CFR 
173.2).
    25. Enter the total number of vehicles owned, term leased and 
trip leased, that are, or can be, operational the day this form is 
completed.
    Motorcoach--a vehicle designed for long distance transportation 
of passengers, usually equipped with storage racks above the seats 
and a baggage hold beneath the cabin.
    School Bus--a vehicle designed and/or equipped mainly to carry 
primary and secondary students to and from school, usually built on 
a medium or large truck chassis.
    Mini-bus/Van--a multi-purpose passenger vehicle with a capacity 
of 10-24 people, typically built on a small truck chassis.
    Limousine--a passenger vehicle usually built on a lengthened 
automobile chassis.
    26. Enter the number of interstate/intrastate drivers used on an 
average work day. Part-time, casual, term leased, trip leased and 
company drivers are to be included. Also, enter the total number of 
drivers and the total number of drivers who have a Commercial 
Drivers License (CDL).
    Interstate--driver transports people or property across State 
lines, including international boundaries, or wholly within one 
State as part of a through movement that originates or terminates in 
another State or country.
    Intrastate--driver transports people or property wholly within 
one State.
    100-mile radius driver--driver operates only within a 100 air-
mile radius of the normal work reporting location.
    27. Print or type the name, in the space provided, of the 
individual authorized to sign

[[Page 18888]]

documents on behalf of the entity listed in Block 1. That individual 
must sign, date, and show his or her title in the spaces provided 
(Certification Statement, see 49 CFR 385.21 and 385.23).

PART 363--ENFORCEMENT PROCEEDINGS

Subpart A--Civil Penalty Proceedings

Sec.
363.101  Nature of proceeding.
363.102  Notice of violation (complaint).
363.103  Form reply to notice of violation.
363.104  Special procedures for out-of-service orders.
363.105  Payment of the claim.
363.106  Settlement of civil penalty claims; generally.
363.107  Settlement negotiations.
363.108  Request for administrative adjudication.
363.109  Procedures in administrative adjudications.
363.110  Expedited review by the Associate Administrator.
363.111  Administrative Law Judge decision.
363.112  Review of Administrative Law Judge decision.
363.113  Decision on review.
363.114  Reconsideration.
363.115  Judicial review.
363.116  Failure to comply with final order.

Subpart B--Driver Qualification Proceedings

Sec.
363.201  Nature of Proceeding.
363.202  Commencement proceedings.
363.203  Answer to medical qualification determination or letter of 
disqualification.
363.204  Special proceeding for resolution of conflicts of medical 
evaluation.
363.205  Driver's qualification status pending determinations and 
proceedings.
363.206  Administrative adjudication.

Subpart C--General Provisions

Sec.
363.301  Applicability.
363.302  Computation of time.
363.303  Service.
363.304  Extension of time.
363.305  Administrative Law Judge.
363.306  Certification of documents.
363.307  Interlocutory appeals.

Subpart A--Civil Penalty Proceedings


Sec. 363.101  Nature of proceeding.

    Civil penalty proceedings are proceedings pursuant to 5 U.S.C. 554 
in which the agency makes a monetary claim or seeks an order against 
the respondent, based on violation of the FMCSRs or HMRs. Final agency 
orders that may result from civil penalty proceedings include one or 
more of the following:
    (a) Monetary penalty;
    (b) Settlement agreement;
    (c) Out-of-service order;
    (d) Notice to post;
    (e) Notice of abate; and
    (f) Any other order within the authority of the agency.


Sec. 363.102  Notice of violation (complaint).

    (a) Civil penalty proceedings are commenced by the issuance of a 
notice of violation, which serves as the complaint in subsequent 
proceedings and represents the claim of the agency against respondent. 
Each notice shall contain the following:
    (1) The provisions of law and regulation alleged to have been 
violated;
    (2) A recitation, separately stated and numbered, of each alleged 
violation, including a brief statement of the material facts 
constituting each violation.
    (3) The amount being claimed and the maximum amount authorized to 
be claimed under the statute, and the contents of any order sought to 
be imposed;
    (4) A statement that failure to answer the notice within the 
prescribed time will constitute a waiver of the opportunity to contest 
the claim;
    (5) A reply form to be completed and returned to the agency, except 
in the case of an out-of-service order; and
    (6) The address and telefax number to which the reply form and/or 
full payment of the amount claimed may be sent, and the telephone 
number to call to discuss settlement.
    (b) A notice may contain such other matters as the FHWA deems 
appropriate, including a notice to abate.
    (c) A notice of violation is transmitted by the agency to the 
respondent using a method of delivery with a return receipt, such as, 
but not limited to, certified mail and personal delivery evidenced by a 
certificate of service.


Sec. 363.103  Form reply to notice of violation.

    (a) Time for reply. The reply form included in the notice of 
violation must be served on the agency by the respondent within 15 days 
of respondent's receipt of the notice. The form reply may be sent to 
the agency by mail, personal delivery, or telefax. Although a return 
receipt is not required, the burden is on the respondent to prove it 
has made a timely answer.
    (b) Contents of reply form. The respondent must provide the 
information requested on the reply form, and indicate, by checking the 
appropriate box, its response to the Notice of Violation. Respondent 
may select only one option on the reply form. The response options are:
    (1) Pay the full amount claimed in the Notice of Violation (check 
included), and/or agree to comply with the order by signing where 
indicated;
    (2) Enter into settlement negotiations (while preserving the right 
to contest the claim at a later date); and
    (3) Contest the claim immediately through the institution of 
administrative adjudication.
    (c) Failure to reply. If a completed reply on the form provided, or 
in a form containing the same information, is not served on the agency 
within 15 days of the respondent's receipt of the notice of violation, 
the notice of violation becomes the final agency order in the 
proceeding. Respondent's failure to reply constitutes an admission of 
all facts alleged in the notice of violation and a waiver of the 
respondent's opportunity to contest the claim.


Sec. 363.104  Special procedures for out-of-service orders.

    (a) Whenever it is determined that a violation of the FMCSRs poses 
an imminent hazard to safety, the agency may order a vehicle or 
employee operating such vehicle out of service, or order a motor 
carrier to cease all or part of the employer's commercial motor vehicle 
operations. In making any such order, no restrictions shall be imposed 
on any employee or motor carrier beyond that required to abate the 
hazard.
    (b) An out-of-service order must be personally served on the driver 
when a driver or vehicle is being placed out of service, and on a 
responsible representative of the motor carrier at its principal place 
of business or other location to which the order applies when all or 
part of a motor carrier's commercial motor vehicle operations are being 
placed out of service.
    (c) A motor carrier or employee shall comply with the out-of-
service order immediately upon its issuance. The penalty for violating 
an out-of-service order shall be specifically noted in the order. An 
out-of-service order shall not prevent vehicles of the motor carrier in 
transit at the time the order is served from proceeding to their 
immediate destinations, unless any such vehicles or drivers are 
specifically ordered out of service effective immediately. Vehicles and 
drivers proceeding to their immediate destination shall be subject to 
compliance with the order upon arrival.
    (d) If the out-of-service order is contested, an administrative 
adjudication shall be made available on an expedited basis under 
procedures provided in Sec. 363.110.
    (e) For purposes of this section, the term immediate destination 
means the next scheduled stop of the vehicle

[[Page 18889]]

already in transit where the cargo on board can be safely secured, and 
the term imminent hazard means any condition of vehicle, employee, or 
commercial motor vehicle operations which is likely to result in 
serious injury of death if not discontinued immediately.


Sec. 363.105  Payment of the claim.

