Document ID: FMCSA-2017-0370-0001
Agency: fmcsa
Document Type: Proposed Rule
Title: Motor Carrier Safety Assistance Program
Posted Date: 2019-08-22T04:00Z

[Federal Register Volume 84, Number 163 (Thursday, August 22, 2019)]
[Proposed Rules]
[Pages 44162-44187]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-17763]

[[Page 44161]]

Vol. 84

Thursday,

No. 163

August 22, 2019

Part V

Department of Transportation

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Federal Motor Carrier Safety Administration

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49 CFR Parts 350, 355, and 388

Motor Carrier Safety Assistance Program; Proposed Rule

  Federal Register / Vol. 84 , No. 163 / Thursday, August 22, 2019 / 
Proposed Rules  

[[Page 44162]]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Parts 350, 355, and 388

[Docket No. FMCSA-2017-0370]
RIN 2126-AC02

Motor Carrier Safety Assistance Program

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: FMCSA proposes amendments to the Agency's financial assistance 
programs resulting from the Fixing America's Surface Transportation 
(FAST) Act, including amendments based on the funding formula 
recommendations derived from the Motor Carrier Safety Assistance 
Program (MCSAP) Formula Working Group (working group). This proposal 
would reorganize the Agency's regulations to create a standalone 
subpart for the High Priority Program. It would also include other 
programmatic changes to reduce redundancies, require the use of 3-year 
MCSAP commercial vehicle safety plans (CVSPs), and align the financial 
assistance programs with FMCSA's current enforcement and compliance 
programs.

DATES: Comments on this notice must be received on or before October 7, 
2019.

ADDRESSES: You may submit comments identified by Docket Number FMCSA-
2017-0370 using any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the online instructions for submitting comments.
     Mail: Docket Management Facility, U.S. Department of 
Transportation, 1200 New Jersey Avenue SE, West Building, Ground Floor, 
Room W12-140, Washington, DC 20590-0001.
     Hand Delivery or Courier: West Building, Ground Floor, 
Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590, between 
9 a.m. and 5 p.m. ET, Monday through Friday, except Federal holidays.
     Fax: (202) 493-2251.
    To avoid duplication, please use only one of these four methods. 
See the ``Public Participation and Request for Comments'' portion of 
the SUPPLEMENTARY INFORMATION section for instructions on submitting 
comments.

FOR FURTHER INFORMATION CONTACT: Jack Kostelnik, State Programs 
Division, Federal Motor Carrier Safety Administration, 1200 New Jersey 
Avenue SE, Washington, DC 20590-0001, by telephone at (202) 366-5721 or 
by email at jack.kostelnik@dot.gov. If you have questions on viewing or 
submitting material to the docket, contact Docket Services, telephone 
(202) 366-9826.

SUPPLEMENTARY INFORMATION: This notice of proposed rulemaking (NPRM) is 
organized as follows:

I. Public Participation and Request for Comments
    A. Submitting Comments
    B. Viewing Comments and Documents
    C. Privacy Act
    D. Waiver of Advance Notice of Proposed Rulemaking
II. Executive Summary
    A. Purpose and Summary of the Regulatory Action
    B. Summary of Major Provisions
    C. Costs and Benefits
III. Abbreviations and Acronyms
IV. Legal Basis for the Rulemaking
V. Background
    A. History of MCSAP
    B. FAST Act
    C. FAST Act Omnibus Rule
    D. MCSAP Formula Working Group
    E. Voluntary Implementation of CVSPs
VI. Discussion of the Proposed Rulemaking
    A. Separation of MCSAP and the High Priority Program Provisions
    B. Proposed MCSAP Allocation Formula
    C. CVSP
    D. Performance and Registration Information Systems Management 
(PRISM)
    E. Authorization and Appropriations Related Changes
    F. Relocation of 49 CFR Part 355--Compatibility of State Laws 
and Regulations Affecting Interstate Motor Carrier Operations
    G. 49 CFR Part 385 Subpart E--Hazardous Material Safety Permits
    H. Removal of 49 CFR Part 388--Cooperative Agreements With 
States
    I. Other Proposed Changes
    J. Request for Comments
VII. International Impacts
VIII. Section-by-Section Analysis
IX. Regulatory Analyses
    A. E.O. 12866 (Regulatory Planning and Review), E.O. 13563 
(Improving Regulation and Regulatory Review), and DOT Regulatory 
Policies and Procedures
    B. E.O. 13771 (Reducing Regulation and Controlling Regulatory 
Costs)
    C. Regulatory Flexibility Act
    D. Assistance for Small Entities
    E. Unfunded Mandates Reform Act of 1995
    F. Paperwork Reduction Act
    G. E.O. 13132 (Federalism)
    H. E.O. 12988 (Civil Justice Reform)
    I. E.O. 13045 (Protection of Children)
    J. E.O. 12630 (Taking of Private Property)
    K. Privacy
    L. E.O. 12372 (Intergovernmental Review)
    M. E.O. 13211 (Energy Supply, Distribution, or Use)
    N. E.O. 13783 (Promoting Energy Independence and Economic 
Growth)
    O. E.O. 13175 (Indian Tribal Governments)
    P. National Technology Transfer and Advancement Act (Technical 
Standards)
    Q. National Environmental Policy Act of 1969

I. Public Participation and Request for Comments

A. Submitting Comments

    If you submit a comment, please include the docket number for this 
NPRM (Docket No. FMCSA-2017-0370), indicate the specific section of 
this document to which each comment applies, and provide a reason for 
each suggestion or recommendation. You may submit your comments and 
material online or by fax, mail, or hand delivery, but please use only 
one of these means. FMCSA recommends that you include your name and a 
mailing address, an email address, or a telephone number in the body of 
your document so that FMCSA can contact you if there are questions 
regarding your submission.
    To submit your comment online, go to http://www.regulations.gov, 
put the docket number, FMCSA-2017-0370, in the keyword box, and click 
``Search.'' When the new screen appears, click on the ``Comment Now!'' 
button and type your comment into the text box on the following screen. 
Choose whether you are submitting your comment as an individual or on 
behalf of a third party and then submit.
    If you submit your comments by mail or hand delivery, submit them 
in an unbound format, no larger than 8\1/2\ by 11 inches, suitable for 
copying and electronic filing. If you submit comments by mail and would 
like to know that they reached the facility, please enclose a stamped, 
self-addressed postcard or envelope.
    FMCSA will consider all comments and material received during the 
comment period and may change this proposed rule based on your 
comments. FMCSA may issue a final rule at any time after the close of 
the comment period.
Confidential Business Information
    Confidential Business Information (CBI) is commercial or financial 
information that is customarily not made available to the general 
public by the submitter. Under the Freedom of Information Act (5 U.S.C. 
552), CBI is eligible for protection from public disclosure. If you 
have CBI that is relevant or responsive to this NPRM, it is important 
that you clearly designate the submitted comments as CBI. Accordingly, 
please mark each page of your submission as ``confidential'' or 
``CBI.'' Submissions designated as CBI and meeting the definition noted 
above

[[Page 44163]]

will not be placed in the public docket of this NPRM. Submissions 
containing CBI should be sent to Brian Dahlin, Chief, Regulatory 
Evaluation Division, Federal Motor Carrier Safety Administration, 1200 
New Jersey Avenue SE, Washington, DC 20590-0001. Any commentary that 
FMCSA receives that is not specifically designated as CBI will be 
placed in the public docket for this rulemaking.

B. Viewing Comments and Documents

    To view comments, as well as any documents mentioned in this 
preamble as being available in the docket, go to http://www.regulations.gov. Insert the docket number, FMCSA-2017-0370, in the 
keyword box, and click ``Search.'' Next, click the ``Open Docket 
Folder'' button and choose the document to review. If you do not have 
access to the internet, you may view the docket online by visiting the 
Docket Management Facility in Room W12-140 on the ground floor of the 
DOT West Building, 1200 New Jersey Avenue SE, Washington, DC 20590, 
between 9 a.m. and 5 p.m. ET, Monday through Friday, except Federal 
holidays.

C. Privacy Act

    In accordance with 5 U.S.C. 553(c), DOT solicits comments from the 
public to better inform its rulemaking process. DOT posts these 
comments, without edit, including any personal information the 
commenter provides, to www.regulations.gov, as described in the system 
of records notice (DOT/ALL 14-FDMS), which can be reviewed at 
www.transportation.gov/privacy.

D. Waiver of Advance Notice of Proposed Rulemaking

    Under section 5202 of the FAST Act, Public Law 114-94, 129 Stat. 
1312, 1534-5 (2015), if a regulatory proposal is likely to lead to the 
promulgation of a major rule,\1\ FMCSA is required to publish an 
advance notice of proposed rulemaking (ANPRM), unless the Agency finds 
good cause that an ANPRM is impracticable, unnecessary, or contrary to 
the public interest (49 U.S.C. 31136(g)). The Agency does not 
anticipate that this rulemaking would result in a major rule. Thus, 
publication of an ANPRM is not necessary. However, a key component of 
this rulemaking involves a new allocation formula governing the 
distribution of MCSAP funds. This NPRM reflects the allocations derived 
from the recommendations of the working group that was appointed by the 
Secretary of Transportation (Secretary) in accordance with section 5106 
of the FAST Act.
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    \1\ A ``major rule'' means any rule that the Administrator of 
the Office of Information and Regulatory Affairs at the Office of 
Management and Budget (OMB) finds has resulted in or is likely to 
result in (a) an annual effect on the economy of $100 million or 
more; (b) a major increase in costs or prices for consumers, 
individual industries, Federal agencies, State agencies, local 
government agencies, or geographic regions; or (c) significant 
adverse effects on competition, employment, investment, 
productivity, innovation, or on the ability of United States-based 
enterprises to compete with foreign-based enterprises in domestic 
and export markets (5 U.S.C. 804(2)).
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    While this working group was not a negotiated rulemaking committee, 
which is an alternative to an ANPRM under the statute, its 
recommendations were developed through a collaborative effort by 
relevant stakeholders.

II. Executive Summary

A. Purpose and Summary of the Regulatory Action

    The purpose of this regulatory action is to amend and reorganize 49 
CFR part 350, including adding relevant sections that are currently 
located in part 355. Certain regulations are no longer necessary or are 
redundant. Moreover, the FAST Act required FMCSA to implement a multi-
year CVSP with annual updates for States applying for MCSAP funds and 
to provide a new MCSAP allocation formula. This proposal would provide 
a new MCSAP allocation formula, require States to adopt 3-year CVSPs, 
and reorganize the Agency's regulations to create a standalone subpart 
for the High Priority Program. FMCSA's primary legal authority for this 
rulemaking is derived from Title V, Subtitle A of the FAST Act, Public 
Law 114-94, 129 Stat. 1312, 1514-1534 (2015).

B. Summary of Major Provisions

    The rule proposes a new MCSAP allocation formula. The FAST Act 
required the Secretary to assemble a working group to recommend a new 
MCSAP allocation formula. The Agency fully considered and is proposing 
to fully adopt the recommendations of the working group.
    The new MCSAP allocation formula would include three components: 
State, Border, and Territory. Each component would be assigned a 
percentage of MCSAP funds. Funds would be allocated under the State 
Component using five equally-weighted factors and then applying minimum 
and maximum caps to the allocated funding. The Border Component would 
allocate funding based on the number of United States ports of entry 
and the number of commercial motor vehicle (CMV) crossings at those 
ports of entry, subject to minimum and maximum funding levels. This 
Border Component accounts for differences in the number of crossings 
per port of entry at the Northern border compared to the Southern 
border of the United States. Finally, the Territory Component would 
ensure that each Territory, except for Puerto Rico (which is allocated 
funding under the State Component), receives a minimum funding amount 
of $350,000. Any funds not allocated under the Border or Territory 
Components would be added to the State Component for allocation. The 
proposed formula would promote stability in funding and protect States 
from experiencing significant and unpredicted changes by including a 
hold-harmless provision and a funding cap.
    This proposed rule would require States to use CVSPs in accordance 
with the FAST Act. The rule would provide direction to States on how 
and when to submit CVSPs, which would be on 3-year cycles. In the first 
year of the CVSP, States would submit quantitative performance 
objectives, analysis of past performance, and other documents 
traditionally provided in an annual CVSP, as well as a budget for the 
initial year. In the second and third years of the CVSP, States would 
submit an annual update that includes changes to the CVSP (including 
updates to performance objectives and adjustments to activities), a 
budget for the applicable fiscal year, and other documents required on 
an annual basis.
    FMCSA proposes to clarify a State's obligation to cooperate in the 
enforcement of hazardous materials safety permits for interstate and 
intrastate carriers, as required under subpart E of 49 CFR part 385, to 
transport certain hazardous materials.
    The rule also proposes to revise and reorganize part 350. 
Currently, the High Priority Program and MCSAP regulations are 
intertwined in part 350, but some regulations do not apply to both 
programs. To provide clarity for the eligible recipients, this NPRM 
separates the two programs into different subparts in part 350. In 
addition, relevant sections of part 355 would be added to part 350. 
These proposed changes address regulatory compatibility and would 
reduce redundancy and make part 350 more clear and concise.
    Finally, FMCSA proposes to remove part 388, titled ``Cooperative 
Agreements with States,'' because FMCSA does not rely on part 388 
provisions.

C. Costs and Benefits

    This rule proposes a new MCSAP allocation formula to replace the 
current

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formula that has been in use for more than a decade with little 
modification. The proposed MCSAP allocation formula would make several 
improvements over the current formula. The proposed formula would 
result in a reallocation of fiscal year (FY) 2020 grant funding that 
would be considered a transfer payment, in that it would not change the 
total amount of funds distributed. In accordance with OMB guidance on 
conducting regulatory analysis (as discussed in OMB Circular A-4, 
``Regulatory Analysis''), transfer payments within the U.S. are not 
included in the estimates of the costs and benefits of rulemakings. 
Thus, FMCSA does not include transfers resulting from the proposed 
changes to the MCSAP allocation formula in its estimate of the rule's 
costs or benefits.
    The proposed rule would require States to use CVSPs in accordance 
with the FAST Act. The rule would provide direction to States on how 
and when to submit CVSPs, which would be on 3-year cycles. Under the 
current regulations, States must submit lengthy CVSP applications 
annually to receive MCSAP funding, unless they volunteer to submit 3-
year CVSPs. The proposed rule would require States to submit robust 3-
year CVSP applications for the first year, with annual updates for the 
second and third years. FMCSA expects that 3-year CVSPs will be less 
burdensome and time consuming for States than submitting lengthy CVSP 
applications annually, which will result in lower program 
administrative costs. All 55 States \2\ have transitioned voluntarily 
to 3-year CVSPs, and thus, there is no impact from this proposed 
change.
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    \2\ Unless otherwise provided in this preamble, we use the term 
``State'' as including the District of Columbia and the Territories. 
FMCSA estimated that there are 55 respondents consisting of the 50 
States minus Oregon, plus the District of Columbia and the 5 
Territories.
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    If a continuing resolution in FY 2020 were to occur, FMCSA would 
utilize the same process it has employed during recent budget cycles. 
State lead agencies would complete the CVSP utilizing an estimated 
annual award total based on the statutorily authorized funding level. 
Should the final appropriation be less than the authorized amount, 
FMCSA would publish a revised funding table and provide MCSAP 
recipients the opportunity to modify their proposed activities and 
budget accordingly.
    FMCSA will also engage in continuous outreach with its MCSAP 
recipients regarding the implementation of the proposed formula and 
related impacts. The Agency anticipates including this as a key topic 
of discussion during its annual meeting of MCSAP grantees, providing 
ongoing updates through its quarterly webinars with grant recipients, 
and developing printed materials relating to the new formula 
implementation.
    FMCSA, through its Division Offices, will work directly with 
individual MCSAP partners to ensure that stakeholders are informed and 
that questions are addressed quickly. In addition, FMCSA has already 
developed and distributed via its website a series of frequently asked 
questions (FAQs) and an executive summary of the working group's report 
to facilitate this process.
    Due to the nature of grants as transfer payments (which are not 
considered costs or benefits), FMCSA anticipates that the proposed 
changes would not result in any societal costs or benefits.

III. Abbreviations and Acronyms

ANPRM Advance notice of proposed rulemaking
BEG Border Enforcement Grant
CBI Confidential Business Information
CE Categorical Exclusion
CFR Code of Federal Regulations
CMV Commercial motor vehicle
CVSP Commercial vehicle safety plan
DOT Department of Transportation
eCVSP Electronic commercial vehicle safety plan
E.O. Executive Order
FAST Act Fixing America's Surface Transportation Act
FHWA Federal Highway Administration
FMCSA Federal Motor Carrier Safety Administration
FMCSRs Federal Motor Carrier Safety Regulations
FR Federal Register
FTE Full-time employees
FY Fiscal year
HMRs Federal Hazardous Materials Regulations
MCSAP Motor Carrier Safety Assistance Program
MOE Maintenance of effort
NOFO Notice of Funding Opportunity
NPRM Notice of proposed rulemaking
OMB Office of Management and Budget
PRISM Performance and Registration Information Systems Management
RFA Regulatory Flexibility Act
Sec.  Section
Secretary Secretary of Transportation
SBREFA Small Business Regulatory Enforcement Fairness Act of 1996 
working group MCSAP Formula Working Group
U.S.C. United States Code
VMT Vehicle miles traveled

IV. Legal Basis for the Rulemaking

    This rule is based primarily on Title V, Subtitle A of the FAST 
Act, Public Law 114-94, 129 Stat. 1312, 1514-1534 (2015), which 
consolidated several of FMCSA's financial assistance programs and 
authorized program funding levels through fiscal year (FY) 2020. Key 
provisions, effective FY 2017, include section 5101, which amended 49 
U.S.C. 31102, consolidating the former New Entrant, Performance and 
Registration Information Systems Management (PRISM), Safety Data 
Improvement Program, and Border Enforcement grant programs into the 
revised MCSAP formula grant. In addition, it established the High 
Priority Program as a separate discretionary financial assistance 
program for qualifying entities and projects relating to motor carrier 
safety and Innovative Technology Deployment. Section 5101 also amended 
49 U.S.C. 31104, which prescribes, among other things, authorized 
funding levels through FY 2020, the minimum Federal funding share 
applicable to these (and other) FMCSA financial assistance programs, 
and the periods of time in which awarded funds may be used.
    Section 5106 of the FAST Act (note following 49 U.S.C. 31102) 
required the Secretary to appoint a working group, consisting of 
prescribed stakeholder interests, to develop and recommend to the 
Secretary a new MCSAP allocation formula reflecting specified factors 
for the award of MCSAP funds. Following receipt of the working group's 
recommendations, the Secretary is required to issue an NPRM. The 
working group submitted its report on April 7, 2017, and an addendum to 
the report on January 8, 2019. Section 5107 of the FAST Act (note 
following 49 U.S.C. 31102) addresses the maintenance of effort 
calculations for FY 2017 and subsequent fiscal years until the new 
MCSAP allocation formula is in place.
    FMCSA has authority under Federal hazardous materials 
transportation law, 49 U.S.C. 5101-5128, to require States to cooperate 
in the enforcement of Federal hazardous materials safety permit 
requirements as a condition to qualify for MCSAP funds. The purpose of 
the hazardous materials transportation law is ``to protect against the 
risks to life, property, and the environment that are inherent in the 
transportation of hazardous material in intrastate, interstate, and 
foreign commerce'' (49 U.S.C. 5101). Section 5109(a) provides that a 
``motor carrier may transport or cause to be transported by motor 
vehicle in commerce hazardous material only if the carrier holds a 
safety permit'' issued by FMCSA. The Secretary has authority to 
prescribe what hazardous materials require a safety permit (49 U.S.C. 
5109(b)). Exercising this authority, this NPRM proposes to clarify that 
States are required to cooperate in ensuring carriers transporting 
certain hazardous

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materials possess the required FMCSA hazardous materials safety permit 
(49 U.S.C. 31102(c)(1)).
    FMCSA is authorized to implement these statutory provisions by 
delegation from the Secretary in 49 CFR 1.87.

