Document ID: FMCSA-2011-0097-2157
Agency: fmcsa
Document Type: Notice
Title: Pilot Program on the North American Free Trade Agreement Long-Haul Trucking Provisions
Posted Date: 2011-07-08T04:00Z

[Federal Register Volume 76, Number 131 (Friday, July 8, 2011)]
[Notices]
[Pages 40420-40439]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-16886]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No FMCSA-2011-0097]

Pilot Program on the North American Free Trade Agreement (NAFTA) 
Long-Haul Trucking Provisions

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

ACTION: Notice; response to public comments.

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SUMMARY: The Federal Motor Carrier Safety Administration (FMCSA) 
announces its intent to proceed with the initiation of a United States-
Mexico cross-border long-haul trucking pilot program to test and 
demonstrate the ability of Mexico-domiciled motor carriers to operate 
safely in the United States beyond the municipalities in the United 
States on the United States-Mexico international border or the 
commercial zones of such municipalities (border commercial zones).

DATES: This notice is effective July 8, 2011.

ADDRESSES: You may search background documents or comments to the 
docket for this notice, identified by docket number FMCSA-2011-0097, by 
visiting the:
     eRulemaking Portal: http://www.regulations.gov. Follow the 
online instructions for reviewing documents and comments. 
Regulations.gov is available electronically 24 hours each day, 365 days 
a year; or.
     DOT Docket Room: Room W12-140 on the ground floor of the 
DOT Headquarters Building at 1200 New Jersey Avenue, SE., Washington, 
DC 20590 between 9 a.m. and 5 p.m., ET, Monday through Friday, except 
Federal holidays.
    Privacy Act: Anyone is able to search the electronic form of all 
comments received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review DOT's 
Privacy Act System of Records Notice for the DOT Federal Docket 
Management System published in the Federal Register on January 17, 2008 
(73 FR 3316), or you may visit http://edocket.access.gpo.gov/2008/pdf/E8-785.pdf.

FOR FURTHER INFORMATION CONTACT: Marcelo Perez, FMCSA, 1200 New Jersey 
Avenue, SE., Washington, DC 20590-0001. Telephone (202) 366-9597; e-
mail marcelo.perez@dot.gov.

SUPPLEMENTARY INFORMATION: On April 13, 2011, FMCSA published a notice 
in the Federal Register announcing its plans to initiate a pilot 
program as part of FMCSA's implementation of the NAFTA cross-border 
long-haul trucking provisions in compliance with section 6901(b)(2)(B) 
of the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq 
Accountability Appropriations Act, 2007, and requested public comments 
on those plans. FMCSA reviewed, assessed, and evaluated the required 
safety measures as noted in the notice, and considered all comments 
received on or before May 13, 2011, in response to the April 13, 2011, 
notice. Additionally, to the extent practicable, FMCSA considered 
comments received after May 13, 2011. Once the U.S. Department of 
Transportation's (DOT) Inspector General completes his report to 
Congress required by section 6901(b)(1) and the Agency completes any 
follow up actions needed to address issues raised in the report, FMCSA 
will proceed with the pilot program. FMCSA made changes and clarified 
elements of the program as a result of comments to the docket. For 
example, the Agency will include International Registration Plan (IRP) 
and International Fuel Tax Association (IFTA) information in its pre-
authority safety audit (PASA) process; posted the Mexican regulations 
in both English and Spanish in the docket for this notice; elaborated 
on the inspection of available vehicles operating in the United States 
during

[[Page 40421]]

the compliance review (CR); and confirmed that the PASA information 
will be published in the Federal Register.
    As indicated in the April 13, 2011, Federal Register notice, this 
pilot program will not include operations that transport placarded 
amounts of hazardous materials or passengers. In addition, on May 31, 
2011, Mexico published its regulations that will govern a U.S. motor 
carrier's application for authority to operate in Mexico. In its 
regulations, Mexico specifies several types of transportation services, 
vehicles, and operations as ineligible for authority to operate into 
Mexico. These include oversized or overweight goods, industrial cranes, 
vehicle towing or rescue, or packaging and courier services. Mexico is 
allowing U.S. motor carriers of international freight to operate into 
Mexico. Mexico has excluded these services, vehicles, and operations 
from the program because they are not classified as, or pertinent to, 
freight operations in Mexico; rather these types of operations are 
subject to separate operating authority requirements than freight motor 
carriers. While the United States does not distinguish between these 
types of freight operations, in order to comply with the reciprocity 
requirements of section 6901(a)(3), the United States will not issue 
authority to Mexico-domiciled motor carriers to transport oversized or 
overweight goods, industrial cranes, or operate vehicle towing, rescue 
or packaging and courier services in this pilot program.

Legal Basis

    Section 6901(a) of the U.S. Troop Readiness, Veterans' Care, 
Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 
[Pub. L. 110-28, 121 Stat. 112, 183, May 25, 2007] (2007 Appropriations 
Act) provides that before DOT may obligate or expend any funds to grant 
authority for Mexico-domiciled trucks to engage in cross-border long-
haul operations, DOT must first test granting such authority through a 
pilot program that meets the standards of 49 U.S.C. 31315(c). In 
accordance with 49 U.S.C. 31315(c)(2), in proposing a pilot program, 
the Secretary of Transportation (Secretary) has general authority to 
conduct pilot programs ``that are designed to achieve a level of safety 
that is equivalent to, or greater than, the level of safety that would 
otherwise be achieved * * *..''
    In a pilot program, DOT typically collects specific data for 
evaluating alternatives to the regulations or innovative approaches to 
safety while ensuring that the goals of the regulations are satisfied. 
A pilot program may not last more than 3 years, and the number of 
participants in a pilot program must be large enough to ensure 
statistically valid findings. Pilot programs must include an oversight 
plan to ensure that participants comply with the terms and conditions 
of participation, and procedures to protect the health and safety of 
study participants and the general public. A pilot program may be 
initiated only after DOT publishes a detailed description of it in the 
Federal Register and provides an opportunity for public comment. 
Accordingly, on April 13, 2011, the Agency published a notice 
announcing its intention to conduct a pilot program and soliciting 
comment (76 FR 20807). This document responds to comments to the April 
13, 2011 notice and provides additional information about the planned 
pilot program as requested by commenters. While a pilot program may 
provide temporary regulatory relief from one or more regulations to a 
person or class of persons subject to the regulations, or a person or 
class of persons who intends to engage in an activity that would be 
subject to the regulations (49 U.S.C. 31315(c)(1) and (2)), in this 
pilot program DOT does not propose to exempt or relieve Mexico-
domiciled motor carriers from any FMCSA safety regulation or evaluate 
any less stringent alternatives to existing regulation. Mexico-
domiciled motor carriers participating in the program will be required 
to comply with the existing motor carrier safety regulatory regime plus 
certain additional requirements associated with acceptance into and 
participation in the program.
    Section 6901(a) of the 2007 Appropriations Act, the terms of which 
have been incorporated in each subsequent DOT appropriations act, also 
provides that this pilot program must comply with section 350 of the 
Department of Transportation and Related Agencies Appropriations Act, 
2002 [Pub. L. 107-87, 115 Stat. 833, 864, December 18, 2001] (section 
350). Section 350 prohibited FMCSA from using funds made available in 
the 2002 DOT Appropriations Act to review or process applications from 
Mexico-domiciled motor carriers to operate beyond the border commercial 
zones until certain preconditions and safety requirements were met. The 
terms of section 350 have also been incorporated in each subsequent DOT 
appropriations act. Section 350(a)(1) required FMCSA to perform a PASA 
of any Mexico-domiciled motor carrier before that motor carrier is 
allowed to engage in long-haul operations in the United States. 
Vehicles the motor carrier will operate beyond the border commercial 
zones that do not already have a Commercial Vehicle Safety Alliance 
(CVSA) decal are required to pass an inspection at the border port of 
entry and obtain a decal before being allowed to proceed. Section 
350(a)(4) also required DOT to give a distinctive identification number 
to each Mexico-domiciled motor carrier that would operate beyond the 
border commercial zones to assist inspectors in enforcing motor carrier 
safety regulations. Additionally, every driver who will operate in the 
United States must have a valid commercial driver's license issued by 
Mexico. Section 350(c)(1) also required DOT's Office of the Inspector 
General (OIG) to conduct a comprehensive review of the adequacy of 
inspection capacity, information infrastructure, enforcement capability 
and other specific factors relevant to safe operations by Mexico-
domiciled motor carriers; and section 350(c)(2) required the Secretary 
to address the OIG's findings and certify that the opening of the 
border poses no safety risk. The OIG was also directed to conduct 
similar reviews at least annually thereafter. A number of the section 
350 requirements were addressed by FMCSA in rulemakings published on 
March 19, 2002 (67 FR 12653, 67 FR 12702, 67 FR 12758, 67 FR 12776) and 
on May 13, 2002 (67 FR 31978).
    Section 136 of the Transportation, Housing and Urban Development, 
and Related Agencies Appropriations Act, 2009 [Division I of the 
Omnibus Appropriations Act, 2009, Pub. L, 111-8, 123 Stat. 524, 932, 
March 11, 2009] (2009 Appropriations Act) prohibited DOT from expending 
funds made available in the 2009 Appropriations Act to establish, 
implement, or continue a cross-border motor carrier pilot program to 
allow Mexico-domiciled motor carriers to operate beyond the border 
commercial zones. The Transportation, Housing and Urban Development, 
and Related Agencies Appropriations Act, 2010 [Division A of the 
Consolidated Appropriations Act, 2010, Pub. L. 111-117, 123 Stat. 3034, 
December 16, 2009] (2010 Appropriations Act) did not bar DOT or FMCSA 
from using funds on a cross-border long-haul program; but, pursuant to 
section 135 of the 2010 Appropriations Act (123 Stat. at 3053) did 
retain the requirements of section 6901 and section 350. Section 
1101(a)(6) of the Full-Year Continuing Appropriations Act, 2011 [Pub. 
L. 112-10, division B, 125 Stat. 102, 103, April

[[Page 40422]]

15, 2011] (2011 Appropriations Act), makes funding available for DOT 
and other Federal agencies during Fiscal Year (FY) 2011 under the 
authority and conditions specified in the 2010 Appropriations Act.
    Section 6901 of the 2007 Appropriations Act also provided that 
simultaneous and comparable authority to operate within Mexico must be 
made available to U.S. motor carriers. Further, before the required 
pilot program may begin, in accordance with section 6901(b)(1), the 
Department's OIG must submit a report to Congress verifying that DOT 
has complied with the requirements of section 350(a). DOT must take any 
actions that are necessary to address issues raised by the OIG and must 
detail those actions in a report to Congress. Section 6901(c) also 
directed the OIG to submit an interim report to Congress 6 months after 
the initiation of a cross-border long-haul Mexican trucking pilot 
program and a final report after the pilot program is completed. The 
statute further specified that the report address the program's 
adequacy as a test of safety. Also, as a precondition to beginning the 
pilot program, section 6901 of the 2007 Appropriations Act requires 
that DOT provide an opportunity for public comment by publishing in the 
Federal Register information on the PASAs conducted. DOT must also 
publish, for comment, the standards that will be used to evaluate the 
pilot program. The Agency must also provide a list of Federal motor 
carrier safety laws and regulations, including commercial driver's 
license (CDL) requirements, for which the Secretary will accept 
compliance with corresponding Mexican law or regulation as the 
equivalent to compliance with the U.S. law or regulation including an 
analysis of how the corresponding United States and Mexican laws and 
regulations differ. Further discussion of relevant U.S. and Mexican 
safety laws and regulations is provided later in this notice.

Background

Introduction

    Before 1982, Mexico- and Canada-domiciled motor carriers could 
apply to the Interstate Commerce Commission (ICC), a former independent 
Federal agency responsible for regulating, inter alia, motor carrier 
operations and safety, for authority to operate within the United 
States. As a result of complaints that U.S. motor carriers were not 
allowed the same access to Mexican and Canadian markets that motor 
carriers from those nations enjoyed in this country, the Bus Regulatory 
Reform Act of 1982 [Pub. L. 97-261, 96 Stat. 2201, September 20, 1982] 
imposed a moratorium on the issuance of new operating authority to 
motor carriers domiciled, or owned or controlled by persons domiciled 
in Canada or Mexico. While the disagreement with Canada was quickly 
resolved, the issue of trucking reciprocity with Mexico was not.
    Currently, most Mexico-domiciled motor carriers are allowed to 
operate only within the border commercial zones typically extending up 
to 25 to 50 miles into the United States. Every year, Mexico-domiciled 
commercial motor vehicles (CMVs) cross into the United States about 4.5 
million times. Mexico granted reciprocal authority to 10 U.S.-domiciled 
motor carriers to operate throughout Mexico during the time of FMCSA's 
previous demonstration project, which was conducted between September 
2007 and March 2009. Four of these motor carriers continue to operate 
in Mexico.
    Trucking issues at the United States-Mexico border were not fully 
addressed until NAFTA was negotiated in the early 1990s. NAFTA required 
the United States to incrementally lift the moratorium on licensing 
Mexico-domiciled motor carriers to operate beyond the border commercial 
zones. On January 1, 1994, President Clinton modified the moratorium 
and the ICC began accepting applications from Mexico-domiciled 
passenger motor carriers to conduct international charter and tour bus 
operations in the United States (Memorandum for the Secretary of 
Transportation, ``Determination Under the Bus Regulatory Reform Act of 
1982,'' 59 FR 653, January 6, 1994). On December 13, 1995, the ICC 
published a rule and a revised application form for the processing of 
Mexico-domiciled property motor carrier applications (Form OP-1(MX)) 
(60 FR 63981). The ICC rule anticipated the implementation of the 
second phase of NAFTA, providing Mexico-domiciled motor carriers of 
property access to California, Arizona, New Mexico and Texas, and the 
third phase, providing access throughout the United States. However, at 
the end of 1995, the United States announced an indefinite delay in 
opening the border to long-haul Mexico-domiciled long-haul motor 
carrier operations.
    In 1998, Mexico filed a claim against the United States under NAFTA 
dispute resolution provisions alleging that the United States' refusal 
to grant authority to Mexico-domiciled trucking companies constituted a 
breach of the United States' NAFTA obligations. On February 6, 2001, 
the arbitration panel, convened pursuant to NAFTA dispute resolution 
provisions, issued its final report and ruled in Mexico's favor, 
concluding that the United States was in breach of its obligations and 
that Mexico could impose tariffs on U.S. exports to Mexico up to an 
amount commensurate with the loss of business resulting from the lack 
of U.S. compliance. The arbitration panel noted that the United States 
could establish a safety oversight regime to ensure the safety of 
Mexico-domiciled motor carriers entering the United States, but that 
the safety oversight regime could not be discriminatory and must be 
justified by safety data.
    After President Bush announced the intent to resume the process for 
opening the border in 2001, Congress enacted section 350, as discussed 
in the ``Legal Basis'' section of this notice. FMCSA took various steps 
to comply with section 350, including the issuance of new regulations 
applicable to Mexico-domiciled long-haul motor carriers (67 FR 12702, 
12758, March 19, 2002). These regulations were challenged on 
environmental grounds in litigation that was ultimately decided in 
FMCSA's favor by the U.S. Supreme Court (Department of Transportation 
v. Public Citizen, 541 U.S. 752 (2004)).
    In November 2002, then Secretary Norman Mineta certified, as 
required by section 350(c)(2), that authorizing Mexico-domiciled motor 
carrier operations beyond the border commercial zones did not pose an 
unacceptable safety risk to the American public. Later that month, 
President Bush modified the moratorium to permit Mexico-domiciled motor 
carriers to provide cross-border cargo and scheduled passenger 
transportation beyond the border commercial zones. (Memorandum of 
November 27, 2002, for the Secretary of Transportation, ``Determination 
Under the Interstate Commerce Commission Termination Act of 1995,'' 67 
FR 71795, December 2, 2002). The Secretary's certification was made in 
response to the June 25, 2002, DOT OIG report on the implementation of 
safety requirements at the United States-Mexico border. In a January 
2005 follow-up report, the OIG concluded that FMCSA had sufficient 
staff, facilities, equipment, and procedures in place to substantially 
meet the eight section 350 requirements that the OIG was required to 
review. These reports are available in the docket for this notice.
    Former Secretary Mary Peters and Mexico's former Secretary of the 
Secretaria de Communicaciones y Transportes (SCT) Luis T[eacute]llez 
Kuenzler