    (a) Payment of the full amount claimed may be made at any time 
before issuance of a final order, with or without the reply form. After 
the issuance of a final order, claims are subject to interest, 
penalties, and administrative charges in accordance with 4 CFR part 
103.
    (b) If the full payment option is selected by the respondent on the 
reply form, but payment is not made on the agency within 15 days of the 
respondent's receipt of the notice of violation, the notice of 
violation becomes the final agency order in the proceeding.
    (c) Unless otherwise provided in writing by the mutual consent of 
the parties, payment and/or compliance with the order constitutes an 
admission of all facts alleged in the notice of violation and a waiver 
of the respondent's opportunity to contest the claim, and results in 
the notice of violation becoming the final agency order.


Sec. 363.106  Settlement of civil penalty claims; generally.

    (a) Settlement of disputed civil penalty claims may occur at any 
time before the issuance of a final order.
    (b) Content of settlement agreements. When agreement is reached to 
resolve the claim, a settlement agreement constituting the final 
disposition of the proceeding shall be signed by the parties. The 
settlement agreement shall contain the following:
    (1) The legal basis of the claim, including an admission of all 
jurisdictional facts;
    (2) Unless otherwise provided, a finding of the facts constituting 
the violations committed;
    (3) The amount due the FHWA and the terms of payment, and/or the 
terms of the order;
    (4) An express waiver of the right to further procedural steps and 
of all rights to judicial review;
    (5) A statement that the agreement is not binding on the agency 
until executed by the agency's authorized representative; and
    (6) A statement that failure to pay other otherwise perform in 
accordance with the terms of the agreement will result in the notice of 
violation becoming the final agency order, and the amount claimed in 
the notice of violation becoming due and payable immediately.
    (c) An executed settlement agreement is binding on the parties 
according to its terms. The respondent's signed, written consent to a 
settlement agreement may only be withdrawn, in writing, if the agency 
has not executed the agreement within 28 days after execution by 
respondent.
    (d) The agency's acceptance of partial payment of a claim tendered 
unilaterally by a respondent does not constitute a settlement 
agreement. All settlement agreements must be in the form specified in 
paragraph (b) of this section.
    (e) Settlement agreements reached during the course of an 
administrative adjudication need not be approved by the Administrative 
Law Judge or Associated Administrator unless specifically directed by 
those officials.


Sec. 363.107  Settlement negotiations.

    This section establishes procedures when the settlement 
negotiations option is selected on the reply form.
    (a) The parties should enter into negotiations expeditiously and in 
good faith, using all reasonable means.
    (b) Opportunity for an administrative adjudication. Respondents 
electing on the reply form to engage in settlement negotiations retain 
the opportunity to contest the claim through an administrative 
adjudication if the negotiations do not result in a settlement 
agreement.
    (c) Discontinuance of negotiations within 90 days. The agency may 
discontinue negotiations within 90 days of the notice of violation by 
sending the respondent a final notice of violation. The respondent may 
discontinue negotiations within the same period by requesting an 
administrative adjudication and sending the agency a written answer to 
the notice of violation.
    (d) Failure to reach agreement after 90 days. If the parties do not 
reach a settlement agreement within 90 days, a final notice of 
violation shall be issued by the agency to the respondent.
    (e) Final Notice of Violation. The final notice of violation 
represents the agency's final claim against the respondent. The final 
notice of violation may incorporate the notice of violation by 
reference, amend the notice of violation to reflect the settlement 
negotiations, or include some combination of both.
    (1) A final notice of violation shall be transmitted to the 
respondent using a method of delivery within a return receipt, such as, 
but not limited to, certified mail and personal delivery evidenced by a 
certificate of service.
    (2) The reply to the final notice of violation shall be completed 
in conformance with the requirements of Sec. 363.108(c).


Sec. 363.108  Request for administrative adjudication.

    The respondent may contest the claim by requesting an 
administrative adjudication and sending a written answer to the agency. 
An administrative adjudication is a process to resolve contested claims 
before the Associate Administrator or an Administrative Law Judge. 
Unless settled, the Associate Administrator shall decide the matter or 
refer it to an Administrative Law Judge expeditiously.
    (a) Time for answer. Respondents who select administrative 
adjudication on the reply form to the notice of violation, or who 
receive a final notice of violation, must serve a written answer on the 
agency within 28 days of receipt of the applicable notice.
    (b) Form of answer. The answer may be sent to the agency by mail, 
personal delivery, or telefax. Though a return receipt is not required, 
the burden is on the respondent to prove it has made a timely answer.
    (c) Contents of answer. Generally, the answer must state the 
grounds for contesting the claim and any affirmative defenses that the 
respondent intends to assert. Specifically, the answer:
    (1) Must admit or deny each separately stated and numbered 
allegation of violation in the claim. A statement that the person is 
without sufficient knowledge or information to admit or deny will have 
the effect of a denial. Any allegation in the claim that is not 
specifically denied in the answer is deemed admitted. A general denial 
of the claim is grounds for a finding of default;
    (2) Must include all affirmative defenses, including those relating 
to jurisdiction, limitations, and procedure;
    (3) Must request referral to an Administrative Law Judge, if 
desired. Referral to an Administrative Law Judge is generally available 
only to resolve material issues of fact. Failure to request it results 
in a waiver of the right to an opportunity for referral; and
    (4) May include a motion to dismiss, but a motion to dismiss is not 
a substitute for an answer.
    (d) Failure to answer. If a written answer meeting the requirements 
of this section is not served on the agency by the respondent or 
representative of the respondent within 28 days, the notice of 
violation or final notice of violation,

[[Page 18890]]

whichever is applicable, becomes the final agency order in the 
proceeding. Merely selecting the adjudication option on the reply form, 
without submitting a written answer in accordance with this section, 
also results in the notice of violation becoming the final agency order 
in the proceeding. Respondent's failure to answer constitutes an 
admission of all facts alleged in the notice of violation and a waiver 
of the respondent's opportunity to contest the claim.
    (e) Default. If an answer is not in the form required by paragraph 
(c) of this section the respondent may be found in default by the 
Associate Administrator or Administrative Law Judge and a final agency 
order issued in the proceeding. Default by respondent constitutes an 
admission of all facts alleged in the notice of violation and a waiver 
of the respondent's opportunity to contest the claim, and results in 
the Notice of Violation becoming the final agency order in the 
proceeding.


Sec. 363.109   Procedures in administrative adjudications.

    (a) Associate Administrator. Contested claims shall be transmitted 
to the Associate Administrator for resolution by final order or for 
assignment to an Administrative Law Judge. The Associate Administrator 
determines if there are material factual issues in dispute, but may 
refer the matter to an administrative law judge to make the 
determination.
    (b) Referral to an Administrative Law Judge. If there are material 
factual issues in dispute and respondent has requested referral to an 
Administrative Law Judge, the Associate Administrator shall assign the 
matter to an Administrative Law Judge. The Associate Administrator may, 
in his or her discretion, refer other matters to an Administrative Law 
Judge.
    (c) Decision. If there are no material factual issues in dispute or 
the matter has not been referred to an Administrative Law Judge, the 
Associate Administrator may resolve the Matter and issue a final order.
    (d) Except as otherwise provided in these rules, in the 
Administrative Procedure Act, 5 U.S.C. 551 et seq., or by the Associate 
Administrator or Administrative Law Judge, the Federal Rules of Civil 
Procedure and the Federal Rules of Evidence shall apply in all 
administrative adjudications.
    (e) Motions. An application for an order or ruling in an 
administrative adjudication shall be by motion. Unless made during an 
oral hearing, motions shall be made in writing, shall state with 
particularity the grounds for relief sought, and shall be accompanied 
by any relevant affidavits or other evidence. Any party may file a 
response to a written motion within 7 days, or within such other time 
provided by the Associate Administrator or the Administrative Law 
Judge. Failure to respond to a motion may constitute grounds for 
granting it. Oral argument or briefs on a motion may be ordered by the 
Administrative Law Judge or by the Associate Administrator.
    (f) The Associate Administrator and the Administrative Law Judge 
have the discretion to conduct an oral hearing on the record, decide 
the matter on the pleadings, or employ any other appropriate process.
    (g) The Associate Administrator and the Administrative Law Judge 
may conduct or permit forms of alternative dispute resolution upon the 
consent of the parties.
    (h) Appearance. Any party to an administrative proceeding may 
appear personally and be represented by an attorney or other person. A 
representative must serve a notice of appearance on all parties, 
including the name of the respondent or title of the matter, as well as 
the representative's name, address, and telephone number, before 
participating in the proceeding.
    (i) Withdrawal. At any time after a request for an administrative 
adjudication, but prior to the issuance of a decision by the 
Administrative Law Judge or Associate Administrator, any party may, in 
writing, withdraw a request for an administrative adjudication or the 
agency may withdraw the notice of violation. If a proceeding before an 
Administrative Law Judge is so withdrawn, the assignment of the 
Administrative Law Judge is terminated and the Administrative Law Judge 
shall dismiss the proceeding with prejudice. A withdrawal by the 
respondent constitutes and irrevocable waiver of the respondent's right 
to an administrative adjudication on the matter presented in the notice 
of violation.