V. Background

A. History of MCSAP

    The Surface Transportation Assistance Act of 1982, Public Law 97-
424, 96 Stat. 2097, 2155 (1983), authorized MCSAP. MCSAP is a Federal 
financial assistance program that provides formula grants to States 
(unless otherwise stated, defined in this proposed rule to include the 
Territories and the District of Columbia) to reduce the number and 
severity of injuries and the number of fatalities resulting from 
crashes involving CMVs and to promote the safe transportation of 
passengers and hazardous materials. MCSAP funds are essential to 
maintaining FMCSA's national CMV safety enforcement programs, and those 
of States. MCSAP establishes the conditions to participate in the 
program and promotes the adoption and uniform enforcement of State 
safety rules, regulations, and standards that are compatible with the 
Federal Motor Carrier Safety Regulations (FMCSRs) and Federal Hazardous 
Materials Regulations (HMRs) for both interstate and intrastate motor 
carriers and drivers.\3\
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    \3\ The program was subsequently modified by the Intermodal 
Surface Transportation Efficiency Act of 1991, Public Law 102-240, 
4002, 105 Stat. 1914, 2140 (1991); the ICC Termination Act of 1995, 
Public Law 104-88, 104(a), 109 Stat. 803, 918 (1995); the 
Transportation Equity Act for the 21st Century, Public Law 105-178, 
4003(b), (c), 112 Stat. 107, 395 (1998); the Motor Carrier Safety 
Improvement Act of 1999, Public Law 106-159, 207, 113 Stat. 1748, 
1764 (1999); the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act: A Legacy for Users, Public Law 109-59, 
4106, 4307(b), 119 Stat. 1144, 1717, 1774 (2005); and the Moving 
Ahead for Progress in the 21st Century Act, Public Law 112-141, 126 
Stat. 405 (2012). The most recent modifications to MCSAP were 
enacted as part of Title V, Subtitle A of the FAST Act, Public Law 
114-94, 129 Stat. 1312, 1514-1534 (2015).
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    Before FY 2017, MCSAP consisted of the Basic Program funds and 
Incentive funds calculated using a formula, and set-asides for the 
discretionary High Priority and New Entrant grant programs. Until a new 
MCSAP allocation formula is implemented, the Basic Program funds and 
Incentive funds ensure that FMCSA and States continue to work in 
partnership to establish programs to improve motor carrier, CMV, and 
driver safety to support a safe and efficient transportation system.
    The Basic Program funds currently distribute MCSAP funds 
proportionally to States using the following four, equally-weighted 
factors:
    (1) 1997 road miles (all highways) as defined by the Federal 
Highway Administration (FHWA);
    (2) Vehicle miles traveled (VMT) as defined by the FHWA;
    (3) Population based on annual census estimates issued by the U.S. 
Census Bureau; and
    (4) Special fuel consumption (net after reciprocity adjustment) as 
defined by the FHWA.
    The Incentive funds are a portion of MCSAP funds distributed to 
States, but not to the Territories. A State's share of the Incentive 
funds is based on:
    (1) Reduction of large truck-involved fatal crashes;
    (2) Reduction of large truck-involved fatal crash rate or 
maintenance of a large truck-involved fatal crash rate that is among 
the lowest 10 percent among MCSAP recipients;
    (3) Uploads of CMV crash reports in accordance with current FMCSA 
policy;
    (4) Verification of commercial driver's licenses during 
inspections; and
    (5) Uploads of CMV inspection data in accordance with FMCSA policy.
    The High Priority Program was a set-aside of MCSAP funds with an 
authorization level of up to $15 million prior to FY 2017. Eligible 
recipients included State agencies, local governments, and 
organizations representing government agencies that used and trained 
qualified officers and employees in coordination with State motor 
vehicle safety agencies. FMCSA provided High Priority Program funds to 
enable recipients to carry out enforcement activities and projects that 
improved CMV safety and compliance with CMV regulations. Funding was 
also available for projects that were national in scope, increased 
public awareness and education, demonstrated new technologies, and 
reduced the number and rate of CMV crashes. The grant period of 
performance was the fiscal year of obligation and the next fiscal year.
    The New Entrant grant program was also a set-aside of MCSAP funds 
with an authorization level of up to $32 million prior to FY 2017. 
Eligible recipients included State agencies and local governments. The 
grant program funded safety audits on new entrant motor carriers to 
ensure that they had effective safety management programs. The grant 
period of performance was the fiscal year of obligation and the next 
fiscal year.
    The Border Enforcement Grant (BEG) program was a standalone grant 
program with an authorization level of up to $32 million prior to FY 
2017. FMCSA provided BEG program funds to eligible recipients, which 
included State governments or entities that share a land border with 
Canada or Mexico and any local government or entity in that State, for 
carrying out border CMV safety programs and related enforcement 
activities and projects. The grant period of performance was the fiscal 
year of obligation and the next fiscal year.
    The PRISM program was a standalone grant program with an 
authorization level of up to $5 million prior to FY 2017. Eligible 
recipients included State agencies, the District of Columbia, Puerto 
Rico, and the Territories. FMCSA provided PRISM funds to enable 
recipients to link State CMV registration and licensing systems with 
Federal motor carrier safety information systems. The grant period of 
performance was from the date of execution through the award end date, 
as provided in the grant agreement.
    The Safety Data Improvement Program was a standalone grant program 
with an authorization level of up to $3 million prior to FY 2017. 
Eligible recipients included State governments such as departments of 
public safety, departments of transportation, or State law enforcement 
agencies in any State, the District of Columbia, Puerto Rico, and the 
Territories, or any agency or instrumentality of a State exclusive of 
local governments. FMCSA provided Safety Data Improvement Program funds 
to eligible recipients that collected, analyzed, and reported large 
truck and bus crash and inspection data to improve the quality of the 
CMV data reported by States to FMCSA. The grant period of performance 
was from the date of execution through the award end date, as provided 
in the grant agreement.
    The Commercial Vehicle Information Systems and Networks (CVISN) was 
a standalone grant program with an authorization level of up to $25 
million prior to FY 2017. Eligible recipients included agencies of 
States, the District of Columbia, Puerto Rico, and the Territories. 
FMCSA provided funding to advance technological capability and promote 
the deployment of intelligent transportation systems applications for 
commercial vehicle operations, including CMV, commercial driver, and 
carrier-specific information systems and networks. The grant period of 
performance was from the date of execution through the award end date, 
as provided in the grant agreement.

B. FAST Act

    The FAST Act restructured FMCSA's financial assistance programs. It 
created a standalone High Priority Program that

[[Page 44166]]

is a competitive financial assistance program. It has two major 
purposes: (1) Supporting, enriching, and augmenting activities related 
to motor carrier safety; and (2) promoting Innovative Technology 
Deployment. The Innovative Technology Deployment program modifies and 
replaces FMCSA's Commercial Vehicle Information Systems and Networks 
program. The Safety Data Improvement Program and PRISM, which were 
previously standalone grant programs, were merged into both the High 
Priority Program and MCSAP. The New Entrant grant program and 
standalone BEG were also merged into MCSAP.
    Section 5106(d) of the FAST Act prescribed the MCSAP interim 
funding formula for FY 2017 and later fiscal years, as necessary. The 
interim formula uses the MCSAP funding formula used in FY 2016 plus the 
average funding awarded to a State in FYs 2013, 2014, and 2015 for BEG 
and New Entrant program grant funds. Subject to the availability of 
funding and notwithstanding fluctuations in the data elements, the 
initial amounts in FY 2017 were adjusted to ensure that, for each 
State, the amount provided while using the interim formula was not less 
than 97 percent of the average amount of funding received in FYs 2013, 
2014, and 2015, or other equitable amounts.
    In FY 2018, FMCSA awarded $294,416,500 for MCSAP formula grants 
using the interim formula, and $42,424,178 for the High Priority 
Program through a competitive financial assistance process. Additional 
information on the Agency's financial assistance programs may be found 
at https://www.fmcsa.dot.gov/mission/grants.
    The FAST Act added 49 U.S.C. 31102(f), which created additional 
allowances for States when determining their average levels of 
expenditure for purposes of the MCSAP-required maintenance of 
effort.\4\ States may exclude expenditures for activities related to 
border enforcement and new entrant safety audits. In addition, section 
5107 of the FAST Act permits States to request a one-time adjustment to 
their maintenance of effort baselines in the first year a new MCSAP 
allocation formula is implemented. The adjusted baseline will become 
the State's baseline maintenance of effort that is required each fiscal 
year as part of the CVSP or annual update. This adjustment eases the 
burden on FMCSA's State partners by accounting for the potentially 
increased match requirements under MCSAP grant consolidation. States 
must request this adjustment before September 30 of the fiscal year in 
which the new formula is implemented. Furthermore, if a State 
subsequently identifies new information, the State may request a 
modification to its maintenance of effort baseline (49 U.S.C. 
31102(f)(2)).
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    \4\ Each fiscal year, a State must maintain the average 
aggregate expenditure (maintenance of effort) of the Lead State 
Agency, exclusive of Federal funds and State matching funds, for CMV 
safety programs eligible for MCSAP funding at a level at least equal 
to the average level of that expenditure for fiscal years 2004 and 
2005.
---------------------------------------------------------------------------

C. FAST Act Omnibus Rule

    On October 14, 2016, FMCSA published a final rule titled 
``Amendments To Implement Grants Provisions of the Fixing America's 
Surface Transportation Act'' (81 FR 71002). That rule made 
nondiscretionary, ministerial changes to FMCSA regulations, consistent 
with the FAST Act. For example, it consolidated the BEG, New Entrant 
grant, and parts of the Safety Data Improvement Program, PRISM, and 
Innovative Technology Deployment grants into the MCSAP formula grant. 
This grant consolidation reduced the administrative burden on eligible 
recipients, provided more flexibility to eligible recipients, and 
streamlined the grant application process. In addition, the rule 
required that each State establish and maintain a new entrant safety 
audit program as a condition of MCSAP funding. To continue to receive 
MCSAP funding for border enforcement, eligible States were required to 
maintain a border enforcement program. Furthermore, FMCSA amended its 
regulations to remove the requirement for an annual CVSP. This change 
allowed States to use a 3-year CVSP, but did not require it (discussed 
in full below). Finally, the rule provided that lead State agencies 
(i.e., those State agencies responsible for MCSAP administration) are 
not eligible to apply for High Priority Program funds for Safety Data 
Improvement Program and PRISM capabilities, unless such projects exceed 
the minimum requirements.

D. MCSAP Formula Working Group

    The FAST Act required the Secretary to establish a working group to 
analyze requirements and factors to recommend a new MCSAP allocation 
formula to the Secretary. The FAST Act mandated that the group be 
composed of representatives from State CMV safety agencies, an 
organization representing State CMV enforcement agencies, FMCSA, and 
any other persons that the Secretary considered necessary for the 
development of a new MCSAP allocation formula. Congress mandated that 
State safety agency participation make up at least 51 percent of the 
working group and exempted the group from the Federal Advisory 
Committee Act.
    FMCSA requested applications for working group members through a 
notice posted on the Agency's website and through direct solicitation 
of MCSAP lead State agencies. An FMCSA panel reviewed applications and 
recommended applicants who would create a diverse working group, taking 
into consideration a State's location and size.
    The working group was established in March 2016. It held six in-
person meetings and several web conferences to discuss various factors 
and issues relevant to the creation of a new MCSAP allocation formula. 
The working group created a web page \5\ that contains meeting 
summaries for both in-person and web-based discussions.
---------------------------------------------------------------------------

    \5\ See www.fmcsa.dot.gov/mission/grants/fast-act-mcsap-formula-working-group.
---------------------------------------------------------------------------

    To develop its recommendation, the working group used the following 
guiding principles and agreed the new formula should:
     Be safety-based (primary objective);
     Improve the previous formula;
     Address FAST Act grant changes;
     Meet FAST Act formula requirements;
     Promote stability in funding;
     Respond to changes in States' exposure to crashes; and
     Use quality data sources.
    In applying these principles, the working group studied the current 
allocation formula's design and data elements and used it as a 
baseline. To improve motor carrier safety, the primary consideration 
was to develop a new MCSAP allocation formula that provides States with 
an appropriate level of funding based on exposure to crashes. The 
working group chose to base the formula on factors correlated with 
crashes, rather than the number of crashes itself, because using CMV 
crashes as a factor in the allocation formula has undesired impacts, 
such as punishing States for having an effective CMV safety program.
    The working group applied a variety of analytical methods to:
     Identify areas in the current formula to improve;
     Create alternative formula designs; and
     Evaluate impacts of the proposed formulas with respect to 
the guiding principles.
    The analytical methods used by the working group are described in 
the working group's report and the

[[Page 44167]]

appendices. These methods include, but are not limited to:
     Analyzing the correlation between each proposed factor and 
the next year's CMV crashes using linear regression. (Note that this 
was tested over the course of 5 years for each factor to ensure 
consistency in the results.)
     Generating and evaluating histograms of changes in 
proposed formula factors over time to quantify the stability of each 
potential formula factor.
     Experimenting with different formula structures (e.g., 
assigning different weights to each factor).
     Generating simulated formula allocation results with each 
iteration of the proposed formula to understand and evaluate the 
impacts of each proposed change.
    The working group submitted a report titled ``Recommendations to 
the U.S. Department of Transportation for the Development of the New 
MCSAP Grant Allocation Formula'' to FMCSA, which was received on April 
7, 2017. FMCSA reviewed the report and agreed with the majority of the 
working group's recommendations. To facilitate additional input from 
the working group and transparency in the development of a new MCSAP 
allocation formula, the FMCSA Administrator requested that the working 
group reconvene for further deliberation on three of its 
recommendations. The working group submitted an addendum to its report 
on January 8, 2019. A full discussion of this process can be found 
below. Copies of the report and addendum are included in the docket.

E. Voluntary Implementation of CVSPs

    Section 5101 of the FAST Act requires the Secretary to prescribe 
procedures for a State to submit a multi-year CVSP with annual updates 
for MCSAP grants. In a Federal Register notice published on October 27, 
2016, FMCSA asked 14 questions to assist the Agency in developing an 
information technology system format and procedures for submission of 
such a CVSP (81 FR 74862). FMCSA considered comments in response to the 
Federal Register notice,\6\ the status of the working group's 
recommendation, and necessary electronic CVSP (eCVSP) tool 
modifications. As a result, the Agency created a CVSP with a 3-year 
plan cycle.
---------------------------------------------------------------------------

    \6\ 83 FR 691 (January 5, 2018).
---------------------------------------------------------------------------

    The Agency elected to test both the 3-year CVSP and revised eCVSP 
tool. The Agency sought volunteers and selected 18 States and 1 
Territory to complete a 3-year CVSP for FY 2018. The selection of 
volunteers was based on geography, program size, and programmatic 
structure variety to allow the Agency to fully test the functionality 
of the CVSP. The 3-year plan cycle for this first group of States 
included FYs 2018, 2019, and 2020.
    Using the experience and feedback of the 3-year CVSP users, FMCSA 
made modifications to the CVSP and eCVSP tool prior to the FY 2019 
MCSAP application. FMCSA worked with the second group of 13 volunteer 
States to submit their CVSPs by August 1, 2018. The 3-year plan cycle 
for this second group of States is FYs 2019, 2020, and 2021. States 
that did not move to 3-year CVSPs for FY 2018 or FY 2019 were required 
to submit an annual CVSP by August 1, 2018.
    FMCSA notes that the remaining States voluntarily submitted a 3-
year CVSP by August 1, 2019. This third group of States completed their 
CVSPs for FYs 2020, 2021, and 2022.
    FMCSA expects that States will remain on one of these 3-year 
planning cycles. For example, States that began submitting 3-year CVSPs 
in FY 2017 for FY 2018-20 grants will submit a 3-year CVSP again in 
2020 for the FY 2021-23 grants.

VI. Discussion of the Proposed Rulemaking

A. Separation of MCSAP and the High Priority Program Provisions

    This NPRM proposes to separate the regulations governing MCSAP and 
the standalone High Priority Program created by the FAST Act. 
Currently, the regulatory provisions for MCSAP and the High Priority 
Program are intermingled. This NPRM proposes to organize the programs 
into distinct regulatory subparts under 49 CFR part 350 to reflect the 
relevant information for each program. This separation would make it 
easier to find needed regulatory information. For MCSAP, the 
regulations have been reorganized and modified to comply with FAST Act 
requirements, provide clarity, and remove redundancies. For the High 
Priority Program, the regulations have been modified to clarify 
eligibility conditions.
    The Agency proposes to implement the changes to FMCSA's financial 
assistance programs required by the FAST Act beginning October 1, 2019, 
for FY 2020. However, consistent with section 5101(a) of the FAST Act 
and a prior rulemaking implementing select provisions of the FAST Act 
(81 FR 71002, October 14, 2016), mandatory participation in PRISM 
remains October 1, 2020 (49 U.S.C. 31102(c)(2)(Z)).

B. Proposed MCSAP Allocation Formula

Working Group Recommendation
    The working group recommended that the formula consist of three 
separately calculated components: A Territory Component, Basic 
Component, and Border Component. As further explained below, the 
working group also recommended terminating the MCSAP Incentive Program.
    The new MCSAP allocation formula recommended by the working group 
makes several improvements to the current formula. The FAST Act 
outlined several factors for the working group to consider.\7\ The 
working group analyzed objective safety data and other information 
prior to making its MCSAP allocation formula recommendation. Various 
methods of research and analysis were used to understand each area of 
improvement, create alternative formula designs, and evaluate their 
impacts with respect to the guiding principles. These efforts included:
---------------------------------------------------------------------------

    \7\ These factors must reflect, at a minimum ``(1) the relative 
needs of the States to comply with section 31102 of title 49, United 
States Code; (2) the relative administrative capacities of and 
challenges faced by States in complying with that section; (3) the 
average of each State's new entrant motor carrier inventory for the 
3-year period prior to the date of enactment of this Act; (4) the 
number of international border inspection facilities and border 
crossings by commercial vehicles in each State; and (5) any other 
factors the Secretary considers appropriate.'' See Sec.  5106(c) of 
the FAST Act, Public Law 114-94, 129 Stat. 1312, 1531 (2015).
---------------------------------------------------------------------------

     Identifying and obtaining data sources.
     Evaluating data sources to determine if they met the 
criteria for formula inclusion, e.g., through statistical analysis.
     Reviewing and considering programmatic needs and trends.
     Understanding the varying administrative needs of grant 
recipients.
     Understanding the investments that recipients made with 
grant funding (e.g., personnel and benefits, contract services, 
equipment, etc.).
     Reviewing published reports by the Office of the Inspector 
General (OIG), the National Research Council (NRC), and a previous 
MCSAP formula evaluation by Oak Ridge National Laboratory.
     Conducting simulations to evaluate funding impacts.
    The working group's recommended MCSAP allocation formula includes 
only those factors that are most highly correlated with a State's total 
CMV crashes, have data that are reliably obtainable, and meet the 
objectives mandated by the FAST Act.
    With respect to the Territory Component, the data used to calculate