[[Page 40423]]

announced a demonstration project to implement certain trucking 
provisions of NAFTA on February 23, 2007. The demonstration project was 
initiated on September 6, 2007, after the DOT complied with the 
conditions imposed by section 6901 of the 2007 Appropriations Act, as 
discussed in the ``Legal Basis'' section of this notice. The 
demonstration project was initially expected to last 1 year (72 FR 
23883, May 1, 2007). On August 6, 2008, FMCSA announced that the 
demonstration project was being extended from 1 year to the full 3 
years allowed by 49 U.S.C. 31315(c)(2)(A) (73 FR 45796) after 
Secretaries Peters and T[eacute]llez exchanged letters on the 
extension.
    On March 11, 2009, President Obama signed into law the 2009 
Appropriations Act. Section 136 of the 2009 Appropriations Act provides 
that:

    [N]one of the funds appropriated or otherwise made available 
under this Act may be used, directly or indirectly, to establish, 
implement, continue, promote, or in any way permit a cross-border 
motor carrier pilot program to allow Mexican-domiciled motor 
carriers to operate beyond the commercial zones along the 
international border between the United States and Mexico, including 
continuing, in whole or in part, any such program that was initiated 
prior to the date of the enactment of this Act (123 Stat. at 932).

    In accordance with section 136, FMCSA terminated the cross-border 
demonstration project that began on September 6, 2007. The Agency 
ceased processing applications by prospective project participants and 
took other necessary steps to comply with the provision. (74 FR 11628, 
March 18, 2009). In light of the termination, two consolidated lawsuits 
challenging the project and pending before the U.S. Court of Appeals 
for the Ninth Circuit were dismissed as moot.
    On March 19, 2009, Mexico announced that it was exercising its 
rights under the 2001 NAFTA Arbitration Panel decision to impose 
retaliatory tariffs for the failure to allow Mexico-domiciled motor 
carriers to provide long-haul service into the United States. The 
tariffs affect approximately 90 U.S. export commodities at an estimated 
annual cost of $2.4 billion. The President directed DOT to work with 
the Office of the U.S. Trade Representative and the Department of 
State, along with leaders in Congress and Mexican officials, to propose 
legislation creating a new cross-border trucking program, and to 
address the legitimate safety concerns of Congress while fulfilling our 
obligations under NAFTA. Secretary Ray LaHood met with numerous members 
of Congress to solicit their input. FMCSA tasked its Motor Carrier 
Safety Advisory Committee (MCSAC) with providing advice and guidance on 
essential elements that the Agency should consider when drafting 
proposed legislation to permit Mexico-domiciled motor carriers beyond 
the border commercial zones. The MCSAC final report on this tasking is 
available on the FMCSA MCSAC Web page at http://mcsac.fmcsa.dot.gov/Reports.htm. Additionally, DOT formed a team to draft principles that 
would guide the creation of the draft legislation.
    President Obama signed the 2010 Appropriations Act on December 16, 
2009, which contained no prohibitions against using FY 2010 funds to 
conduct a cross border long-haul program (unlike the 2009 
Appropriations Act) and retained requirements specified in section 350 
and section 6901 of the 2007 Appropriations Act.
    On April 12, 2010, Secretary LaHood met with Mexico's former 
Secretary of SCT, Juan Molinar Horcasitas, and announced a plan to 
establish a working group to consider the next steps in implementing a 
cross-border trucking program. On May 19, 2010, President Obama and 
Mexico's President Felipe Calderon Hinojosa issued a joint statement 
acknowledging that safe, efficient, secure, and compatible 
transportation is a prerequisite for mutual economic growth. They 
committed to continue their countries' cooperation in system planning, 
operational coordination, and technical cooperation in key modes of 
transportation.

The Initial Concept Document and the Preliminary Agreement

    On January 6, 2011, Secretary LaHood shared with Congress and the 
Government of Mexico an initial concept document for a cross-border 
long-haul Mexican trucking pilot program that prioritizes safety, while 
satisfying the U.S. international obligations. On the same day, the 
Department posted the concept documents on its Web site for public 
viewing (http://www.dot.gov/affairs/2011/dot0111.html). The initial 
concept document was the starting point for renewed negotiations with 
Mexico; and the United States commenced discussions with the Government 
of Mexico on January 18, 2011. The preliminary agreement between DOT 
and SCT is reflected in the program description and described below.
    On March 3, 2011, President Obama met with Mexico's President 
Calderon and announced that there is a clear path forward to resolving 
the trucking issues between the United States and Mexico.
    On April 13, 2011, FMCSA published notice of the pilot program on 
NAFTA Long-Haul Trucking Provisions in the Federal Register (76 FR 
20807) and the comment period ended May 13, 2011.
    The Agency explained that the pilot program will allow Mexico-
domiciled motor carriers to operate throughout the United States for up 
to 3 years, and that U.S.-domiciled motor carriers will be granted 
reciprocal rights to operate in Mexico for the same period. 
Participating Mexico-domiciled motor carriers and drivers must comply 
with all applicable U.S. motor carrier safety laws and regulations, as 
well as other applicable U.S. laws and regulations, inter alia, those 
concerned with customs, immigration, vehicle emissions, employment, 
vehicle registration, and vehicle/fuel taxation.
    The Agency explained that the safety performance of the 
participating motor carriers will be tracked closely by FMCSA and its 
State partners, a Federal Advisory Committee Act group, and the OIG. 
The Agency will monitor and evaluate the data from the pilot program as 
a test of the granting of authority to Mexico-domiciled motor carriers 
to conduct long-haul operations in the United States. FMCSA indicated 
that it anticipated participating motor carriers may be able to convert 
their provisional status under the pilot program to ``permanent'' 
authority under the pilot program after operating 18 months and 
successfully completing a compliance review (CR). This ``permanent'' 
authority under the pilot program, in turn, may be converted into 
standard permanent authority upon completion or termination of the 
pilot program. It should be noted that the Agency will be maintaining 
its oversight strategies and resources that have been reviewed by the 
OIG during the previous demonstration project and the OIG's other 
reviews of the Agency's compliance with section 350. The April 13th 
notice outlined how the Agency would maintain those strategies and 
augment them with new strategies to address stakeholder input. This 
notice responds to comments on those previous and augmented strategies.
    As indicated in the April 13, 2011, Federal Register notice, this 
pilot program will not include operations that involve the transport of 
placarded amounts of hazardous materials or passengers. As noted in the 
``Summary'' section of this notice, Mexico's regulations identify other 
types of CMV operations and services as ineligible for authority to 
operate into Mexico. These include the transportation of oversized

[[Page 40424]]

or overweight goods, industrial cranes, vehicle towing or rescue, or 
packaging and courier services. Mexico is allowing U.S. motor carriers 
of international freight to operate into Mexico. In order to comply 
with the reciprocity requirements of section 6901(a)(3) of the 2007 
Appropriations Act, the United States will not issue authority to 
Mexico-domiciled motor carriers to transport oversized or overweight 
goods, industrial cranes, or operate vehicle towing, rescue, or 
packaging and courier services in this pilot program.

Discussion of Comments

    The notice and comment process for all pilot programs is required 
by statute (49 U.S.C. 31315) with the intent of providing all 
interested parties with the opportunity to review information published 
by the Agency and to comment on the specific details about any proposed 
pilot program. As of June 1, 2011, FMCSA received 2,254 comments or 
docket submissions in response to the April 13, 2011, notice. Over 
1,000 comments were submitted by individuals on behalf of the 
International Brotherhood of Teamsters (Teamsters).
    There were three recurring submissions from individuals that made 
up the majority of the comments. These commenters expressed concerns 
about the violence in Mexico and indicated that the pilot program will 
negatively impact U.S. jobs at a time when unemployment is high. 
Approximately 1,000 of the comments were submissions by individuals 
suggesting that the Agency should abandon the idea of a pilot program. 
Generally, these comments did not include information concerning the 
technical details of the Agency's proposal (e.g., specific safety 
oversight procedures or processes), economic or legal aspects of the 
pilot program, or any other information supporting the view that the 
program should not be pursued. While FMCSA is not responding to these 
comments individually, the Agency believes that its responses to the 
substantive comments received address the brief comments submitted by 
these individuals.
    Moreover, the purpose of this pilot program is to test the granting 
of authority to Mexico-domiciled motor carriers to conduct long-haul 
operation in the United States, in order to evaluate the ability of 
Mexico-domiciled motor carriers to operate safely in the United States 
beyond the border commercial zones as part of DOT's implementation of 
the NAFTA land transportation provisions. While FMCSA acknowledges 
these commenters' concerns, the issues are beyond the scope of the 
pilot project in that they do not relate to the safe operation of CMVs 
by Mexico-domiciled motor carriers or compliance with U.S. motor 
carrier safety regulations. Therefore, these comments will not be 
addressed in this notice.
    The remaining comments were from members of Congress, companies, 
organizations, associations, and individuals expressing their views on 
specific details about the pilot program.
    The Agency's announcement of its intent to proceed with the program 
is based on its consideration of all data and information currently 
available, including information submitted by the commenters.
    The Agency received substantive comments from: Advocates for 
Highway and Auto Safety (Advocates); Teamsters; the American Trucking 
Associations (ATA); California Trucking Association (CTA); the Owner-
Operator Independent Drivers Association (OOIDA); International 
Registration Plan (IRP), the Border Trade Alliance (BTA), the American 
Association for Justice (AAJ), Werner Enterprises, and the Truck Safety 
Coalition (Coalition)--a partnership with Citizens for Reliable and 
Safe Highways and Parents Against Tired Truckers. In addition, comments 
were received from several U.S. Representatives and Senators.

General Support for the Pilot Program

    Many commenters supported the pilot program and recognized its 
importance in meeting U.S. obligations under NAFTA. U.S. companies and 
their representative associations that have been negatively impacted by 
the tariffs imposed by the Government of Mexico as a result of the 
termination of the previous demonstration project also expressed their 
strong support for the program. Companies negatively impacted by the 
tariffs included Oceanspray, Kraft Foods, Con Agra, Campbell Soup 
Company, American Frozen Foods Institute, National Cattlemen's Beef 
Association, National Potato Council, North American Equipment Dealers 
Association, the Grocery Manufacturers Association, Association of 
Food, Beverage and Consumer Products Companies, Distilled Spirits 
Council of the United States, Fresh Produce Association of the 
Americas, Mars, National Association of State Departments of 
Agriculture, the Snack Food Association, and Tysons Food. These 
commenters expressed their support for the pilot program as the means 
to remove the tariffs that have negatively impacted their industries.
    Supporters of the pilot program include U.S. Representatives Mike 
Thompson and Reid Ribble. Representative Thompson stated,

    The proposal the Administration crafted includes important 
protections to ensure trucks crossing the border are operating 
safely on our roadways and under our environmental standards, 
allowing us to monitor and inspect vehicles before they are approved 
for cross-border trucking operations. I believe implementation of 
this revised pilot program provides a clear path toward the 
elimination of these harmful retaliatory tariffs and normalization 
of trade between our two countries, while also ensuring the 
integrity of our roadways.

    Thirteen commenters--including the U.S. Apple Association, the 
National Council of Farmer Cooperatives and the National Association of 
State Departments of Agriculture--referenced the Congressional Research 
Service and/or OIG reports that concluded during the previous 18-month 
pilot program, Mexican trucks were as safe as--if not safer than--their 
U.S. counterparts and were subject to far more inspections.
    U.S. Representative Doc Hastings and 29 congressional colleagues 
provided a letter in support of the pilot program, stating,

    As you know, Mexico imposed $2.6 billion in retaliatory tariffs 
on 99 U.S. agricultural and manufacturing products more than two 
years ago, after the United States halted a cross-border trucking 
program that was designed to bring the United States into compliance 
with our international obligations in a matter consistent with U.S. 
law. Since then, Mexico has rotated the tariffs to cover additional 
products, and Mexican officials have made clear they are prepared to 
do so yet again.
    These tariffs have already cost tens of thousands of U.S. jobs 
and over $4 billion to U.S. job creators, at a time when our economy 
is already struggling. It is imperative for U.S. workers and 
exporters that these tariffs be eliminated. Mexico has agreed to 
suspend fifty percent of the tariffs across the board once the new 
cross-border trucking pilot program is officially instituted and 
remaining tariffs once the first permit is issued under the program. 
The success of this pilot program is, thus, critical for U.S. 
workers and exporters--and for U.S. economic recovery.

    This letter concluded with the statement that,

    In short, we have long believed that the United States can 
strengthen its economy by resolving this major issue with one of our 
largest trading partners--in a manner that fully ensures the safety 
of U.S. highways. This pilot program and its substantial safeguards 
are prudent and responsible. We strongly encourage you to move 
forward with finalizing and implementing this plan as soon as 
possible. These tariffs have done irreparable damage to our local 
economies, and U.S. workers, farmers, manufacturers,

[[Page 40425]]

and other exporters simply cannot afford any further delays.

    The United States-Mexico Chamber of Commerce stated,

    In 2010, Mexico and the United States enjoyed a nearly $400 
billion trade relationship, and 70 percent of it travels by truck in 
an antiquated transportation system that requires three trucks and 
three drivers to do the job of one. This not only bloats producer 
and consumer prices by hundreds of millions of dollars a year. It 
also fails to fulfill the benefits (particularly lower 
transportation costs) that accrue from U.S.-Mexico proximity--a key 
NAFTA advantage. Doing so now clearly would boost U.S. and North 
American competitiveness against economic rivals and result in still 
more jobs.