Sec. 363.110   Expedited review by the Associate Administrator.

    (a) Decisions to order a motor carrier's operations out of service 
is whole or in part are subject to review by the Associate 
Administrator in accordance with 5 U.S.C. 554, except that such review 
must be provided within 10 days from the date of the out-of-service 
order; provided a written request for review is received by the 
Associate Administrator within 5 days from the date of the notice. 
Written requests received after the 5th day but within 10 days of the 
effective date of the out-of-service order or final unsatisfactory 
rating resulting in an out-of-service order will be reviewed within 10 
days from the date of the request.
    (b) Any petition for review received more than 10 days after the 
date of an out-of-service order will be treated as a request for 
administrative adjudication under Sec. 363.108 of this part, unless the 
Associate Administrator, in his or her discretion, provides otherwise.
    (c) Any requests for review submitted pursuant to this section must 
be in writing and particularly address the matters which are disputed, 
the grounds for the dispute, and the reasons why expedited review is 
required.
    (d) The Associate Administrator may refer the matter for a hearing 
before and Administrative Law Judge within the same time prescribed for 
expedited review. The procedures in Sec. 363.109, except for time 
periods, shall apply to the hearing.
    (e) The Associate Administrator or Administrative Law Judge may 
stay any order or safety rating during the pendency of the expedited 
review. Thereafter, the matter may be administered pursuant to 
Sec. 363.109.
    (f) Unless a stay is granted under paragraph (e) of this section or 
the period extended by mutual consent of the parties, the decision on 
an expedited review shall be issued within the time prescribed for such 
expedited review.
    (g) The decision of the Administrative Law Judge on referral from 
the Associate Administrator shall become the final agency order after 
24 hours unless amended or vacated by the Associate Administrator.


Sec. 363.111  Administrative Law Judge decision.

    (a) After considering the evidence and arguments of the parties, 
the Administrative Law Judge shall issue a decision. The decision shall 
be sent to the parties and to the Associate Administrator. The 
Administrative Law Judge may issue an oral decision in the presence of 
the parties, which will be entered in the record of the proceedings.
    (b) Finality. Except for expedited review under Sec. 363.110, the 
decision of the Administrative Law Judge becomes the final decision of 
the agency 45 days after it is issued, unless a petition for review is 
filed under Sec. 363.112 within that period, or the Associate 
Administrator, on his own motion, reviews or vacates the decision.


Sec. 363.112  Review of Administrative Law Judge decision.

    (a) All petitions to review administrative adjudication decisions 
of the Administrative Law Judge must be accompanied by a statement of 
the

[[Page 18891]]

grounds for review. Each petition must set out in detail objections to 
the decision and refer to any evidence in the record which is relied 
upon to support the petition. It shall also state the relief requested. 
Failure to object to any error in the decision constitutes a waiver of 
the right to allege such error in subsequent proceedings.
    (b) A party may petition for review of a decision of the 
Administrative Law Judge on only the following three grounds:
    (1) A finding of fact is not supported by substantial evidence;
    (2) A conclusion of law is not made in accordance with applicable 
law, precedent, or public policy; and
    (3) The Administrative Law Judge committed prejudicial error in 
applying the governing procedural rules.
    (c) Reply briefs may be filed within 35 days after the petition for 
review is filed. Further pleadings may be filed by a party only if 
expressly allowed by the Associate Administrator.
    (d) Copies of the petition for review and all motions and briefs 
must be served on all parties.
    (e) Oral argument will be permitted only if expressly allowed by 
the Associate Administrator.


Sec. 363.113  Decision on review.

    (a) The Associate Administrator may adopt, modify, or reverse the 
Administrative Law Judge's decision and may make any necessary findings 
of law or fact. The Associate Administrator may also remand the matter 
to the Administrative Law Judge with instructions for further 
proceedings. If the matter is not remanded, the Associate Administrator 
shall issue a final order disposing of the proceedings and serve it on 
all parties.
    (b) Finality. Unless otherwise stated, an order of the Associate 
Administrator on review becomes the final order of the agency upon 
issuance.


Sec. 363.114  Reconsideration.

    Within 21 days of a decision by the Associate Administrator, any 
party may petition for reconsideration. The filing of a petition for 
reconsideration does not stay the effectiveness of a final order unless 
so ordered by the Associate Administrator.


Sec. 363.115  Judicial review.

    (a) Any aggrieved person, who, after an administrative 
adjudication, is adversely affected by a final order issued may, within 
30 days, petition for review of the order in the United States Court of 
Appeals in the circuit wherein the violation is alleged to have 
occurred, or where the violator has its principal place of business or 
residence, or in the United States Court of Appeals for the District of 
Columbia Circuit.
    (b) Judicial review shall be based on a determination of whether or 
not the findings and conclusions in the final order were supported by 
substantial evidence or otherwise in accordance with law. No objection 
that has not been urged before the agency must be considered by the 
court, unless reasonable grounds existed for failure or neglect to do 
so. The commencement of proceedings under this section shall not, 
unless ordered by the court, operate as a stay of the final order of 
the agency.


Sec. 363.116  Failure to comply with final order.

    If, within 30 days of receipt of a final agency order issued under 
this part, the respondent does not pay a civil penalty assessed, take 
any other action required by the order, or file a petition under 
Secs. 363.114 or 363.115, the case may be referred to the Attorney 
General with a request that an action be brought in the appropriate 
United States District Court to enforce the terms of the order or 
collect the civil penalty.

Subpart B--Driver Qualification Proceedings


Sec. 363.201  Nature of proceeding.

    Driver qualification proceedings are the means by which the agency 
resolves challenges to or disputes involving a determination of a 
driver's medical qualification to operate a commercial motor vehicle or 
challenges to disqualification by the Federal Highway Administration of 
a driver following convictions for certain driving offenses.


Sec. 363.202  Commencement of proceedings.

    (a) Driver qualification proceedings are commenced by the issuance 
to a driver or motor carrier of:
    (1) A notice of determination by the agency (the determination may 
be issued unilaterally by the agency or in resolution of a conflict of 
medical evaluations pursuant to Sec. 363.204); or
    (2) A letter of disqualification issued by the agency, based upon a 
conviction for a disqualifying offense or other cause listed in 
Sec. 383.51 or 391.15 of this subchapter.
    (b) Each notice of determination or letter of disqualification 
shall contain the following:
    (1) A statement of the provisions of the regulations under which 
the action is being taken;
    (2) A copy of all documentary evidence relied on or considered in 
taking such action, or, in the case of voluminous evidence, a summary 
of such evidence;
    (3) Notice that the determination or disqualification may be 
contested, and that failure to answer will constitute a waiver of the 
opportunity to contest the determination or disqualification; and
    (4) Notice that the burden of proof will be on the applicant in 
cases arising under Sec. 363.204.
    (c) In a medical qualification proceeding, the notice of 
determination must be transmitted to the driver involved. In cases 
arising under Sec. 363.204, the notice of determination shall also be 
transmitted to the motor carrier and any other parties involved in the 
resolution of a conflict of medical evaluations. Any party may respond. 
In a disqualification proceeding, the letter of disqualification must 
be transmitted both to the driver and to the employing motor carrier, 
if the latter is known.
    (d) The notice or letter commencing the proceeding is transmitted 
by the agency to any respondent or necessary party using a method of 
delivery with a return receipt, such as, but not limited to, certified 
mail and personal delivery evidenced by a certificate of service.