[[Page 44168]]

the Basic Component (discussed below) is not available for the 
Territories, defined as American Samoa, the Commonwealth of the 
Northern Mariana Islands, Guam, and the Virgin Islands. Thus, the 
working group originally recommended that the Territories have a 
separate component that allocates a maximum of 0.65 percent of 
available MCSAP funds among these Territories. The allocation would be 
based on FMCSA's assessment of each Territory's proposed CMV projects 
and costs included in its CVSP. The working group recommended a funding 
floor to ensure that Territories would receive a minimum amount to 
maintain an effective program, and it tasked FMCSA with establishing 
this floor.
    The Basic Component allocates funding to States, which includes the 
District of Columbia and Puerto Rico, based on factors that are highly 
correlated with the State's total CMV crashes. This allocation, as 
originally proposed by the working group, would represent at least 
89.85 percent of available MCSAP funds, plus any unallocated Border and 
Territory Component amounts. The Basic Component allocation calculates 
a proportion for each State based on the following five equally-
weighted factors, using the most recent data available:
    (1) National Highway System Road Length--total National Highway 
System roadway miles contained within the jurisdictional boundaries of 
the State as measured by the FHWA;
    (2) Total VMT--total VMT for all vehicles within the State as 
measured by the FHWA;
    (3) Total Population--U.S. Census Bureau population estimates;
    (4) Special Fuel Consumption--total consumption of special fuels 
within the State as measured by the FHWA; and
    (5) Motor Carrier Registrations--the number of interstate carriers 
and intrastate hazardous materials carriers as measured by FMCSA to 
address a FAST Act requirement on new entrant carriers.
    To equally weight the factors, each State's percentage of the 
national total for each factor would be determined. Then, the five 
percentages for each State are combined to result in the State's 
percentage.
    While the new Basic Component includes all the factors included in 
the current formula, the working group proposed an update to an 
existing factor and one addition. For example, the existing formula 
factor of 1997 road miles is removed, and it is replaced with the more 
current National Highway System highway miles, which would be updated 
as new data becomes available (versus the static factor of 1997). Not 
only does the National Highway System miles formula factor provide a 
more recent measurement of roadway exposure, it is also more highly 
correlated with CMV crashes. The working group recommended adding 
carrier registrations to the Basic Component as a new factor because of 
its stability over time, correlation with crashes, and ability to 
account for new entrant safety audit workload (a FAST Act mandated 
MCSAP requirement).
    The working group recommended adjustments to the proportions 
calculated under the Basic Component to ensure that each State receives 
at least 0.44 percent, but no more than 4.944 percent, of the MCSAP 
funds available for the Basic Component. After adjustment, each State's 
percentage would be multiplied by the total MCSAP funds available for 
the Basic Component to determine the dollar value of the State's 
allocation under the Basic Component.
    In addition, the working group recommended eliminating the existing 
MCSAP Incentive funds in favor of a risk-based \8\ and consistent 
formula in alignment with the goals of the working group and the FAST 
Act. The working group stated that funding can have a greater safety 
impact by allocating it to recipients who need it to address safety 
issues, rather than when it is used as an incentive for certain program 
areas. Furthermore, according to the working group, the existing 
program-oriented incentive factors are no longer relevant. In the past, 
they have helped improve compliance in certain program areas 
(especially data quality), but those areas are no longer the focus for 
improvement (almost all States have good data quality now). Finally, 
the working group noted that the FAST Act expanded MCSAP participation 
requirements so that program aspects that previously required 
incentivizing are now basic participation requirements. Thus, State 
performance in reaching safety objectives can be assessed through 
effective performance management techniques employed by FMCSA. To this 
end, FMCSA continues to modernize its existing Analysis and Information 
resources used to monitor MCSAP, and has instituted a performance, 
standards and benchmarks initiative with States to develop additional 
performance metrics, trend analysis, and reporting tools.
---------------------------------------------------------------------------

    \8\ The working group intended the term ``crash risk'' to refer 
to a State's total number of crashes expected to occur during a 
year, and not a crash rate. See Part II, Section 3D, and Part III, 
Section 2A of the report.
---------------------------------------------------------------------------

    The Border Component aims to maintain safety gains attained through 
border CMV enforcement programs and to support continued performance of 
CMV safety inspections, traffic enforcement, and other activities 
pertaining to vehicles engaged in international commerce or occurring 
near our borders with Canada and Mexico. To provide adequate resources, 
the working group originally recommended that the Border Component 
should allocate a maximum of 9.5 percent of available MCSAP funds to 
border States.
    Because funding for border activities is mostly used to pay for 
personnel conducting border activities, the funding would be allocated 
based on relative need for personnel in the southern and northern 
border States. The need for personnel would be estimated based on the 
volume of annual CMV crossings at each port of entry and represented as 
full-time employees (FTE).
    The personnel needed at each port of entry would be calculated as 
follows:
    (1) Allocate the minimum required FTE to each port of entry:
    (a) 8 FTE per each Mexican port of entry.
    (b) 0.25 FTE per each Canadian port of entry with more than 1,000 
annual CMV crossings.
    (2) Allocate FTEs according to annual CMV crossings (if not already 
covered by the minimum):
    (a) 25,000 crossings per FTE for Mexican ports of entry.
    (b) 200,000 crossings per FTE for Canadian ports of entry.
    The FTEs at all ports in a border State would be totaled and 
divided by the national total of FTEs, as demonstrated by a percentage. 
There would be a minimum (0.075 percent) and maximum (50 percent) 
funding limit established to ensure equitable distribution of grant 
dollars among States sharing a land border with Canada or Mexico. Each 
border State's percentage would be multiplied by the total border 
allocation amount available to determine the dollar amount.
    The new MCSAP allocation formula would include hold-harmless and 
cap provisions to ensure stable funding over fiscal years, which would 
apply to a State's total share of MCSAP funds allocated under the Basic 
and Border Components. The hold-harmless provision would be based on 
shares rather than dollar amounts. A State would receive no less than 
97 percent and no more than 105 percent of its prior year's share of 
MCSAP funding. Neither the hold-harmless nor the cap would apply to 
Territories.

[[Page 44169]]

    FMCSA agreed with the majority of the working group's 
recommendations, but requested that the working group reconvene for 
further deliberation on three of its recommendations. They related to 
the percentages of MCSAP funds allocated to the Territory and Border 
Components, and the maximum amount of the Border Component that a State 
could receive.
    FMCSA questioned the percentage of total MCSAP funds allocated to 
the Territory Component. FMCSA determined that the current level of 
$350,000 per Territory (which equated to approximately 0.49 percent) 
adequately addresses the CMV safety needs in most of the Territories. 
Therefore, allocating 0.65 percent of the total MCSAP funds would 
exceed the amount necessary for most Territories to conduct their CMV 
safety programs.
    FMCSA also suggested increasing the percentage of total MCSAP funds 
allocated to the Border Component from a maximum of 9.5 percent to 11 
or 12 percent. This suggestion was made due to increased border 
activity in recent years and several recent policy changes, including 
the renegotiation of trade agreements, that may impact border activity. 
In addition, an allocation of 11 percent would maintain current Federal 
funding levels and an allocation of 11 or 12 percent would still align 
with CMV crashes.
    Finally, FMCSA suggested removing the 50 percent maximum limit on 
the amount of the Border Component a State could receive. This 
suggestion was made because the 50 percent limit would not meet the 
growing needs of the State with the most border activity.
    The working group reconvened and met four times via interactive web 
conferences to consider FMCSA's concerns. A process that was similar to 
the one used to develop the original recommendations was followed. The 
working group discussed the questions raised by FMCSA in relation to 
the original recommendations and the various options that were 
considered during the group's deliberations. Additional data relating 
to discretionary funding for border activities, with accompanying match 
requirements, prior to the FAST Act, as well as financial performance 
metrics and fund utilization for Territorial jurisdictions, was 
analyzed so the working group could understand and evaluate the 
potential impact of FMCSA's suggestions. All of FMCSA's suggestions 
were evaluated based on the established guiding principles.
    The working group concurred, based on the information provided by 
FMCSA, that an allocation of not more than 0.49 percent for the 
Territory Component adequately addresses CMV safety needs in the 
Territories. With respect to the Border Component allocation, the group 
agreed that an increase in the maximum allocation to 11 percent 
maintained Federal funding levels that were based on border enforcement 
needs and that the group's recommendation should be adjusted 
accordingly. The working group continued to find that a border maximum 
is necessary to maintain the balance of the funding levels between 
larger and smaller border States and to promote funding stability. An 
increase to a maximum of 55 percent was recommended because it meets 
the current needs of the State with the most border activity.
FMCSA's Proposed MCSAP Allocation Formula
    FMCSA has reviewed the amended recommendations provided by the 
working group, agrees with the rational for the proposed changes, and 
is adopting them in full. In this NPRM, FMCSA proposes a new MCSAP 
allocation formula as Sec.  350.217. FMCSA proposes to adopt the 
working group's three components: A Territory Component; Border 
Component; and State Component.\9\
---------------------------------------------------------------------------

    \9\ FMCSA proposes changing the name of the ``Basic Component'' 
to the ``States Component'' to provide a distinction between the 
proposed formula and the interim formula.
---------------------------------------------------------------------------

    FMCSA supports establishing a separate Territory Component and the 
set-aside of not more than 0.49 percent of MCSAP funds for Territories. 
FMCSA proposes that each territory receive no less than $350,000, with 
the remaining MCSAP funds allocated among Territories in a manner 
proportional to the Territories' populations, as reflected in the 
decennial census issued by the U.S. Census Bureau.
    FMCSA proposes establishing a separate Border Component, using the 
formula that the working group recommended. Therefore, a maximum of 11 
percent of MCSAP funds would be allocated to the Border Component with 
each border State receiving at least 0.075 percent but no more than 55 
percent of the total border allocation available. Additionally, FMCSA 
proposes using the term ``share'' instead of the term ``FTE'' used by 
the working group, because FMCSA does not want to inadvertently imply 
how many personnel should be employed at each port of entry as part of 
the funding allocation.
    Under the share calculation, border States would receive 1 share 
per 25,000 annual CMV crossings at each United States port of entry on 
the Mexican border, with a minimum of 8 shares for each United States 
port of entry on the Mexican border, or 1 share per 200,000 annual CMV 
crossings at each United States port of entry on the Canadian border, 
with a minimum of 0.25 shares for each United States port of entry on 
the Canadian border with more than 1,000 annual CMV crossings.
    FMCSA proposes establishing a State Component using the working 
group's Basic Component formula. At least 88.51 percent of MCSAP funds 
would be set aside for this component.
    The table below shows estimated FY 2020 awards to each State and 
Territory under the interim funding formula, as prescribed by the FAST 
Act, and the new proposed formula. The FY 2020 FAST Act authorized 
amount of $304,069,500 (after a 1.5 percent administrative takedown 
fund set-aside) was used to calculate the estimated awards. The Agency 
calculated the estimated funding for FY 2020 using the FY 2018 formula 
factor data, which was the most recent available at the time of 
calculation. Data used to calculate the formula may change each year so 
the funding shown is an estimated amount at that point in time. Please 
note the below table also provides an estimation of percentage 
difference in funding allotment comparing the interim formula to the 
proposed new formula (using estimated FY 2020 dollars). The hold-
harmless and cap provisions proposed in this NPRM would mitigate any 
gain or loss in funding from the previous year's formula calculation. 
For example, if the newly proposed formula were implemented in FY 2020, 
no State would lose more than 3 percent, or gain more than 5 percent, 
compared to their share of the formula grant calculation in FY 2019. 
Therefore, the estimated FY 2020 funding shown in the table is not 
guaranteed.

[[Page 44170]]

                                                     Estimated MCSAP Funding Formula Comparison a b
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Including Oregon                                Excluding Oregon
                                                         -----------------------------------------------------------------------------------------------
                                                                              FY 2020                                         FY 2020
                                                                             estimated                                       estimated
                     State/territory                          FY 2020     MCSAP  formula                      FY 2020     MCSAP  formula
                                                             estimated      award  (new       Percent        estimated      award  (new       Percent
                                                              interim       formula as      difference        interim       formula as      difference
                                                          formula awards    proposed by                   formula awards    proposed by
                                                                              FMCSA)                                          FMCSA)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama.................................................      $5,981,155      $5,965,678               0      $6,084,689      $5,965,678              -2
Alaska..................................................       1,269,196       1,257,326              -1       1,269,068       1,257,326              -1
American Samoa..........................................         350,000         350,000               0         350,000         350,000               0
Arizona.................................................      11,234,838      10,804,840              -4      11,332,514      10,804,840              -5
Arkansas................................................       4,371,959       4,138,170              -5       4,448,908       4,138,170              -7
California..............................................      18,590,048      19,145,982               3      18,587,874      19,368,217               4
Colorado................................................       4,906,099       4,950,448               1       4,994,077       5,103,801               2
Connecticut.............................................       2,393,631       2,527,768               6       2,434,316       2,527,768               4
Delaware................................................       1,251,260       1,166,066              -7       1,250,776       1,179,601              -6
District of Columbia....................................       1,092,231       1,118,593               2       1,091,747       1,118,593               2
Florida.................................................      12,706,226      13,102,346               3      12,704,051      13,254,430               4
Georgia.................................................      10,223,708      10,443,179               2      10,394,519      10,443,179               0
Guam....................................................         350,000         439,941              26         350,000         439,941              26
Hawaii..................................................       1,066,679       1,099,298               3       1,066,422       1,099,298               3
Idaho...................................................       2,500,201       2,436,607              -3       2,541,685       2,436,607              -4
Illinois................................................      11,177,027      11,285,176               1      11,359,365      11,634,765               2
Indiana.................................................       7,600,938       7,286,679              -4       7,728,822       7,286,679              -6
Iowa....................................................       5,004,354       4,837,215              -3       5,087,635       4,837,215              -5
Kansas..................................................       4,504,320       4,458,505              -1       4,584,021       4,458,505              -3
Kentucky................................................       4,736,164       4,686,676              -1       4,819,511       4,784,186              -1
Louisiana...............................................       4,502,334       4,346,759              -3       4,581,061       4,346,759              -5
Maine...................................................       1,815,663       1,751,636              -4       1,842,792       1,751,636              -5
Maryland................................................       3,898,791       4,175,980               7       3,970,778       4,175,980               5
Massachusetts...........................................       4,437,614       4,604,630               4       4,514,021       4,604,630               2
Michigan................................................       8,663,352       8,967,604               4       8,805,741       9,224,388               5
Minnesota...............................................       6,711,732       6,422,249              -4       6,824,363       6,453,904              -5
Mississippi.............................................       4,008,984       3,893,741              -3       4,079,776       3,994,903              -2
Missouri................................................       6,892,605       6,844,323              -1       7,014,924       6,975,820              -1
Montana.................................................       3,063,123       2,994,454              -2       3,102,581       2,994,454              -3
Nebraska................................................       3,650,919       3,626,881              -1       3,709,539       3,626,881              -2
Nevada..................................................       2,596,460       2,584,009               0       2,643,932       2,664,056               1
New Hampshire...........................................       1,352,053       1,343,600              -1       1,351,569       1,384,743               2
New Jersey..............................................       7,038,352       6,943,724              -1       7,140,767       7,158,824               0
New Mexico..............................................       4,002,101       4,107,636               3       4,058,337       4,107,636               1
New York................................................      13,199,642      12,842,509              -3      13,412,776      13,226,416              -1
North Carolina..........................................       8,730,173       8,972,029               3       8,880,140       9,249,962               4
North Dakota............................................       2,889,717       2,696,955              -7       2,934,189       2,696,955              -8
Northern Marianas.......................................         350,000         350,000               0         350,000         350,000               0
Ohio....................................................      10,070,415       9,781,884              -3      10,250,889      10,046,336              -2
Oklahoma................................................       5,927,263       5,769,781              -3       6,025,865       5,769,781              -4
Oregon..................................................       3,745,475       3,946,430               5               -               -               -
Pennsylvania............................................      10,038,363      10,424,935               4      10,214,498      10,424,935               2
Puerto Rico.............................................       1,172,803       1,166,066              -1       1,195,818       1,179,601              -1
Rhode Island............................................       1,356,289       1,300,175              -4       1,355,805       1,300,175              -4
South Carolina..........................................       4,824,547       4,796,236              -1       4,910,771       4,944,812               1
South Dakota............................................       2,359,346       2,253,064              -5       2,400,857       2,253,064              -6
Tennessee...............................................       6,630,299       6,489,424              -2       6,743,955       6,683,303              -1
Texas...................................................      30,695,205      31,217,150               2      30,693,031      31,579,500               3
Utah....................................................       3,093,422       3,085,281               0       3,147,010       3,085,281              -2
Vermont.................................................       1,212,839       1,298,730               7       1,212,647       1,298,730               7
Virgin Islands..........................................         350,000         350,000               0         350,000         350,000               0
Virginia................................................       6,760,878       6,895,938               2       6,879,407       7,109,558               3
Washington..............................................       6,566,316       6,457,545              -2       6,664,872       6,457,545              -3
West Virginia...........................................       2,297,186       2,171,592              -5       2,335,720       2,238,863              -4
Wisconsin...............................................       6,439,562       6,188,280              -4       6,548,726       6,363,493              -3
Wyoming.................................................       1,415,639       1,507,775               7       1,442,339       1,507,775               5
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................     304,069,500     304,069,500               0     304,069,500     304,069,500               0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Estimated calculations for FY 2020 are shown both with and without the State of Oregon. Note that Oregon did not participate in FY 2019, but it may
  re-enter the program in the future.
\b\ Calculation of funds for the proposed formula was made after setting aside 11 percent for the Border Component and 0.49 percent for the Territory
  Component of available MCSAP funds, and applying the hold-harmless and cap provisions as explained above.

[[Page 44171]]

C. CVSP

    This rulemaking would implement the FAST Act requirement that 
States use multi-year CVSPs in proposed Sec. Sec.  350.209 and 350.211. 
This NPRM proposes to require that all States submit a CVSP covering a 
3-year period. Currently, States are voluntarily submitting CVSPs 
covering a 3-year period based upon the Federal Register notice 
published on January 5, 2018 (83 FR 691) and the explicit requirement 
for the establishment of multi-year plans in section 5101(a) of the 
FAST Act (49 U.S.C. 31102(c)(1)).
    FMCSA would expect to have approximately one-third of MCSAP 
applicants completing 3-year CVSPs in each grant application year, with 
the other two-thirds submitting annual updates. States would submit the 
3-year CVSP, or the second and third year annual updates, to FMCSA by 
the date prescribed in the MCSAP application memorandum for that fiscal 
year.
    First Year of the CVSP
    FMCSA proposes to require that States submit through the eCVSP 
online tool the following prior to the first year of the CVSP:
    (1) Quantitative objectives regarding the national MCSAP elements 
and related State-specific objectives for all 3 years;
    (2) Analysis of past performance;
    (3) Budget and resource allocation information for the first year 
of the CVSP;
    (4) Monitoring plan;
    (5) List of MCSAP contacts;
    (6) Certification of MCSAP conformance;
    (7) Annual certification of compatibility;
    (8) New or amended laws and regulations relevant to CMV safety; and
    (9) Additional information as required in the MCSAP application 
memorandum.
    Second and Third Years of the CVSP
    For the second and third years of the CVSP, States would provide an 
annual update, including that year's budget, and revise program goals 
and certifications, if needed. States would submit through the eCVSP 
online tool the following for the second and third years of the CVSP:
    (1) Revised program goals, if needed;
    (2) Budget and resource allocation information for the applicable 
fiscal year;
    (3) List of MCSAP contacts;
    (4) Certification of MCSAP conformance;
    (5) New or amended laws and regulations relevant to CMV safety;
    (6) Annual certification of compatibility; and
    (7) Additional information as required in the MCSAP application 
memorandum.

D. Performance and Registration Information Systems Management (PRISM)

    To be eligible to receive MCSAP funding, each State must fully 
participate in PRISM by October 1, 2020, or use an alternative approach 
approved by FMCSA for identifying and immobilizing a motor carrier with 
serious safety deficiencies. To ``fully participate'' in PRISM, a State 
must satisfy the conditions of 49 U.S.C. 31106(b)(3), including the 
suspension (or revocation) and denial of a vehicle registration if the 
motor carrier responsible for safety of the vehicle is under any 
Federal out-of-service order. Therefore, this NPRM reflects the 
appropriate changes to MCSAP eligibility in proposed Sec.  
350.207(a)(27). However, the requirement for participation in PRISM by 
October 1, 2020, does not extend to the Territories, including Puerto 
Rico.

E. Authorization and Appropriations Related Changes

    The distribution of MCSAP funding is often impacted by FMCSA's 
authorizations and appropriations. Thus, a new provision is proposed as 
Sec.  350.219 to explain the FMCSA Administrator's discretion (found 
generally in 49 U.S.C. 31102) to distribute funding during an extension 
of the Agency's authorization or during a period the Agency is 
operating under a continuing resolution.