    The Cato Institute advised,

    The failure of Congress to allow implementation of the NAFTA 
trucking provisions has proven costly to the United States in three 
important ways.
    First, U.S. failure to comply has deprived our economy of the 
efficiencies of moving goods across our mutual border at lower cost. 
With the ban in place, trucks approaching the border are required to 
unload their cargo into warehouses in so-called commercial zones 
within 25 miles of the border, only to have that cargo reloaded onto 
short-haul vehicles and then onto domestic trucks for final 
delivery. This inefficient system causes delays, increased pollution 
and added costs at busy border crossings such as Calexico East; San 
Ysidro; Nogales, Ariz.; and Laredo, Texas. Because more than 70 
percent of U.S. trade with Mexico travels by truck, the ban on 
cross-border trucking imposes an additional $200 million to $400 
million in transportation costs each year, according to the U.S. 
Department of Transportation.
    Second, failure to comply has exposed U.S. exporters to 
perfectly legal sanctions imposed by the Mexican government. Under 
the provisions of NAFTA, and after waiting patiently for more than a 
decade, the Mexican government imposed sanctions in 2009 on more 
than $2.4 billion in U.S. exports affect 100 products, from 
Washington apples to Iowa pork. The sanctions would be lifted in two 
stages as the U.S. government implements the proposed program to 
comply with Annex I.
    Third, failure to comply has compromised the U.S. government's 
reputation as a good citizen of the global trading system. Simply 
put, the U.S. government has failed to keep its word to our Mexican 
neighbors. Our government has been in flagrant violation of a major 
trade agreement for more than 15 years. This breach of trust has 
undermined the U.S. government's standing to challenge other 
governments, from Mexico to China to the European Union, who may 
also be in violation of various trade agreements. The Obama 
administration's promise to more vigorously ``enforce'' our rights 
in the World Trade Organization and other agreements will lack 
credibility as long as the U.S. government fails to comply with such 
clear commitments as the trucking provisions of NAFTA.
    For all these reasons, the U.S. government should act as quickly 
and as thoroughly as possible to implement the proposed regulations 
to bring our nation into compliance with our mutually beneficial 
agreement with our Mexican neighbors on cross-border trucking.

General Opposition to the Pilot Program

    Most of the individual commenters to the April 13 notice expressed 
concerns about the following:
    (1) The U.S. Government's funding of the electronic monitoring 
devices for participating Mexico-domiciled motor carriers;
    (2) Mexico's standards for CDLs;
    (3) The accuracy and completeness of Mexico's driver records;
    (4) Compliance with hours-of-service requirements; and
    (5) Comparable access for U.S. motor carriers.
    U.S. Senator John D. Rockefeller and U.S. Representative Peter A. 
DeFazio both noted the economic impacts of NAFTA. Representative 
DeFazio expressed concern that ``the Administration is not launching a 
pilot program, but rather starting the full liberalization of cross-
border trucking without having fully addressed the concerns raised by 
members of Congress surrounding safety, security, and job impacts that 
will necessarily arise.'' Representative DeFazio further suggested 
``that the U.S. should renegotiate U.S. NAFTA Annex I (I-U-21) * * * 
thus eliminat[ing] the requirement to open our borders to Mexican 
trucks.''
    U.S. Representative Bob Filner and U.S. Senator Mark Pryor also 
expressed concerns about the pilot program. Representative Filner's 
concerns included traffic congestion at our land port-of-entry and the 
impact on border wait times. He stated that, ``Many of my constituents 
already have to wait in lines several hours each day to cross the 
border * * *. We simply do not have enough Border Patrol and 
Immigration and Customs Enforcement agents at the border to deal with 
the existing traffic or the heavy burden of the proposed program.''
    U.S. Representative Duncan Hunter, Jr. and 43 additional members of 
Congress co-signed a letter to the Secretary communicating their 
concerns about safety, the costs of electronic monitoring devices, and 
violence in Mexico. A copy of each congressional letter is available in 
the docket for this notice.
1. Operating Authority Under the Pilot Program
    The Coalition stated that the pilot program participants should not 
be granted permanent authority before completion of the pilot program 
and evaluation of the results. The Coalition stated that, ``Granting 
permanent operating authority before the Pilot Program is completed 
undermines the purpose of the experiment and data collection and puts 
the public at serious risk.''
    Representative DeFazio questioned how the Agency could comply with 
49 U.S.C. 31315, which requires DOT to immediately revoke the 
participation of any motor carrier or driver who fails to comply with 
the terms and conditions of the pilot program, if the Agency is 
granting permanent authority.
    OOIDA challenged the Agency's statutory authority for issuing 
operating authority. OOIDA averred that 49 U.S.C. 13902 precludes FMCSA 
from accepting compliance with certain Mexican laws and regulations in 
lieu of compliance with U.S. laws and regulations. OOIDA stated, 
``FMCSA is simply not authorized to issue operating authority to any 
motor carrier (U.S. or Mexican) unless that carrier agrees to comply 
with applicable U.S. statutes and regulations.'' To support its 
position, OOIDA quoted a statement in the November 27, 2002, Memorandum 
of the President for the Secretary of Transportation, ``Determination 
Under the Interstate Commerce Commission Termination Act of 1995,'' (65 
FR 71795, November 27, 2002), which terminated a moratorium on issuing 
operating authority to Mexico-domiciled motor carriers:

    Motor carriers domiciled in Mexico operating in the United 
States will be subject to the same Federal and State laws, 
regulations, and procedures that apply to carriers domiciled in the 
United States.

    Advocates questioned whether FMCSA will be granting temporary 
operating authority to any participating Mexico-domiciled long-haul 
motor carriers before they are accepted into the pilot program. 
Advocates also stated that it opposes the granting of any operating 
authority, including temporary authority, in advance of FMCSA's 
publication of a notice in the Federal Register describing its data and 
information on completed PASAs and its analysis of public comments in 
response to the notice concerning the completed PASAs. Advocates also 
requested ``that the agency publish all the PASAs of all the 
participating motor carriers in advance of the start of the Pilot 
Program and before any motor carriers are granted temporary operating 
authority.''
    FMCSA Response: FMCSA's Authority to Issue Operating Authority. 
Title 49 U.S.C. 13902(a) directs FMCSA

[[Page 40426]]

to grant operating authority to motor carriers that comply with all 
applicable safety regulations and financial responsibility 
requirements. As discussed in the ``Legal Basis'' section above, 
section 6901(a) of the 2007 Appropriations Act requires that before 
FMCSA may obligate or expend any funds to grant authority for Mexico-
domiciled motor carriers to engage in cross-border long-haul 
operations, it is required to first test granting such authority 
through a pilot program that meets the standards of 49 U.S.C. 31315(c). 
By expressly providing for pilot programs in 49 U.S.C. 31315(c), and 
requiring FMCSA to first test the granting of long-haul authority to 
Mexico-domiciled motor carriers through a pilot program, Congress 
clearly contemplated that motor carriers participating in a test 
meeting the conditions of section 31315(c) would lawfully be granted 
operating authority under 49 U.S.C. 13902(a). Furthermore, the pilot 
program satisfies the fundamental statutory standard of equivalent 
safety protection and all other pilot program requirements. The safety-
equivalence standard in section 31315(c) requires that the pilot 
program be designed to achieve a safety level equal to that prevailing 
under existing Federal Motor Carrier Safety Regulations (FMCSRs). The 
pilot program does not relax U.S. regulations for participants. Rather, 
it simply implements the presidential order lifting geographic 
limitations on cross-border trucking for a limited number of Mexico-
domiciled motor carriers and imposes additional layers of safety 
monitoring upon those motor carriers. Existing Federal regulations 
already recognize and accept the Mexican Licencia Federal de Conductor 
(LFC) as equivalent to the U.S. CDL, (Sec.  383.23(b) and footnote) and 
pursuant to these regulations, thousands of LFC holders have driven 
Mexican trucks into the United States since their adoption in 1992 and 
continue to do so today. In all other significant respects, U.S. 
requirements apply with full force to participants in the pilot 
program. The Agency, by showing that the pilot program satisfies the 
standard of equivalent safety protection imposed by 49 U.S.C. 31315(c), 
satisfies the requirements of 49 U.S.C. 13902(a).
    Permanent Operating Authority under the Pilot Program. Some 
commenters seemed to misapprehend the reference to ``pilot program 
permanent authority'' in the April 13, 2011 notice. That authority is 
not the same as standard permanent authority; will not continue after 
the expiration of the pilot program (unless converted into standard 
permanent authority); and may be revoked at any time if the operator 
fails to comply with the terms and conditions of the pilot program.
    All operating authority granted under the pilot program will be 
subject to the terms and conditions of the pilot program. Under the 
pilot program, participating motor carriers will have the opportunity 
to operate under three successive stages of monitoring. Stage 1 will 
begin when the motor carrier is issued a provisional operating 
authority. The motor carrier's vehicles and drivers approved for long-
haul transportation will be inspected each time they enter the United 
States for at least 3 months. This initial 3-month period may be 
extended if the motor carrier does not receive at least three vehicle 
inspections. FMCSA will also conduct an evaluation of the motor 
carrier's performance during Stage 1.
    Mexico-domiciled motor carriers may be permitted to proceed to 
Stage 2 of the pilot program after FMCSA completes an evaluation of the 
motor carrier's performance in Stage 1. During Stage 2, the motor 
carrier's vehicles and drivers participating in the pilot program will 
be inspected at a rate comparable to other Mexico-domiciled motor 
carriers that cross the United States-Mexico border. The motor 
carrier's safety data will be monitored to assure the motor carrier is 
operating in a safe manner. Within 18 months after a Mexico-domiciled 
motor carrier is issued provisional operating authority, FMCSA will 
conduct a CR on the motor carrier. If the motor carrier obtains a 
satisfactory safety rating, has no pending enforcement or safety 
improvement actions, and has operated under provisional authority for 
at least 18 months, the provisional operating authority will become 
permanent, moving the motor carrier into Stage 3.
    Stage 3 of the pilot program includes participating Mexico-
domiciled motor carriers that have successfully operated for an 18-
month monitoring period, have a satisfactory safety rating from a CR, 
and have no pending enforcement or safety improvement actions. Motor 
carriers that advance to Stage 3 of the pilot program will operate 
under permanent operating authority under, and fully subject to the 
requirements of, the pilot program. Granting this permanent operating 
authority under the pilot program does not restrict the Agency's 
authority to remove from the program any motor carrier that fails to 
comply with terms and conditions of the pilot program. Under 49 U.S.C. 
31315, FMCSA may revoke participation in the pilot program of a motor 
carrier, CMV, or driver for failure to comply with the terms and 
conditions of the pilot program.
    The successive stages in the pilot program are intended to be 
consistent with the Agency's regulations promulgated in 2002 related to 
Mexico-domiciled motor carriers operating beyond the border commercial 
zones (49 CFR part 365, subpart E). Those regulations provide for a 
Mexico-domiciled motor carrier to be initially granted provisional 
operating authority and be subject to increased monitoring. The 
authority, by definition, is provisional because it will be revoked if 
the motor carrier is not assigned a satisfactory safety rating 
following a CR conducted during an 18-month safety monitoring period 
established in the regulations. Under these regulations, if, at the end 
of 18-months of monitoring the motor carrier's most recent safety 
rating is satisfactory and the motor carrier does not have any pending 
enforcement or safety improvement actions, the Mexico-domiciled motor 
carrier's provisional operating authority becomes permanent. However, 
this authority is still subject to revocation as detailed above. 
Section 6901 requires FMCSA to first test the granting of operating 
authority for long-haul operation by Mexico-domiciled motor carriers 
through a pilot program. An important component and improvement of this 
pilot program is that by using the progressive stages of monitoring, 
the Agency is able to test the full range of its regulations while 
effectively monitoring Mexico-domiciled motor carriers to ensure the 
safety of long-haul operations and that such operations are conducted 
in compliance with all applicable laws and regulations.
    In accordance with section 6901(c), within 60 days after the 
conclusion of the pilot program, the OIG is required to review the 
program and submit to Congress a final report addressing whether FMCSA 
has established sufficient mechanisms to determine whether the pilot 
program is having any adverse effects on motor carrier safety, and 
whether Federal and State monitoring and enforcement activities are 
sufficient to ensure that participants in the pilot program are in 
compliance with all applicable laws and regulations. Only at the 
conclusion of the pilot program will Mexico-domiciled motor carriers 
that participated in the pilot program and advanced to the Stage 3 
permanent authority in the pilot program be eligible to convert their 
pilot program permanent authority to standard permanent authority. 
FMCSA has not yet developed the procedures for such conversions, but 
anticipates the

[[Page 40427]]

