Document ID: FMCSA-2011-0321-0001
Agency: fmcsa
Document Type: Proposed Rule
Title: Patterns of Safety Violations by Motor Carrier Management
Posted Date: 2012-11-13T05:00Z

[Federal Register Volume 77, Number 219 (Tuesday, November 13, 2012)]
[Proposed Rules]
[Pages 67613-67624]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-27569]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Parts 385 and 386

[Docket No. FMCSA-2011-0321]
RIN 2126-AB42

Patterns of Safety Violations by Motor Carrier Management

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

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: FMCSA proposes amendments to its regulations that would enable 
the Agency to suspend or revoke the operating authority registration of 
motor carriers that have

[[Page 67614]]

shown egregious disregard for safety compliance or that permit persons 
who have shown egregious disregard for safety compliance to act on 
their behalf. These amendments would implement section 4113 of the 
Safe, Accountable, Flexible, Efficient Transportation Equity Act: A 
Legacy for Users (SAFETEA-LU) as amended by section 32112 of the Moving 
Ahead for Progress in the 21st Century Act (MAP-21), and are designed 
to enhance the safety of commercial motor vehicle (CMV) operations on 
our nation's highways.

DATES: You must submit comments on or before January 14, 2013.

ADDRESSES: You may submit comments identified by docket number FMCSA-
2011-0321 using any one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.
     Fax: 202-493-2251.
     Mail: Docket Management Facility (M-30), U.S. Department 
of Transportation, West Building Ground Floor, Room W12-140, 1200 New 
Jersey Avenue SE., Washington, DC 20590-0001.
     Hand delivery: Same as mail address above, between 9 a.m. 
and 5 p.m., e.t., Monday through Friday, except Federal holidays. The 
telephone number is 202-366-9329.
    To avoid duplication, please use only one of these four methods. 
See the ``Public Participation and Request for Comments'' heading under 
the SUPPLEMENTARY INFORMATION section below for instructions on 
submitting comments.

FOR FURTHER INFORMATION CONTACT: If you have questions on this proposed 
rule, call or email Juan Moya, Transportation Specialist, Enforcement 
Division, Federal Motor Carrier Safety Administration, telephone: 202-
366-4844; email: juan.moya@dot.gov. If you have questions on viewing or 
submitting material to the docket, call Renee V. Wright, Program 
Manager, Docket Operations, telephone 202-366-9826.

SUPPLEMENTARY INFORMATION: 

Public Participation and Request for Comments

    FMCSA encourages you to participate in this rulemaking by 
submitting comments and related materials.

Submitting Comments

    If you submit a comment, please include the docket number for this 
rulemaking (FMCSA-2011-0321), 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 phone number in the body of your 
document so the Agency can contact you if it has questions regarding 
your submission.
    To submit your comment online, go to http://www.regulations.gov and 
click on the ``Submit a Comment'' box, which will then become 
highlighted in blue. In the ``Document Type'' drop down menu, select 
``Rules,'' insert ``FMCSA-2011-0321'' in the ``Keyword'' box, and click 
``Search.'' When the new screen appears, click on ``Submit a Comment'' 
in the ``Actions'' column. 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.

Viewing Comments and Documents

    To view comments, as well as documents mentioned in this preamble 
as being available in the docket, go to http://www.regulations.gov and 
click on the ``Read Comments'' box in the upper right hand side of the 
screen. Then, in the ``Keyword'' box, insert ``FMCSA-2011-0321'' and 
click ``Search.'' Next, click ``Open Docket Folder'' in the ``Actions'' 
column. Finally, in the ``Title'' column, click on the document you 
would like 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., 
e.t., Monday through Friday, except Federal holidays.

Privacy Act

    All comments received will be posted without change to http://www.regulations.gov and will include any personal information you have 
provided. Anyone is able to search the electronic form for all comments 
received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review DOT's 
complete Privacy Act Statement in the Federal Register published on 
January 17, 2008 (73 FR 3316), or you may visit http://edocket.access.gpo.gov/2008/pdf/E8-785.pdf.