F. Relocation of 49 CFR Part 355--Compatibility of State Laws and 
Regulations Affecting Interstate Motor Carrier Operations

    This NPRM would relocate relevant requirements of 49 CFR part 355 
to part 350. FMCSA proposes this move to improve ease of use of the 
regulations and improve understanding of the inter-relationship between 
MCSAP and State laws. Remaining provisions of part 355, including the 
Appendix, would be eliminated. FMCSA would reserve the current part 355 
for future use.

G. 49 CFR Part 385 Subpart E--Hazardous Material Safety Permits

    The rule proposes to clarify a State's obligation to cooperate in 
the enforcement of hazardous materials safety permits for interstate 
and intrastate carriers to transport certain hazardous materials, as 
required under subpart E of 49 CFR part 385. These regulations require 
a motor carrier to hold a safety permit issued by FMCSA and to keep a 
copy of the permit, or other proof of its existence, in the vehicle. 
Adding a requirement that States cooperate in the enforcement of 
subpart E of part 385 as a condition of MCSAP funding would clarify 
States' obligation to document compliance with hazardous materials 
permit requirements in the course of inspections that States conduct.

H. Removal of 49 CFR Part 388--Cooperative Agreements With States

    FMCSA is proposing to remove 49 CFR part 388, titled ``Cooperative 
Agreements with States.'' Part 388 predates MCSAP. Under its current 
statutory authority, FMCSA provides financial assistance to States to 
address CMV safety and to reduce the number and severity of crashes 
involving CMVs. This is conducted primarily through MCSAP, governed by 
part 350. While Congress provides funding to support MCSAP, there is no 
specific funding source supporting a financial assistance program under 
part 388. Thus, FMCSA does not rely on part 388 to enter into 
agreements with States to enforce Federal and State safety laws and 
regulations concerning motor carrier operations. FMCSA would reserve 
part 388 for future use.

I. Other Proposed Changes

    Because MCSAP has evolved through multiple authorization and 
appropriations acts, the existing regulations are redundant and not 
orderly. As stated above, this NPRM proposes an organizational change 
that separates MCSAP and the High Priority Program into distinct 
regulatory subparts under 49 CFR part 350. This NPRM proposes to 
reorganize part 350 so that the program requirements are clearer, more 
succinct, and presented chronologically from grant application through 
execution.
    In addition, definitions would be updated and expanded to reflect 
the proposed changes to the grant programs or to otherwise provide 
consistency. For example, the definition of ``investigation'' is used 
rather than ``compliance review'' to reflect the revised national MCSAP 
elements. The definition of ``motor carrier'' in Sec.  350.105 would be 
revised to be more consistent with the definition provided in Sec.  
390.5T. The definition of ``HMRs'' would be updated to include all of 
part 171 concerning HMRs. Specifically, the rule proposes to eliminate 
the exception to adopt Sec. Sec.  171.15 and 171.16 by States 
participating in MCSAP. This would require those States that choose to 
conduct investigations to ensure compliance with the hazardous

[[Page 44172]]

materials incident reporting requirements contained in these sections. 
The elimination of this exception to the HMRs would not create a new 
State hazardous materials reporting requirement.
    FMCSA would clarify in proposed Sec.  350.305(b) that a State may 
retain an exemption for a particular segment of the motor carrier 
industry from all or part of its laws or regulations that were in 
effect before April 1988. However, to retain the exemption, it must 
continue to be in effect, it must apply to specific industries 
operating in intrastate commerce, and the scope of the original 
exemption must not have been amended.

J. Request for Comments

    FMCSA is requesting public comment on all provisions being proposed 
in this NPRM. Additionally, the Agency is specifically seeking comment 
on the following questions.
    1. Are there other elements FMCSA should consider including in a 
new MCSAP allocation formula and, if so, what are they? Why should such 
elements be considered? How would they promote safety?
    2. Should there be additional requirements in CVSPs to ensure MCSAP 
funding is used efficiently to promote safety and, if so, what are 
they? Why should such requirements be considered? How would they 
promote safety?
    3. Should the Incentive fund be eliminated from a new MCSAP 
allocation formula? Why should the Incentive fund be kept or 
eliminated? How would keeping or eliminating the Incentive fund promote 
safety?
    4. Should a new MCSAP allocation formula include variables 
connected with crash rates or risk? If so, what variables should be 
considered and why? How would such variables promote safety?
    4. Should a new MCSAP allocation formula be more sensitive to 
changes in crash rates? If so, how could a new allocation formula be 
more sensitive to changes in crash rates and why would it be more 
sensitive to such changes? How would such a formula promote safety?

VII. International Impacts

    The FMCSRs, and any exceptions to the FMCSRs, apply only within the 
United States (and, in some cases, United States Territories). Motor 
carriers and drivers are subject to the laws and regulations of the 
countries in which they operate, unless an international agreement 
states otherwise. Drivers and carriers should be aware of the 
regulatory differences among nations.

VIII. Section-by-Section Analysis

    In addition to the substantive changes discussed below, FMCSA 
proposes stylistic, conforming, and organizational changes to the 
proposed rule for the purposes of clarity and consistency.

A. Subpart A--General

    Proposed subpart A would provide a general overview and define the 
terms used in part 350 applicable to both MCSAP and the High Priority 
Program. Furthermore, the Agency proposes to restructure distinct 
provisions pertaining to MCSAP and the High Priority Program and codify 
them under separate subparts.
Sec.  350.101 What is the purpose of this part?
    In this proposal, Sec.  350.101 would be added to provide a general 
description of the purpose of part 350.
Sec.  350.103 When do the financial assistance program changes take 
effect?
    Proposed Sec.  350.103 would be added to specify the effective date 
of the financial assistance program changes.
Sec.  350.105 What definitions are used in this part?
    FMCSA proposes to add the following definitions to reflect 
phraseology used in this rulemaking: ``border State,'' ``FMCSA,'' 
``High Priority Program funds,'' ``investigation,'' and ``Motor Carrier 
Safety Assistance Program (MCSAP) funds.'' The term ``traffic 
enforcement,'' which is defined in existing Sec.  350.111, would be 
added to this section.
    The definition of ``commercial vehicle safety plan (CVSP)'' would 
be revised to reflect that States would be required to submit 3-year 
CVSPs. FMCSA also proposes to modify the definition of ``motor 
carrier'' to more closely reflect the definition in Sec.  390.5T. 
Furthermore, FMCSA proposes to modify the definitions of ``FMCSRs'' and 
``HMRs'' to reference standards and orders issued under the respective 
regulations in order to avoid repeating this phraseology throughout the 
regulatory text. Conversely, references to standards and orders would 
be added throughout the regulatory text where appropriate when 
referring to State laws and regulations for consistency. Finally, in 
the definition of ``HMRs,'' the Agency proposes to update the 
definition to eliminate the exceptions for Sec. Sec.  171.15 and 171.16 
in existing Sec. Sec.  350.337 and 355.5 in order to be consistent with 
existing Sec.  350.201(a) and current practice for those States that 
conduct investigations. Similarly, the inconsistency in existing Sec.  
355.5 concerning the definition of ``HMRs'' as it relates to the 
exception to part 107 would be eliminated. Consistent with existing 
Sec.  350.337, the proposed definition would include subparts F and G 
of part 107.
    The following existing definitions in Sec.  350.105 would be 
eliminated because they are not used in this proposal: ``10-year 
average accident rate,'' ``Accident rate,'' ``Agency,'' ``Basic Program 
Funds,'' ``Incentive Funds,'' ``Innovative Technology Deployment 
funds,'' ``Large truck,'' ``Level of effort,'' ``Operating authority,'' 
and ``Plan.''
    The remaining definitions that appear in existing Sec. Sec.  
350.105 and 355.5 would be revised for clarity.

B. Subpart B--Motor Carrier Safety Assistance Program Administration

    Proposed subpart B would provide an overview of MCSAP only. Content 
regarding the High Priority Program would be addressed in proposed 
subpart D.
Sec.  350.201 What is MCSAP?
    Proposed Sec.  350.201(a) is derived, in part, from existing Sec.  
350.101(a), but would add references to PRISM and border enforcement 
requirements, as applicable to MCSAP. Proposed Sec.  350.201(b) is 
derived without substantive change from existing Sec.  350.103 as it 
relates to program requirements. Proposed Sec.  350.201(c) would 
incorporate the substantive content from the last sentence of existing 
Sec.  350.101(a).
Sec.  350.203 What are the national MCSAP elements?
    Proposed Sec.  350.203 is derived, in part, from existing Sec.  
350.109. New items (e), (f), (g), and (j) would be added as part of 
revisions to MCSAP. Item (d), investigations, would be substituted for 
the existing reference to compliance reviews.
Sec.  350.205 What entities are eligible for funding under MCSAP?
    Proposed Sec.  350.205 is derived from existing Sec.  350.107(a) 
without substantive change. Governmental entities eligible for funding 
would be reflected in the definition of ``State.''
Sec.  350.207 What conditions must a State meet to qualify for MCSAP 
funds?
    Proposed Sec.  350.207(a) is derived, in part, from existing Sec.  
350.201, but is reorganized for clarity and to reduce redundancies. 
Proposed paragraph (a)(25) would be revised to reflect that

[[Page 44173]]

certain exemptions are granted, not just to individual drivers or 
carriers, but to a particular class. Proposed paragraph (a)(28) would 
be added to clarify a State's obligation to cooperate in the 
enforcement of hazardous materials safety permits. Proposed Sec.  
350.207(b) would incorporate the substance of existing Sec.  350.201(z) 
relating to third parties conducting new entrant safety audits. 
Proposed Sec.  350.207(c) would be added to reflect exceptions 
applicable to Territories concerning new entrant safety audits and 
participation in PRISM.
Sec.  350.209 How and when does a State apply for MCSAP funds using a 
CVSP?
    Proposed Sec.  350.209 is derived, in part, from existing Sec.  
350.205, but revised to reflect the general requirements for submitting 
a 3-year CVSP. It also proposes that the deadline for the CVSP 
submission be changed from August 1 to a date that will be stated in 
the MCSAP application memorandum. It further proposes that the 
Administrator, rather than the Division Administrator, may extend the 
CVSP deadline.
Sec.  350.211 What must a State include for the first year of the CVSP?
    Proposed Sec.  350.211 is derived, in part, from existing 
Sec. Sec.  350.209, 350.211, 350.213, and 350.331(b)(2). This proposed 
section would set forth information to be included for the first year 
of the CVSP. The required certifications would be consolidated in 
proposed paragraph (i) by referring to the conditions a State must meet 
to qualify for MCSAP funding in proposed Sec.  350.207. Proposed 
paragraph (i)(3) would be added to clarify that the certifying official 
must have the necessary authority to certify the CVSP on behalf of the 
State. The proposed language would no longer require that a State 
training plan be included as part of the CVSP.
Sec.  350.213 What must a State include for the second and third years 
of the CVSP?
    Proposed Sec.  350.213 would be added to set forth the information 
to be submitted in the annual update for the second and third years of 
the CVSP.
Sec.  350.215 What response does a State receive to its CVSP or annual 
update?
    Proposed Sec.  350.215 is derived, in part, from existing Sec.  
350.207, but revised to reflect submissions under a 3-year CVSP. FMCSA 
would revise the proposed section to reflect current practice that a 
State receives a response to the CVSP within 30 days after FMCSA begins 
its review of the CVSP, rather than within 30 days of receipt of the 
CVSP. It would also clarify circumstances under which States would not 
be eligible for MCSAP funding.
Sec.  350.217 How are MCSAP funds allocated?
    Proposed Sec.  350.217 sets forth the proposed MCSAP allocation 
formula and would replace existing Sec. Sec.  350.313, 350.315, 
350.317, 350.323, and 350.327. Under this proposal, the availability of 
Basic Program funds and Incentive funds would be incorporated into the 
State Component of the proposed formula. The new MCSAP allocation 
formula would also add a separate Border Component and a separate 
Territory Component.
Sec.  350.219 How are MCSAP funds awarded under a continuing resolution 
appropriations act or an extension of FMCSA's authorization?
    Proposed Sec.  350.219 would be added to address MCSAP funding 
under a continuing resolution appropriations act or an extension of the 
Agency's authorization.
Sec.  350.221 How long are MCSAP funds available to a State?
    Proposed Sec.  350.221 is derived, in part, from existing Sec.  
350.307. Existing regulatory language requiring that funds be expended 
in the order that they are obligated would be eliminated because it is 
no longer necessary, given that FMCSA requires a fixed period of 
performance.
Sec.  350.223 What are the Federal and State shares of costs incurred 
under MCSAP?
    Proposed Sec.  350.223 would consolidate existing Sec. Sec.  
350.303 and 350.305. In paragraph (b), references to 2 CFR part 1201 
would be added to accompany the current references to 2 CFR part 200 
(OMB's Uniform Administrative Requirements, Cost Principles, and Audit 
Requirements for Federal Awards) to reflect that part 1201 addresses 
DOT's adoption and implementation of part 200. This reference is made 
in similar provisions throughout the proposed regulatory text. Language 
would be added in paragraph (c)(2) to clarify circumstances when a 
waiver of the State share may be granted.
Sec.  350.225 What MOE must a State maintain to qualify for MCSAP 
funds?
    Proposed Sec.  350.225 is derived, in part, from existing Sec.  
350.301. Language would be added to reflect an additional maintenance 
of effort baseline calculation option allowed under section 5101(f) of 
the FAST Act, as a one-time adjustment to the maintenance of effort 
permitted under section 5107 of the Act. Furthermore, a 120-day time 
period would be established for the Agency to evaluate requests for the 
maintenance of effort waivers. Finally, a provision would be added 
authorizing permanent adjustments after fiscal year 2020, reducing a 
State's maintenance of effort requirement, provided that new 
information was produced that was unavailable during fiscal year 2020.
Sec.  350.227 What activities are eligible for reimbursement under 
MCSAP?
    Proposed Sec.  350.227 would be generally the same as existing 
Sec.  350.309 substantively, but would reflect the proposed expanded 
national program elements and changes to the MCSAP allocation formula.
Sec.  350.229 What specific costs are eligible for reimbursement under 
MCSAP?
    Proposed Sec.  350.229 is derived from existing Sec. Sec.  350.311, 
350.201(cc), and 350.341(h)(3). The list of reimbursable items in 
existing Sec.  350.311 would be eliminated as unnecessary in light of 
the reference to the MCSAP application memorandum and title 2 of the 
CFR. Proposed paragraph (c)(2) would clarify that a State may not use 
MCSAP funds for the creation or maintenance of its own State registry 
of medical examiners.
Sec.  350.231 What are the consequences for failure to meet MCSAP 
conditions?
    Proposed Sec.  350.231 would not be substantively changed from 
existing Sec.  350.215, but would be modified for clarity.

C. Subpart C--MCSAP Required Compatibility Review

    Proposed subpart C would include information related to the MCSAP-
required FMCSR and HMR compatibility review and variances available to 
States participating in MCSAP.
Sec.  350.301 What is the purpose of this subpart?
    Proposed Sec.  350.301 is derived, in part, from existing Sec.  
355.1. This proposed section would add an introductory paragraph for 
clarity and paragraph (d) to address the process for requesting 
exemptions for intrastate commerce.
Sec.  350.303 How does a State ensure compatibility?
    Proposed Sec.  350.303 is derived from existing Sec. Sec.  350.331, 
350.333, 355.21, 355.23, 355.25, and, in part, Appendix

[[Page 44174]]

A of part 355. It would consolidate the existing regulations to reduce 
redundancies. In proposed paragraph (c), language would be added to 
clarify that a review for compatibility must accompany any new or 
amended laws submitted to FMCSA in accordance to preferred practice. 
Proposed Sec.  350.303(d) is revised to closer track the applicable 
statutory provision, 49 U.S.C. 31141. Proposed Sec.  350.303(g)(2), 
addressing the opportunity for an administrative hearing, would be 
added to reflect a requirement under 49 U.S.C. 31141(d)(2). Language 
determined to be obsolete would be eliminated.
Sec.  350.305 What specific variances from the FMCSRs are allowed for 
State laws and regulations and not subject to Federal jurisdiction?
    Proposed Sec.  350.305 is derived from existing Sec. Sec.  350.341 
and 350.345. Language would be added in paragraph (b)(2) to clarify 
that the grandfathering of State exemptions issued before April 1988 
only applies if the scope of the original exemption has not changed. 
Language determined to be obsolete would be eliminated, including Sec.  
350.341(g) that addresses grandfather clauses.
Sec.  350.307 How may a State obtain a new exemption for State laws and 
regulations for a specific industry involved in intrastate commerce?
    Proposed Sec.  350.307 is derived, in part, from existing Sec.  
350.343. Existing paragraph (j) would be removed from this section, 
given that it has no bearing on safety.
Sec.  350.309 What are the consequences if a State has provisions that 
are not compatible?
    Proposed Sec.  350.309 is derived from existing Sec. Sec.  350.335 
and 355.25(a). The reference to ``interstate'' commerce in Sec.  
355.25(a) would be eliminated as inconsistent with the MCSAP 
requirements.

D. Subpart D--High Priority Program

    The Agency proposes to add a new subpart D, describing the High 
Priority Program.
Sec.  350.401 What is the High Priority Program?
    Proposed Sec.  350.401 is derived from existing Sec. Sec.  
350.101(b) and 350.107(b).
Sec.  350.403 What are the High Priority Program objectives?
    Proposed Sec.  350.403 is derived from existing Sec.  350.110. It 
would reorganize existing Sec.  350.110 and add an objective to reflect 
the Innovative Technology Deployment Program.
Sec.  350.405 What conditions must an applicant meet to qualify for 
High Priority Program funds?
    Proposed Sec.  350.405 is derived from existing Sec.  350.203 and 
would clarify that all applicants must comply with the High Priority 
Program Notice of Funding Opportunity (NOFO). The reference to a 
State's obligation to provide a match of up to 15 percent under 
existing Sec.  350.203(b)(5) would be eliminated as unnecessary in 
light of proposed Sec.  350.413(a).
Sec.  350.407 How and when does an eligible entity apply for High 
Priority Program funds?
    Proposed Sec.  350.407 would not be substantively changed from 
existing Sec.  350.206, but would be modified for clarity.
Sec.  350.409 What response will an applicant receive under the High 
Priority Program?
    Proposed Sec.  350.409 would not be substantively changed from 
existing Sec.  350.208, but would be modified for clarity.
Sec.  350.411 How long are High Priority Program funds available to a 
recipient?
    Proposed Sec.  350.411 would not be substantively changed from 
existing Sec.  350.308, but would be modified for clarity.
Sec.  350.413 What are the Federal and recipient shares of costs 
incurred under the High Priority Program?
    Proposed Sec.  350.413 is derived from existing Sec.  350.303. 
Language would be added to clarify circumstances when a recipient share 
of costs waiver may be granted.
Sec.  350.415 What types of activities and projects are eligible for 
reimbursement under the High Priority Program?
    Proposed Sec.  350.415 is derived from Sec.  350.310. It would 
cross-reference proposed Sec.  350.403 for the High Priority Program 
objectives, rather than listing all eligible activities, for brevity.
Sec.  350.417 What specific costs are eligible for reimbursement under 
the High Priority Program?
    Proposed Sec.  350.417 is derived, in part, from existing Sec.  
350.311. The list of reimbursable items in existing Sec.  350.311 would 
be eliminated as unnecessary in light of the reference to the NOFO and 
title 2 of the CFR. Proposed paragraph (b)(2) would be added to clarify 
that a State may not use High Priority Program funds for the creation 
or maintenance of its own State registry of medical examiners.