procedures will establish an administrative process that would occur 
once the pilot program ends.
    Granting of Provisional Operating Authority. The Agency may have 
caused some confusion in the April 13, 2011, notice when it stated that 
``the Agency will publish a summary of the application as a provisional 
grant of authority in the FMCSA Register.'' FMCSA will review and act 
on applications for authority in the pilot program in accordance with 
applicable regulations. The Agency's rules governing applications for 
authority are codified in 49 CFR part 365. FMCSA is required under its 
regulations to publish a summary of each application for motor carrier 
operating authority, regardless of the applicant's country of domicile, 
as a preliminary grant of operating authority for public notice in the 
FMCSA Register (49 CFR 365.109(b) and 365.507(d)). For prospective 
pilot program participants, such publication will occur only after the 
motor carrier successfully completes the PASA and FMCSA approves the 
application. Such publication of the application as a preliminary grant 
of authority in the FMCSA Register is not an issuance of temporary 
authority, but a notice to the public to permit interested parties 
wishing to oppose the authority to submit a protest to FMCSA. A 
preliminary grant of authority cannot become effective or active 
operating authority for a minimum of 10 days after publication. If a 
motor carrier successfully completes the PASA and FMCSA approves its 
application, the Agency will publish a summary of the application as a 
preliminary grant of authority in the FMCSA Register at: http://li-public.fmcsa.dot.gov/LIVIEW/pkg_html.prc_limain. To review these 
notices, select ``FMCSA Register'' from the pull down menu.
    The FMCSA emphasizes that the public has the opportunity to comment 
in response to the FMCSA Register on every operating authority 
application that the Agency proposes to grant and that motor carriers 
may not operate during the comment period. Any member of the public may 
protest a motor carrier's application on the grounds that the motor 
carrier is not fit, willing, or able to provide the transportation 
services for which it has requested approval. FMCSA must consider all 
protests before determining whether to grant provisional operating 
authority to the motor carrier. The Agency's regulations regarding 
protests, codified at 49 CFR part 365 subpart B, set forth the 
procedures for protesting operating authority requests, including 
requests filed by U.S.- and Canada-domiciled motor carriers.
    As required by section 6901(b)(2)(B)(i) of the 2007 Appropriations 
Act, 2007, FMCSA will also publish in the Federal Register, and solicit 
comment on comprehensive data and information relating to the PASAs of 
motor carriers domiciled in Mexico that are granted authority in the 
pilot program to operate beyond the border commercial zones. Therefore, 
the public has two opportunities to comment on Mexico-domiciled motor 
carriers' applications: (1) In response to the application summary 
information posted on the FMCSA Register, and in response to the 
Federal Register notice required by section 6901(b)(2)(B)(i) of the 
2007 Appropriations Act. Provisional authority will not be granted 
until these processes and their respective notice periods are complete.
    While FMCSA will publish information on the results of the PASA in 
the Federal Register for public comment for each motor carrier before 
granting the motor carrier provisional operating authority, FMCSA is 
not able to publish the results of the PASAs for all motor carriers 
that may ultimately apply to participate in the pilot program before 
the program begins. FMCSA will have no way of knowing at the beginning 
of the pilot program all of the motor carriers that may decide to apply 
to participate in the program during its three year duration and, 
therefore, could not publish the results of all PASAs before beginning 
the pilot program. Additional motor carriers that apply to participate 
in the pilot program after it begins will also be subject to PASAs, and 
the results of those PASAs will be published in the Federal Register 
before any such motor carrier is granted provisional operating 
authority.
2. Pilot Program Improperly Exempts Mexico-Domiciled Motor Carriers 
From Safety Laws and Regulations
    OOIDA contends that accepting Mexican standards and regulations in 
lieu of U.S. statutes and regulations results in an exemption, and that 
FMCSA has failed to follow its authority and regulations for 
exemptions. OOIDA stated that, ``Excusing compliance with U.S. 
regulations for the duration of its pilot program certainly qualifies 
as `temporary regulatory relief' for a person or class of persons 
subject to those regulations.'' OOIDA asserts that this, therefore, 
requires the Agency to follow the procedures for granting exemptions 
from U.S. regulations and deprives interested parties procedural 
protections.
    FMCSA Response: This pilot program does not provide Mexico-
domiciled motor carriers with exemptions from any statutory 
requirements or any of the Agency's regulations or make them eligible 
for any existing exemption. To the contrary, motor carriers 
participating in the program will be subject to existing statutory 
requirements and regulations, including the regulations mandating the 
PASA (49 CFR 365.507(c)). Additionally, because no exemptions from or 
new approaches to statutory requirements and safety regulations are 
being employed in the pilot program, the level of safety oversight that 
will be achieved in the program is the same or greater than would 
otherwise be achieved if Mexico-domiciled motor carriers were granted 
authority to operate beyond the border commercial zones outside of the 
context of a pilot program.
    As to the issue of driver's license equivalency, the Agency has 
long recognized Mexico's LFC as equivalent to the CDL issued by U.S. 
State driver licensing agencies that follow the Federal standards under 
49 CFR Parts 383 and 384. The Mexican LFC is recognized as a valid 
substitute for the CDL and is the basis for a signed international 
agreement under which the United States and Mexico have recognized each 
other's commercial driver's licenses, a decision that was upheld on 
judicial review (Int'l. Brotherhood of Teamsters v. Pe[ntilde]a, 17 
F.3rd 1478 (DC Cir. 1994)). The Agency has also long recognized 
Mexico's physical qualification standards. These are not exemptions, 
but well-established alternative means of meeting U.S. standards that 
pre-date the pilot program. Indeed, every day, thousands of Mexican 
drivers safely operate Mexico-domiciled trucks in the United States 
under these rules.
    Neither the Government of Mexico nor any Mexico-domiciled motor 
carrier has requested that FMCSA consider granting an exemption from 
U.S. safety requirements for participating motor carriers, and the 
Agency is not seeking public comment on any forms of regulatory relief. 
The continued honoring of reciprocity agreements concerning the 
acceptance of the Mexican LFC and the medical certification should not 
be construed as granting regulatory relief. Nor is the allowance of 
specimen collections on the Mexican side of the border, in accordance 
with U.S. requirements, a form of regulatory relief.
    All tests musts must be performed in accordance with the 
Department's controlled substances and alcohol testing regulations (49 
CFR part 40),

[[Page 40428]]

which require that specimens be processed at U.S. laboratories 
certified to conduct such tests.
3. Equivalency of United States-Mexico Laws and Regulations Governing 
Safety
    Advocates, Teamsters, the Coalition and OOIDA all challenged the 
equivalency of U.S. and Mexican safety laws. Advocates asserted that 
``[r]egulatory differences that affect vehicle operation must be 
reconciled before commencement of Pilot Program.'' Advocates questioned 
the equivalence of CDLs, disqualification violations, and drug testing.
    Several commenters requested clarification of the Agency's system 
to monitor performance of Mexico-licensed drivers and expressed 
concerns about the accuracy and completeness of the Mexican LFC and 
Mexican State license information.
    Teamsters also noted that there are no drug testing laboratories in 
Mexico that are certified by the U.S. Department of Health and Human 
Services. OOIDA and Teamsters both requested additional information 
regarding the training regime for Mexican personnel to follow U.S. 
procedures for drug and alcohol testing collection and chain of 
custody.
    Teamsters noted that the medical qualification standard for vision 
is different in Mexico than in the United States, as Mexico requires 
red-vision only. OOIDA encouraged the Agency to provide additional 
information on the Mexican medical certification requirements.
    Multiple commenters asked how information about violations in 
personal vehicles in Mexico would be obtained and used by FMCSA.
    OOIDA and Advocates both believe that FMCSA has an obligation to 
post more information about the equivalent laws and regulations and to 
provide copies of the Mexican regulations in English.
    FMCSA Response: CDLs. As noted above, in 1991, the Secretary and 
his counterpart in Mexico entered into an agreement on the matter of 
driver license reciprocity. The agreement is in the form of a 
memorandum of understanding (MOU) and was reproduced as Appendix A to a 
final rule issued in 1992 by FMCSA's predecessor agency, the Federal 
Highway Administration (FHWA). (Commercial Driver's License Reciprocity 
with Mexico, 57 FR 31454 (July 16, 1992)). The primary purpose of the 
MOU was to establish reciprocal recognition of the CDL issued by the 
States to U.S. operators and the LFC issued by the government of the 
United Mexican States (i.e., by the national government of Mexico, not 
by the individual Mexican states). In light of the agreement, the FHWA 
determined that an LFC meets the standards contained in 49 CFR part 383 
for a CDL. (49 CFR 383.23(b)(1) and footnote) FHWA also stated in the 
July 16, 1992 final rule:

    It should be noted that Mexican drivers must be medically 
examined every 2 years to receive and retain the Licencia Federal de 
Conductor; no separate medical card [certificate] is required as in 
the United States for drivers in interstate commerce. As the 
Licencia Federal de Conductor cannot be issued to or kept by any 
driver who does not pass stringent physical exams, the Licencia 
Federal de Conductor itself is evidence that the driver has met 
medical standards as required by the United States. Therefore, 
Mexican drivers with a Licencia Federal de Conductor do not need to 
possess a medical card while driving a CMV in the United States.

(57 FR 31455)

    The Agency's determination that a Mexico-domiciled driver with an 
LFC does not need to possess a separate medical certificate is based on 
the fact that the medical examination necessary to obtain the LFC meets 
the standards for an examination by a medical examiner in accordance 
with FMCSA regulations, and would therefore meet the requirements of 49 
U.S.C. 31136(a)(3).
    While FMCSA recognizes that U.S. CDL regulations have been amended 
since 1991, those changes relate almost exclusively to the types of 
offenses that would result in disqualification of licenses and to the 
administration of the licensing program (i.e., how information is 
reported and shared among the States). There have been no major changes 
to the U.S. knowledge and skills testing until issuance of a May 9, 
2011 final rule implementing the CDL Learner's Permit processes titled, 
``Commercial Driver's License Testing and Commercial Learner's Permits 
Testing,'' (76 FR 26854). States have 3 years to implement the 
provisions of that rule. The United States will address the changes in 
U.S. CDL regulations with Mexico during the updating of the 1991 CDL 
MOU that is currently underway.
    With respect to the changes relating to disqualifying offenses (49 
CFR part 383, subpart D), FMCSA is not relying on Mexico's 
disqualifying offenses. During the PASA, FMCSA will review violation 
information from a driver's U.S. record, LFC record, and Mexican State 
license record to determine if the driver is qualified to drive in the 
United States, based on the current disqualification requirements for a 
U.S. CDL holder. FMCSA will also review Mexican State license records 
for violations in a personal vehicle that would result in suspension or 
revocation in the United States. After the PASA, these sets of records 
will be reviewed annually by FMCSA to ensure continued compliance.
    FMCSA does, however, recognize the concern about the on-going 
acceptance of the existing CDL MOU. In the Agency's efforts to update 
the MOU, on February 16, 2011, a delegation of FMCSA and DOT 
representatives toured SCT's commercial driver's licensing office in 
Mexico City, Districto Federal, Mexico. The review of the commercial 
driver's licensing office showed that the LFC is issued in a manner 
similar to that employed by U.S. State commercial drivers licensing 
offices. Applicants are required to present documentation to verify 
their identity and place of residence. Additionally, applicants are 
required to provide documentation that they have passed the required 
psycho-physical examination. The drivers licensing office verifies this 
information by accessing the SCT's medical units' database. Applicants 
are also required to provide a training certificate from an SCT-
certified training school.
    On February 17, 2011, a delegation of FMCSA, CVSA, and the American 
Association of Motor Vehicle Administrators (AAMVA) representatives 
toured the commercial driver's licensing office in Monterrey, Nuevo 
Leon, Mexico. The delegation observed the same processes as were seen 
in Mexico City. In addition, the delegation toured an SCT-certified 
training school in Monterrey. The tour included a description of the 
classroom, simulator, maintenance shop, and behind the wheel training. 
The training school operator described the driver testing procedures.
    FMCSA will be undertaking additional site visits to Mexican driver 
training, testing, and licensing locations prior to beginning the pilot 
program to review Mexico's on-going compliance with the terms of the 
current MOU. Reports of these visits will be posted on the FMCSA pilot 
program Web site at http://www.fmcsa.dot.gov.
    FMCSA's statement that Mexico-domiciled drivers and motor carriers 
will be subject to the same standards as U.S. drivers and motor 
carriers does not mean that U.S. standards must be applied to Mexico-
domiciled drivers and motor carriers while operating in Mexico. The 
Agency does not have authority to apply U.S. standards to driver or 
motor carrier actions occurring in Mexico, i.e., it has no 
extraterritorial

[[Page 40429]]

jurisdiction to enforce FMCSA rules. If Mexico chooses to suspend or 
revoke a driver's LFC for violations committed in Mexico, the Licencia 
Federal Information System (LIFIS) will reflect that fact and FMCSA 
will refuse to let the driver operate in this country.
    All drivers operating CMVs in the United States are subject to the 
same driver disqualification rules, regardless of the jurisdiction that 
issued the driver's license. The driver disqualification rules apply to 
driving privileges in the United States. Any convictions for 
disqualifying offenses that occur in the United States will result in 
the driver being disqualified from operating a CMV for the period of 
time prescribed in the FMCSRs.
    In Mexico, in order to obtain the LFC, a driver must meet the 
requirements established by the Ley de Caminos, Puentes y 
Autotransporte Federal (Roads, Bridges and Federal Motor Carrier 
Transportation Act) Article 36, and Reglamento de Autotransporte 
Federal y Servicios Auxiliares (Federal Motor Carrier Transportation 
Act) Article 89, which state that a Mexican driver must pass the 
medical examination performed by Mexico's SCT, Directorship General of 
Protection and Prevention Medicine in Transportation (DGPMPT). While 
there is currently no government oversight of the proficiency and 
knowledge of medical examiners in the United States, the medical 
examinations in Mexico are conducted by government doctors or 
government-approved doctors instead of the private physicians who 
perform the examination on U.S. drivers.
    The Agency emphasizes that drivers for Mexico-domiciled motor 
carriers have been operating within the border commercial zones for 
years with the medical certification provided as part of the LFC, and 
the Agency is not aware of any safety problems that have arisen as a 
result.
    In response to the questions regarding how violations in personal 
vehicles will be handled and the quality of the Mexican databases, 
FMCSA notes that it and its Federal and State partners performed 
254,397 checks of LFC holders in FY 2010. These LFC checks resulted in 
detection of a valid license 250,640 times, expired licenses 3,713 
times, and disqualified licenses 44 times. While the Mexican State 
driving records systems vary significantly, FMCSA will be working with 
the applicant motor carriers, drivers, and SCT to secure valid copies 
of the State driving records for review.
    FMCSA has satisfied the requirement of section 350(c)(1)(G) 
concerning an accessible database containing sufficiently comprehensive 
data to allow safety monitoring of motor carriers operating beyond the 
border commercial zones and their drivers. Looking specifically at 
driver monitoring, in 2002 FMCSA established a system known as the 
Foreign Convictions and Withdrawals Database (FCWD), which serves as 
the repository of the U.S. conviction history on Mexican CMV drivers. 
The system allows FMCSA to disqualify such drivers from operating in 
the United States if they are convicted of disqualifying offenses 
listed in the FMCSRs.
    The FCWD is integrated into the Agency's gateway to the Commercial 
Driver's License Information System (CDLIS), allowing enforcement 
personnel performing a Mexican CDLIS-check to simultaneously query both 
the Mexican LIFIS and the FCWD. The response is a consolidated driver 
U.S./Mexican record showing the driver's status from the two countries' 
systems.
    The States also have the capability to forward U.S. convictions of 
LFC holders, and other drivers from Mexico, to the FCWD via CDLIS. To 
accomplish this, the States implemented changes to their information 
systems and tested their ability to make a status/history inquiry and 
forward a conviction to the FCWD. All States except Oregon, (which does 
not electronically transmit any convictions) and the District of 
Columbia (which does not electronically transmit convictions of Mexico-
domiciled CDL drivers) have successfully tested electronically 
forwarding convictions on Mexico-domiciled CMV drivers. Both 
jurisdictions, however, can manually transmit the information to FMCSA 
for uploading into the system.
    As of May 31, 2011, the border States transmitted 46,065 
convictions to the FCWD between 2002 and 2011. This averages 5,118 per 
year. Of that number, 41,118 were transmitted electronically and 4,947 
were manually entered into the system. It should be noted that only 242 
of these convictions were for major traffic offenses (as listed in 49 
CFR 383.51(b)), and 1,709 were for serious traffic offenses (as listed 
in 49 CFR 383.51(c)). In comparison, between May 2010 and May 2011, the 
States transmitted 186,184 U.S. driver convictions through CDLIS.
    The conviction data shows that the system is working, and States 
can both transmit the conviction data on Mexico-domiciled drivers and 
query the system to retrieve conviction data. FMCSA and its State 
partners have experience from providing safety oversight for Mexico-
domiciled drivers currently operating within the border commercial 
zones. It is reasonable to believe that the small group of drivers who 
would be involved in the pilot program will be no more difficult to 
monitor than the much larger population of Mexico-domiciled drivers 
currently allowed to operate within the border commercial zones.
    As an additional safety enhancement, compared to the previous 
demonstration project, the Agency will review the Mexican State license 
of a driver for violations that would result in a revocation or 
suspension in the United States. This will include violations in 
personal vehicles that would impact a CDL in the United States.
    Drug and Alcohol Testing. Regarding the protocols for collection of 
specimens for drug and alcohol testing, FMCSA clarifies that Mexico is 
using procedures equivalent to those established by DOT regulations. A 
copy of the 1998 MOU between DOT and the Government of Mexico is 
included in the docket for this notice.
    Urine specimens for controlled substances testing must be collected 
in a manner consistent with 49 CFR part 40, Procedures for 
Transportation Workplace Drug and Alcohol Testing Programs. During the 
2007-2009 demonstration project, an independent evaluation panel 
conducted its own assessment of the urine collection procedures at four 
collection facilities in Mexico. The panel concluded that Mexico has a 
collection program with protocols that are at least equivalent to U.S. 
protocols found in 49 CFR part 40. Because there are no U.S.-certified 
laboratories in Mexico, Mexico-domiciled motor carriers must comply by 
ensuring that the specimens are tested in a U.S.-certified laboratory. 
The participants in the 2007-2009 demonstration project all had 
specimens tested in U.S.-certified laboratories located in the United 
States.
    In the new pilot program, urine collection may continue to take 
place in Mexico. The specimens will be processed in accordance with 
U.S. requirements. Drivers who refuse to report to the collection 
facility in a timely manner will be considered to have refused to 
undergo the required random test, and the motor carrier would be 
required to address the issue in accordance with FMCSA's Controlled 
Substances and Alcohol Use and Testing regulations (49 CFR part 382).
    Currently, Mexico-domiciled drivers operating within the border 
commercial zones use this approach to comply with the random testing 
requirements of 49 CFR 382.305. The random selection of drivers must be 
made by a scientifically valid method; each driver selected for