Background

    Implementation of this proposed rule would enable the Agency to 
suspend or revoke the operating authority registration of motor 
carriers that have shown egregious disregard for safety compliance, 
permit persons who have shown egregious disregard for safety compliance 
to exercise controlling influence over their operations or operate 
multiple entities under common control to conceal noncompliance with 
safety regulations. Motor carriers that engage in such conduct may face 
suspension or revocation of their operating authority registration. 
FMCSA acknowledges that loss of operating authority registration is a 
significant penalty, but the Agency believes this rule is necessary and 
appropriate for the small number of motor carriers that engage in the 
most egregious instances of noncompliance.
    FMCSA has determined that each year a small number of motor 
carriers have attempted to avoid regulatory compliance or mask or 
otherwise conceal noncompliance by submitting new applications for 
registration, often under a different name, to continue operations 
after being placed out of service. Motor carriers and individuals do 
this for a variety of reasons that include avoiding payment of civil 
penalties, circumventing denial of operating authority registration 
based on a determination that they are not willing or able to comply 
with the applicable statutes or regulations, or avoiding a negative 
compliance history. Other motor carriers attempt to avoid compliance, 
or mask or otherwise conceal noncompliance, by creating or using an 
affiliated company under common operational control. They shift 
customers, vehicles, drivers, and other operational activities to one 
of the affiliated companies when FMCSA places one of the other commonly 
controlled companies out of service.
    On August 8, 2008, a fatal bus crash occurred in Sherman, Texas, 
highlighting the danger posed by motor carriers and other persons who 
avoid regulatory compliance or mask or otherwise conceal noncompliance. 
Seventeen motorcoach passengers died, and the driver and 38 other 
passengers received minor-to-serious injuries. The investigations 
conducted by FMCSA and the National Transportation Safety Board 
revealed that the motor carrier was operating without authority and a 
reincarnation of another bus company

[[Page 67615]]

that had been recently placed out of service for safety violations and 
that both companies were under the control of the same person. FMCSA 
determined that the companies' flagrant disregard for safety under this 
person's control demonstrated a hazard to the safety of the motoring 
public.
    Based on these findings, FMCSA instituted a vetting process for 
for-hire passenger and household goods carriers that involves a 
comprehensive review of registration applications to determine whether 
the applicants are reincarnations or affiliates of other motor carriers 
with negative compliance histories or are otherwise not willing and 
able to comply with the applicable regulations. Although the vetting 
process was a significant improvement to the previous registration 
review and regulatory compliance process, it is not a complete solution 
to the problem of regulatory avoidance because it does not impose 
sanctions, and, therefore, deter, the motor carriers or individuals who 
engage in or condone egregious disregard for safety compliance.
    The Sherman crash is but one example that demonstrates how the 
practice of avoiding compliance or masking or otherwise concealing 
noncompliance to circumvent Agency enforcement action or to avoid a 
negative safety compliance history creates an unacceptable risk of harm 
to the public, resulting in the continued operation of at-risk carriers 
and impeding FMCSA's ability to execute its safety mission. This rule 
would help address these problems by providing a significant 
enforcement tool that allows the Agency to suspend, or revoke the 
operating authority registration of motor carriers that have shown 
egregious disregard for safety compliance, permit persons who have 
shown egregious disregard for safety compliance to exercise controlling 
influence on their operations or operate multiple entities under common 
control to conceal noncompliance with safety regulations.
    Section 31135 of title 49, United States Code, originally enacted 
as Sec.  4113 of SAFETEA-LU (Pub. L. 109-59, 119 Stat. 1144) and 
subsequently amended by Sec.  32112 of MAP-21 (Pub. L. 112-141, 126 
Stat. 405), authorizes FMCSA to withhold, suspend, amend, or revoke the 
operating authority registration of a motor carrier if it or any person 
has engaged in a pattern or practice of avoiding compliance, or 
concealing noncompliance with regulations governing CMV safety 
prescribed under 49 U.S.C., Chapter 311, subchapter III. That section, 
as amended, also permits FMCSA to revoke the individual operating 
authority registration of any officer of a motor carrier that engages 
in or has engaged in a pattern or practice of, or assisted in avoiding 
compliance, or masking or otherwise concealing noncompliance while 
serving as an officer of such motor carrier. FMCSA is required to issue 
standards to implement the authority granted in Sec.  31135.
    To assist the Agency in developing those standards, FMCSA tasked 
the Motor Carrier Safety Advisory Committee (MCSAC) with identifying 
ideas and concepts that FMCSA should consider. On June 21, 2011, the 
MCSAC issued a number of recommendations, some of which formed the 
foundation for this proposed rule described below. These 
recommendations include the concepts that a pattern is both widespread 
and continuing over time, involves more than isolated violations, and 
does not require a specific number of violations. The Agency also 
embraced the idea that the Agency would have to exercise discretion to 
identify those motor carriers whose officers have shown egregious 
disregard for safety compliance.