E. Miscellaneous

    The term ``tolerance guidelines'' in existing Sec.  350.339 is no 
longer being used; therefore; the section would be removed. This 
concept, addressing variances and exemptions that States may permit for 
motor carriers, CMV drivers, and CMVs engaged in intrastate commerce 
and that are not subject to Federal jurisdiction, is addressed under 
proposed Sec. Sec.  350.305 and 350.307. Existing Sec.  350.210, 
discussing how an applicant demonstrates that it satisfies the 
conditions for High Priority Program funding, would be deleted as 
unnecessary in light of proposed Sec.  350.405.
    Part 355 of title 49 of the CFR (Compatibility of State Laws and 
Regulations Affecting Interstate Motor Carrier Operations) would be 
removed and reserved. Substantive provisions of continued effect would 
be incorporated into this proposed rule. Remaining provisions of part 
355, including the Appendix, would be eliminated. Part 388 (Cooperative 
Agreements with States) would be removed and reserved.

IX. Regulatory Analyses

A. Executive Order (E.O.) 12866 (Regulatory Planning and Review), E.O. 
13563 (Improving Regulation and Regulatory Review), and DOT Regulatory 
Policies and Procedures

    FMCSA performed an analysis of the impacts of the proposed rule and 
determined it is a significant regulatory action under section 3(f) of 
E.O. 12866, Regulatory Planning and Review (58 FR 51735, October 4, 
1993), as supplemented by E.O. 13563, Improving Regulation and 
Regulatory Review (76 FR 3821, January 21, 2011). Therefore, the 
proposed rule requires an assessment of potential costs and benefits 
under section 6(a)(3) of that Order. Accordingly, OMB has reviewed it 
under that Order. It is also significant within the meaning of DOT 
regulatory policies and procedures because the Agency expects there 
will be substantial public interest in this rulemaking (DOT Order 
2100.6 dated December 20, 2018).
    E.O. 12866 directs each agency to identify the problem it intends 
to address, as well as the significance of that problem.\10\ OMB 
Circular A-4 \11\

[[Page 44175]]

and the accompanying document ``Regulatory Impact Analysis: A Primer'' 
\12\ provide guidance for how agencies should implement E.O. 12866, 
including guidance on identifying and describing the problem that the 
regulatory action intends to address, and whether ``the action is 
intended to address a market failure or promote some other goal.'' \13\
---------------------------------------------------------------------------

    \10\ Executive Office of the President. Executive Order 12866 of 
September 30, 1993. Regulatory Planning and Review. 58 FR 51735-
51744. October 4, 1993. Page 51735.
    \11\ Office of Management and Budget (OMB). Circular A-4. 
Regulatory Analysis. September 17, 2003.
    \12\ Office of Management and Budget (OMB). Regulatory Impact 
Analysis: A Primer.
    \13\ Office of Management and Budget (OMB). Regulatory Impact 
Analysis: A Primer. Page 2.
---------------------------------------------------------------------------

    The purpose of this regulatory action is to amend and reorganize 49 
CFR part 350, including adding relevant sections that are currently 
located in part 355. Certain regulations are no longer necessary or are 
redundant. Moreover, the FAST Act required FMCSA to implement a multi-
year CVSP with annual updates for States applying for MCSAP funds and 
to provide a new MCSAP allocation formula. The proposed MCSAP formula 
would help the government to operate more efficiently by establishing a 
reallocation of grant funds based on changes in safety factors.
    As explained elsewhere in this NPRM, this rule proposes a new MCSAP 
allocation formula to replace the current formula that has been in use 
for more than a decade with little modification. The proposed MCSAP 
allocation formula would make several improvements over the current 
formula. The proposed formula was constructed based on a careful 
statistical analysis of the relationship between numerous highway 
safety variables and crashes (fatal and non-fatal). While this analysis 
revealed that several of the existing formula factors (e.g., population 
and special fuel consumption) remain highly correlated with crashes, 
newer data (carrier registration and highway miles) are available to 
more closely link the allocation of funding to safety risk.
    The new formula also proposes changes that go beyond modifications 
to just the calculation methodology. First, the proposed formula 
discontinues the use of Incentive funds. Instead, the allocation of 
funds is based primarily on the calculation of the applicable formula 
factors. Further, mitigation measures are employed to ensure that State 
funding levels do not substantially fluctuate from year to year. 
Specifically, a State may not have a decrease of more than 3 percent, 
or an increase of more than 5 percent, from the prior year's share of 
MCSAP funding.\14\ This helps the State ensure a degree of 
predictability to aid in budget planning while still allowing for fair 
allocation of funds.
---------------------------------------------------------------------------

    \14\ In this respect, the States, the District of Columbia, and 
Puerto Rico are treated differently than the remaining Territories. 
The U.S. Census Bureau does not provide annual population estimates 
for Territories other than Puerto Rico. Thus, these percentage 
limitations governing funding levels do not apply to these 
Territories.
---------------------------------------------------------------------------

    The proposed MCSAP allocation formula would result in a 
reallocation of grant funding that would be considered a transfer 
payment, in that it would not change the total amount of funds 
distributed. In accordance with OMB guidance on conducting regulatory 
analysis (as discussed in OMB Circular A-4, ``Regulatory Analysis''), 
transfer payments within the U.S. are not included in the estimate of 
the costs and benefits of rulemakings. Thus, FMCSA does not include 
transfers resulting from the proposed changes to the MCSAP allocation 
formula in its estimate of the costs and benefits of the proposed rule. 
The following table displays the amounts that States could expect to 
receive under both the interim and proposed formulas in FY 2020, given 
certain criteria (i.e., the inclusion of Oregon and the total amount of 
appropriated funds). The table is provided for informational purposes 
and is not a guarantee of a specific funding level.

                                 Estimated MCSAP Funding Formula Comparison a b
----------------------------------------------------------------------------------------------------------------
                                                     FY 2020 Estimated interim        FY 2020 Estimated MCSAP
                                                          formula awards           formula award (new formula as
                                                 --------------------------------       proposed by FMCSA)
                 State/territory                                                 -------------------------------
                                                     Including       Excluding       Including       Excluding
                                                      Oregon          Oregon          Oregon          Oregon
----------------------------------------------------------------------------------------------------------------
Alabama.........................................      $5,981,155      $6,084,689      $5,965,678      $5,965,678
Alaska..........................................       1,269,196       1,269,068       1,257,326       1,257,326
American Samoa..................................         350,000         350,000         350,000         350,000
Arizona.........................................      11,234,838      11,332,514      10,804,840      10,804,840
Arkansas........................................       4,371,959       4,448,908       4,138,170       4,138,170
California......................................      18,590,048      18,587,874      19,145,982      19,368,217
Colorado........................................       4,906,099       4,994,077       4,950,448       5,103,801
Connecticut.....................................       2,393,631       2,434,316       2,527,768       2,527,768
Delaware........................................       1,251,260       1,250,776       1,166,066       1,179,601
District of Columbia............................       1,092,231       1,091,747       1,118,593       1,118,593
Florida.........................................      12,706,226      12,704,051      13,102,346      13,254,430
Georgia.........................................      10,223,708      10,394,519      10,443,179      10,443,179
Guam............................................         350,000         350,000         439,941         439,941
Hawaii..........................................       1,066,679       1,066,422       1,099,298       1,099,298
Idaho...........................................       2,500,201       2,541,685       2,436,607       2,436,607
Illinois........................................      11,177,027      11,359,365      11,285,176      11,634,765
Indiana.........................................       7,600,938       7,728,822       7,286,679       7,286,679
Iowa............................................       5,004,354       5,087,635       4,837,215       4,837,215
Kansas..........................................       4,504,320       4,584,021       4,458,505       4,458,505
Kentucky........................................       4,736,164       4,819,511       4,686,676       4,784,186
Louisiana.......................................       4,502,334       4,581,061       4,346,759       4,346,759
Maine...........................................       1,815,663       1,842,792       1,751,636       1,751,636
Maryland........................................       3,898,791       3,970,778       4,175,980       4,175,980
Massachusetts...................................       4,437,614       4,514,021       4,604,630       4,604,630
Michigan........................................       8,663,352       8,805,741       8,967,604       9,224,388
Minnesota.......................................       6,711,732       6,824,363       6,422,249       6,453,904
Mississippi.....................................       4,008,984       4,079,776       3,893,741       3,994,903

[[Page 44176]]

 
Missouri........................................       6,892,605       7,014,924       6,844,323       6,975,820
Montana.........................................       3,063,123       3,102,581       2,994,454       2,994,454
Nebraska........................................       3,650,919       3,709,539       3,626,881       3,626,881
Nevada..........................................       2,596,460       2,643,932       2,584,009       2,664,056
New Hampshire...................................       1,352,053       1,351,569       1,343,600       1,384,743
New Jersey......................................       7,038,352       7,140,767       6,943,724       7,158,824
New Mexico......................................       4,002,101       4,058,337       4,107,636       4,107,636
New York........................................      13,199,642      13,412,776      12,842,509      13,226,416
North Carolina..................................       8,730,173       8,880,140       8,972,029       9,249,962
North Dakota....................................       2,889,717       2,934,189       2,696,955       2,696,955
Northern Marianas...............................         350,000         350,000         350,000         350,000
Ohio............................................      10,070,415      10,250,889       9,781,884      10,046,336
Oklahoma........................................       5,927,263       6,025,865       5,769,781       5,769,781
Oregon..........................................       3,745,475  ..............       3,946,430  ..............
Pennsylvania....................................      10,038,363      10,214,498      10,424,935      10,424,935
Puerto Rico.....................................       1,172,803       1,195,818       1,166,066       1,179,601
Rhode Island....................................       1,356,289       1,355,805       1,300,175       1,300,175
South Carolina..................................       4,824,547       4,910,771       4,796,236       4,944,812
South Dakota....................................       2,359,346       2,400,857       2,253,064       2,253,064
Tennessee.......................................       6,630,299       6,743,955       6,489,424       6,683,303
Texas...........................................      30,695,205      30,693,031      31,217,150      31,579,500
Utah............................................       3,093,422       3,147,010       3,085,281       3,085,281
Vermont.........................................       1,212,839       1,212,647       1,298,730       1,298,730
Virgin Islands..................................         350,000         350,000         350,000         350,000
Virginia........................................       6,760,878       6,879,407       6,895,938       7,109,558
Washington......................................       6,566,316       6,664,872       6,457,545       6,457,545
West Virginia...................................       2,297,186       2,335,720       2,171,592       2,238,863
Wisconsin.......................................       6,439,562       6,548,726       6,188,280       6,363,493
Wyoming.........................................       1,415,639       1,442,339       1,507,775       1,507,775
                                                 ---------------------------------------------------------------
    Total.......................................     304,069,500     304,069,500     304,069,500     304,069,500
----------------------------------------------------------------------------------------------------------------
\a\ Estimated calculations for FY 2020 are shown both with and without the State of Oregon. Note that Oregon did
  not participate in FY 2019, but it may re-enter the program in the future.
\b\ Calculation of funds for the proposed formula was made after setting aside 11 percent for the Border
  Component and 0.49 percent for the Territory Component of available MCSAP funds, and applying the hold-
  harmless and cap provisions as explained above.

    FMCSA proposes to clarify a State's obligation to cooperate in the 
enforcement of hazardous materials safety permits for interstate and 
intrastate carriers as required under subpart E of 49 CFR part 385 to 
transport certain hazardous materials. The proposed rule would ensure 
that all States would document compliance with hazardous materials 
safety permit requirements in the course of inspections that States 
conduct. State officials are already receiving training on subpart E of 
part 385, and FMCSA estimates that no new costs or benefits would 
result from this clarification.
    This rule proposes to eliminate the exception to adopt Sec. Sec.  
171.15 and 171.16 in the HMRs by States participating in MCSAP. These 
provisions require incident reporting of certain hazardous materials 
incidents. This proposal would allow States to ensure compliance with 
these provisions during the course of investigations, but would not 
require States to conduct investigations. Additionally, eliminating the 
exception would not expand the incident reporting burden. State 
officials are already receiving investigation training, which would 
include training on enforcement of Sec. Sec.  171.15 and 171.16. 
Therefore, FMCSA estimates that no new costs or benefits would result 
from this elimination.
    The proposed rule would require States to use CVSPs in accordance 
with the FAST Act. The rule would provide direction to States on how 
and when to submit CVSPs, which would be on 3-year cycles. Under the 
current regulations, States must submit lengthy annual CVSP 
applications to receive MCSAP funding. The proposed rule would require 
States to submit robust 3-year CVSP applications for the first year, 
with annual updates for the second and third years. Specifically, for 
the first year of the CVSP, States would submit information regarding 
performance goals, past performance, and other documents traditionally 
provided in an annual CVSP, as well as a budget for the initial year. 
For the second and third years of the CVSP, States would submit an 
annual update that includes a budget for the applicable fiscal year, 
changes to the CVSP, and other documents required on an annual basis. 
As of FY 2020, all 55 States have transitioned voluntarily to 3-year 
CVSPs, and thus, the Agency does not estimate an impact from this 
proposed change.
    When considering alternatives to the proposed requirements, FMCSA 
considered requiring a CVSP cycle other than the proposed 3-year CVSP 
cycle. In a Federal Register notice published October 27, 2016, FMCSA 
asked 14 questions that would assist the Agency in developing an 
information technology system form and procedures for submission of a 
multi-year plan. Regarding questions on the length of the multi-year 
plan, responses to this question varied with some States indicating 
that they are not interested in a multi-year plan and some States

[[Page 44177]]

expressing interest in a 5-year plan. However, the largest number of 
States recommended a 3-year period. Regarding the accuracy of available 
data, all States confidently reported that they can provide complete 
and accurate data, with many States recommending 2 or 3 years for the 
multi-year plan. These States advised that their responses were 
specific to their recommended timeframes. These responses confirmed 
FMCSA's expectations. Section 5101 of the FAST Act requires the 
Secretary to prescribe procedures for a State to submit a multi-year 
CVSP with annual updates for MCSAP grants. The FAST Act provided 
discretion to FMCSA in choosing the length of the CVSP cycle. FMCSA is 
proposing to require a CVSP with a 3-year plan cycle. The 3-year CVSP 
proposal is informed by comments received to the October 27, 2016, 
Federal Register notice (81 FR 74862), the working group's 
recommendations, and necessary eCVSP tool modifications. Furthermore, 
FMCSA elected to test the 3-year CVSP with volunteers for the FY 2018 
CVSP and receive feedback. FMCSA developed the 3-year CVSP proposal 
using the experience and feedback of the FY 2018 3-year CVSP users. As 
such, FMCSA believes that the 3-year CVSP would be the most 
advantageous for FMCSA and the CVSP users and is no longer considering 
a time-frame other than 3 years for the CVSP (see 83 FR 691, 692, 
January 5, 2018).

B. E.O. 13771 (Reducing Regulation and Controlling Regulatory Costs)

    This proposed rule is neither expected to be an E.O. 13771 
regulatory action nor an E.O. 13771 deregulatory action because there 
would be no cost impacts resulting from the rule.\15\
---------------------------------------------------------------------------

    \15\ Executive Office of the President. Executive Order 13771 of 
January 30, 2017. Reducing Regulation and Controlling Regulatory 
Costs. 82 FR 9339-9341. February 3, 2017.
---------------------------------------------------------------------------

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) of 1980, as amended by the 
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) 
(Pub. L. 104-121, 110 Stat. 857; 5 U.S.C. 601 et seq.), requires 
Federal agencies to consider the impact of their regulatory proposals 
on small entities, analyze effective alternatives that minimize small 
entity impacts, and make their analyses available for public comment. 
The term ``small entities'' means small businesses and not-for-profit 
organizations that are independently owned and operated and are not 
dominant in their fields, and governmental jurisdictions with 
populations under 50,000 (5 U.S.C. 601(6)). Accordingly, DOT policy 
requires an analysis of the impact of all regulations on small 
entities, and mandates that agencies strive to lessen any adverse 
effects on these entities. Section 605 of the RFA allows an Agency to 
certify a rule, in lieu of preparing an analysis, if the rulemaking is 
not expected to have a significant economic impact on a substantial 
number of small entities.
    This proposed rule primarily affects States applying for MCSAP 
funds due to the new MCSAP allocation formula governing distribution of 
MCSAP funds and the requirement to submit CVSPs on a 3-year cycle. 
Under the standards of the RFA, as amended, States are not considered 
small entities because they do not meet the definition of a small 
entity in Section 601 of the RFA. Specifically, States are not 
considered small governmental jurisdictions under Section 601(5) of the 
RFA, both because State government is not included among the various 
levels of government listed in Section 601(5), and because, even if 
this were the case, no State, including the District of Columbia, has a 
population of less than 50,000, which is the criterion for a 
governmental jurisdiction to be considered small under Section 601(5) 
of the RFA.
    Although States would not be considered small entities, there is a 
possibility that other entities that could be considered small may be 
grant program applicants. These other entities include local 
governments, Federally-recognized Indian tribes, other political 
jurisdictions, universities, non-profit organizations, and other 
persons who, although not eligible for MCSAP funds, which are 
designated for States, would be eligible for funding under the High 
Priority Program. However, the estimated impact of the proposed rule 
results from changes to MCSAP, which do not affect the High Priority 
Program applicants. As such, FMCSA does not estimate that these non-
State entities would experience economic impacts as a result of the 
proposed rule.
    In summary, this proposed rule would only impact States, which are 
not small entities. The proposed rule thus does not have a significant 
economic impact on the regulated entities, and does not significantly 
impact a substantial number of small entities. Accordingly, I certify 
that the action does not have a significant economic impact on a 
substantial number of small entities.

D. Assistance for Small Entities

    In accordance with section 213(a) of the SBREFA, FMCSA wants to 
assist small entities in understanding this proposed rule so that they 
can better evaluate its effects on themselves and participate in the 
rulemaking initiative. If the proposed rule would affect your small 
business, organization, or governmental jurisdiction and you have 
questions concerning its provisions or options for compliance, please 
consult the FMCSA point of contact, Jack Kostelnik, listed in the For 
Further Information Contact section of this proposed rule.
    Small businesses may send comments on the actions of Federal 
employees who enforce or otherwise determine compliance with Federal 
regulations to the Small Business Administration's Small Business and 
Agriculture Regulatory Enforcement Ombudsman and the Regional Small 
Business Regulatory Fairness Boards. The Ombudsman evaluates these 
actions annually and rates each agency's responsiveness to small 
business. If you wish to comment on actions by employees of FMCSA, call 
1-888-REG-FAIR (1-888-734-3247). DOT has a policy regarding the rights 
of small entities to regulatory enforcement fairness and an explicit 
policy against retaliation for exercising these rights.

E. Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) 
requires Federal agencies to assess the effects of their discretionary 
regulatory actions. In particular, the Act addresses actions that may 
result in the expenditure by a State, local, or tribal government, in 
the aggregate, or by the private sector, of $161 million (which is the 
value equivalent of $100,000,000 in 1995, adjusted for inflation to 
2017 levels) or more in any 1 year. Though this proposed rule would not 
result in such an expenditure, the Agency does discuss the effects of 
this rule elsewhere in this preamble.

F. Paperwork Reduction Act

    This proposed rule would call for no new collection of information 
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The 
Agency notes that MCSAP applications are not subject to OMB's standard 
application requirements pursuant to 2 CFR 1201.206. Entities apply for 
the Agency's other financial assistance programs using standardized 
forms found in grants.gov, which account for any information collection 
burden and are not impacted by this proposed rule.

[[Page 44178]]

G. E.O. 13132 (Federalism)

    A rule has implications for federalism under section 1(a) of 
E.O.13132 if it has ``substantial direct effects on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.'' FMCSA determined that this proposal would not have 
substantial direct costs on or for States, nor would it limit the 
policymaking discretion of States. Nothing in this document preempts 
any State law or regulation. Therefore, this rule does not have 
sufficient federalism implications to warrant the preparation of a 
Federalism Impact Statement.

H. E.O. 12988 (Civil Justice Reform)

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

I. E.O. 13045 (Protection of Children)

    E.O. 13045, Protection of Children from Environmental Health Risks 
and Safety Risks (62 FR 19885, April 23, 1997), requires agencies 
issuing ``economically significant'' rules, if the regulation also 
concerns an environmental health or safety risk that an agency has 
reason to believe may disproportionately affect children, to include an 
evaluation of the regulation's environmental health and safety effects 
on children. The Agency determined this proposed rule is not 
economically significant. Therefore, no analysis of the impacts on 
children is required. In any event, the Agency does not anticipate that 
this regulatory action could in any respect present an environmental or 
safety risk that could disproportionately affect children.