[[Page 40430]]

testing must have an equal chance (compared to the motor carrier's 
other drivers operating in the United States) of being selected, and 
drivers must be selected during a random selection period. Also, the 
tests must be unannounced, and the dates for administering random tests 
must be spread reasonably throughout the calendar year. Employers must 
require that each driver who is notified of selection for random 
testing proceed to the test site immediately.
    In addition, through the PASA, the Agency will determine whether 
the motor carrier has a program in place to achieve full compliance 
with the controlled substances and alcohol testing requirements under 
49 CFR parts 40 and 382. The ability of the border commercial zone 
motor carriers to follow these procedures further demonstrates that 
Mexico-domiciled motor carriers are capable of satisfying the Agency's 
drug and alcohol testing requirements. Based on FMCSA's experience 
enforcing the controlled substances and alcohol testing requirements on 
border commercial zone motor carriers, the Agency believes long-haul 
Mexico-domiciled motor carriers can and will comply with the random 
testing requirements, especially given that some of the anticipated 
participants in the pilot program may already have authority to conduct 
operations within the border commercial zones.
    The Agency's experience in this area and the drug collection 
facility reviews performed during the previous demonstration project 
make us confident that testing is being conducted correctly. In 
addition, the Agency will be conducting collection facility reviews 
during the pilot program to verify specimens are being collected 
correctly.
    Medical Qualifications. FMCSA has compared each of its physical 
qualifications standards with the corresponding requirements in Mexico 
and continues to believe acceptance of Mexico's medical certificate is 
appropriate, especially given that some Mexican medical standards are 
more stringent than their U.S. counterparts.
    For example, one of the areas where Mexico's standards exceed those 
of the U.S. is in Body Mass Index (BMI) and the association between BMI 
and certain medical conditions that could increase the risk of a driver 
having difficulty operating a CMV safely. Mexico's regulations include 
certain limits on BMI, as it relates to medical conditions related to 
obesity, whereas FMCSA's regulations do not include such requirements.
    Another area where Mexico's physical examination and qualifications 
process is more rigorous is vision testing. Mexico's examination 
process includes a measurement of intraocular pressure, a test that may 
be indicative of glaucoma, a disease characterized by a pattern of 
damage to the optic nerve. FMCSA's regulations do not require a 
measurement of intraocular pressure.
    Finally, the medical certification for an LFC is part of Mexico's 
licensing process for commercial drivers. This means the license is not 
issued or renewed unless there is proof the driver has satisfied the 
physical qualifications standards. This is not the case in the United 
States, where medical certification is not currently posted on the CDL 
record. FMCSA has issued regulations to move towards this level of 
oversight (``Medical Certification Requirements as Part of the CDL,'' 
final rule, published at 73 FR 73096, December 1, 2008), but Mexico has 
more stringent requirements in effect at this time.
    There are some areas where FMCSA's requirements are more stringent. 
Specifically, FMCSA requires drivers be capable of distinguishing 
between red, green and yellow, while Mexico limits the color 
recognition requirement to red. Additionally, the U.S. medical 
examination has standards for both systolic and diastolic blood 
pressure readings while Mexico only has a standard on the systolic 
reading. A finding of equivalency, however, does not require that both 
country's standards be identical. Here, it was FMCSA's considered 
judgment that these differences would not diminish safety and that, 
therefore, the Mexican requirements are equivalent to U.S. 
requirements.
    FMCSA has prepared a table comparing the United States' and 
Mexico's physical qualifications standards. A copy of the table is 
provided in the docket for this notice.
    To assist in the review of Mexican regulations, FMCSA has added 
English versions of the regulations to the docket for this notice. This 
includes the Mexican regulations for the Transportation Preventive 
Medicine Service Regulations, the Federal Motor Carrier Transportation 
and Auxiliary Services Regulations, and the Federal Roads, Bridges, and 
Motor Carrier Transportation Act.
4. Reciprocity With Mexico
    The CTA, ATA, and numerous individual commenters stated that NAFTA 
reciprocity could not be achieved because of the current state of 
violence and corruption in Mexico. OOIDA also provided U.S. State 
Department alerts to travelers and instruction to U.S. government 
employees as documentation of the inability of Mexico to provide 
``simultaneous and comparable'' authority and access.
    The Teamsters elaborated that ``[s]ection 6901 limits funds to 
grant authority to Mexican-domiciled motor carriers to operate beyond 
the commercial zones to the extent that `simultaneous and comparable 
authority to operating within Mexico is made available to motor 
carriers domiciled in the United States.' '' Teamsters further stated 
that ``[i]t is very clear that the safety of U.S. drivers traveling 
into Mexico cannot be ensured, and therefore simultaneous and 
comparable authority is not made available to U.S. motor carriers under 
the pilot program.''
    Ron Cole pointed out that a Congressional Research Report dated 
February 1, 2010, notes ``[a]s of this writing the Mexican government 
has not begun accepting applications from U.S. trucking companies for 
operating authority in Mexico.'' The Texas Department of Motor Vehicles 
suggested that FMCSA provide detailed information on Mexico's 
regulatory requirements to the States and U.S. motor carriers that 
express an interest in participating in the program.
    The ATA also endorsed allowing Mexico-domiciled motor carriers with 
U.S. investors to join the program as Mexico-domiciled motor carriers.
    FMCSA Response: In response to the comments about reciprocity for 
U.S. motor carriers, FMCSA will continue to work closely with the 
Mexican government to ensure that U.S.-domiciled motor carriers are 
granted reciprocal authority to operate in Mexico during the pilot 
program. Mexico will publish rules for its current program before 
initiation of the program. Both English and Spanish versions of SCT's 
draft rules have been added to the docket for informational purposes.
    In addition, the Department of Transportation is entering into a 
MOU with Mexico's SCT that requires that Mexico provide reciprocal 
authority.
    The Agency will also work with the U.S. trucking industry to 
facilitate the exchange of information between the Mexican government 
and U.S. trucking companies interested in applying for authority to 
enter Mexico under this pilot program.
    Both Teamsters and OOIDA commented on the ongoing violence in 
Mexico, and that it negatively impacts the possibility of U.S. motor 
carriers entering Mexico. Both cite to the U.S.

[[Page 40431]]

State Department travel advisory, and in turn point to a portion of 
section 6901 that states that ``simultaneous and comparable authority 
to operate within Mexico is made available to motor carriers domiciled 
in the United States.'' The reference to the section 6901 language 
speaks to the ability of U.S. motor carriers to receive comparable 
operating authority from Mexico's SCT. The MOU between DOT and SCT 
provides for reciprocal access to each country. The SCT has issued 
proposed rules outlining procedures for U.S. motor carriers to operate 
in Mexico. They will have the ability to apply for authority and 
operate within Mexico similar to that of Mexico-domiciled motor 
carriers in the United States. Therefore, the statutory requirement has 
been met. It is an independent business decision on the part of motor 
carriers as to whether or not they wish to apply for authority, or use 
it once obtained. Hundreds of companies are currently operating in the 
border region, and four U.S. motor carriers from the 2007 demonstration 
project continue to operate into Mexico. (Whereas the United States 
required Mexico-domiciled motor carriers participating in the 2007 
demonstration project to relinquish their operating authority when the 
project was terminated, Mexico permitted the U.S.-domiciled motor 
carriers holding reciprocal authority to continue their operations in 
Mexico.)
    OOIDA makes the claim that the violence in Mexico is a violation of 
the NAFTA as a nullification and impairment of U.S. motor carrier 
rights to engage in cross-border trade in services under Chapter 12 of 
the NAFTA. OOIDA contends that, ``Federal, state and local governments 
within Mexico are seen by many to be complicit'' in the drug-related 
violence. OOIDA quotes Annex 2004 of the NAFTA ``Nullification and 
Impairment'' language, including ``* * * being nullified or impaired as 
a result of the application of any measure that is not inconsistent 
with this Agreement * * *'' (emphasis added). The violence of the drug 
cartels, according to OOIDA, impairs U.S. motor carriers wishing to 
operate in Mexico. The fundamental error with this reasoning is that no 
measure has been put in place by the Government of Mexico that would 
prohibit U.S. motor carriers from doing business in Mexico, or would 
put U.S. motor carriers at such a competitive disadvantage that they 
are impaired. In order for Annex 2004 to apply, a State actor, such as 
SCT, must put in place ``measures not inconsistent with'' cross-border 
trade in services. It could constitute a violation of the NAFTA if a 
Mexican agency put in place restrictions on U.S. motor carriers that 
would on its face not be discriminatory but have the ultimate effect of 
denying the motor carriers the benefits they reasonably expected under 
Chapter 12. That, however, is not the case here. The application for 
authority and using it to operate into Mexico requires several business 
decisions on the part of the motor carrier, and it is ultimately the 
motor carrier's decision to operate into Mexico, as much as it would be 
for a motor carrier to expand its business from short-haul to long-
haul.
    FMCSA also notes that while Mexico has not begun accepting 
applications from U.S. trucking companies for operating authority in 
Mexico, neither has FMCSA begun accepting applications from Mexico-
domiciled motor carriers for participation in the pilot program. 
Mexico, like the United States, is updating its application procedures 
for U.S. motor carriers to operate into Mexico. Following the 
publication of this notice, FMCSA will begin accepting applications 
from Mexico-domiciled motor carriers to participate in the pilot 
program. Mexico will begin accepting applications from U.S. motor 
carriers to operate in Mexico soon thereafter. When Mexico's new 
processes are finalized, FMCSA will post information regarding those 
requirements on our Web page related to this pilot program so that 
States and industry are aware of the requirements. In any case, the 
United States will not grant authority to operate beyond the border 
commercial zones to any Mexico-domiciled motor carriers under this 
pilot program unless and until Mexico is ready to provide authority to 
U.S. motor carriers. FMCSA also uses this notice to clarify that 
Mexico-domiciled motor carriers with U.S. investors are eligible to 
participate in the pilot program.
5. Pilot Program Requirements
    The Agency received comments from the OOIDA, Teamsters, Advocates, 
and the Coalition regarding the requirements of FMCSA's pilot program 
authority.
    OOIDA noted that, under 49 U.S.C. 31315(c)(2), a pilot program must 
include safety measures designed to achieve a level of safety that is 
``equivalent to, or greater than'' the required level of safety. OOIDA 
also faulted the proposal for not elaborating on the countermeasures to 
protect the public health and safety of study participants and the 
general public.
    FMCSA Response: The FMCSA and its State partners will ensure 
compliance with the requirements of the pilot program the same way the 
Agency and the States ensure that Mexico-domiciled motor carriers 
operating in and beyond the border commercial zones comply with the 
applicable safety regulations. There are currently 6,861 motor carriers 
with authority to operate within the border commercial zones and an 
additional 1,063 motor carriers with Certificates of Registration to 
operate beyond the commercial zones. FMCSA and the States have a robust 
safety oversight program for Mexico-domiciled motor carriers that are 
currently allowed to operate CMVs in the United States. In FY 2010, 
FMCSA and its State partners conducted over 256,000 commercial vehicle 
inspections on vehicles operated by Mexico-domiciled motor carriers in 
the border commercial zones. Further, in order to assist in ensuring 
compliance, FMCSA imposed the following pre-requisites for Mexico-
domiciled motor carriers to participate in the pilot program: (1) The 
application for long-haul operating authority, which includes 
requirements for proof of a continuous valid insurance with an 
insurance company licensed in the United States, in contrast to trip 
insurance used by motor carriers that operate solely within the border 
commercial zones; (2) successful completion of the PASA prior to being 
granted provisional authority; (3) the continuous display of a valid 
CVSA decal; and (4) a special designation in their USDOT Numbers to 
allow enforcement officials to readily distinguish between vehicles 
permitted to operate solely within the border commercial zone and those 
authorized to operate beyond the border commercial zones.
    In addition, section 350 and 49 CFR 385.707 require that a CR be 
conducted within 18 months of the motor carrier being granted 
provisional operating authority. In the context of the pilot, FMCSA 
will prioritize long-haul Mexico-domiciled motor carriers for CRs based 
on a number of factors, such as the motor carrier's safety performance 
as measured through roadside inspections and crash involvement and the 
Agency's Safety Measurement System.
    The vehicles and drivers will be monitored through data collected 
from electronic monitoring devices with GPS. In addition, the drivers' 
complete driving records will be reviewed in advance of participation 
and then annually thereafter. Also, during the first stage, the 
vehicles and drivers will be subjected to more inspections.
    The FMCSA and its State partners have for many years provided 
safety