Legal Basis for the Rulemaking

    The FMCSA has authority, delegated by the Secretary of 
Transportation (Secretary) under 49 CFR 1.87, to establish the minimum 
safety standards governing the operation and equipment of a motor 
carrier operating in interstate commerce (49 U.S.C. 31136(a) and 
31502(b)). Also, as amended by section 4114 of SAFETEA-LU, 49 U.S.C. 
31144(a) requires that the Secretary shall determine whether an owner 
or operator is fit to safely operate CMVs; periodically update the 
safety determinations of motor carriers; and prescribe, by regulation, 
penalties for violations of applicable commercial safety fitness 
requirements.
    Section 31135 of title 49, United States Code, was originally 
enacted as part of Sec.  4113 of SAFETEA-LU and was subsequently 
amended by Sec.  32112 of MAP-21. Section 31135 requires employers and 
employees to comply with FMCSA's safety regulations that apply to the 
employees' and the employers' conduct. It prohibits motor carriers from 
using common ownership, common management, common control or common 
familial relationships to avoid compliance or mask or otherwise conceal 
noncompliance, or a history of noncompliance. It also authorizes FMCSA 
to withhold,\1\ suspend, amend, or revoke the operating authority 
registration of a motor carrier if it or any person has engaged in a 
pattern or practice of avoiding compliance, or concealing noncompliance 
with regulations governing CMV safety prescribed under 49 U.S.C., 
Chapter 311, subchapter III. FMCSA may suspend, amend, or revoke the 
individual registration of an officer of a motor carrier who has 
engaged in a pattern or practice of or assisted in avoiding compliance, 
or masking or otherwise concealing noncompliance while serving as an 
officer of such motor carrier. FMCSA is required to establish standards 
implementing Sec.  31135 through rulemaking.
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    \1\ Although MAP-21 includes authority for FMCSA to withhold 
operating authority registration under Sec.  31135, FMCSA has 
elected not to incorporate that authority into this proposed rule. 
The Agency has existing authority to withhold operating authority 
registration and will continue to exercise this authority under its 
current registration process.
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    FMCSA relies on 49 U.S.C. 13902, 13905, 31134, and 31135 for the 
authority and procedures to suspend and revoke operating authority 
registration in this proposed rule. The Motor Carrier Act of 1935 (Pub. 
L. 74-255, 49 Stat. 543) authorized the Interstate Commerce Commission 
(ICC) to issue operating authority registration to motor carriers, 
brokers, and freight forwarders subject to its jurisdiction and to 
suspend or revoke such operating authority registration for willful 
failure to comply with applicable statutes and regulations. The ICC 
Termination Act of 1995 (Pub. L. 104-88, 109 Stat. 803) transferred 
this authority to the Secretary by enacting 49 U.S.C. 13902 
(establishing standards for issuing operating authority registration) 
and 13905 (establishing standards and procedures for suspending and 
revoking operating authority registration). Section 4113 of SAFETEA-LU 
amended 49 U.S.C. 13902 to authorize FMCSA to deny an application for 
operating authority registration of a for-hire motor carrier if the 
motor carrier is not willing and able to comply with the duties of 
employers and employees established under 49 U.S.C. 31135. In addition, 
section 32105 of MAP-21 created new 49 U.S.C. 31134 establishing 
requirements for motor carriers seeking to obtain operating authority 
registration and USDOT numbers. This new section authorizes FMCSA to 
withhold, suspend or revoke operating authority registration for 
failing to disclose, among other things, common management or control 
with any other person or applicant for operating authority registration 
or any other person or applicant for operating authority registration 
that has been determined to be unfit, unwilling or