Sec. 363.203  Answer to medical qualification determination or letter 
of disqualification.

    (a) Time to answer. An answer to the notice of determination or 
letter of disqualification must be completed by the respondent and 
served on the agency within 2 months of respondent's receipt of the 
notice of determination. The answer may be sent to the agency by mail 
or telefax. Though a return receipt is not required, the burden is on 
the respondent to prove it has made a timely answer.
    (b) Contents of the answer. The answer must contain the following:
    (1) The grounds for contesting the determination;
    (2) Copies of all evidence upon which petitioner relies.
    (3) A request for referral to an Administrative Law Judge, if one 
is desired, which must set forth material factual issues believed to be 
in dispute.
    (c) Supporting evidence. All written evidence shall be submitted in 
the following forms:
    (1) An affidavit of a person having personal knowledge of the facts 
alleged;
    (2) Documentary evidence in the form of exhibits attached to an 
affidavit identifying the exhibit and giving its source;
    (3) A medical report (or reports) prepared by a medical examiner or 
authorized representative of a medical institution; and
    (4) An official record of a government agency.
    (d) Failure to answer. If a written answer contesting the notice or 
letter is

[[Page 18892]]

not received by the agency within 2 months, the notice of determination 
or letter of disqualification becomes the final agency order in the 
proceeding. Respondent's failure to answer constitutes and admission of 
all facts alleged in the letter or notice and a waiver of the 
respondent's opportunity to contest the determination of 
disqualification.
    (e) Letter of Disqualification. In proceedings based on convictions 
for disqualifying offenses, the only relevant defenses are that:
    (1) The respondent driver was not convicted as alleged;
    (2) The alleged conviction was overturned, vacated, remanded, or 
otherwise voided on appeal;
    (3) The violation for which the conviction was entered is not a 
disqualifying offense; or
    (4) The term of the disqualification period has already been served 
in whole or in part because of State action.


Sec. 363.204  Special procedures for resolution of conflicts of medical 
evaluation.

    (a) Applications. An application for determination of a driver's 
medical qualifications under standards in part 391 of this chapter will 
only be accepted if they conform to the requirements of this section.
    (b) Conditions. Each applicant must meet the following conditions.
    (1) The application must be in writing and contain the name and 
address of the driver, motor carrier, and all physicians involved in 
the conflict.
    (2) The applicant must provide documentary evidence that there is 
disagreement between the physician for the driver and the physician for 
the motor carrier concerning the driver's medical qualifications.
    (3) The applicant must submit a written opinion and report from an 
independent medical specialist in the field in which the conflict 
arose, together with the results of all tests performed by that 
independent specialist. The independent medical specialist should be 
one agreed to by the motor carrier and the driver.
    (4) If no agreement to select an independent specialist can be 
reached, the applicant must demonstrate it agreed and the other party 
refused to submit the matter to a specialist. If possible, the 
applicant must then submit the report of an independent specialist 
selected by the applicant. The report should be based on personal 
examination or, if that is not possible, on an evaluation of the 
reports of the two examining physicians in conflict.
    (5) The independent medical specialist must be provided with a copy 
of the regulations in part 391 of this subchapter, and this part, a 
medical history of the driver, and a detailed statement of the work the 
driver performs or is to perform, which must be noted in the 
specialist's report.
    (6) The applicant must submit all medical records, statements and 
reports of all physicians known to have provided opinions as to the 
driver's qualifications.
    (7) The applicant must submit any other documentary evidence which 
may reflect on the driver's qualifications.
    (8) The application must allege that the driver intends to drive or 
is intended to be used as driver in interstate commerce.
    (9) The application and all supporting documents must be submitted 
in triplicate to the Director, Office of Motor Carrier Research and 
Standards, Federal Highway Administration, Washington DC 20590.
    (c) Initiation. Upon receipt of a satisfactory application, the 
Director will issue a notice to all parties that an application for 
resolution of a medical conflict has been received with respect to the 
identified driver, and may require additional information from the 
parties.
    (d) Reply. Any party may submit a reply to the notice within 30 
days after service. The reply must be accompanied by all evidence the 
party desires to be considered by the Director in making a 
determination.
    (e) Parties. For purposes of this section, the parties are the 
driver, the motor carrier, and any other person whom the Director 
designates as such.
    (f) Determination. After considering all the medical evidence 
submitted by the parties and the opinions of medical experts to whom 
any matter under consideration may have been referred, the Director 
shall issue a Determination of Qualification deciding whether the drive 
is qualified under part 391 of this subchapter.
    (g) Petitions for review. A driver or motor carrier adversely 
affected by the Director's determination may within 60 days petition 
for review to the Associate Administrator under this part.


Sec. 363.205  Driver's qualification status pending determinations and 
proceedings.

    (a) In proceedings which are unilaterally commenced by the agency, 
the driver shall be deemed qualified unless and until a final order is 
issued disqualifying the driver.
    (b) In proceedings arising under Sec. 363.204:
    (1) If the driver is not yet employed by the motor carrier with 
which the conflict of medical qualification arises, the driver shall be 
deemed unqualified as a driver only with respect to that motor carrier.
    (2) If the conflict arises from a biennial or other medical 
examination conducted after the driver was previously found qualified 
and employed as a driver by the motor carrier with which the conflict 
exists, the driver shall be deemed qualified only with respect to that 
motor carrier unless and until a final determination by the Director, 
Office of Motor Standards is issued finding the driver unqualified, or 
unless the Associate Administrator otherwise provides.
    (c) During the pendency of a proceeding on a petition for review of 
the Determination of Qualification issued by the Director under 
Sec. 363.204, the driver's status will remain as decided in that 
Determination, unless otherwise provided by the Associate 
Administrator.


Sec. 363.206  Administrative adjudication.

    (a) Referral to an Administrative Law Judge. If there are material 
factual issues in dispute and respondent has requested referral to an 
Administrative Law Judge, the Associate Administrator may assign the 
matter to an Administrative Law Judge.
    (b) Decision. If there are not material factual issues in dispute 
or respondent has not requested referral, the Associate Administrator 
may resolve the matter and issue a final order.
    (c) Procedures. Administrative adjudication and any agency review 
are conducted in accordance with Secs. 363.109 and 363.111-363.115.

Subpart C--General Provisions


Sec. 363.301  Applicability.

    The general provisions in this subpart apply to part 362 of this 
subchapter and this part 363.


Sec. 363.302  Computation of time.

    (a) Generally, in computing any time period set out in these rules 
or in an order issued hereunder, the time computation begins with the 
day following the act, event, or default. The last day of the period is 
included unless it is a Saturday, Sunday, or legal Federal holiday, in 
which case the time period shall run to the end of the next day that is 
not a Saturday, Sunday, or legal Federal holiday. All Saturdays, 
Sundays, and legal Federal holidays except those falling on the last 
day of the period shall be counted.
    (b) Date of entry of orders. In computing any period of time 
involving the date of the entry of an order, the date of entry shall be 
the date the order is served.

[[Page 18893]]

Sec. 363.303  Service.