[[Page 40432]]

oversight under the same regulations for a much larger population of 
Mexico-domiciled motor carriers operating in U.S. border commercial 
zones and motor carriers with Certificates of Registration than the 
group that will participate in the pilot program. As a result, the 
Agency has a well-established and effective enforcement program in 
place to ensure that participants comply with the terms and conditions 
of the program. Moreover, full compliance with existing U.S. safety 
regulations and domestic point-to-point transportation prohibitions 
will be required, as is the case with Mexico-domiciled motor carriers 
operating in the border commercial zones and certificated motor 
carriers already operating beyond the border commercial zones.
    As discussed in this section, FMCSA has taken necessary steps to 
comply with the requirement to provide an equivalent or greater level 
of safety, and countermeasures are therefore not required.
6. PASA Requirements
    Commenters, including Teamsters and Advocates, recommended that 
information about the PASAs be posted in the Federal Register rather 
than the FMCSA Register.
    Teamsters recommended that the PASA also include a spot check of 
vehicles other than those to be used in the long-haul program to gather 
more information on the carrier's operations.
    OOIDA, Advocates and Teamsters requested additional information on 
the Agency's standards for evaluating English language proficiency and 
one association submission indicated the English language screening and 
should be a component of the initial screening.
    Advocates requested that the violation histories of applicant motor 
carriers, and their driver convictions records in both Mexico and the 
U.S. should be disclosed in the Federal Register publication as part of 
the PASA information disclosure. OOIDA requested additional information 
about participating motor carrier's past operations within the United 
States.
    The IRP requested that the Agency use the PASA as an opportunity to 
reiterate the requirements for IRP and IFTA registrations.
    OOIDA also recommended that PASAs be conducted again on motor 
carriers that participated in the previous demonstration project to 
ensure they are still safe motor carriers.
    FMCSA Response: There appears to have been some confusion about 
where the PASA information will be published. The results of the PASAs 
will be posted in the Federal Register. This was where the PASA 
information was posted during the previous demonstration project, and 
FMCSA will follow this protocol again in this pilot program. The 
operating authority application information will also continue to be 
posted in the FMCSA Register as required by applicable regulations.
    If the motor carrier has passed the PASA, FMCSA will publish the 
motor carrier's request for authority in the FMCSA Register. The FMCSA 
Register can be viewed by going to: http://li-public.fmcsa.dot.gov/LIVIEW/pkg_html.prc_limain and then selecting ``FMCSA Register'' from 
the drop-down box in the upper right corner of the screen. Any member 
of the public may protest the motor carrier's application on the 
grounds that the motor carrier is not fit, willing, or able to provide 
the transportation services for which it has requested approval. FMCSA 
will consider all protests before determining whether to grant 
provisional operating authority. Under FMCSA regulations, all motor 
carriers receive provisional new entrant authority for 18 months after 
receiving a USDOT Number and are subject to enhanced safety scrutiny 
during the provisional operating period.
    Regarding the Teamster's request that additional vehicles in the 
motor carrier's fleet be inspected during the PASA, the Agency points 
out that all available vehicles that are used in U.S. operations will 
be subject to review during the CR. Additionally, vehicles operated in 
the U.S. by Mexico-domiciled motor carriers also regularly cross the 
border, where the vehicle inspection rate is 13 times higher than that 
of vehicles in the interior of the U.S. As a result, the Agency does 
not believe it is necessary to inspect vehicles other than the 
participating vehicles during the PASA.
    FMCSA will check participating Mexico-domiciled drivers during the 
PASA through an interview in English. The interview will include a 
variety of operational questions, which may include inquiries about the 
origin and destination of the driver's most recent trip; the amount of 
time spent on duty, including driving time, and the record of duty 
status; the driver's license; and vehicle components and systems 
subject to the FMCSRs. The driver will also be asked to recognize and 
explain U.S. traffic and highway signs in English.
    If the driver successfully completes the interview, FMCSA has 
confidence that the driver can sufficiently communicate in English to 
converse with the general public, understand traffic signs and signals 
in English, respond to official inquiries and make entries on reports 
and records required by FMCSA.
    Regarding Advocates' request that additional information be 
published about the history of Mexico-domiciled motor carriers and 
drivers, FMCSA is committed to publishing the results of the PASAs as 
required by section 6901(b)(2)(B) of the 2007 Appropriations Act. FMCSA 
will not publish violation data on individual Mexican drivers as 
protection of their personal privacy. FMCSA, however, will make 
additional information about all participating motor carriers' past 
U.S. performance available through its Safety Management System (SMS) 
as requested by OOIDA.
    FMCSA agrees with the IRP's suggestion that information regarding 
the requirements for registration and fuel taxes be provided during the 
PASA. The Agency is revising its PASA procedures to include this 
information.
    In regard to motor carriers that participated in the previous 
demonstration project that choose to apply to participate in the pilot 
program, it has always been in FMCSA's plan that PASAs will be 
completed on these motor carriers. FMCSA recognizes that there may have 
been changes in the motor carrier's operations since the demonstration 
project ended in 2009 and that a current PASA is needed.
7. Credit to Demonstration Project Participants
    Most commenters did not agree with the Agency's plans to give 
credit to motor carriers that participated in the demonstration project 
for the amount of time they operated safely. The Teamsters specifically 
contended that providing credit to previous participants was a 
violation of section 6901.
    FMCSA Response: It appears that there was some confusion about how 
these motor carriers, if they chose to participate in the new pilot 
program, would enter the program, and how their safety would be 
evaluated. As noted above, it has always FMCSA's plan and 
responsibility to conduct PASAs on all motor carriers applying for 
authority under the pilot program including motor carriers that 
participated in the prior demonstration project. As a result, the motor 
carrier's safety management controls will be assessed again in advance 
of participation. The only distinction that is being made for motor 
carriers that previously participated in the demonstration project is 
to give them credit for the amount of time they operated under the 
project in completing the 18 months of provisional authority before 
being eligible to

[[Page 40433]]

advance to Stage 3 in this pilot program. FMCSA believes this is 
consistent with section 6901 because the previous demonstration project 
was subject to the same pilot program statute and regulations. While it 
was ultimately determined that the previous project did not have 
sufficient participation to allow for a statistically valid 
demonstration that Mexico-domiciled motor carriers as a whole could 
comply with U.S. safety standards and this program has added additional 
safeguards, reports from both the OIG and the Independent Panel 
documented that motor carriers in the previous program had safety 
records that were comparable or better than the U.S. fleet averages.
    As a result, if a motor carrier from the demonstration project 
chooses to apply to participate in the pilot program, it will be 
subject to the security check by the Department of Homeland Security, 
PASA, financial responsibility, CVSA decal, and CR requirements. If a 
motor carrier operated for 5 months under the demonstration project, it 
would then only need to operate safely for an additional 13 months 
under the pilot program before being eligible to advance to Stage 3 in 
the program.
8. Use of Electronic Monitoring Devices and Compliance With Hours-of-
Service Requirements
    The majority of commenters did not support FMCSA funding the 
installation of electronic monitoring devices on Mexican trucks 
participating in the pilot program. Representative Peter A. DeFazio 
stated that, ``it is outrageous that U.S. truckers, through the Federal 
fuel tax, will subsidize the cost of doing business for these Mexican 
carriers.'' Representative Reid J. Ribble articulated his understanding 
of his colleagues' disapproval of using the Highway Trust Fund to cover 
the costs of the electronic monitoring devices, but ``recognize[d] that 
DOT cannot require Mexican motor carriers to cover these expenses 
because there is no similar requirement for U.S. carriers.''
    The BTA pointed out that the hours-of-service requirements for 
drivers of Mexico-domiciled motor carriers participating in the program 
must include the driver's on-duty and driving time in Mexico before 
reaching the Southern border. In addition, Teamsters asserted that 
electronic monitoring devices do not measure ``on-duty/not driving'' 
time and, as a result, Mexican drivers need to provide logs and 
supporting documents.
    Several commenters did not understand if the data from the 
electronic monitoring devices would be processed in real-time or at the 
conclusion of the program. In addition, there were several questions 
about who would be reviewing the data.
    FMCSA Response: FMCSA developed guidelines for this new pilot 
program after extensive engagement with members of Congress and other 
stakeholders to better understand the strengths and weaknesses of the 
prior demonstration project that ended in March 2009. Using that 
valuable input, we worked with the Government of Mexico to craft a more 
robust program. As described in the April 13, 2011, Federal Register 
notice, all participating Mexican trucks will be required to be 
equipped with electronic monitoring devices with GPS capabilities so 
that FMCSA is able to monitor the vehicle and use the data to address 
hours-of-service and domestic point-to-point transportation concerns. 
Stakeholders felt strongly that FMCSA include this as an element of the 
new pilot program.
    FMCSA will own the monitoring equipment and thereby will have 
access and control of the data provided by the electronic monitoring 
devices and GPS units and will be able to customize reports and alerts 
from the system of the vendor that will collect the data. This proposed 
approach is necessary to address concerns expressed by members of 
Congress and others regarding hours-of-service and domestic point-to-
point compliance. The most the Agency would spend on electronic 
monitoring devices for purchase, installation, and monitoring over the 
life of the 3-year program is $2.5 million--less than 0.1 percent of 
the costs borne by U.S. firms subject to the tariffs imposed by Mexico 
in a 12-month period. As a result, we believe this is not only in the 
public interest to require and provide the electronic monitoring 
devices, but is also a good investment for the country. Moreover, as 
stated above, the in-truck equipment will be the property of the United 
States.
    In addition, the electronic monitoring devices that FMCSA will 
install will have functionality to allow on-duty start and end times to 
be entered and tracked. As a result, FMCSA will be monitoring on-duty 
time in Mexico to ensure that drivers comply with FMCSA hours-of-
service regulations while operating in the United States. FMCSA agrees, 
however, that the participating motor carriers will be expected to 
maintain the appropriate supporting documents for review by FMCSA 
during the safety and compliance reviews.
    It is FMCSA's intention to acquire devices and monitoring software 
that will allow the Agency to develop alerts and reports of the 
vehicles and drivers' information. These reports will be reviewed by 
FMCSA at least weekly to identify compliance issues. If there are any 
indicators of problems, FMCSA will initiate an investigation. FMCSA 
expects to use staff to conduct the analysis, but acknowledges that the 
conversion of the electronic data to a format usable for analysis may 
require some processing by a third party. Finally, once the pilot 
program is terminated, the program participants must return the 
equipment to FMCSA.
9. Federal Motor Vehicle Safety Standards (FMVSS) and Emissions Issues
    Commenters on this issue all supported the requirement that the 
equipment must meet the FMVSS or Canadian Motor Vehicle Safety 
Standards (CMVSS) at the time of manufacturing. However, Teamsters 
believe that the Agency's proposal that model years 1996 and newer do 
not need a label constitutes a waiver and that FMCSA does not have the 
authority to waive this requirement.
    ATA argued that the vehicles should not have to comply with the 
FMVSS, but instead with the FMCSRs.
    ATA and CTA stressed that all equipment operating in the United 
States must comply with Federal emissions standards. Both also 
expressed concern about the limited availability of low-sulfur fuels in 
Mexico and the impact on vehicle emissions.
    Werner Enterprises requested clarification on the requirement that 
the vehicles meet the EPA requirements at the time of manufacturing.
    FMCSA Response: Participating Mexico-domiciled motor carriers, the 
drivers they employ, and the vehicles they operate in the United States 
must comply with all applicable Federal and State laws and regulations, 
including those concerning customs, immigration, vehicle emissions, 
employment, vehicle registration and taxation, and fuel taxation.
    Environmental Issues. First, Mexico-domiciled motor carriers 
operating in the United States must ensure compliance with all 
applicable Federal and State laws related to the environment. FMCSA has 
no reason to doubt that its sister Federal and State agencies will 
enforce their laws and regulations as they apply to long-haul Mexico-
domiciled motor carriers, just as they have done for years with respect 
to the border commercial zone motor carriers as well as U.S.- and 
Canada-domiciled motor carriers.
    Second, FMCSA does not have the statutory authority to enforce 
Federal

[[Page 40434]]

environmental laws and regulations, with the exception of those 
concerning vehicle noise emissions (49 CFR part 325). The Agency 
cannot, for example, condition the grant of operating authority to a 
motor carrier on the motor carrier's demonstration that its truck 
engines comply with EPA engine standards. FMCSA does not construe 
section 6901 as expanding the scope of the Agency's regulatory 
authority into environmental regulation or any other new area of 
regulation. Section 6901 makes no mention of environmental regulation, 
and FMCSA construes the reference to ``measures * * * to protect public 
health and safety'' in section 6901(b)(2)(B)(ii) of the 2007 
Appropriations Act as within the context of the scope of the Agency's 
existing statutory authority. Moreover, because FMCSA is a safety 
rather than an environmental regulatory agency, the pilot program is 
appropriately focused on evaluating the safety of long-haul Mexican 
truck operations in the United States, consistent with the scope of 49 
U.S.C. 31315(c). However, vehicle data is being collected to assist 
with determining the potential environmental impacts of the pilot 
program (and for any further actions concerning the border) in 
accordance with the National Environmental Policy Act of 1969 (NEPA) 
and the Council on Environmental Quality's (CEQ) NEPA implementing 
regulations (40 CFR part s1500-1508) and FMCSA's NEPA Order 5610.1 as 
this program is not exempt from NEPA review.
    Third, the Agency is conducting an Environmental Assessment (EA) in 
accordance with NEPA, CEQ implementing regulations, and FMCSA's NEPA 
Order 5610.1 to examine the potential impacts of this pilot project on 
the environment. It is important to note that the EA is limited to the 
environmental impacts of this particular pilot project. FMCSA will 
announce availability of the draft Environmental Assessment in a 
separate Federal Register notice and place a copy in the docket for 
this rulemaking.
    Finally, EPA, in partnership with Mexico and other governments on 
both sides of the border, has conducted numerous diesel emissions 
reduction projects. These include vehicle testing, monitoring, and 
tracking, diesel retrofitting, accelerated use of ultra-low sulfur 
diesel fuel, and anti-idling programs. In addition, the State of 
California regulates particulate matter emissions from trucks through 
roadside emissions testing conducted throughout the State, including in 
its border commercial zones. California has also issued regulations 
requiring truck engines, including those in Mexican trucks, to have 
proof that they were manufactured in compliance with the EPA emissions 
standard in effect on the date of their manufacture and will be able to 
conduct inspections of these vehicles while they are in California. 
Motor carriers are subject to penalties for the violation of these 
regulations. In addition, FMCSA considers these issues in its NEPA 
review for the pilot program.
    Regarding the availability of low sulfur fuels, it is our 
understanding that low sulfur fuels are available in the border areas 
and large cities, so access should not limit participation in the 
project.
    FMVSS Compliance. With regard to concerns about compliance with the 
FMVSSs, the Agency already requires Mexico-domiciled motor carriers to 
certify on their applications for operating authority that CMVs used in 
the United States meet the applicable FMVSSs in effect on the date of 
manufacture. While there is no requirement that the vehicles display an 
FMVSS certification label, the Agency believes the concerns about 
displaying a certification label have been adequately addressed by the 
Department through a notice-and-comment rulemaking proceeding.
    On March 19, 2002, FMCSA and NHTSA published four notices 
requesting public comments on regulations and policies directed at 
enforcement of the statutory prohibition on the importation of CMVs 
that do not comply with the applicable FMVSSs. The notices were issued 
as follows: (1) FMCSA's notice of proposed rulemaking (NPRM) proposing 
to require motor carriers to ensure their vehicles display an FMVSS 
certification label (67 FR 12782); (2) NHTSA's proposed rule to issue a 
regulation incorporating a 1975 interpretation of the term ``import'' 
(67 FR 12806); (3) NHTSA's draft policy statement providing that a 
vehicle manufacturer may, if it has sufficient basis for doing so, 
retroactively certify a motor vehicle complied with all applicable 
FMVSSs in effect at the time of manufacture and affix a label attesting 
this (67 FR 12790); and 4) NHTSA's proposed rule concerning 
recordkeeping requirements for manufacturers that retroactively certify 
their vehicles (67 FR 12800).
    After reviewing the public comments in response to those notices, 
FMCSA and NHTSA withdrew their respective proposals on August 26, 2005 
(70 FR 50269). NHTSA withdrew a 1975 interpretation in which the agency 
had indicated that the Vehicle Safety Act is applicable to foreign-
based motor carriers operating in the United States. Accordingly, it is 
the Department's position that the FMVSSs do not obligate foreign-
domiciled trucks engaging in cross-border trade to bear a certification 
label. Although FMCSA withdrew its NPRM, the Agency indicated that it 
would continue to uphold the operational safety of CMVs on the nation's 
highways, including that of Mexico-domiciled CMVs operating beyond the 
United States-Mexico border commercial zones, through continued 
vigorous enforcement of the FMCSRs, many of which cross-reference 
specific FMVSSs.
    FMCSA explained in its withdrawal notice that Mexico-domiciled 
motor carriers are required under 49 CFR 365.503(b)(2) and 368.3(b)(2) 
to certify on the application form for operating authority that all 
CMVs they intend to operate in the United States were built in 
compliance with the FMVSSs in effect at the time of manufacture. These 
vehicles will be subject to inspection by enforcement personnel at 
U.S.-Mexico border ports of entry and at roadside inspection sites in 
the United States to ensure their compliance with all applicable 
FMCSRs, including those that cross-reference the FMVSSs.
    For vehicles lacking a certification label, enforcement officials 
could, as necessary, refer to the VIN (vehicle identification number) 
in various locations on the vehicle. The VIN will assist inspectors in 
identifying the vehicle model year and country of manufacture to 
determine compliance with the FMVSSs based on guidance provided by 
FMCSA. Based on information provided by the Truck Manufacturers 
Association in a September 16, 2002, letter to NHTSA and FMCSA, FMCSA 
believes model year 1996 and later CMVs manufactured in Mexico meet the 
FMVSSs. The Agency continues to believe this information is an 
appropriate basis for considering whether a vehicle is likely to have 
been manufactured in compliance with the FMVSSs because most of the 
members of TMA have truck manufacturing facilities in Mexico that are 
used to build vehicles for both the United States and Mexico markets.
    Therefore, FMCSA continues to use its August 26, 2005 guidance, 
``Enforcement of Mexico-Domiciled Motor Carriers' Self-Certification of 
Compliance with Motor Vehicle Safety Standards,'' which provides 
technical assistance to Federal and State enforcement personnel on this 
issue. The guidance indicates that if FMCSA finds, during the PASA or 
subsequent inspections, that a Mexico-domiciled motor carrier has 
falsely certified on the