J. E.O. 12630 (Taking of Private Property)

    FMCSA reviewed this proposed rule in accordance with E.O. 12630, 
Governmental Actions and Interference with Constitutionally Protected 
Property Rights, and has determined it will not effect a taking of 
private property or otherwise have taking implications.

K. Privacy

    Section 522 of title I of division H of the Consolidated 
Appropriations Act, 2005, enacted December 8, 2004 (Pub. L. 108-447, 
118 Stat. 2809, 3268, note following 5 U.S.C. 552a), requires the 
Agency to conduct a Privacy Impact Assessment of a regulation that will 
affect the privacy of individuals. The assessment considers impacts of 
the rule on the privacy of information in an identifiable form and 
related matters. The FMCSA Privacy Officer has evaluated the risks and 
effects the rulemaking might have on collecting, storing, and sharing 
personally identifiable information and has evaluated protections and 
alternative information handling processes in developing the rule to 
mitigate potential privacy risks. FMCSA determined that this rule does 
not require the collection of individual personally identifiable 
information.
    Additionally, the Agency submitted a Privacy Threshold Assessment 
analyzing the rulemaking to the DOT, Office of the Secretary's Privacy 
Office. The DOT Privacy Office has determined that this rulemaking does 
not create privacy risk.
    The E-Government Act of 2002, Public Law 107-347, Sec.  208, 116 
Stat. 2899, 2921 (Dec. 17, 2002), requires Federal agencies to conduct 
a Privacy Impact Assessment for new or substantially changed technology 
that collects, maintains, or disseminates information in an 
identifiable form. No new or substantially changed technology would 
collect, maintain, or disseminate information because of this rule.

L. E.O. 12372 (Intergovernmental Review)

    The regulations implementing E.O. 12372 regarding intergovernmental 
consultation on Federal programs and activities do not apply to this 
program.

M. E.O. 13211 (Energy Supply, Distribution, or Use)

    FMCSA has analyzed this proposed rule under E.O. 13211, Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. The Agency has determined that it is not a 
``significant energy action'' under that order because it is not a 
``significant regulatory action'' likely to have a significant adverse 
effect on the supply, distribution, or use of energy. Therefore, it 
does not require a Statement of Energy Effects under E.O. 13211.

N. E.O. 13783 (Promoting Energy Independence and Economic Growth)

    E.O. 13783 directs executive departments and agencies to review 
existing regulations that potentially burden the development or use of 
domestically produced energy resources, and to appropriately suspend, 
revise, or rescind those that unduly burden the development of domestic 
energy resources. In accordance with E.O. 13783, DOT prepared and 
submitted a report to the Director of OMB that provides specific 
recommendations that, to the extent permitted by law, could alleviate 
or eliminate aspects of agency action that burden domestic energy 
production. This proposed rule has not been identified by DOT under 
E.O. 13783 as potentially alleviating unnecessary burdens on domestic 
energy production.

O. E.O. 13175 (Indian Tribal Governments)

    This proposed rule does not have tribal implications under E.O. 
13175, Consultation and Coordination with Indian Tribal Governments, 
because it does not have a substantial direct effect on one or more 
Indian tribes, on the relationship between the Federal government and 
Indian tribes, or on the distribution of power and responsibilities 
between the Federal government and Indian tribes.

P. National Technology Transfer and Advancement Act (Technical 
Standards)

    The National Technology Transfer and Advancement Act (note 
following 15 U.S.C. 272) directs agencies to use voluntary consensus 
standards in their regulatory activities unless the agency provides 
Congress, through OMB, with an explanation of why using these standards 
would be inconsistent with applicable law or otherwise impractical. 
Voluntary consensus standards (e.g., specifications of materials, 
performance, design, or operation; test methods; sampling procedures; 
and related management systems practices) are standards that are 
developed or adopted by voluntary consensus standards bodies. This rule 
does not use technical standards. Therefore, FMCSA did not consider the 
use of voluntary consensus standards.

Q. National Environmental Policy Act of 1969

    FMCSA analyzed this proposed rule for the purpose of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and 
determined this action is categorically excluded from further analysis 
and documentation in an environmental assessment or environmental 
impact statement under FMCSA Order 5610.1 (69 FR 9680, March 1, 2004), 
Appendix 2, paragraphs 6.f. and 6.g. The Categorical Exclusions (CEs) 
in paragraphs 6.f. and 6.g. cover regulations implementing activities, 
whether performed by FMCSA or by States pursuant to MCSAP, and 
procedures to promote adoption and enforcement of State laws and 
regulations pertaining to CMV safety that are compatible with the 
FMCSRs

[[Page 44179]]

and HMRs, and procedures to provide guidelines for a continuous 
regulatory review of State laws and regulations. The proposed 
requirements in this rule are covered by these CEs and the proposed 
rule would not have any effect on the quality of the environment.

List of Subjects

49 CFR Part 350

    Grant programs-transportation, Highway safety, Motor carriers, 
Motor vehicle safety, Reporting and recordkeeping requirements.

49 CFR Part 355

    Highway safety, Intergovernmental relations, Motor carriers, Motor 
vehicle safety, Reporting and recordkeeping requirements.

49 CFR Part 388

    Administrative practice and procedure, Highway safety, Motor 
carriers, Motor vehicle safety.

    In consideration of the foregoing, FMCSA proposes to amend 49 CFR 
Chapter III as follows.

0
1. Revise part 350 to read as follows:

PART 350--MOTOR CARRIER SAFETY ASSISTANCE PROGRAM (MCSAP) AND HIGH 
PRIORITY PROGRAM

Subpart A--General
Sec.
350.101 What is the purpose of this part?
350.103 When do the financial assistance program changes take 
effect?
350.105 What definitions are used in this part?
Subpart B--Motor Carrier Safety Assistance Program Administration
350.201 What is MCSAP?
350.203 What are the national MCSAP elements?
350.205 What entities are eligible for funding under MCSAP?
350.207 What conditions must a State meet to qualify for MCSAP 
funds?
350.209 How and when does a State apply for MCSAP funds using a 
CVSP?
350.211 What must a State include for the first year of the CVSP?
350.213 What must a State include for the second and third years of 
the CVSP?
350.215 What response does a State receive to its CVSP or annual 
update?
350.217 How are MCSAP funds allocated?
350.219 How are MCSAP funds awarded under a continuing resolution 
appropriations act or an extension of FMCSA's authorization?
350.221 How long are MCSAP funds available to a State?
350.223 What are the Federal and State shares of costs incurred 
under MCSAP?
350.225 What MOE must a State maintain to qualify for MCSAP funds?
350.227 What activities are eligible for reimbursement under MCSAP?
350.229 What specific costs are eligible for reimbursement under 
MCSAP?
350.231 What are the consequences for failure to meet MCSAP 
conditions?
Subpart C--MCSAP Required Compatibility Review
350.301 What is the purpose of this subpart?
350.303 How does a State ensure compatibility?
350.305 What specific variances from the FMCSRs are allowed for 
State laws and regulations and not subject to Federal jurisdiction?
350.307 How may a State obtain a new exemption for State laws and 
regulations for a specific industry involved in intrastate commerce?
350.309 What are the consequences if a State has provisions that are 
not compatible?
Subpart D--High Priority Program
350.401 What is the High Priority Program?
350.403 What are the High Priority Program objectives?
350.405 What conditions must an applicant meet to qualify for High 
Priority Program funds?
350.407 How and when does an eligible entity apply for High Priority 
Program funds?
350.409 What response will an applicant receive under the High 
Priority Program?
350.411 How long are High Priority Program funds available to a 
recipient?
350.413 What are the Federal and recipient shares of costs incurred 
under the High Priority Program?
350.415 What types of activities and projects are eligible for 
reimbursement under the High Priority Program?
350.417 What specific costs are eligible for reimbursement under the 
High Priority Program?

    Authority: 49 U.S.C. 13902, 31101-31104, 31108, 31136, 31141, 
31161, 31310-31311, 31502; and 49 CFR 1.87.

Subpart A--General

Sec.  350.101  What is the purpose of this part?

    The purpose of this part is to provide direction for entities 
seeking MCSAP or High Priority Program funding to improve motor 
carrier, CMV, and driver safety.

Sec.  350.103   When do the financial assistance program changes take 
effect?

    Unless otherwise provided, the changes to the FMCSA financial 
assistance programs under this part take effect for fiscal year 2020, 
beginning October 1, 2019.

Sec.  350.105  What definitions are used in this part?

    As used in this part:
    Administrative takedown funds means funds FMCSA deducts each fiscal 
year from the amounts made available for MCSAP and the High Priority 
Program for expenses incurred by FMCSA for training State and local 
government employees and for the administration of the programs.
    Administrator means the administrator of FMCSA.
    Border State means a State that shares a land border with Canada or 
Mexico.
    Commercial motor vehicle (CMV) means a motor vehicle that has any 
of the following characteristics:
    (1) A gross vehicle weight (GVW), gross vehicle weight rating 
(GVWR), gross combination weight (GCW), or gross combination weight 
rating (GCWR) of 4,537 kilograms (10,001 pounds) or more.
    (2) Regardless of weight, is designed or used to transport 16 or 
more passengers, including driver.
    (3) Regardless of weight, is used in the transportation of 
hazardous materials and is required to be placarded pursuant to 49 CFR 
part 172, subpart F.
    Commercial vehicle safety plan (CVSP) means a State's CMV safety 
objectives, strategies, activities, and performance measures that cover 
a 3-year period, including the submission of the CVSP for the first 
year and annual updates thereto for the second and third years.
    Compatible or compatibility means State safety laws and 
regulations, standards, and orders:
    (1) As applicable to interstate commerce, that are identical to, or 
have the same effect as, the FMCSRs;
    (2) As applicable to intrastate commerce, that:
    (i) Are identical to, or have the same effect as, the FMCSRs; or
    (ii) Fall within the limited variances from the FMCSRs allowed 
under subpart C of this part; and
    (3) As applicable to interstate and intrastate commerce involving 
the movement of hazardous materials, that are identical to the HMRs.
    FMCSA means the Federal Motor Carrier Safety Administration of the 
United States Department of Transportation.
    FMCSRs means:
    (1) The Federal Motor Carrier Safety Regulations under parts 390, 
391, 392, 393, 395, 396, and 397 of this subchapter; and
    (2) Applicable standards and orders issued under these provisions.
    HMRs means:
    (1) The Federal Hazardous Materials Regulations under subparts F 
and G of part 107, and parts 171, 172, 173, 177, 178, and 180 of this 
title; and
    (2) Applicable standards and orders issued under these provisions.
    High Priority Program funds means total funds available for the 
High

[[Page 44180]]

Priority Program, less the administrative takedown funds.
    Investigation means an examination of motor carrier operations and 
records, such as drivers' hours of service, maintenance and inspection, 
driver qualification, commercial driver's license requirements, 
financial responsibility, crashes, hazardous materials, and other 
safety and transportation records, to determine whether a motor carrier 
meets safety standards, including the safety fitness standard under 
Sec.  385.5 of this chapter or, for intrastate motor carrier 
operations, the applicable State standard.
    Lead State Agency means the State CMV safety agency responsible for 
administering the CVSP throughout a State.
    Maintenance of effort (MOE) means the level of a State's financial 
expenditures, other than the required match, the Lead State Agency is 
required to expend each fiscal year in accordance with Sec.  350.225.
    Motor carrier means a for-hire motor carrier or private motor 
carrier. The term includes a motor carrier's agents, officers, and 
representatives as well as employees responsible for hiring, 
supervising, training, assigning, or dispatching a driver or an 
employee concerned with the installation, inspection, and maintenance 
of motor vehicle equipment or accessories.
    Motor Carrier Safety Assistance Program (MCSAP) funds means total 
formula grant funds available for MCSAP, less the administrative 
takedown funds.
    New entrant safety audit means the safety audit of an interstate 
motor carrier that is required as a condition of MCSAP eligibility 
under Sec.  350.207(a)(26), and, at the State's discretion, an 
intrastate new entrant motor carrier under 49 U.S.C. 31144(g) that is 
conducted in accordance with subpart D of part 385 of this chapter.
    North American Standard Inspection means the procedures used by 
certified safety inspectors to conduct various levels of safety 
inspections of the vehicle or driver.
    State means a State of the United States, the District of Columbia, 
American Samoa, the Commonwealth of the Northern Mariana Islands, the 
Commonwealth of Puerto Rico, Guam, and the Virgin Islands.
    Traffic enforcement means the stopping of vehicles operating on 
highways for moving violations of State, tribal, or local motor vehicle 
or traffic laws by State, tribal, or local officials.

Subpart B--Motor Carrier Safety Assistance Program Administration

Sec.  350.201  What is MCSAP?

    (a) General. MCSAP is a Federal formula grant program that provides 
financial assistance to States to reduce the number and severity of 
crashes, and resulting injuries and fatalities, involving CMVs and to 
promote the safe transportation of passengers and hazardous materials. 
The goal of MCSAP is to reduce CMV-involved crashes, fatalities, and 
injuries through consistent, uniform, and effective CMV safety programs 
that include driver or vehicle inspections, traffic enforcement, 
carrier investigations, new entrant safety audits, border enforcement, 
safety data improvements, and Performance and Registration Information 
Systems Management (PRISM).
    (b) MCSAP requirements. MCSAP requires States to:
    (1) Make targeted investments to promote safe CMV transportation, 
including transportation of passengers and hazardous materials;
    (2) Invest in activities likely to generate maximum reductions in 
the number and severity of CMV crashes and in fatalities resulting from 
CMV crashes;
    (3) Adopt and enforce effective motor carrier, CMV, and driver 
safety regulations and practices consistent with Federal requirements; 
and
    (4) Assess and improve State-wide performance of motor carrier, 
CMV, and driver safety by setting program goals and meeting performance 
standards, measurements, and benchmarks.
    (c) State participation. MCSAP sets conditions of participation for 
States and promotes compatibility in the adoption and uniform 
enforcement of safety laws and regulations, standards, and orders.

Sec.  350.203  What are the national MCSAP elements?

    The national MCSAP elements are:
    (a) Driver inspections;
    (b) Vehicle inspections;
    (c) Traffic enforcement;
    (d) Investigations;
    (e) New entrant safety audits;
    (f) CMV safety programs focusing on international commerce in 
border States;
    (g) Beginning October 1, 2020, full participation in PRISM or an 
acceptable alternative as determined by the Administrator;
    (h) Accurate, complete, timely, and corrected data;
    (i) Public education and awareness; and
    (j) Other elements that may be prescribed by the Administrator.

Sec.  350.205  What entities are eligible for funding under MCSAP?

    Only States are eligible to receive MCSAP grants directly from 
FMCSA.

Sec.  350.207  What conditions must a State meet to qualify for MCSAP 
funds?

    (a) General. To qualify for MCSAP funds, a State must:
    (1) Designate a Lead State Agency;
    (2) Assume responsibility for improving motor carrier safety by 
adopting and enforcing compatible safety laws and regulations, 
standards, and orders, except as may be determined by the Administrator 
to be inapplicable to a State enforcement program;
    (3) Ensure that the State will cooperate in the enforcement of 
financial responsibility requirements under part 387 of this chapter;
    (4) Provide that the State will enforce the registration 
requirements under 49 U.S.C. 13902 and 31134 by prohibiting the 
operation of any vehicle discovered to be operated by a motor carrier 
without a registration issued under those sections or operated beyond 
the scope of the motor carrier's registration;
    (5) Provide a right of entry (or other method a State may use that 
is adequate to obtain necessary information) and inspection to carry 
out the CVSP;
    (6) Give satisfactory assurances in its CVSP that the Lead State 
Agency has the legal authority, resources, and qualified personnel 
necessary to enforce compatible safety laws and regulations, standards, 
and orders;
    (7) Provide satisfactory assurances that the State will undertake 
efforts that will emphasize and improve enforcement of State and local 
traffic laws and regulations related to CMV safety;
    (8) Give satisfactory assurances that the State will devote 
adequate resources to the administration of the CVSP throughout the 
State, including the enforcement of compatible safety laws and 
regulations, standards, and orders;
    (9) Provide that the MOE of the Lead State Agency will be 
maintained each fiscal year in accordance with Sec.  350.225;
    (10) Provide that all reports required in the CVSP be available to 
FMCSA upon request, meet the reporting requirements, and use the forms 
for recordkeeping, inspections, and investigations that FMCSA 
prescribes;
    (11) Implement performance-based activities, including deployment 
and maintenance of technology, to enhance the efficiency and 
effectiveness of CMV safety programs;
    (12) Establish and dedicate sufficient resources to a program to 
ensure that accurate, complete, and timely motor

[[Page 44181]]

carrier safety data are collected and reported, and to ensure the 
State's participation in a national motor carrier safety data 
correction system prescribed by FMCSA;
    (13) Ensure that the Lead State Agency will coordinate the CVSP, 
data collection, and information systems with the State highway safety 
improvement program under 23 U.S.C. 148(c);
    (14) Ensure participation in information technology and data 
systems as required by FMCSA for jurisdictions receiving MCSAP funding;
    (15) Ensure that information is exchanged with other States in a 
timely manner;
    (16) Grant maximum reciprocity for inspections conducted under the 
North American Standard Inspection Program through the use of a 
nationally accepted system that allows ready identification of 
previously inspected CMVs;
    (17) Provide that the State will conduct comprehensive and highly 
visible traffic enforcement and CMV safety inspection programs in high-
risk locations and corridors;
    (18) Ensure that driver or vehicle inspections will be conducted at 
locations that are adequate to protect the safety of drivers and 
enforcement personnel;
    (19) Except in the case of an imminent or obvious safety hazard, 
ensure that an inspection of a vehicle transporting passengers for a 
motor carrier of passengers is conducted at a bus station, terminal, 
border crossing, maintenance facility, destination, or other location 
where a motor carrier may make a planned stop (excluding a weigh 
station);
    (20) Provide satisfactory assurances that the State will address 
activities in support of the national program elements listed in Sec.  
350.203, including activities:
    (i) Aimed at removing impaired CMV drivers from the highways 
through adequate enforcement of regulations on the use of alcohol and 
controlled substances and by ensuring ready roadside access to alcohol 
detection and measuring equipment;
    (ii) Aimed at providing training to MCSAP personnel to recognize 
drivers impaired by alcohol or controlled substances; and
    (iii) Related to criminal interdiction, including human 
trafficking, when conducted with an appropriate CMV inspection and 
appropriate strategies for carrying out those interdiction activities, 
including interdiction activities that affect the transportation of 
controlled substances (as defined in section 102 of the Comprehensive 
Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 802) and 
listed in 21 CFR part 1308) by any occupant of a CMV;
    (21) Ensure that detection of criminal activities and size and 
weight activities described in Sec.  350.227(b), if financed through 
MCSAP funds, will not diminish the effectiveness of the development and 
implementation of the programs to improve motor carrier, CMV, and 
driver safety;
    (22) Ensure consistent, effective, and reasonable sanctions;
    (23) Provide that the State will include in the training manuals 
for the licensing examinations to drive a CMV and non-CMV information 
on best practices for driving safely in the vicinity of CMVs and non-
CMVs;
    (24) Require all registrants of CMVs to demonstrate their knowledge 
of applicable FMCSRs, HMRs, or compatible State laws or regulations, 
standards, and orders;
    (25) Ensure that the State transmits to inspectors the notice of 
each Federal exemption granted under subpart C of part 381 and 
Sec. Sec.  390.23 and 390.25 of this subchapter that relieves a person 
or class of persons in whole or in part from compliance with the FMCSRs 
or HMRs that has been provided to the State by FMCSA and identifies the 
person or class of persons granted the exemption and any terms and 
conditions that apply to the exemption;
    (26) Subject to paragraphs (b) and (c)(1) of this section, conduct 
new entrant safety audits of interstate and, at the State's discretion, 
intrastate new entrant motor carriers in accordance with subpart D of 
part 385;
    (27) Subject to paragraph (c)(2) of this section, beginning October 
1, 2020, participate fully in PRISM by complying with the conditions 
for full participation, or receiving approval from the Administrator 
for an alternative approach for identifying and immobilizing a motor 
carrier with serious safety deficiencies in a manner that provides an 
equivalent level of safety;
    (28) Ensure that the State will cooperate in the enforcement of 
hazardous materials safety permits issued under subpart E of part 385 
of this chapter; and
    (29) For border States, conduct a border CMV safety program 
focusing on international commerce that includes enforcement and 
related projects, or forfeit all funds allocated for border-related 
activities.
    (b) New entrant safety audits--Use of third parties. If a State 
uses a third party to conduct new entrant safety audits under paragraph 
(a)(26) of this section, the State must verify the quality of the work 
and the State remains solely responsible for the management and 
oversight of the audits.
    (c) Territories. (1) The new entrant safety audit requirement under 
paragraph (a)(26) does not apply to American Samoa, the Commonwealth of 
the Northern Mariana Islands, the Commonwealth of Puerto Rico, Guam, 
and the Virgin Islands.
    (2) The required PRISM participation date under paragraph (a)(27) 
of this section does not apply to American Samoa, the Commonwealth of 
the Northern Mariana Islands, the Commonwealth of Puerto Rico, Guam, 
and the Virgin Islands.