[[Page 67616]]

unable to comply with the requirements for registration. The changes 
enacted as a part of MAP-21 are effective October 1, 2012.

Section-by-Section Analysis

    FMCSA proposes to amend 49 CFR parts 385 and 386 in the following 
ways.

Section 385.901

    The proposed rule would apply to for-hire motor carriers, 
employers, officers, or other persons subject to FMCSA's safety 
jurisdiction that are also required to register (have operating 
authority) under 49 U.S.C. 13902. This would include for-hire motor 
carriers that transport passengers and/or property, including household 
goods carriers and hazardous materials carriers. The rule would not 
apply to private motor carriers and for-hire motor carriers that are 
exempt from registering with the Agency under section 13902 because of 
the commodities they haul or the nature of the services they provide.

Section 385.903

    FMCSA proposes to add new Sec.  385.903, which would define the 
terms ``Agency Official'' and ``officer.''
    The term ``Agency Official'' would mean the Director of FMCSA's 
Office of Enforcement and Compliance or his or her designee. The Agency 
Official is the person within FMCSA authorized to initiate suspension 
(Sec.  385.913) or revocation proceedings (Sec.  385.915) and rule on 
petitions for rescission (Sec.  385.917) on behalf of the Agency, as 
described below.
    The term ``officer'' would identify those individuals whose conduct 
would trigger the proposed rule's suspension and revocation procedures. 
The definition is identical to the statutory definition codified at 49 
U.S.C. 31135. It would make clear that a person may be an officer not 
only because of the title or position that person holds, but also 
because of the functions he or she performs or the control the person 
exercises over the operations of the motor carrier. This could extend 
beyond just direct employees of the company, including, but not limited 
to, contractors and consultants.
    The term ``motor carrier'' when used in this proposed rule would 
mean any motor carrier, employer, officer or other person, however 
characterized, required to register under 49 U.S.C. 13902.

Section 385.905

    Section 385.905 describes the conduct that could trigger suspension 
or revocation of a motor carrier's operating authority registration and 
how the Agency would determine whether that conduct occurred. Paragraph 
(a)(1) would set forth the Agency's authority to suspend or revoke the 
motor carrier's operating authority registration if it engages or has 
engaged in a pattern or practice of avoiding regulatory compliance or 
masking noncompliance. This paragraph would apply to any motor carrier 
that holds operating authority registration and has engaged in a 
pattern or practice of avoiding regulatory compliance or masking 
noncompliance.
    Paragraph (a)(2) would set forth the Agency's authority to suspend 
or revoke a motor carrier's operating authority registration if it 
permits any person to exercise controlling influence over the motor 
carrier's operations if that person engages or has engaged in a pattern 
or practice of avoiding regulatory compliance or masking noncompliance 
while acting on behalf of any motor carrier. This would include conduct 
the person engaged in on behalf of a previous or current motor carrier. 
A person exercising controlling influence could be an employee, 
contractor, consultant or other advisor acting on behalf the motor 
carrier, and the conduct triggering enforcement could have been 
undertaken by an employee, contractor, consultant or advisor acting on 
behalf of another motor carrier.
    A motor carrier would not necessarily avoid liability under the 
rule by asserting it was not aware that the person had previously 
engaged in a pattern or practice of avoiding compliance or masking 
noncompliance on behalf of another motor carrier. Motor carriers are 
responsible for evaluating the qualifications of people who act on 
their behalf or plan to engage to act on their behalf. They can do this 
by, among other things, reviewing the person's application, resume or 
work proposal, checking references, if any, and reviewing the person's 
history working in or with the motor carrier industry. If a person 
previously worked for or on behalf of motor carriers subject to FMCSA 
jurisdiction, it is possible to review previous motor carriers' safety 
performance history and registration status during the time the person 
was employed by or engaged to act on behalf of these previous motor 
carriers by accessing FMCSA's publically available information systems 
located at the Agency Web site http://www.fmcsa.dot.gov. Using these 
and other available resources may provide valuable information to help 
determine whether motor carriers should permit a person to exercise 
controlling influence over their operations.
    Paragraph (a)(3) would set forth the Agency's authority to suspend 
or revoke the operating authority registration of two or more motor 
carriers that use common ownership, common control, or common familial 
relationships to avoid regulatory compliance, or mask or otherwise 
conceal noncompliance. Under this subparagraph, motor carriers that use 
or create other motor carriers in an effort to avoid the consequences 
of regulatory noncompliance would be subject to suspension or 
revocation.
    Paragraph (b) would authorize FMCSA's Director of the Office of 
Enforcement and Compliance or his or her designee (the Agency Official) 
to exercise the authorities established in paragraph (a).