[[Page 40435]]

application for authority that its vehicles are FMVSS compliant, that 
the Agency may use this information to deny, suspend, or revoke the 
motor carrier's operating authority or certificate of registration or 
take enforcement action for falsification, if appropriate. A copy of 
the Agency's guidance is included in the docket referenced at the 
beginning of this notice.
    Although Mexico-domiciled vehicles may be less likely to display 
FMVSS certification labels, FMCSA believes continued strong enforcement 
of the FMCSRs in real-world operational settings, coupled with existing 
regulations and enhanced enforcement measures, will ensure the safe 
operation of Mexico-domiciled CMVs in interstate commerce. As the 
Agency stated in the 2005 withdrawal notice, FMCSR enforcement, and by 
extension the FMVSSs they cross-reference, is the bedrock of these 
compliance assurance activities. The Agency continues to believe it is 
not necessary to require participating motor carriers to ensure their 
CMVs display an FMVSS certification label. Requiring CMVs to have FMVSS 
certification labels would not ensure their operational safety. The 
American public is better protected by enforcing the FMCSRs than by a 
label indicating a CMV was originally built to certain manufacturing 
performance standards. See 70 FR at 50287.
    There appeared to be some confusion about when the vehicles would 
be checked for FMVSS or CMVSS certification. During the PASA, the 
Agency will check those vehicles identified for the long-haul trucking 
program to determine whether the vehicle displays an FMVSS or CMVSS 
certification label, or whether the vehicle is a 1996 model year or 
newer truck. Alternatively, if there is no label, the motor carrier may 
present a certificate or other documentation from the manufacturer 
confirming that the vehicle was built to the appropriate standard.
    FMCSA understands ATA's position that the safety of the 
participating vehicles should be determined based on compliance with 
the FMCSRs, rather than the FMVSSs. FMCSA acknowledges that vehicle 
manufacturers must comply with the FMVSSs at the vehicle manufacturing 
state and that the vehicles may not meet the FMVSSs after they are 
placed in service. However, the Agency's inspection of participating 
vehicles during the PASA, inspections, and CR will confirm compliance 
with the FMCSRs, as is required by 49 CFR 390.3.
10. Statistical Validity
    Teamsters asserted that the Agency's evaluation plan was flawed 
because the statute requires evaluation based on participants, not the 
number of inspections.
    Advocates challenged the Agency's null hypothesis and asserted that 
the evaluation plan does not conform to established scientific research 
methodology.
    Advocates also requested additional information on how the rate of 
violations per type of inspection performed will be calculated. 
Advocates further requested information on the specific statistical 
tests or methods of analysis to be used, and suggested that a peer 
review panel review the study design. Specifically, Advocates noted 
that ``the elements contained in the pilot program statutory provision 
under 49 U.S.C. 31315(c) require more specific and detailed information 
about the experimental design of the Pilot Program than the agency has 
provided.''
    FMCSA Response: Section 31315(c)(2)(C) of title 49, United States 
Code, requires a pilot program to have a sufficient number of 
participants to allow for statistically valid findings. Given that the 
majority of statistical comparisons between the Mexico-domiciled and 
U.S.-domiciled motor carriers will focus on roadside inspection data, 
the relevant question becomes whether or not the total number of 
inspections performed on the pilot program participants will be 
sufficient to allow for valid statistical comparisons. The Agency 
believes that the sample size targets presented in the April 13, 2011, 
Federal Register notice will ensure that the number of motor carrier 
participants will be sufficient for achieving this objective. As 
discussed in that notice, based on the results of the application and 
vetting process from previous border demonstration project, the Agency 
estimates an upper limit for the total number of Mexico-domiciled motor 
carriers both capable and interested in taking advantage of the NAFTA 
cross border provisions at 316 motor carriers. Thus, if 46 motor 
carriers were to participate in the current effort, the sample would 
represent 15 percent of this population.
    The Agency acknowledges, however, that the statistical validity of 
the findings also hinges upon the representativeness of the study data. 
For example, if most of the inspection data collected in the pilot 
program were to come from just a few of the Mexico-domiciled motor 
carriers, the question of sample bias becomes a legitimate concern when 
producing survey estimates. To mitigate the effect of this potential 
bias, the Agency plans to calculate the various violation rates both 
for the population of program participants as a whole, as well as for 
individual program participants. Thus, for each metric in question, the 
violation rates for each of the program participants will be averaged 
to give an alternate violation rate for the program participant 
population. This alternate violation rate calculation will help to 
minimize the effect of inspection data being potentially dominated by a 
small number of motor carriers. Comparison of the original population 
violation rate to this alternate violation rate calculation will give 
the Agency an indication of the magnitude of this problem.
    With regard to the United States' obligations under NAFTA, FMCSA 
does not have reason to deny Mexico-domiciled motor carriers from 
operating in the United States unless it can demonstrate that the motor 
carriers pose a safety threat to the American public. Thus, the null 
hypothesis for the study begins with a presumption that Mexico-
domiciled motor carriers are as safe as U.S. motor carriers. The data 
from the study will be used to determine whether this assumption should 
be rejected or not. While the term ``null hypothesis'' can be used for 
any hypothesis set up primarily to see whether it can be rejected, the 
more common statistical practice is to hypothesize that two methods, 
populations, or processes are the same and then determine if there is 
sufficient statistical evidence to reject this null hypothesis. If one 
can demonstrate definitively from the pilot program data that Mexico-
domiciled motor carriers are inherently less safe than U.S. motor 
carriers, then the Agency would be justified in rejecting this null 
hypothesis and restricting Mexico-domiciled motor carrier operations in 
the United States. If, on the other hand, the Agency cannot establish 
as a fact, there would be no justification for denying these motor 
carriers full access to our roadways as guaranteed under NAFTA. Had the 
null hypothesis for the study begun with the assumption that Mexico-
domiciled motor carriers were inherently less safe than U.S. motor 
carriers (as recommended by the commenter), then all non-statistically 
significant results from the study would imply that Mexico-domiciled 
motor carriers are less safe than U.S. motor carriers, since this 
initial assumption would not be rejected. In contrast, the approach 
taken by FMCSA is a prudent one, and is similar to the scientific 
approach used

[[Page 40436]]

in virtually all medical research examining safety risk. In such 
studies, the null hypothesis assumes that a particular food, chemical, 
or activity poses no safety risk, or no safety benefit. In other words, 
the null hypothesis always assumes that the item or activity in 
question has absolutely no effect. The results of the study are used to 
determine whether one can reject this null hypothesis, to identify a 
clear risk or clear benefit attributable to the item or activity. 
Additionally, the null hypothesis is supported by the safety data on 
border commercial zone motor carriers and the Mexico-domiciled motor 
carriers that participated in the previous demonstration project.
    With regard to the Advocates' reference to 49 U.S.C. 31315(c), the 
Agency believes the commenter's interpretation of this section is 
incorrect. The section does not speak to the findings of a program or 
the conclusions to be drawn from them. Rather, the section simply 
states that a pilot program must be designed to ensure that public 
safety is not compromised while the study is being conducted. All of 
the safeguards put in place by the Agency, such as requiring pilot 
program participants to achieve a specified level of safety performance 
at various stages of the pilot in order to continue with their 
participation (as stipulated in the original notice requesting public 
comment), speak directly to this issue.
    On a routine basis, program participant vehicles will be inspected 
at border crossings and other roadside inspection stations. 
Additionally, under section 350, each participating motor carrier will, 
within 18 months of being granted provisional operating authority, be 
subject to a full CR. During the CR, the Agency plans to inspect both 
``program participating'' and ``nonparticipating'' vehicles of a 
Mexico-domiciled motor carrier that operate in the United States.
    Concerning how the violation rates obtained from the study will be 
used, these rates will be directly compared to similar rates from U.S. 
motor carriers. Although a motor carrier's crash history is a good 
predictor of future crashes, given the relatively short time frame of 
the pilot study, it is anticipated that participating motor carriers 
will have very few, if any, crashes while operating in the United 
States. Thus, violation rates based on inspection data will be used to 
assess the safety performance of each participating motor carrier. This 
same approach is used to evaluate U.S. motor carriers. For example, six 
of the seven performance metrics used to assess a motor carrier's 
safety risk under the Agency's Compliance, Safety, Accountability (CSA) 
program are based on data collected from the roadside.
    Inspection data used in the study will be based on Level 1, 2, and 
3 inspections. The Agency anticipates that inspections performed on 
program participants' trucks will be, on average, as thorough and 
rigorous as those performed on U.S. motor carriers. For those 
violations only observable by a Level 1 inspection, such as brake 
violations, only Level 1 inspection data will be used when making 
comparisons between program participants and U.S. motor carriers.
    The Agency plans to evaluate the safety performance of the Mexico-
domiciled motor carriers participating in the pilot project by looking 
at a variety of metrics and comparing their performance on these 
metrics with the performance of U.S. motor carriers. All of these 
metrics represent proportions of some type (proportion of inspections 
having a particular violation, or the proportion of motor carriers 
having a particular violation), and, as such, statistical tests 
designed for comparing proportions from two populations can be used. 
The metrics to be evaluated are discussed below.
    Vehicle Out of Service (OOS) Rate. The vehicle OOS rate will be 
calculated in two different ways for the Mexico-domiciled motor 
carriers. First, the rate will be calculated in the standard manner, 
summing up all vehicle OOS violations found from all vehicles belonging 
to Mexico-domiciled motor carrier participants, divided by the total 
number of vehicle inspections performed in the United States on these 
vehicles during the study.
    In addition, a vehicle OOS rate will be calculated for each 
participating motor carrier based upon the data collected during the 
duration of the pilot program. Using these carrier-level OOS rates, the 
average value for these carrier-level vehicle OOS rates will then be 
computed by summing up the individual vehicle OOS rates and dividing by 
the number of motor carriers having an OOS rate assigned to them. This 
last statistic, which is the average value of each motor carrier's OOS 
rate, will be used as a check to determine if the standard vehicle OOS 
rate calculated for the Mexican trucks participating in the pilot 
program is dominated by data from a small number of carriers. If it is, 
then more emphasis will be placed on the average OOS rate in the 
analysis.
    Vehicle Violation Rate. The vehicle violation rate is similar to 
the vehicle OOS rate, except that all violations will be considered, 
rather than just OOS violations.
    Driver OOS Rate. The driver OOS rate for the Mexico-domiciled 
drivers participating in the pilot program will be calculated in the 
same manner as the vehicle OOS rates. First, the rate will be 
calculated in the standard manner, summing up all driver OOS violations 
found from all Mexico-domiciled drivers participating in the pilot, 
divided by the total number of driver inspections performed on these 
drivers during the study. In addition, the driver OOS rate will be 
calculated for each Mexico-domiciled motor carrier in the pilot, and 
these carrier-level driver OOS rates will next be averaged over all 
participating motor carriers.
    Driver Violation Rate. The driver violation rate is similar to the 
driver OOS rate, except that all violations will be considered, rather 
than just OOS violations.
    Safety Audit Pass Rate. The percentage of motor carriers in the 
pilot program that pass the PASA will be calculated and compared to the 
percentage of U.S.-domiciled motor carriers that pass the new entrant 
safety audit. The Agency recognizes that there are differences in these 
two types of reviews. However, they both evaluate success at meeting 
the established safety standards.
    Crash Rate. Because crashes are relatively rare events, FMCSA will 
likely have insufficient crash data to evaluate safety performance of 
Mexico-domiciled motor carriers in this area. However, if sufficient 
data are available to produce meaningful statistical results, crash 
rate comparisons will be produced. It is anticipated that motor 
carriers participating in the pilot program will be involved in a wide 
variety of trucking operations, and many, if not most, of them will not 
be operating their vehicles full-time in the United States. For this 
reason, crash rates for carriers participating in the pilot program 
will be calculated in terms of crashes per million miles, and not 
crashes per power unit. All crashes that have a severity level of 
towaway or higher will be included in the crash count.
    Crash rates will be calculated based on crashes occurring within 
both the United States and Mexico, and on mileage accumulated within 
both countries.
    Specific Violation Rates. In addition to overall vehicle and driver 
violation and OOS rates, violation rates for study participants will be 
calculated for specific types of violations, including traffic 
enforcement, driver fitness, and hours of service. These violation 
rates