    (a) Definition.
    Service means the delivery of documents to necessary entities in 
the context of an administrative proceeding. Service by mail is 
complete upon mailing.
    (b) Certificate of service. A certificate of service shall 
accompany all documents served in an administrative proceeding, except 
the notice of violation on Sec. 363.102, the reply form in 
Sec. 363.103, and the notice of determination and letter of 
disqualification in Sec. 363.202. It shall consist of a certificate of 
personal delivery or a certificate of mailing, executed by the person 
making the personal delivery or mailing the document.
    (c) Service list. The initial notice or other document of the 
agency in an administrative proceeding shall have attached a list of 
persons to be served. This service list shall be updated by the agency 
as necessary. Copies of all documents must be served on the persons, 
and in the number of copies, indicated on the service list.
    (d) Form of delivery. All service required by these rules shall be 
made by mail or personal delivery, unless otherwise prescribed.


Sec. 363.304  Extension of time.

    (a) Unless directed otherwise by the Associate Administrator or 
Administrative Law Judge before whom a matter is pending, the parties 
may stipulate to reasonable extensions of time by filing such 
stipulation in the official docket and serving copies on all parties on 
the service list.
    (b) All requests for extensions of time shall be filed with the 
office in the agency to which the answer is to be sent, or, if the 
matter is an administrative adjudication, with the Administrative Law 
Judge or the Associate Administrator, whichever is appropriate. All 
requests must state the reasons for the request. Only those requests 
showing good cause or upon the mutual consent of the parties may be 
granted by the appropriate official. No motion for continuance or 
postponement of a hearing date filed within 7 days of the date set for 
a hearing will be granted unless it is accompanied by an affidavit 
showing that extraordinary circumstances warrant a continuance.


Sec. 363.305  Administrative Law Judge.

    (a) Powers of an Administrative Law Judge. In accordance with the 
rules in this subchapter, an Administrative Law Judge may:
    (1) Give notice of and hold prehearing conferences and hearings;
    (2) Administer oaths and affirmations;
    (3) Issue subpoenas authorized by law
    (4) Rule on offers of proof;
    (5) Receive relevant and material evidence;
    (6) Regulate the course of the administrative adjudication in 
accordance with the rules of this subchapter;
    (7) Hold conferences to settle or simplify the issues by the 
consent of the parties;
    (8) Dispose of procedural motions and requests;
    (9) Make findings of fact and conclusions of law, and issue 
decisions.
    (b) Limitations on the power of the Administrative Law Judge. The 
Administrative Law Judge is bound by the procedural requirements of 
this part and the precedent opinions of the agency as recorded in 
written opinions of the Associate Administrator or in opinions adopted 
by the Associate Administrator. If the Administrative Law Judge imposes 
any sanction not specified in this subchapter, a party may file an 
interlocutory appeal of right with the Associate Administrator pursuant 
to Sec. 363.307. This section does not preclude an Administrative Law 
Judge from barring a person from a specific proceeding based on a 
finding of obstreperous or disruptive behavior in that proceeding.
    (c) Disqualification. The Administrative Law Judge may disqualify 
himself or herself at any time, either at the request of any party or 
upon his or her own initiative. Assignments of Administrative Law 
Judges are made by the Chief Administrative Law Judge upon the request 
of the Associate Administrator. Any request for a change in such 
assignment, including disqualification, will be considered only for 
good cause which would unduly prejudice the proceeding.


Sec. 363.306  Certification of documents.

    (a) Signature required. The attorney of record, the party, or the 
party's representative shall sign each document tendered for filing 
with the hearing docket clerk, the Administrative Law Judge, the 
Associate Administrator, or served on a party.
    (b) Effect of signing a document. By signing a document, the 
attorney of record, the party, or the party's representative certifies 
that the attorney, the party, or the party's representative has read 
the document and, based on reasonable inquiry and to the best of that 
person's knowledge, information, and belief, the document is--
    (1) Consistent with these rules;
    (2) Warranted by existing law or that a good faith argument exists 
for extension, modification, or reversal of existing law; and
    (3) Not unreasonable or unduly burdensome or expensive, not made to 
harass any person, not made to cause unnecessary delay, not made to 
cause needless increase in the cost of the proceedings, or for any 
other improper purpose.
    (c) Sanctions. If the attorney of record, the party, or the party's 
representative signs a document in violation of this section, the 
Administrative Law Judge or the Associate Administrator may:
    (1) Strike the pleading signed in violation of this section;
    (2) Strike the request for discovery or the discovery response 
signed in violation of this section and preclude further discovery by 
the party;
    (3) Deny the motion or request signed in violation of this section;
    (4) Exclude the document signed in violation of this section from 
the record;
    (5) Dismiss the interlocutory appeal and preclude further appeal on 
that issue by the party who filed the appeal until an initial decision 
has been entered on the record; or
    (6) Dismiss the petition for review of the Administrative Law 
Judge's decision to the Associate Administrator.


Sec. 363.307  Interlocutory appeals.

    (a) General. Unless otherwise provided in this subpart, a party may 
not appeal a ruling or decision of the Administrative Law Judge to the 
Associate Administrator until the Administrative Law Judge's decision 
has been entered on the record. A decision or order of the Associate 
Administrator on the interlocutory appeal does not constitute a final 
order for the purposes of judicial review under Sec. 363.115.
    (b) Interlocutory appeal for cause. If a party files a written 
request for an interlocutory appeal for cause with the Administrative 
Law Judge, or orally requests an interlocutory appeal for cause, the 
proceedings are stayed until the Administrative Law Judge issues a 
decision on the request. If the Administrative Law Judge grants the 
request, the proceedings are stayed until the Associate Administrator 
issues a decision on the interlocutory appeal. The Administrative Law 
Judge shall grant an interlocutory appeal for cause if a party shows 
that delay of the appeal would be detrimental to the public interest or 
would result in undue prejudice to any party.
    (c) Interlocutory appeals of right. If a party notifies the 
Administrative Law

[[Page 18894]]

Judge of an interlocutory appeal of right, the proceedings shall be 
stayed until the Associate Administrator issues a decision on the 
interlocutory appeal. A party may file an interlocutory appeal with the 
Associate Administrator, without the consent of the Administrative Law 
Judge, before the Administrative Law Judge has made a decision, in the 
following situations:
    (1) A ruling or order by the Administrative Law Judge barring a 
person from the proceedings;
    (2) Failure of the Administrative Law Judge to dismiss the 
proceedings in accordance with Sec. 363.109(i);
    (3) A ruling or order by the Administrative Law Judge in violation 
of Sec. 363.305(b); and
    (4) Denial by the Administrative Law Judge of a motion to 
disqualify under Sec. 363.305(c).
    (d) Procedure. A party must file a notice of interlocutory appeal, 
with any supporting documents, with the Associate Administrator, and 
serve copies on each party and the Administrative Law Judge, not later 
than 10 days after the Administrative Law Judge's decision forming the 
basis of an interlocutory appeal of right or not later than 10 days 
after the Administrative Law Judge's decision granting an interlocutory 
appeal for cause, whichever is appropriate. A party must file a reply 
brief, if any, with the Associate Administrator and serve a copy of the 
reply brief on each party, not later than 10 days after service of the 
appeal brief. The Associate Administrator shall render a decision on 
the interlocutory appeal, on the record and as a part of the decision 
in the proceedings, within a reasonable time after receipt of the 
interlocutory appeal.
    (e) The Associate Administrator may reject frivolous, repetitive, 
or dilatory appeals, and may issue an order precluding one or more 
parties from making further interlocutory appeals in a proceeding in 
which there have been frivolous, repetitive, or dilatory interlocutory 
appeals.

PART 364--VIOLATIONS, PENALTIES, AND COLLECTIONS

Subpart A--General

Sec.
364.101  Purpose.
364.102  Policy.

Subpart B--Civil Penalties

364.201  Types of violations and maximum monetary penalties.
364.202  Civil penalty assessment factors.

Subpart C--Criminal Penalties and Other Sanctions

364.301  Criminal penalties.
364.302  Injunctions.
364.303  Disqualifications.

Subpart D--Monetary Penalty Collection

364.401  Payment.
364.402  Collections.

    Authority: 49 U.S.C. Chapters 5, 51, 311, 313 and 315.