Sec.  350.209  How and when does a State apply for MCSAP funds using a 
CVSP?

    (a) MCSAP Application Submission Format. (1) The CVSP is a 3-year 
plan.
    (2) The first year of the CVSP varies by State, depending on when 
the State implemented the CVSP.
    (3) For the first year of the CVSP, the Lead State Agency must 
submit a CVSP projecting programs and projects covering 3 years and a 
budget for the first fiscal year for which the CVSP is submitted, as 
explained in Sec.  350.211.
    (4) For the second and third years of the CVSP, the Lead State 
Agency must submit an annual update and budget for that fiscal year and 
any other needed adjustments or changes to the CVSP, as explained in 
Sec.  350.213.
    (b) MCSAP Application Submission Deadline. (1) The Lead State 
Agency must submit the CVSP, or the annual updates, to FMCSA by the 
date prescribed in the MCSAP application memorandum for the fiscal 
year.
    (2) The Administrator may extend for a period not exceeding 30 days 
the deadline prescribed in the MCSAP application memorandum for 
document submission for good cause.

Sec.  350.211   What must a State include for the first year of the 
CVSP?

    (a) General. (1) The first year of the CVSP must comply with the 
MCSAP application memorandum and, at a minimum, provide a performance-
based program with a general overview section that includes:
    (i) A statement of the Lead State Agency's goal or mission; and
    (ii) A program summary of the effectiveness of prior activities in 
reducing CMV crashes, injuries, and fatalities and in improving driver 
and motor carrier safety performance.
    (2) The program summary must identify and address safety or 
performance problems in the State.
    (3) The program summary must use 12-month data periods that are

[[Page 44182]]

consistent from year to year. This may be a calendar year, fiscal year, 
or any 12-month period for which the State's data is current.
    (4) The program summary must show trends supported by safety and 
program performance data collected over several years.
    (b) National MCSAP elements. (1) The first year of the CVSP must 
include a brief narrative describing how the State CVSP addresses the 
national program elements listed in Sec.  350.203.
    (2) The CVSP must address each national program element even if 
there are no planned activities in a program area.
    (c) Resource allocation. The first year of the CVSP must explain 
the rationale for the State's resource allocation decisions.
    (d) Specific activities. The first year of the CVSP must have a 
narrative section that includes a description of how the CVSP supports:
    (1) Activities aimed at removing impaired CMV drivers from the 
highways through adequate enforcement of restrictions on the use of 
alcohol and controlled substances and by ensuring ready roadside access 
to alcohol detection and measuring equipment;
    (2) Activities aimed at providing an appropriate level of training 
to MCSAP personnel to recognize drivers impaired by alcohol or 
controlled substances;
    (3) Criminal interdiction activities and appropriate strategies for 
carrying out those interdiction activities, including human 
trafficking, and interdiction activities affecting the transportation 
of controlled substances by any occupant of a CMV; and
    (4) Activities to enforce registration requirements and to 
cooperate in the enforcement of financial responsibility requirements 
under Sec.  392.9a and part 387 of this subchapter.
    (e) Performance objectives. The first year of the CVSP must include 
performance objectives, strategies, and activities stated in 
quantifiable terms, that are to be achieved through the CVSP.
    (f) Monitoring. The first year of the CVSP must include a 
description of the State's method for ongoing monitoring of the 
progress of the CVSP.
    (g) Budget. The first year of the CVSP must include a budget for 
that year that describes the expenditures for allocable costs, such as 
personnel and related costs, equipment purchases, printing, information 
systems costs, and other eligible costs consistent with Sec.  350.229.
    (h) List of MCSAP contacts. The first year of the CVSP must include 
a list of MCSAP contacts.
    (i) Certification. (1) For the first year of the CVSP, the Lead 
State Agency must certify that it has:
    (i) Met all the MCSAP conditions in Sec.  350.207; and
    (ii) Completed the annual review required by Sec.  350.303 and 
determined that the State maintains required compatibility.
    (2) If a State CMV safety law or regulation, standard, or order is 
no longer compatible, the certifying official must explain the State's 
plan to address the discrepancy.
    (3) A certification under this paragraph must reflect that the 
certifying official has authority to make the certification on behalf 
of the State.
    (j) New or amended laws. For the first year of the CVSP, the Lead 
State Agency must submit to FMCSA a copy of any new or amended law or 
regulation affecting CMV safety that was enacted by the State since the 
last CVSP or annual update was submitted.
    (k) Further submissions. For the first year of the CVSP, the Lead 
State Agency must also submit other information required, as described 
in the MCSAP application memorandum for that fiscal year.

Sec.  350.213  What must a State include for the second and third years 
of the CVSP?

    (a) General. For the second and third years of the CVSP, a State 
must submit an annual update that complies with the MCSAP application 
memorandum and, at a minimum, must include program goals, 
certifications, other information revised since the prior year's CVSP, 
and the items listed in paragraphs (b) to (g) of this section.
    (b) Budget. For the second and third years of the CVSP, the Lead 
State Agency must include a budget that supports the applicable fiscal 
year of the CVSP and describes the expenditures for allocable costs, 
such as personnel and related costs, equipment purchases, printing, 
information systems costs, and other eligible costs consistent with 
Sec.  350.229.
    (c) Resource allocation. For the second and third years of the 
CVSP, the Lead State Agency must explain the rationale for the State's 
resource allocation decisions.
    (d) List of MCSAP contacts. For the second and third years of the 
CVSP, the Lead State Agency must include a list of MCSAP contacts.
    (e) Certification. (1) For the second and third years of the CVSP, 
the Lead State Agency must certify that it has:
    (i) Met all the MCSAP conditions in Sec.  350.207; and
    (ii) Completed the annual review required by Sec.  350.303 and 
determined that State CMV safety laws and regulations, standards, and 
orders are compatible.
    (2) If a State CMV safety law or regulation, standard, or order is 
no longer compatible, the certifying official must explain the State's 
plan to address the discrepancy.
    (3) A certification under this paragraph must reflect that the 
certifying official has authority to make the certification on behalf 
of the State.
    (f) New or amended laws. For the second and third years of the 
CVSP, the Lead State Agency must submit to FMCSA a copy of any new or 
amended law or regulation affecting CMV safety that the State enacted 
since the last CVSP or annual update was submitted.
    (g) Further submissions. For the second and third years of the 
CVSP, the Lead State Agency must submit other information required, as 
described in the MCSAP application memorandum for that fiscal year.

Sec.  350.215  What response does a State receive to its CVSP or annual 
update?

    (a) First year of the CVSP. (1) FMCSA will notify the Lead State 
Agency within 30 days after FMCSA begins its review of a State's first 
year of the CVSP, including the budget, whether FMCSA:
    (i) Approves the CVSP; or
    (ii) Withholds approval because the CVSP:
    (A) Does not meet the requirements of this part; or
    (B) Is not adequate to ensure effective enforcement of compatible 
safety laws and regulations, standards, and orders.
    (2) If FMCSA withholds approval of the CVSP, FMCSA will give the 
Lead State Agency a written explanation of the reasons for withholding 
approval and allow the Lead State Agency to modify and resubmit the 
CVSP for approval.
    (3) The Lead State Agency has 30 days from the date of the notice 
under paragraph (a)(2) of this section to modify and resubmit the CVSP.
    (4) Failure to resubmit the modified CVSP may delay funding or 
jeopardize MCSAP eligibility.
    (5) Final disapproval of a resubmitted CVSP will result in 
disqualification for MCSAP funding for that fiscal year.
    (b) Annual update for the second or third year of the CVSP. (1) 
FMCSA will notify the Lead State Agency within 30 days after FMCSA 
begins its review of the State's annual update, including the budget, 
whether FMCSA:
    (i) Approves the annual update; or
    (ii) Withholds approval.
    (2) If FMCSA withholds approval of the annual update, FMCSA will 
give the Lead State Agency a written explanation

[[Page 44183]]

of the reasons for withholding approval and allow the Lead State Agency 
to modify and resubmit the annual update for approval.
    (3) The Lead State Agency will have 30 days from the date of the 
notice under paragraph (b)(2) of this section to modify and resubmit 
the annual update.
    (4) Failure to resubmit the modified annual update may delay 
funding or jeopardize MCSAP eligibility.
    (5) Final disapproval of a resubmitted annual update will result in 
disqualification for MCSAP funding for that fiscal year.
    (c) Judicial review. Any State aggrieved by an adverse decision 
under this section may seek judicial review under 5 U.S.C. chapter 7.

Sec.  350.217  How are MCSAP funds allocated?

    (a) General. Subject to the availability of funding, FMCSA must 
allocate MCSAP funds to grantees with approved CVSPs in accordance with 
this section.
    (b) Territories--excluding Puerto Rico. (1) Not more than 0.49 
percent of the MCSAP funds may be allocated in accordance with this 
paragraph among the Territories of American Samoa, the Commonwealth of 
the Northern Mariana Islands, Guam, and the Virgin Islands.
    (2) Half of the MCSAP funds available under paragraph (b)(1) of 
this section will be divided equally among the Territories.
    (3) The remaining MCSAP funds available under paragraph (b)(1) will 
be allocated among the Territories in a manner proportional to the 
Territories' populations, as reflected in the decennial census issued 
by the U.S. Census Bureau.
    (4) The amounts calculated under paragraphs (b)(2) and (b)(3) of 
this section will be totaled for each Territory.
    (5) The amounts calculated under paragraph (b)(4) of this section 
will be adjusted proportionally, based on population, to ensure that 
each Territory receives at least $350,000.
    (c) Border States. (1) Not more than 11 percent of the MCSAP funds 
may be allocated in accordance with this paragraph among border States 
that maintain a border enforcement program.
    (2) The shares for each border State will be calculated based on 
the number of CMV crossings at each United States port of entry, as 
determined by Bureau of Transportation Statistics, with each border 
State receiving:
    (i) 1 share per 25,000 annual CMV crossings at each United States 
port of entry on the Mexican border, with a minimum of 8 shares for 
each port of entry; or
    (ii) 1 share per 200,000 annual CMV crossings at each United States 
port of entry on the Canadian border, with a minimum of 0.25 share for 
each port of entry with more than 1,000 annual CMV crossings.
    (3) The shares of all border States calculated under paragraph 
(c)(2) of this section will be totaled.
    (4) Each individual border State's shares calculated under 
paragraph (c)(2) of this section will be divided by the total shares 
calculated in paragraph (c)(3) of this section.
    (5) The percentages calculated in paragraph (c)(4) of this section 
will be adjusted proportionally to ensure that each border State 
receives at least 0.075 percent but no more than 55 percent of the 
total border allocation available under paragraph (c)(1) of this 
section.
    (6) Each border State's percentage calculated in paragraph (c)(5) 
of this section will be multiplied by the total border allocation 
available under this paragraph to determine the dollar amount of the 
border State's allocation.
    (7) To maintain eligibility for an allocation under this paragraph, 
a border State must maintain a border enforcement program, but may 
expend more or less than the amounts allocated under this paragraph for 
border activities. Failure to maintain a border enforcement program 
will result in forfeiture of all funds allocated under this paragraph, 
but will not affect the border State's allocation under paragraph (d) 
of this section.
    (8) Allocations made under this paragraph are in addition to 
allocations made under paragraph (d) of this section.
    (d) States. (1)(i) At least 88.51 percent of the MCSAP funds must 
be allocated in accordance with this paragraph among the eligible 
States, including Puerto Rico, but excluding American Samoa, the 
Commonwealth of the Northern Mariana Islands, Guam, and the Virgin 
Islands.
    (ii) The amounts made available under paragraphs (b) and (c) of 
this section that are not allocated under those paragraphs must be 
added to the total amount to be allocated in accordance with this 
paragraph.
    (iii) In the case of reallocation of funds under paragraph (c) of 
this section by a border State that no longer maintains a border 
enforcement program, no portion of the reallocated funds will be 
allocated to that border State.
    (2) The amount available under paragraph (d)(1) of this section 
must be calculated based on each State's percentage of the national 
total for each of the following equally-weighted factors:
    (i) National Highway System Road Length Miles, as reported by the 
Federal Highway Administration (FHWA);
    (ii) All Vehicle Miles Traveled, as reported by the FHWA;
    (iii) Population (annual census estimates), as issued by the U.S. 
Census Bureau;
    (iv) Special Fuel Consumption, as reported by the FHWA; and
    (v) Carrier Registrations, as determined by FMCSA, based on the 
physical State of the carrier, and calculated as the sum of interstate 
carriers and intrastate hazardous materials carriers.
    (3) Each State's percentages calculated in paragraph (d)(2) of this 
section will be averaged.
    (4) The percentage calculated in paragraph (d)(3) of this section 
will be adjusted proportionally to ensure that each State receives at 
least 0.44 percent but no more than 4.944 percent of the MCSAP funds 
available under paragraph (d)(1) of this section.
    (5) Each State's percentage will be multiplied by the total MCSAP 
funds available under this paragraph to determine the dollar amount of 
the State's allocation.
    (e) Hold-harmless and cap. (1) The dollar amounts calculated under 
paragraphs (c)(6) and (d)(5) of this section will be totaled and then 
divided by the total MCSAP funds to determine a State's percentage of 
the total MCSAP funds.
    (2) Each State's total percentage of its MCSAP funding in the 
fiscal year immediately prior to the year for which funding is being 
allocated will be determined by dividing the State's dollar allocation 
by the overall MCSAP funding in that prior year.
    (3) Proportional adjustments will be made to ensure that each 
State's percentage of MCSAP funds as calculated under subparagraph (1) 
of this paragraph will be no less than 97 percent or more than 105 
percent of the State's percentage of MCSAP funds allocated for the 
prior fiscal year.
    (f) Withholding. (1) Allocations made under this section are 
subject to withholdings under Sec.  350.231(d).
    (2) Minimum or maximum allocations described in paragraphs (b), 
(c), and (d) of this section are to be applied prior to any reduction 
under Sec.  350.231(d).
    (3) State MCSAP funds affected by Sec.  350.231(d) will be 
allocated to the unaffected States in accordance with paragraph (d) of 
this section.
    (4) Paragraph (e) of this section does not apply after any 
reduction under Sec.  350.231(d).

[[Page 44184]]

Sec.  350.219  How are MCSAP funds awarded under a continuing 
resolution appropriations act or an extension of FMCSA's authorization?

    In the event of a continuing resolution appropriations act or an 
extension of FMCSA's authorization, subject to the availability of 
funding, FMCSA may first issue grants to States that have the lowest 
percent of undelivered obligations of the previous Federal fiscal 
year's funding, or as otherwise determined by the Administrator.

Sec.  350.221  How long are MCSAP funds available to a State?

    MCSAP funds obligated to a State will remain available for the 
Federal fiscal year that the funds are obligated and the next full 
Federal fiscal year.

Sec.  350.223  What are the Federal and State shares of costs incurred 
under MCSAP?

    (a) Federal share. FMCSA will reimburse at least 85 percent of the 
eligible costs incurred under MCSAP.
    (b) Match. (1) In-kind contributions are acceptable in meeting a 
State's matching share under MCSAP if they represent eligible costs, as 
established by 2 CFR parts 200 and 1201 and FMCSA policy.
    (2) States may use amounts generated under the Unified Carrier 
Registration Agreement as part of the State's match required for MCSAP, 
provided the amounts are not applied to the MOE required under Sec.  
350.225 and are spent on eligible costs, as established by 2 CFR parts 
200 and 1201 and FMCSA policy.
    (c) Waiver. (1) The Administrator waives the requirement for the 
matching share under MCSAP for American Samoa, the Commonwealth of the 
Northern Mariana Islands, Guam, and the Virgin Islands.
    (2) The Administrator reserves the right to reduce or waive the 
matching share under MCSAP for other States in any fiscal year:
    (i) As announced in the MCSAP application memorandum; or
    (ii) As determined by the Administrator on a case-by-case basis.

Sec.  350.225  What MOE must a State maintain to qualify for MCSAP 
funds?

    (a) General. Subject to paragraph (e) of this section, a State must 
maintain an MOE each fiscal year equal to the average aggregate 
expenditure of the Lead State Agency for CMV safety programs eligible 
for funding under this part at a level at least equal to:
    (1) The average level of that expenditure for the base period of 
fiscal years 2004 and 2005; or
    (2) The level of expenditure in fiscal year 2020, as adjusted under 
section 5107 of the Fixing America's Surface Transportation (FAST) Act 
(Pub. L. 114-94, 129 Stat. 1312, 1532-1534 (2015)).
    (b) Calculation. In determining a State's MOE, FMCSA:
    (1) May allow the State to exclude State expenditures for 
Federally-sponsored demonstration and pilot CMV safety programs and 
strike forces;
    (2) May allow the State to exclude expenditures for activities 
related to border enforcement and new entrant safety audits;
    (3) May allow the State to use amounts generated under the Unified 
Carrier Registration Agreement, provided the amounts are not applied to 
the match required under Sec.  350.223;
    (4) Requires the State to exclude Federal funds; and
    (5) Requires the State to exclude State matching funds.
    (c) Costs. (1) A State must include all eligible costs associated 
with activities performed during the base period by the Lead State 
Agency that receives funds under this part.
    (2) A State must include only those activities that meet the 
current requirements for funding eligibility under the grant program.
    (d) Waivers and modifications. (1) If a State requests, FMCSA may 
waive or modify the State's obligation to meet its MOE for a fiscal 
year if FMCSA determines that the waiver or modification is reasonable, 
based on circumstances described by the State.
    (2) Requests to waive or modify the State's obligation to meet its 
MOE must be submitted to FMCSA in writing.
    (3) FMCSA will review the request and provide a response as soon as 
practicable, but no later than 120 days following receipt of the 
request.
    (e) Permanent adjustment. After Federal fiscal year 2020, at the 
request of a State, FMCSA may make a permanent adjustment to reduce the 
State's MOE only if a State has new information unavailable to it 
during Federal fiscal year 2020.

Sec.  350.227   What activities are eligible for reimbursement under 
MCSAP?