[[Page 40437]]

measure safety performance in subject areas considered key by Agency's 
CSA program. The purpose of this is to see whether there are specific 
types of violations that are more common among the Mexico-domiciled 
carriers than their U.S. counterparts.
    Traffic Enforcement. Of particular interest are traffic enforcement 
violations pertaining to local laws, including, but not limited to, 
speeding, reckless driving, or driving too fast for conditions. Because 
traffic enforcement pertaining to driving only occurs when a violation 
is suspected, the exposure measure for these violation rates will not 
be total inspections, but, rather, the total number motor carrier 
trucks participating in the program, prorated by the number of months 
each motor carrier is in the pilot program. This traffic enforcement 
violation rate will be compared to a similar rate for US.-domiciled 
motor carriers, based on 36 months of data.
    Driver Fitness. A driver fitness violation rate will be calculated 
for the motor carriers participating in the pilot program by summing-up 
all of the driver fitness-related violations detected during the 
program for participating motor carriers, divided by their total number 
of inspections. This statistic will be compared to this same rate for 
U.S.-domiciled motor carriers.
    Hours-of-Service. An hours-of-service violation rate will be 
calculated for the motor carriers participating in the pilot program by 
summing-up all of the hours-of-service violations detected during the 
program for participating motor carriers, divided by their total number 
of inspections. This statistic will be compared to this same rate for 
U.S.-domiciled motor carriers.
    The Agency will conduct a peer review to assess the study design. 
Upon its conclusion, we will submit the results of the peer review to 
the docket for this notice. If the peer review results in recommended 
changes, the Agency will publish a notice in the Federal Register 
explaining the change.
    Regarding the assertion that Mexico-domiciled drivers are not cited 
for violations in the United States, FMCSA does not have any 
information available that would corroborate this statement.
11. Minimum Levels of Financial Responsibility
    The Coalition requested that the minimum insurance requirements for 
all CMVs, domestic and foreign, be increased before conducting the 
pilot program.
    The American Association for Justice interpreted the Agency's 
regulations as allowing participating motor carriers to self insure and 
suggested that all Mexican motor carriers carry insurance at all times.
    FMCSA Response: FMCSA does not agree with the Coalition's 
suggestion that motor carriers transporting general freight should be 
required to have a greater level of financial responsibility. Mexico-
domiciled motor carriers must establish financial responsibility, as 
required by 49 CFR part 387, through an insurance carrier licensed in a 
State in the United States. Based on the terms provided in the required 
endorsement, FMCSA Form MCS-90, if there is a final judgment against 
the motor carrier for loss and damages associated with a crash in the 
United States, the insurer must pay the claim. The financial 
responsibility claims would involve legal proceedings in the United 
States and an insurer based here. There is no reason that a Mexico-
domiciled motor carrier, insured by a U.S.-based company, should be 
required to have a greater level of insurance coverage than a U.S.-
based motor carrier.
    Increasing the minimum levels of financial responsibility for all 
motor carriers is beyond the scope of this notice and would require a 
rulemaking.
    In accordance with section 350(a)(1)(B)(iv), FMCSA must verify 
participating motor carriers' proof of insurance through a U.S., State-
licensed insurer. As a result, participating motor carriers may not 
self-insure.
12. Vehicle Inspection and Fleet Safety
    Teamsters expressed concern that only the segment of the motor 
carrier's fleet participating in long-haul trucking would be inspected. 
They also questioned how inspections at ``a rate comparable to other 
Mexico-domiciled motor carriers'' will be effective. Additionally, 
several commenters questioned what level of inspections would be 
conducted during each phase of the pilot program.
    FMCSA Response: As noted previously, while only participating 
vehicles will be inspected during the PASA, the maintenance of all of 
the motor carrier's available vehicles that operate in the United 
States will be subject to inspection during the CR. Additionally, motor 
carriers currently operating within the border commercial zone are 
subject to inspections on a routine basis. The inspection rate of 
border commercial zone motor carriers is significantly higher than the 
average U.S. motor carrier. As a result, at all stages of the program, 
the participating motor carriers' drivers and vehicles are expected to 
be inspected more frequently than those of the average U.S. motor 
carrier.
    In FY 2010, FMCSA and its State partners conducted 2,614,052 
commercial vehicle inspections on U.S.-based motor carriers with 
4,125,778 CMVs. FMCSA and its State partners conducted 256,151 CMV 
inspections on Mexico-domiciled motor carriers within the border 
commercial zones with 29,566 CMVs. Thus, the inspections rates for 
U.S.-based motor carriers and Mexico-domiciled motor carriers are 
0.636336% and 8.6337% respectively. At an inspection rate that is 13 
times greater for Mexico-domiciled motor carriers, FMCSA is confident 
that the inspections performed on motor carriers during Stages 2 and 3 
should be sufficient to ensure continued safe operations. Additionally, 
Mexico-domiciled motor carriers that are in Stages 2 and 3 of the pilot 
program are required to be inspected at least once every 90 days in 
order to maintain a valid CVSA safety decal.
    FMCSA will use all available inspection levels as well as license/
insurance check inspections on the vehicles during the program. The 
level of inspection chosen will depend on a number of factors including 
the presence of a CVSA decal, previous history, and other observations 
by the inspector. At a minimum, a Level I inspection will be conducted 
if a CVSA decal has expired or will soon expire.
    It must also be noted that participating vehicles will be required 
to maintain a current CVSA decal and must be inspected every 90 days. 
This is not a requirement for U.S. motor carriers or border commercial 
zone motor carriers.
13. Transparency
    Advocates requested that all of the Agency's agreements with Mexico 
be subject to notice and comment and that each step in the pilot 
program be subject as well.
    Advocates and ATA advised that the monitoring group should be 
independent from the Agency's Motor Carrier Safety Advisory Committee 
(MCSAC), and Advocates further indicated that under the Federal 
Advisory Committee Act (FACA), the use of a subcommittee of a Federal 
advisory committee to provide consensus advice and recommendations to a 
Federal official is prohibited. Advocates questioned whether the MCSAC 
participants comprised persons with backgrounds in basic research and 
statistical analysis who can offer advice on how decisions made by the 
monitoring group will affect the research design. Advocates requested 
that FMCSA provide all reports to the

[[Page 40438]]

appropriate congressional authorities and the public in a timely 
fashion.
    The Coalition requested that monthly or quarterly reports of data 
collection be made available to the public.
    FMCSA Response: The FMCSA has added copies of the 1991 MOU 
regarding CDL reciprocity and the 1998 MOU regarding drug and alcohol 
testing protocols to the docket for this notice. However, these 
documents are for informational purposes only and are not the subject 
of comments as they were negotiated by the Governments of the United 
States and Mexico more than a decade ago. The MOU between DOT and SCT 
that has been under negotiation since January 2011, is not subject to 
public comment, and the terms of that MOU have been explained in the 
April 13, 2011, Federal Register notice. The terms for U.S.-domiciled 
motor carriers wishing to travel south can be found in the draft rules 
proposed by SCT, which have been placed in the docket.
    The FMCSA provided the opportunity for notice and comment on all 
steps of this pilot program through the notice published on April 13, 
2011, and will not be providing another notice.
    Regarding the monitoring groups, FMCSA clarifies that there will be 
a government monitoring group to discuss bi-lateral operational issues. 
In addition, there will be an independent monitoring group.
    The FMCSA agrees that the group must be independent from the 
Agency. As a result, FMCSA continues to believe that the most efficient 
and effective process is to establish a subcommittee of the MCSAC. The 
MCSAC has proven itself to be independent of the Agency. We, however, 
want to clarify that the subcommittee would be able to invite input 
from individuals outside the MCSAC itself and would report out through 
the Committee. As a result, consistent with FACA requirements, only the 
MCSAC will transmit recommendations and advice to the FMCSA 
Administrator. FMCSA will make reports of the monitoring group 
available to the appropriate congressional committees and the public in 
a timely manner.
    The FMCSA will maintain a comprehensive Web site dedicated to this 
pilot program to keep the public informed about how the program 
progresses. In addition to the specific information mentioned within 
this notice, FMCSA will publish the name and DOT Number of each 
participating motor carrier, the Vehicle Identification Numbers (VIN) 
of all vehicles approved for long-haul transportation, details on the 
driver/vehicle inspections the motor carrier has received, and details 
on any crashes involving the motor carrier. FMCSA will also publish 
aggregate data regarding the number of trips taken by participating 
motor carriers and the destinations of those trips.
14. Resources
    Senator John D. Rockefeller expressed a concern about the adequacy 
of FMCSA, State law enforcement, and Immigration and Customs 
Enforcement (ICE) resources to support the program. Representative 
Hunter indicated he believed the Agency had gaps in its ability to 
properly manage the previous program. OOIDA indicated that based on 
contacts at the International Association of Chiefs of Police, more 
training on cabotage is needed.
    The Texas Department of Motor Vehicles recommends that FMCSA 
provide financial assistance to the Border States to off-set the Border 
States' administrative and enforcement expenses related to the pilot 
program.
    FMCSA Response: The FMCSA notes that the number of Mexico-domiciled 
motor carriers and vehicles that will participate in the pilot program 
is extremely small compared to the population of motor carriers and 
vehicles currently operating within the border commercial zones. Most 
of the motor carriers that would participate in the pilot program 
already have authority to operate in the border commercial zones, so 
their participation in the program would not result in a significant 
increase in the population of Mexico-domiciled motor carriers operating 
in the United States. Further, as to concerns regarding possible 
strains on border inspection facility capacity, it should be noted that 
FMCSA has no reason to believe the number of Mexican trucks crossing 
the border during the pilot program will increase significantly because 
the cargo carried by the long-haul trucks would have crossed the border 
in any event via short-haul, border commercial zone trucks.
    The FMCSA and its State partners have sufficient staff, facilities, 
equipment, and procedures in place to meet the requirements of this 
pilot program. This conclusion is based on the Agency's experience 
providing safety oversight for Mexico-domiciled motor carriers 
currently authorized to operate within the border commercial zones and 
on its regular liaison with its State enforcement partners with whom 
the Agency has worked for years in anticipation of the opening of the 
border to long-haul Mexico-domiciled motor carriers. In fact, during 
the previous program, FMCSA was able to confirm that over 99 percent of 
the participating vehicles received an inspection at the border. 
Further, FMCSA can find no evidence that the remaining less than one 
percent of the vehicles were not inspected as they crossed the border, 
and neither the OIG, nor the Independent Panel, nor any other entity 
has identified any vehicles that crossed without an inspection. FMCSA 
currently employs 260 Federal personnel dedicated to border enforcement 
activities.
    In response to the OOIDA's concerns about the burden on the States 
for providing safety oversight for Mexico-domiciled motor carriers and 
the Texas Department of Motor Vehicles comment regarding making funding 
available to Border States, FMCSA is authorized under 49 U.S.C. 31107 
to provide border enforcement grants for carrying out CMV safety 
programs and related enforcement activities and projects and has $32 
million available in FY2011 for this purpose. The Agency's State 
partners along the border employ 456 State officials for this purpose. 
Therefore, the Congress has provided funding for enforcement resources 
dedicated exclusively to ensuring the safe operation of foreign-
domiciled motor carrier operations.
    The FMCSA works with the States to ensure that motor carrier safety 
enforcement personnel receive extensive training. From 2008 to date, 
over 5,800 State motor carrier safety inspectors have received North 
American Standard (NAS) inspection procedures training. The NAS 
training course is designed to provide State motor carrier safety 
enforcement personnel with the basic knowledge, skills, practices, and 
procedures necessary for performing inspections under the Motor Carrier 
Safety Assistance Program (MCSAP).
    Additionally, through the Agency's partnership with the 
International Association of Chiefs of Police (IACP), four Foreign CMV 
Awareness Training sessions have been conducted on a recurring basis 
including a session that covers cabotage laws. Approximately 215 
officers were certified to train law enforcement officers throughout 
the United States using this course which includes cabotage 
information.
    The training these officers will provide to other law enforcement 
officials will ensure patrol officers are informed about potential 
safety and enforcement issues involving foreign-based CMVs and drivers 
operating beyond the border commercial zones. Therefore, not only has 
FMCSA provided funding resources to support the States' role in 
providing Safety oversight for Mexico-domiciled motor

[[Page 40439]]

carriers operating in the United States, the Agency has provided 
training. Presently, 1,755 law enforcement officers have received such 
training.
    Finally, during the program, FMCSA will monitor for domestic point-
to-point transportation violations using the information obtained from 
the GPS feature of the electronic monitoring devices installed on the 
vehicles and during CRs.
15. Impact on Truck Drivers, Small Fleets and Businesses
    Over 1,000 commenters felt that this pilot program would have a 
negative economic impact on the United States at a time when 
unemployment was high.
    FMCSA Response: The FMCSA does not believe the pilot program will 
have a significant adverse impact on U.S. motor carriers or drivers. As 
an initial matter, however, it is important to note that FMCSA lacks 
the authority to alter the terms under which Mexico-domiciled motor 
carriers operate in the United States based on the possible economic 
impact of those motor carriers on U.S. motor carriers. FMCSA's 
responsibility, pursuant to the November 2002 presidential order, is to 
implement NAFTA's motor carrier provisions in a manner consistent with 
the motor carrier safety laws.
    While the wages for a Mexico-domiciled driver may differ from those 
of a U.S.-domiciled driver, wages represent only one factor in the cost 
of a trucking operation. The costs for safety management controls to 
achieve full compliance with U.S. safety requirements, equipment 
maintenance, fuel, taxes and insurance costs must also be considered. 
Therefore, driver wages alone should not be considered the determining 
factor for an economic advantage.
    Also, Mexico-domiciled motor carriers cannot compete against U.S.-
domiciled motor carriers for point-to-point deliveries of domestic 
freight within the United States. Section 365.501(b) of title 49, Code 
of Federal Regulations, provides that ''a Mexico-domiciled motor 
carrier may not provide point-to-point transportation services, 
including express delivery services, within the United States for goods 
other than international cargo.'' FMCSA notes that engaging in domestic 
point-to-point transportation in the U.S. is operating beyond the scope 
of a Mexico-domiciled motor carrier's authority, and FMCSA and its 
State partners are actively engaged in enforcing this regulation. 
Vehicles caught in this practice will be placed out-of-service, 
participating motor carriers may be subject to civil penalties of up to 
$11,000 and more comprehensive review of operations by FMCSA, and they 
could be removed from the pilot program.
16. Concerns About Furthering Illegal Activity
    Numerous commenters noted the existence of drug cartels in Mexico 
and expressed concern that the long-haul program would increase drug 
trafficking.
    FMCSA Response: The FMCSA disagrees with the commenters on this 
issue. FMCSA is not aware of any information that would suggest the 
pilot program will increase the extent to which illegal activities 
occur. Mexico-domiciled motor carriers are already allowed to operate 
in border commercial zones. Many of the motor carriers that may apply 
for authority to operate beyond the border commercial zones and 
participate in the pilot program are already conducting CMV operations 
in the U.S., albeit limited to the border commercial zones. Moreover, 
as noted above, FMCSA does not anticipate that the pilot program will 
result in a substantial increase in the number of Mexican trucks 
crossing the border. It follows that the pilot program will not 
increase instances of cross-border drug smuggling in any significant 
way.
    Finally, as the U.S. Immigration and Customs Enforcement's 
inspections of long-haul trucks will not change as a result of this 
pilot, we do not believe this program introduces any new risks.

FMCSA's Intent To Proceed With Pilot Program

    In consideration of the above, FMCSA believes it is appropriate to 
commence the pilot program after the Department's Inspector General 
completes his report to Congress, as required by section 6901(b)(1) of 
the 2007 Appropriations Act, and the Agency completes any follow-up 
actions needed to address any issues that may be raised in the report. 
FMCSA reiterates that before an applicant Mexico-domiciled motor 
carrier may receive operating authority, it must submit a complete and 
accurate application; complete the DHS security review process; 
successfully complete the PASA; and file with FMCSA evidence of 
adequate insurance from a U.S. company. In addition, as stated above, 
FMCSA will complete reviews of Mexican licensing facilities to ensure 
compliance with the 1991 MOU before granting authority. FMCSA does not 
anticipate that any Mexico-domiciled motor carrier seeking 
participation in the pilot program will receive its provisional 
operating authority before the first weeks of August 2011.

    Issued on: June 29, 2011.
William Bronrott,
Deputy Administrator.
[FR Doc. 2011-16886 Filed 7-7-11; 8:45 am]
BILLING CODE 4910-EX-P