Subpart A--General


Sec. 364.101   Purpose.

    The purposes of this part are to define the various types of 
violations of the Federal Motor Carrier Safety Regulations (FMCSRs) and 
Hazardous Materials Regulations (HMRs), and orders authorized to be 
issued thereunder; to describe the range of penalties that may be 
imposed for such violations and how those penalties are assessed; and 
to identify the means that may be employed to collect those penalties 
once it has been finally decided by the agency that they are due.


Sec. 364.102   Policy.

    (a) Penalties are assessed administratively by the agency for 
violations of the FMCSRs, HMRs, and administrative orders at levels 
sufficient to bring about satisfactory compliance. Criminal penalties 
are also authorized to be sought in U.S. District Court under certain 
circumstances.
    (b) The maximum amounts of civil penalties that can be assessed for 
regulatory violations subject to the proceedings in this subchapter are 
established in the statutes granting enforcement powers. The 
determination of the actual civil penalties assessed in each proceeding 
is based on those defined limits and consideration of information 
available at the time the claim is made concerning the nature, 
circumstances, extent and gravity of the violation and, with respect to 
the violator, the degree of culpability, history of prior offenses, 
ability to pay, effect on ability to continue to do business, and such 
other matters as justice and public safety may require. In adjudicating 
the claims and orders under the administrative procedures in this 
subchapter, additional information may be developed regarding these 
factors that may affect the final amount of the claim.
    (c) When assessing penalties for violations of notices and orders 
or settling claims based on these assessments, consideration will be 
given to good faith efforts to achieve compliance with the terms of the 
notices and orders.
    (d) Criminal penalties may be sought against a motor carrier, its 
officers or agents, a driver, or other persons when it can be 
established that violations were deliberate or resulted from a willful 
disregard for the regulations. Criminal penalties may be sought against 
an employee only when a causative link can be established between a 
knowing and willful violation and an accident or hazardous materials 
incident or the risk thereof.
    (e) If a State, political subdivision of a State, foreign nation, 
or other governmental entity imposes any civil or criminal penalty for 
acts constituting violations of the regulations covered by this part, 
and those penalties are determined by the Associate Administrator to be 
appropriate for such violations, no further penalties will be assessed 
by the Federal Highway Administration.

Subpart B--Civil Penalties


Sec. 364.201   Types of violations and maximum monetary penalties.

    (a) Violations of parts 350-399 of the FMCS are divided into three 
categories, each of which carries a maximum penalty as noted below. 
Unless otherwise noted, a separate violation occurs for each day the 
violation continues:
    (1) Recordkeeping--violations which involve knowing failure to 
prepare or maintain a record required by the regulations, or knowing 
preparation or maintenance of a required record which is incomplete, 
inaccurate or false. Maximum penalty: $500 per violation, which may be 
increased by $500 for each day the violation continues up to $2,500. 
Actual or constructive possession of the means with which to verify the 
existence or accuracy of the record is presumptive evidence that the 
person responsible for maintaining such record committed a knowing 
violation when such record is incomplete, inaccurate, or false.
    (2) Serious pattern of safety violations--no civil penalties are 
assessed for isolated violations of non-recordkeeping provisions of the 
regulations. The term ``serious patterns of violations'' describes a 
middle range of violations between those of recordkeeping noncompliance 
and willful disregard of the regulations. These types of violations are 
not the isolated human errors, but are tolerated patterns of equipment 
violations or operating conduct that any responsible business entity 
could detect and correct if it wanted to meet its full safety 
responsibility to the public. A pattern may be established by single 
violations

[[Page 18895]]

of more than one regulation, as well as by multiple violations of a 
single regulation. No set number of acts are required. All that is 
needed is a basis to infer that the acts are not isolated or sporadic. 
More than one pattern may be alleged in a single claim. For example, in 
one notice of violations, patterns of hours-of-service violations, use 
of unsafe equipment, and employment of unqualified drivers may be 
alleged and supported with separately counted violations in each 
category. The area of noncompliance may be further broken down if 
patterns are discernible to that extent. In the same notice, for 
instance, it may be alleged that each driver used by a carrier 
constitutes a separate pattern and further that each such driver may 
account for separate patterns of violations of the 10-hour driving rule 
(49 CFR 395.3(a)(1)), the 15-hour on-duty rule (Sec. 395.3(a)(2)), and 
the 70-hours in 8 days on-duty rule (Sec. 395.3(b)(2)), each of which 
presents a separate pattern. When serious patterns of violation are 
detected, civil penalties not to exceed $1,000 for each violation 
within a pattern up to a maximum of $10,000 for each pattern may be 
assessed.
    (3) Substantial Health and Safety Violations. This category applies 
to violations which could reasonably lead to, or have resulted in, 
serious personal injury or death. These are violations that are serious 
in their nature and have been allowed to occur or continue by the motor 
carrier who knew or should have known of their existence. Illustrative 
of such violations are vehicles that are dispatched or continued in a 
condition which would result in an out-of-service order; drivers who 
are dispatched or continued in use when they are unqualified, 
disqualified, or have tested positive for drugs; and drivers who are 
dispatched or continue in an unsafe or fatigued condition. Penalties up 
to $10,000 may be assessed for each violation.
    (4) Limitation on employee non-recordkeeping violations. Except for 
recordkeeping violations, no civil penalty may be assessed against an 
employee of a motor carrier unless it is determined that the employee's 
actions amounted to gross negligence or reckless disregard for safety. 
When that can be shown, the maximum civil penalty is $1,000.
    (i) Owner operators. For purposes of this section, an owner-
operator while in the course of personally operating a commercial motor 
vehicle is considered an employee. When that same owner-operator is not 
acting in a driving capacity, he or she shall be treated as a motor 
carrier or employer.
    (ii) Gross negligence is an act or omission of an aggravated nature 
regarding a legal duty, as opposed to a mere failure to exercise 
ordinary care. It amounts to indifference to or utter disregard of a 
legal duty so far as other persons may be affected. Reckless disregard 
for safety is conduct evincing indifference to consequences under 
circumstances involving danger to life or safety of others even though 
no harm was intended.
    (b) Violations pertaining to commercial drivers licenses (CDL). 
Violations with respect to the operations of commercial motor vehicles 
(CMV) for which a CDL is required under part 383 of this chapter are 
subject to civil penalties up to a maximum of $2,500 per violation. 
These violations include the operation of a CMV by a driver who has not 
obtained a CDL or has more than one driver's license; failure to make 
required notifications of traffic violations, license suspensions or 
previous employment; and operating a CMV after the driver or the CMV 
was placed out-of-service by a duly authorized enforcement official.
    (c) Violations pertaining to minimum levels of Financial 
Responsibility.
    (1) Failure by a motor carrier to maintain the prescribed levels of 
financial responsibility pursuant to Part 387 of this chapter 
constitutes a violation for which a civil penalty of up to $10,000 may 
be assessed for each violation. Each time a motor carrier dispatches a 
commercial motor vehicle without the required level of Financial 
Responsibility may be counted as a separate violation with no overall 
limitation.
    (2) Failure to produce the required proof of Financial 
Responsibility (MCS-90 or MCS-82) is presumptive evidence of failure to 
maintain the required levels of Financial Responsibility. The 
presumption may be rebutted by presentation of the required proof of 
Financial Responsibility covering the applicable period of time within 
10 days of demand.
    (3) Failure to maintain the required proof of Financial 
Responsibility upon demand is a separate offense for which a civil 
penalty of up to $500 may be assessed. A separate civil penalty of $500 
may be assessed for each day such record is not produced after demand 
has been made.
    (d) Violations of the Hazardous Materials Regulations. The 
violations in this subsection apply to motor carriers, drivers, and 
shippers when the transportation is by highway in commercial motor 
vehicles.
    (1) All violations of the Hazardous Materials Transportation Act 
(HMTA), as amended, or orders or regulations issued under the authority 
of that Act applicable to the transporting of hazardous materials by 
highway or the causing of them to be transported by highway are subject 
to a civil penalty of not more than $25,000 and not less than $250 for 
each violation. When the violation is a continuing one, each day of the 
violation constitutes a separate offense.
    (2) All violations of the HMTA, as amended, or orders, regulations, 
or exemptions issued under the authority of that Act applicable to the 
manufacture, fabrication, marking, maintenance, reconditioning, repair 
or testing of a packaging or container which is represented, marked, 
certified or sold as being qualified for use in the transportation of 
hazardous materials by highway are subject to a civil penalty of not 
more than $25,000 and not less than $250 for each violation.
    (3) Whenever regulations issued under the authority of the HMTA, as 
amended, require compliance with another set of regulations, e.g., the 
Federal Motor Carrier Safety Regulations, while transporting hazardous 
materials, any such violation of the latter regulations will be 
considered a violation of the HMR and subject to a civil penalty of not 
more than $25,000 and not less than $250.
    (4) Transporting hazardous materials requiring the display of 
placards or transporting more than 15 passengers by a motor carrier 
during any period in which such motor carrier has a final safety rating 
of unsatisfactory is considered a violation of the MHTA and subject to 
a civil penalty of not more than $25,000 and not less then $250, and 
each transportation movement by such carrier is considered a separate 
violation.
    (e) Violations of Notices and Orders. Additional civil penalties 
pursuant to 49 U.S.C. 521(b) are chargeable for violations of notices 
and orders which are issued in proceedings under part 306, as follows:
    (1) Notice to Abate.
    (i) Failure to cease violations of the safety regulations in the 
time prescribed in the notice may subject the motor carrier to 
reinstatement of any deferred assessment or payment of a penalty or 
portion thereof. (The time within which to comply with a notice to 
abate shall not begin with respect to contested violations until such 
time as the violations are established.)
    (ii) Failure to comply with specific actions prescribed in an order 
(other than to cease violations of the regulations), which were 
determined to be essential to abatement of future