Section 385.907

    The Agency Official would determine whether a motor carrier or 
person acting on its behalf has avoided regulatory compliance or masked 
or otherwise concealed regulatory noncompliance based on the results of 
an investigation by FMCSA, State, or local enforcement personnel. A 
motor carrier or person acting on its behalf engages in this conduct 
when he, she or it, either individually or on behalf of another motor 
carrier, fails to or conceals failure to: (1) Comply with statutory or 
regulatory safety requirements; (2) comply with FMCSA, State, or local 
orders intended to redress violations of Federal regulatory safety 
requirements; (3) pay civil penalties for violations of regulatory 
safety requirements; or (4) respond to enforcement actions arising out 
of violations of regulatory safety requirements. Failure to respond to 
an enforcement action includes, but is not limited to, failure to: 
Respond to a Notice of Claim, participate in binding arbitration, 
respond to a demand for records, or respond to FMCSA correspondence if 
required. Regulatory safety requirements include statutory or 
regulatory requirements prescribed under 49 U.S.C. Chapter 311, 
subchapter III, which include 49 U.S.C. sections 31131-31151 and 49 CFR 
parts 380-387 and 390-398.

Section 385.909

    If the Agency Official concludes that the motor carrier or person 
acting on its behalf has failed, or concealed failure, to do one or 
more of the actions described in Sec.  385.907, the Agency Official 
would determine whether such conduct constitutes a pattern or practice 
of noncompliance or masking noncompliance by considering certain 
factors. These factors would include, but are not limited to, the 
frequency, remoteness in time or continuing nature

[[Page 67617]]

of the conduct; the extent to which the regulatory violations caused by 
the conduct create a risk to safety; the effect the conduct had on 
safety performance, taking into account crashes, deaths and injuries, 
if any; whether the motor carrier or person acting on its behalf knew 
or should have known the conduct violated regulatory requirements; 
existing or closed enforcement actions; whether the motor carrier or 
person acting on its behalf engaged in the conduct for the purpose of 
avoiding compliance; and the extent to which the person exercises a 
controlling influence on the motor carrier's operations, if applicable. 
Inadvertent, isolated, or sporadic violations of FMCSA's regulations 
generally would not rise to the level of a pattern or practice. To 
establish a pattern or practice, the Agency would look for evidence of 
knowledge, conduct, or intent that shows egregious disregard for 
FMCSA's safety regulations.