    (a) General. The primary activities eligible for reimbursement 
under MCSAP are:
    (1) Activities that support the national program elements listed in 
Sec.  350.203; and
    (2) Sanitary food transportation inspections performed under 49 
U.S.C. 5701.
    (b) Additional activities. If part of the approved CVSP and 
accompanied by an appropriate North American Standard Inspection and 
inspection report, additional activities eligible for reimbursement 
are:
    (1) Enforcement of CMV size and weight limitations at locations, 
other than fixed-weight facilities, where the weight of a CMV can 
significantly affect the safe operation of the vehicle, such as near 
steep grades or mountainous terrains, or at ports where intermodal 
shipping containers enter and leave the United States; and
    (2) Detection of, and enforcement activities taken as a result of, 
criminal activity involving a CMV or any occupant of the vehicle, 
including the trafficking of human beings.
    (c) Traffic enforcement. Documented enforcement of State traffic 
laws and regulations designed to promote the safe operation of CMVs, 
including documented enforcement of such laws and regulations relating 
to non-CMVs when necessary to promote the safe operation of CMVs, are 
eligible for reimbursement under MCSAP if:
    (1) The number of motor carrier safety activities, including safety 
inspections, is maintained at a level at least equal to the average 
level of such activities conducted in the State in fiscal years 2004 
and 2005; and
    (2) The State does not use more than 10 percent of its MCSAP funds 
for enforcement activities relating to non-CMVs necessary to promote 
the safe operation of CMVs, unless the Administrator determines that a 
higher percentage will result in significant increases in CMV safety.

Sec.  350.229   What specific costs are eligible for reimbursement 
under MCSAP?

    (a) General. FMCSA must establish criteria for activities eligible 
for reimbursement and publish those criteria in policy or the MCSAP 
application memorandum before the MCSAP application period.
    (b) Costs eligible for reimbursement. All costs relating to 
activities eligible for reimbursement must be necessary, reasonable, 
allocable, and allowable under this subpart and 2 CFR parts 200 and 
1201. The eligibility of specific costs for reimbursement is addressed 
in the MCSAP application memorandum and is subject to review and 
approval by FMCSA.
    (c) Ineligible costs. MCSAP funds may not be used for the:
    (1) Acquisition of real property or buildings; or
    (2) Development, implementation, or maintenance of a State registry 
of medical examiners.

Sec.  350.231   What are the consequences for failure to meet MCSAP 
conditions?

    (a) General. (1) If a State is not performing according to an 
approved CVSP or not adequately meeting the

[[Page 44185]]

conditions set forth in Sec.  350.207, the Administrator may issue a 
written notice of proposed determination of nonconformity to the chief 
executive of the State or the official designated in the CVSP.
    (2) The notice will set forth the reasons for the proposed 
determination.
    (b) Response. The State has 30 days from the date of the notice to 
reply. The reply must address the discrepancy cited in the notice and 
must provide documentation as requested.
    (c) Final Agency decision. (1) After considering the State's reply, 
the Administrator makes a final decision.
    (2) In the event the State fails to timely reply to a notice of 
proposed determination of nonconformity, the notice becomes the 
Administrator's final determination of nonconformity.
    (d) Consequences. Any adverse decision will result in FMCSA:
    (1) Withdrawing approval of the CVSP and withholding all MCSAP 
funds to the State; or
    (2) Finding the State in noncompliance in lieu of withdrawing 
approval of the CVSP and withholding:
    (i) Up to 5 percent of MCSAP funds during the fiscal year that 
FMCSA notifies the State of its noncompliance;
    (ii) Up to 10 percent of MCSAP funds for the first full fiscal year 
of noncompliance;
    (iii) Up to 25 percent of MCSAP funds for the second full fiscal 
year of noncompliance; and
    (iv) Up to 50 percent of MCSAP funds for the third and any 
subsequent full fiscal year of noncompliance.
    (e) Judicial review. Any State aggrieved by an adverse decision 
under this section may seek judicial review under 5 U.S.C. chapter 7.

Subpart C--MCSAP Required Compatibility Review

Sec.  350.301   What is the purpose of this subpart?

    The purpose of this subpart is to assist States receiving MCSAP 
funds to address compatibility, including the availability of variances 
or exemptions allowed under Sec.  350.305 or Sec.  350.307, to:
    (a) Promote adoption and enforcement of compatible safety laws and 
regulations, standards, and orders;
    (b) Provide for a continuous review of safety laws and regulations, 
standards, and orders;
    (c) Establish deadlines for States to achieve compatibility; and
    (d) Provide States with a process for requesting exemptions for 
intrastate commerce.

Sec.  350.303   How does a State ensure compatibility?

    (a) General. The Lead State Agency is responsible for reviewing and 
analyzing State safety laws and regulations, standards, and orders to 
ensure compatibility.
    (b) Compatibility deadline. As soon as practicable, but no later 
than 3 years after the effective date of any new addition or amendment 
to the FMCSRs or HMRs, the State must amend its laws and regulations, 
standards, and orders to ensure compatibility.
    (c) State adoption of CMV law or regulation. A State must submit to 
FMCSA a copy of any new or amended State safety law and regulation, 
standard, and order relating to CMV safety immediately after its 
enactment or issuance and with the State's next annual compatibility 
review.
    (d) Annual State compatibility review. (1) A State must conduct a 
review of its laws and regulations, standards, and orders relating to 
CMV safety, including those of its political subdivisions, for 
compatibility and report in the CVSP, or annual update, as part of its 
application for funding under Sec.  350.209 each fiscal year.
    (2)(i) The State must demonstrate whether its laws and regulations, 
standards, and orders relating to CMV safety are identical to or have 
the same effect as a corresponding provision of the FMCSRs, are in 
addition to or more stringent than provisions of the FMCSRs, or are 
less stringent than a corresponding provision of the FMCSRs.
    (ii) If a State's law or regulation, standard, or order relating to 
CMV safety is identical to or has the same effect as the corresponding 
provision of the FMCSRs, the State provision is enforceable.
    (iii) If a State's law or regulation, standard, or order relating 
to CMV safety is in addition to or more stringent than the provisions 
of the FMCSRs, in order to be enforceable, the State must demonstrate 
that:
    (A) The State provision has a safety benefit;
    (B) It is compatible with the FMCSRs; and
    (C) Enforcement would not cause an unreasonable burden on 
interstate commerce.
    (iv) If a State's law or regulation, standard, or order relating to 
CMV safety is less stringent than the FMCSRs, it is not enforceable, 
unless it falls within the provisions of Sec. Sec.  350.305 or 350.307.
    (3) The State must demonstrate that its laws and regulations, 
standards, and orders relating to CMV safety applicable to both 
interstate and intrastate commerce are identical to the corresponding 
provision of the HMRs.
    (4) The State's laws and regulations, standards, and orders 
relating to CMV safety reviewed for the commercial driver's license 
compliance report are excluded from the compatibility review.
    (5) Definitions of words or terms in a State's laws and 
regulations, standards, and orders relating to CMV safety must be 
compatible with those in the FMCSRs and HMRs.
    (e) Reporting to FMCSA. (1) The reporting required by paragraph (d) 
of this section, to be submitted with the CVSP or annual update, must 
include:
    (i) A copy of any State law or regulation, standard, or order 
relating to CMV safety that was adopted or amended since the State's 
last report; and
    (ii) A certification that states the annual review was performed 
and State laws and regulations, standards, and orders relating to CMV 
safety remain compatible, and that provides the name of the individual 
responsible for the annual review.
    (2) If State laws and regulations, standards, and orders relating 
to CMV safety are no longer compatible, the certifying official must 
explain the State's plan to correct the discrepancy.
    (f) FMCSA response. Not later than 10 days after FMCSA determines 
that a State law or regulation, standard, or order may not be enforced, 
FMCSA must give written notice of the decision to the State.
    (g) Waiver of determination. (1) A State or any person may petition 
the Administrator for a waiver of a decision by the Administrator that 
a State law or regulation, standard, or order may not be enforced.
    (2) Before deciding whether to grant or deny a waiver under this 
paragraph, the Administrator shall give the petitioner an opportunity 
for a hearing on the record.
    (3) If the State or person demonstrates to the satisfaction of the 
Administrator that the waiver is consistent with the public interest 
and the safe operation of CMVs, the Administrator shall grant the 
waiver as expeditiously as practicable.

Sec.  350.305   What specific variances from the FMCSRs are allowed for 
State laws and regulations and not subject to Federal jurisdiction?

    (a) General. (1) Except as otherwise provided in this section, a 
State may exempt a CMV from all or part of its laws or regulations 
applicable to intrastate commerce, if the gross vehicle weight rating, 
gross combination weight rating, gross vehicle weight, or gross 
combination weight does not equal or

[[Page 44186]]

exceed 11,801 kilograms (26,001 pounds).
    (2) A State may not exempt a CMV from laws or regulations under 
paragraph (a)(1) of this section if the vehicle:
    (i) Transports hazardous materials requiring a placard; or
    (ii) Is designed or used to transport 16 or more people, including 
the driver.
    (b) Non-permissible exemptions--Type of business operation. (1) 
Subject to paragraph (b)(2) of this section and Sec.  350.307, State 
laws and regulations applicable to intrastate commerce may not grant 
exemptions based on the type of transportation being performed (e.g., 
for-hire carrier, private carrier).
    (2) A State may retain those exemptions from its motor carrier 
safety laws and regulations that were in effect before April 1988, are 
still in effect, and apply to specific industries operating in 
intrastate commerce, provided the scope of the original exemption has 
not been amended.
    (c) Non-permissible exemptions--Distance. (1) Subject to paragraph 
(c)(2) of this section, State laws and regulations applicable to 
intrastate commerce must not include exemptions based on the distance a 
motor carrier or driver operates from the work reporting location.
    (2) Paragraph (c)(1) of this section does not apply to distance 
exemptions contained in the FMCSRs.
    (d) Hours of service. State hours-of-service limitations applied to 
intrastate transportation may vary to the extent that they allow:
    (1) A 12-hour driving limit, provided that a driver of a CMV is not 
permitted to drive after having been on duty more than 16 hours;
    (2) Driving prohibitions for drivers who have been on duty 70 hours 
in 7 consecutive days or 80 hours in 8 consecutive days; or
    (3) Extending the 100-air mile radius under Sec.  395.1(e)(1)(i) to 
a 150-air mile radius.
    (e) Age of CMV driver. All intrastate CMV drivers must be at least 
18 years of age.
    (f) Driver physical conditions. (1) Intrastate drivers who do not 
meet the physical qualification standards in Sec.  391.41 of this 
chapter may continue to be qualified to operate a CMV in intrastate 
commerce if:
    (i) The driver was qualified under existing State law or regulation 
at the time the State adopted physical qualification standards 
consistent with the Federal standards in Sec.  391.41 of this chapter;
    (ii) The otherwise non-qualifying medical or physical condition has 
not substantially worsened; and
    (iii) No other non-qualifying medical or physical condition has 
developed.
    (2) The State may adopt or continue programs granting variances to 
intrastate drivers with medical or physical conditions that would 
otherwise be non-qualifying under the State's equivalent of Sec.  
391.41 of this chapter if the variances are based on sound medical 
judgment combined with appropriate performance standards ensuring no 
adverse effect on safety.
    (3) A State that has in effect physical qualification standards or 
variances continued in effect or adopted by the State under this 
paragraph for drivers operating CMVs in intrastate commerce has the 
option not to adopt laws and regulations that establish a separate 
registry of medical examiners trained and qualified to apply such 
physical qualification standards or variances.
    (g) Additional variances. A State may apply to the Administrator 
for a variance from the FMCSRs not otherwise covered by this section 
for intrastate commerce. The variance will be granted only if the State 
satisfactorily demonstrates that the State safety law or regulation, 
standard, or order:
    (1) Achieves substantially the same purpose as the similar Federal 
regulation;
    (2) Does not apply to interstate commerce; and
    (3) Is not likely to have an adverse impact on safety.

Sec.  350.307   How may a State obtain a new exemption for State laws 
and regulations for a specific industry involved in intrastate 
commerce?

    FMCSA will only consider a State's request to exempt a specific 
industry from all or part of a State's laws or regulations applicable 
to intrastate commerce if the State submits adequate documentation 
containing information allowing FMCSA to evaluate:
    (a) The type and scope of the industry exemption request, including 
the percentage of the industry it affects, number of vehicles, mileage 
traveled, and number of companies it involves;
    (b) The type and scope of the requirement to which the exemption 
would apply;
    (c) The safety performance of that specific industry (e.g., crash 
frequency, rates, and comparative figures);
    (d) Inspection information (e.g., number of violations per 
inspection, and driver and vehicle out-of-service information);
    (e) Other CMV safety regulations that other State agencies not 
participating in MCSAP enforce;
    (f) The commodity the industry transports (e.g., livestock or 
grain);
    (g) Similar exemptions granted and the circumstances under which 
they were granted;
    (h) The justification for the exemption; and
    (i) Any identifiable effects on safety.

Sec.  350.309   What are the consequences if a State has provisions 
that are not compatible?

    (a) General. To remain eligible for MCSAP funding, a State may not 
have in effect or enforce any State law or regulation, standard, or 
order relating to CMV safety in commerce that the Administrator finds 
not to be compatible.
    (b) Process. FMCSA may initiate a proceeding to withdraw the 
current CVSP approval or withhold MCSAP funds in accordance with Sec.  
350.231:
    (1) If a State enacts a law or regulation, standard, or order 
relating to CMV safety that is not compatible;
    (2) If a State fails to adopt a new or amended FMCSR or HMR within 
3 years of its effective date; or
    (3) If FMCSA finds, based on its own initiative or on a petition of 
a State or any person, that a State law, regulation, or enforcement 
practice relating to CMV safety, in either interstate or intrastate 
commerce, is not compatible.
    (c) Hazardous materials. Any decision regarding the compatibility 
of a State law or regulation, standard, or order relating to CMV safety 
with the HMRs that requires an interpretation will be referred to the 
Pipeline and Hazardous Materials Safety Administration of the United 
States Department of Transportation for interpretation before 
proceeding under Sec.  350.231.

Subpart D--High Priority Program

Sec.  350.401   What is the High Priority Program?

    The High Priority Program is a competitive financial assistance 
program available to States, local governments, Federally-recognized 
Indian tribes, other political jurisdictions, and other persons to 
carry out high priority activities and projects that augment motor 
carrier safety activities and projects. The High Priority Program also 
promotes the deployment and use of innovative technology by States for 
CMV information systems and networks. Under this program, the 
Administrator may make competitive grants to and enter into cooperative 
agreements with eligible entities to carry out high priority activities 
and projects that augment motor carrier safety activities and projects. 
The Administrator also may award grants to

[[Page 44187]]

States for projects planned in accordance with the Innovative 
Technology Deployment Program.

Sec.  350.403   What are the High Priority Program objectives?

    FMCSA may use the High Priority Program funds to support, enrich, 
or evaluate CMV safety programs and to:
    (a) Target unsafe driving of CMVs and non-CMVs in areas identified 
as high-risk crash corridors;
    (b) Improve the safe and secure movement of hazardous materials;
    (c) Improve safe transportation of goods and passengers in foreign 
commerce;
    (d) Demonstrate new technologies to improve CMV safety;
    (e) Support participation in PRISM and safety data improvement 
projects by Lead State Agencies:
    (1) Before October 1, 2020, to achieve full participation in PRISM; 
and
    (2) Beginning on October 1, 2020, or once full participation in 
PRISM is achieved, whichever is sooner, to conduct special initiatives 
or projects that exceed routine operations for participation;
    (f) Support participation in PRISM and safety data improvement 
projects by entities other than Lead State Agencies;
    (g) Support safety data improvement projects conducted by:
    (1) Lead State Agencies for projects that exceed MCSAP safety data 
requirements; or
    (2) Entities other than Lead State Agencies for projects that meet 
or exceed MCSAP safety data requirements;
    (h) Advance the technological capability and promote the Innovative 
Technology Deployment of intelligent transportation system applications 
for CMV operations;
    (i) Increase public awareness and education on CMV safety; and
    (j) Otherwise improve CMV safety.

Sec.  350.405   What conditions must an applicant meet to qualify for 
High Priority Program funds?

    (a) States. To qualify for High Priority Program funds, a State 
must:
    (1) Participate in MCSAP under subpart B of this part; and
    (2) Prepare a proposal that is responsive to the High Priority 
Program Notice of Funding Opportunity (NOFO).
    (b) Other applicants. To qualify for High Priority Program funds, 
applicants other than States must, to the extent applicable:
    (1) Prepare a proposal that is responsive to the NOFO;
    (2) Except for Federally-recognized Indian tribes, coordinate the 
proposal with the Lead State Agency to ensure the proposal is 
consistent with State and national CMV safety program priorities;
    (3) Certify that the applicant has the legal authority, resources, 
and trained and qualified personnel necessary to perform the functions 
specified in the proposal;
    (4) Designate an individual who will be responsible for 
implementation, reporting, and administering the approved proposal and 
who will be the primary contact for the project;
    (5) Agree to prepare and submit all reports required in connection 
with the proposal or other conditions of the grant or cooperative 
agreement;
    (6) Agree to use the forms and reporting criteria required by the 
Lead State Agency or FMCSA to record work activities to be performed 
under the proposal;
    (7) Certify that a political jurisdiction will impose sanctions for 
violations of CMV and driver laws and regulations that are consistent 
with those of the State; and
    (8) Certify participation in national databases appropriate to the 
project.

Sec.  350.407   How and when does an eligible entity apply for High 
Priority Program funds?

    FMCSA publishes application instructions and criteria for eligible 
activities to be funded under this subpart in a NOFO at least 30 days 
before the financial assistance program application period closes.

Sec.  350.409   What response will an applicant receive under the High 
Priority Program?

    (a) Approval. If FMCSA awards a grant or cooperative agreement, the 
applicant will receive a grant agreement to execute.
    (b) Denial. If FMCSA denies the grant or cooperative agreement, the 
applicant will receive a notice of denial.

Sec.  350.411   How long are High Priority Program funds available to a 
recipient?

    (a) General. High Priority Program funds related to motor carrier 
safety activities under Sec.  350.403 paragraphs (a) through (g), (i), 
and (j) obligated to a recipient are available for the rest of the 
fiscal year that the funds are obligated and the next 2 full fiscal 
years.
    (b) Innovative Technology Deployment. High Priority Program funds 
for Innovative Technology Deployment activities under Sec.  350.403(h) 
obligated to a State are available for the rest of the fiscal year that 
the funds were obligated and the next 4 full fiscal years.

Sec.  350.413   What are the Federal and recipient shares of costs 
incurred under the High Priority Program?

    (a) Federal share. FMCSA will reimburse at least 85 percent of the 
eligible costs incurred under the High Priority Program.
    (b) Match. In-kind contributions are acceptable in meeting the 
recipient's matching share under the High Priority Program if they 
represent eligible costs, as established by 2 CFR parts 200 and 1201 
and FMCSA policy.
    (c) Waiver. The Administrator reserves the right to reduce or waive 
the recipient's matching share in any fiscal year:
    (1) As announced in the NOFO; or
    (2) As determined by the Administrator on a case-by-case basis.

Sec.  350.415   What types of activities and projects are eligible for 
reimbursement under the High Priority Program?

    Activities that fulfill the objectives in Sec.  350.403 are 
eligible for reimbursement under the High Priority Program.

Sec.  350.417   What specific costs are eligible for reimbursement 
under the High Priority Program?

    (a) Costs eligible for reimbursement. All costs relating to 
activities eligible for reimbursement must be necessary, reasonable, 
allocable, and allowable under this subpart and 2 CFR parts 200 and 
1201. The eligibility of specific costs for reimbursement is addressed 
in the NOFO and is subject to review and approval by FMCSA
    (b) Ineligible costs. High Priority Program funds may not be used 
for the:
    (1) Acquisition of real property or buildings; or
    (2) Development, implementation, or maintenance of a State registry 
of medical examiners.

PART 355--[Removed and Reserved]

0
2. Under the authority of 49 U.S.C. 504 and 31101 et seq., remove and 
reserve part 355, consisting of Sec. Sec.  355.1 through 355.25 and 
appendix A to part 355.

PART 388--[Removed and Reserved]

0
3. Under the authority of 49 U.S.C. 113 and 502, remove and reserve 
part 388, consisting of Sec. Sec.  388.1 through 388.8.

    Issued under authority delegated in 49 CFR 1.87.

    Dated: August 12, 2019.
Raymond P. Martinez,
Administrator.
[FR Doc. 2019-17763 Filed 8-21-19; 8:45 am]
 BILLING CODE 4910-EX-P