[[Page 18896]]

violations is subject to a civil penalty of $1,000 per violation per 
day up to a maximum of $10,000 per violation.
    (2) Notice to Post. Failure to post the notice of violation as 
directed is subject to a civil penalty of $500 for each such failure.
    (3) Final Order. Failure to pay the penalty assessed in a final 
order within the time prescribed in the order will result in an 
automatic waiver of any reduction in the original claim found to be 
valid and immediate restoration to the full amount assessed in the 
notice of violation.
    (4) Out-of-Service Order.
    (i) Operation of a commercial motor vehicle by a driver during the 
period the driver was placed out of service subjects the driver to 
civil penalty of $1,000 to $2,500 per violation. (For purposes of this 
violation, the term ``driver'' includes an independent contractor who, 
while in the course of operating a commercial motor vehicle, is 
employed or used by another person.)
    (ii) Requiring or Permitting a driver to operate a commercial motor 
vehicle during the period the driver was placed out of service subjects 
the motor carrier to a civil penalty of $2,500 to $10,000 per 
violation.
    (iii) Operation of a commercial motor vehicle by a driver after the 
vehicle was placed out of service and before the required repairs are 
made subjects the driver to a civil penalty of $1,000 to $2,500 each 
time the vehicle is so operated. (This violation applies to drivers as 
defined in paragraph (e)(4)(i) of this section.)
    (iv) Requiring or Permitting the operation of a commercial motor 
vehicle after the vehicle was placed out of service and before the 
required repairs were made subjects the motor carrier to a civil 
penalty of $2,500 to $10,000 each time the vehicle is so operated after 
notice of the defect is received. (This violation applies to motor 
carriers, including independent contractors who are not ``drivers'' as 
defined in paragraph (e)(4)(i) of this section).
    (v) Failure to return written certification of correction as 
required by the out-of-service order is subject to a civil penalty of 
up to $500 per violation.
    (vi) Knowingly falsifying written certification of correction 
required by the out-of-service order is considered the same as 
operating or requiring or permitting a driver to operate an out-of-
service vehicle and is subject to the same civil penalties provided in 
paragraph (e)(4)(iii) and (iv) of this section. Falsification of 
certification may also result in criminal prosecution under 18 U.S.C. 
1001.
    (vii) Operating or causing to operate in violation of an order to 
cease all or part of the motor carrier's commercial motor vehicle 
operations, i.e., failure to cease operations as ordered, is subject to 
a civil penalty of up to $10,000 per day after the effective date and 
time of the order to cease.


Sec. 364.202  Civil penalty assessment factors.

    (a) The nature, circumstances, extent, and gravity of the 
violations listed in Sec. 364.201 may serve as mitigating or 
aggravating factors affecting the amount of the penalty assessed. These 
factors relate to the violations per se, i.e., their magnitude, 
blatancy, frequency and potential for immediate consequences. They 
could be determinative in charging substantial health and safety 
violations or patterns of safety violations, as well as assessing a 
high, medium, or low penalty. In evaluating a motor carrier's safety 
fitness, the terms acute and critical are used in reference to 
particular regulations of which violations are noted. Violations of 
these regulations, therefore, are by their nature serious, and this 
will be considered in assessing penalties. Similarly, when the 
circumstances in which violations occur are so obvious that any 
responsible motor carrier could easily correct them, the continuation 
of such violations is an aggravating factor to be considered in 
assessing the level of civil penalty. When violations are so numerous, 
frequent or longstanding as to indicate habitual noncompliance, the 
extent of the violations is a consideration. Finally, the gravity of 
the violation relates to the likelihood of immediate and harmful 
consequences. When violations have resulted in death or serious 
injuries, the level of civil penalty is likely to be higher. Similarly, 
the occurrence of death or serious injury in other instances resulting 
from the same type of violation increases the gravity of the offense.
    (b) Violator factors. The following factors relate to the 
disposition or conduct of the violator for consideration in the 
assessment of civil penalties.
    (1) Degree of culpability. This factor requires an evaluation of 
blameworthiness on the part of the violator. It will range from the low 
end, where a motor carrier may have had various knowledge of violations 
but little actual involvement, to the high end, where the motor carrier 
had actual knowledge and disregarded or even promoted noncompliance.
    (2) History of prior offenses. Persistent noncompliance reflects a 
disregard for safety which, in turn, increases the prospect for 
imminently hazardous conditions leading to accidents. Timely correction 
of violation patterns should prevent imminent hazards from developing 
and reduce the likelihood of accidents. Consequently, this factor is a 
major indicator of a motor carrier's knowledge of its responsibility 
and disposition toward compliance. Evaluation of this factor will range 
from a low end, where there is no history of previous violation, to a 
history of previous noncompliance with the regulations generally, to 
prior violations of similar regulations, to recent violations of the 
same regulations, to the high end of repeated and persistent violations 
of the same regulations.
    (3) Ability to pay. The violator's size, gross revenues, resources, 
and the standards in 4 CFR part 103 (Standards for Compromise of 
Claims: Inability to Pay) should be taken into consideration in making 
a determination whether to charge the total potential assessment. This 
consideration may affect the decision as to the number of violations to 
cite as well as the level of the penalty to be assessed for each 
violation. The violator may submit evidence of its ability to pay at 
any time, and it will be considered in mitigation of the amount 
claimed. However, this evidence may not be given much weight when the 
other factors in this paragraph (b) indicate a high assessment is 
warranted.
    (4) Effect on ability to continue to do business. Insofar as this 
factor is distinguishable from paragraph (b)(3) of this section, it 
relates to the timeliness of payment and abatement of violations. 
Evidence that immediate payment of even a mitigated civil penalty will 
effectively terminate a motor carrier's or shipper's business will be 
considered in determining whether to defer payment or to allow 
installment payments of the civil penalty assessed.
    (5) Other matters as justice and public safety may require. Matters 
other than those specifically included in the factors listed in this 
section may also be either aggravating or mitigating in the interest of 
justice or public safety. These may include such factors as cooperation 
or lack thereof; general attitude toward compliance; institution or 
revision of a safety program; hiring or assignment of personnel with 
specifically defined safety responsibilities; comprehensiveness of 
corrective actions; and effectiveness and speed of compliance.
    (c) The preponderance of aggravating factors may also indicate the 
need for more intensive enforcement in the form of other orders, 
revocations of operating authority, out-of-service, injunctions, or 
criminal prosecutions.