Section 385.911

    To determine whether two or more motor carriers have common 
ownership, common management, common control or common familial 
relationships, the Agency Official must determine whether there is 
substantial continuity between the motor carrier that has engaged in 
regulatory noncompliance and another motor carrier so as to conclude 
that one is merely the continuation of another. In making that 
determination, the Agency Official may consider, among other things, 
the following factors: (1) Whether there is a new or affiliated motor 
carrier that was used for the purpose of avoiding regulatory compliance 
or masking or otherwise concealing noncompliance; (2) the motor 
carriers' safety performance histories; (3) consideration exchanged for 
assets sold or transferred between motor carriers; (4) dates the motor 
carriers were created, dissolved or ceased operations; (5) whether and 
to what extent the motor carriers have shareholders, investors, 
officers, managers and employees in common; (6) whether and to what 
extent relationships exist between the motor carriers' shareholders, 
investors, officers, managers, employees or other persons; (7) whether 
and to what extent the motor carriers share or have proximity of 
physical or mailing addresses, telephone, fax numbers, or email 
addresses; (8) whether and to what extent the motor carriers share or 
have motor vehicle equipment in common; (9) whether and to what extent 
the motor carriers share or have continuity of liability insurance 
policies or coverage under such policies; (10) whether and to what 
extent the motor carriers use, share or take over each other's 
facilities and other physical assets; (11) continuity or commonality of 
nature and scope of operations, including customers for whom 
transportation is provided; and (12) advertising, corporate name, or 
other acts through which the motor carriers hold themselves out to the 
public. The Agency does not consider any one of these factors to be 
dispositive, and the proof of all twelve would not be required to 
indicate substantial continuity. When considered collectively, however, 
they would show whether two or more motor carriers are operationally 
the same.

Section 385.913

    If the Agency Official makes a determination in accordance with 
Sec.  385.905, Sec.  385.913(a) would authorize the Agency Official to 
issue an order suspending the motor carrier's registration. Paragraphs 
(b) through (e) would establish the procedures FMCSA would follow to 
suspend an motor carrier's registration.
    Under paragraph (b), the Agency Official would initiate a 
suspension proceeding by issuing an order directing the motor carrier 
to show good cause, within 30 days of service of the order, why its 
operating authority registration should not be suspended. The order 
would provide the motor carrier with notice of the alleged conduct and 
would explain how to respond to the order. If the proceeding is based 
on the conduct of another person, the Agency Official would be required 
to serve a copy on the person alleged to have engaged in the conduct 
giving rise to the order, and to inform the person that he or she may--
but is not required to--intervene by filing a response in the 
proceeding in accordance with the procedures in paragraph (c). Finally, 
the order would state that it would be effective on the 35th day after 
it was served, if the motor carrier or an intervening person does not 
respond appropriately.
    Paragraph (c) would establish an independent right for the person 
on whose conduct the proceeding is based to intervene in the suspension 
proceeding. This provision would give the person an opportunity to 
respond to allegations about his or her conduct to protect his or her 
interests, which may diverge from the interests of the motor carrier. 
If the person does not respond within 30 days of being served with the 
order, he or she would waive the right to participate in the 
proceeding. By declining to intervene at this stage, he or she would 
also waive the right to participate in any future proceedings that 
arise out of the initial show cause order, such as revocation, 
administrative review, or rescission proceedings under this proposed 
rule. When the motor carrier is a sole proprietor or other corporate 
structure under which the interests of the company and the person in 
question are one and the same, the person may want to specify that he 
or she is responding both as the motor carrier and the intervening 
person to preserve his or her right to participate in a proceeding at a 
later date as an intervening person in the event that the motor 
carrier's ownership structure changes.
    Under paragraph (d), the Agency Official who issued the order would 
review all responses to the order. In reviewing the responses, the 
Agency Official would consider, among other things, the factors 
described in proposed Sec. Sec.  385.907, 385.909 and/or 385.911. After 
reviewing the response, the Agency Official would take one of three 
actions. First, he or she could enter an order suspending the motor 
carrier's operating authority registration. Second, he or she could 
enter an order directing the motor carrier to come into compliance with 
this proposed rule. Based on the motor carrier's response and the 
factors described in proposed Sec. Sec.  385.907, 385.909 and/or 
385.911, an order directing compliance might be more appropriate than 
suspension. Third, the Agency Official could determine that neither 
suspension nor an order directing compliance is appropriate. In this 
case, the Agency Official would enter an order terminating the 
proceeding. The Agency Official could enter a termination order in a 
number of different circumstances. The Agency Official could terminate 
the proceeding after determining that the motor carrier or person 
acting on its behalf did not engage in the alleged conduct. 
Alternatively, the Agency Official could determine that although the 
motor carrier or person acting on its behalf had engaged in the alleged 
conduct, the motor carrier had already taken the appropriate remedial 
action, rendering an order unnecessary. In this example, the motor 
carrier might not be subject to an order under Sec.  385.905 but it 
could nonetheless remain subject to civil or criminal penalties under 
Sec.  385.921.
    If the Agency Official issues an order under paragraph (d) of this 
section, the motor carrier or the intervening person may submit a 
petition for administrative review with FMCSA's Assistant Administrator 
within 15 days of service of that order. The effective date of the 
order would be stayed, if either the