[[Page 18897]]

Subpart C--Criminal Penalties and Other Sanctions


Sec. 364.301  Criminal penalties.

    (a) Except as provided in paragraph (b) of this section, any person 
who knowingly and willfully violates any provision of the FMCS shall, 
upon conviction, be subject for each offense to a fine not to exceed 
$25,000 or imprisonment for a term not to exceed one year, or both, 
except that, if such violator is an employee, the violator shall only 
be subject to penalty if, while operating a commercial motor vehicle, 
the violator's activities have led to or could have led to death or 
serious injury, in which case the violator shall be liable upon 
conviction, for a fine not to exceed $2,500.
    (b) Any person who knowingly and willfully violates sections 12002, 
12003, 12004, 12005(b), or 12008(d)(2) of the Commercial Motor Vehicle 
Safety Act of 1986 (49 U.S.C. 31302, 31303, 31304, 31305(b), or 
31310(g)(2)), or regulations issued under such sections, shall, upon 
conviction, be subject for each offense to a fine not to exceed $5,000 
or imprisonment for a term not to exceed 90 days, or both.
    (c) Any person who knowingly violates 49 U.S.C. 5104(b), or any 
person who knowingly and willfully violates any provision of the HMTA, 
as amended, or any regulation issued thereunder, shall be fined under 
title 18 of the United States Code, imprisoned for 5 years, or both.
    (d) Additional criminal penalties appear in 49 U.S.C. 522-526.
    (e) If the agency becomes aware of any willful act for which a 
criminal penalty may be imposed as noted in this section, the facts and 
circumstances of such violation may be reported to the Department of 
Justice for criminal prosecution of the offender.


Sec. 364.302  Injunctions.

    (a) The Associate Administrator may file a civil action to enforce 
or redress a violation of a commercial motor vehicle safety regulation 
or order of the FHWA under 49 U.S.C. chapters 5, 51, 311 (except 
sections 31138 and 31139), and 315, in an appropriate district court of 
the United States. The court may grant such relief as is necessary or 
appropriate, including injunctive and equitable relief and punitive 
damages.
    (b) Imminent Hazard--Hazardous Materials Regulations. The Associate 
Administrator may file a civil action to suspend or restrict the 
transportation of hazardous material responsible for an imminent hazard 
or to eliminate or ameliorate such a hazard, in an appropriate district 
court of the United States. The court may grant such relief as is 
necessary or appropriate, including injunctive and equitable relief and 
punitive damages. ``Imminent hazard'' means that there is substantial 
likelihood that death, serious illness, or severe personal injury will 
result from the transportation by motor vehicle of a particular 
hazardous material before an administrative proceeding to abate the 
risk of harm can be completed.
    (c) Imminent Hazard--Federal Motor Carrier Safety Regulations. 
Whenever it is determined that a violation of the FMCS poses an 
imminent hazard, the Associate Administrator or the authorized delegate 
of that official shall order a commercial motor vehicle or the operator 
of a commercial motor vehicle out of service, or order an employer to 
cease all or part of its commercial motor vehicle operations until such 
time as the violations creating the imminently hazardous condition are 
satisfactorily abated. ``Imminent hazard'' means any condition of 
commercial motor vehicle, driver or commercial motor vehicle operations 
which is likely to result in serious personal injury or death if not 
discontinued immediately.
    (d) The employer or driver shall comply immediately upon the 
issuance of an order under paragraph (c) of this section. Opportunity 
for review shall be provided in accordance with Sec. 363.110 of this 
subchapter. An order to an employer to cease all or part of its 
operations shall not prevent vehicles in transit at the time the order 
is served from proceeding to their immediate destinations, unless any 
such vehicle or its driver is specifically ordered out of service 
forthwith. Vehicles and drivers proceeding to their immediate 
destinations shall be subject to full compliance with the order upon 
arrival.
    (e) For purposes of paragraph (d), the term immediate destination 
means the next scheduled stop of the vehicle already in motion where 
the cargo on board can be safely secured.


Sec. 364.303  Disqualifications.

    In addition to any civil or criminal penalties provided for in this 
part, operators of commercial motor vehicles who are convicted of 
certain offenses may also be disqualified for periods from 60 days to 
lifetime, as follows:
    (a) Serious traffic violations.
    (1) Two serious traffic violations in a 3-year period--sixty days.
    (2) Three serious traffic violations in a 3-year period--one 
hundred twenty days.
    (b) Violations of out-of-service orders.
    (1) First violation of operating a commercial motor vehicle during 
the period that the operator, operation, or vehicle are placed out of 
service--ninety days.
    (2) Second violation in a ten-year period of operating a commercial 
motor vehicle during the period that the operator, operation, or 
vehicle are placed out of service--one to five years.
    (3) Third violation or more in a ten-year period of operating a 
commercial motor vehicle during the period that the operator, 
operation, or vehicle are placed out of service--three to five years.
    (4) First violation of operating a commercial motor vehicle 
transporting hazardous materials or passengers during the period that 
the operator, operation, or vehicle are placed out of service--180 
days.
    (5) Second violation or more of operating a commercial motor 
vehicle transporting hazardous materials or passengers during the 
period that the operator, operation, or vehicle are placed out of 
service--three to five years.
    (c) First violation of driving a commercial motor vehicle under the 
influence of alcohol or a controlled substance--at least one year.
    (d) First violation of leaving the scene of an accident involving a 
commercial motor vehicle operated by the violator--at least one year.
    (e) Using a commercial motor vehicle in the commission of a felony 
(except a felony described in paragraph (i) of this section--at least 
one year.
    (f) Second or further violations described in paragraphs (c) and 
(d) of this section--lifetime.
    (g) Using a commercial motor vehicle in the commission of more than 
one felony arising out of different criminal episodes--lifetime.
    (h) Any combination of violations described in paragraphs (c) 
through (f) of this section--lifetime.
    (i) Using a commercial motor vehicle in the commission of a felony 
involving manufacturing, distributing, or dispensing a controlled 
substance, or possession in a commercial motor vehicle with intent to 
manufacture, distribute, or dispense a controlled substance--lifetime.

Subpart D--Monetary Penalty Collection


Sec. 364.401  Payment.

    All monetary penalties are due and payable as provided in the final 
agency order or settlement agreement disposing of the notice of 
violation or claim. Interest will accrue from the date payment was due 
and payable after issuance of a final order, and will be added to all 
outstanding balances not timely paid.

[[Page 18898]]

Sec. 364.402  Collections.

     Unpaid monetary penalties or balances will be pursued aggressively 
under the Federal Standards for the Administrative Collection of Claims 
at 4 CFR part 102, as adopted by the Department of Transportation and 
delegated to the Federal Highway Administration in 49 CFR part 89. 
Penalties may be recovered in an action on behalf of the United States 
in the appropriate U.S. District Court.

PARTS 385 AND 386 AND Sec. 391.47--[REMOVED AND RESERVED]

    2. Chapter III of title 49, CFR, is amended by removing and 
reserving parts 385 and 386 and Sec. 391.47.

[FR Doc. 96-10125 Filed 4-26-96; 8:45 am]
BILLING CODE 4910-22-M