[[Page 67618]]

motor carrier or the intervening person seeks administrative review 
within the required timeframe, unless the Assistant Administrator finds 
good cause not to stay the order. Should neither the motor carrier nor 
the intervening person seek administrative review, the order would 
become a Final Agency Order 20 days after being served. Failure to 
submit a petition for administrative review would constitute a waiver 
of the right to contest the order.
    Paragraph (e) would establish the procedures for motor carriers and 
intervening persons to petition for administrative review of an order 
issued under this section. If a person did not intervene under 
paragraph (c), he or she would have waived the right to seek 
administrative review under this section. Any party seeking 
administrative review under this section would be limited to 
challenging errors of fact and/or law. The Assistant Administrator 
would review the petition(s), and his or her decision regarding the 
petition(s) would become the Final Agency Order.

Section 385.915

    The Agency Official would be able to initiate a proceeding to 
revoke the motor carrier's operating authority registration for failure 
to comply with a suspension or compliance order issued under Sec.  
385.913. FMCSA's ability to revoke a motor carrier's operating 
authority registration is limited to specific circumstances. Under 
FMCSA's current statutory authority, the Agency may revoke a motor 
carrier's operating authority registration only after: (1) Issuing an 
order to the registrant requiring compliance with the statute, an FMCSA 
regulation, or a condition of the operating authority registration; and 
(2) the registrant willfully does not comply with the order for a 
period of 30 days (49 U.S.C. 13905(d)). That means that, under this 
proposed rule, the Agency Official could only seek revocation if he or 
she determined that the motor carrier willfully failed to comply with 
the suspension or compliance order issued under Sec.  385.913 for at 
least 30 days. For that reason, there must be a separate procedure 
under which the Agency Official could issue a suspension or compliance 
order prior to initiating a revocation proceeding under Sec.  385.915.
    The procedure for commencing a revocation proceeding under Sec.  
385.915 would be similar to the procedure for commencing a suspension 
proceeding under Sec.  385.913. Under paragraph (b), the Agency 
Official would issue an order to the motor carrier directing it to show 
good cause within 30 days of service of the order why its operating 
authority registration should not be revoked for failure to comply with 
an order issued under Sec.  385.913. The order would provide the motor 
carrier with notice of the alleged violation and would explain how to 
respond to the order. The order would inform any person who intervened 
in the initial proceeding that he or she may--but is not required to--
intervene under paragraph (c) of this section. Any person who did not 
intervene in the initial proceeding in accordance with Sec.  385.913(c) 
would have waived the right to participate under this section and would 
not be entitled to submit an independent response. Finally, the order 
would inform the motor carrier that the order would be effective on the 
35th day after it was served if the motor carrier or an intervening 
person does not respond.
    Paragraph (c) would establish an independent right for the person 
to intervene in the revocation proceeding, provided he or she 
intervened in the initial proceeding under Sec.  385.913(c). If the 
person does not respond within 30 days of being served with the order, 
he or she waives the right to participate in the proceeding and any 
future proceedings that may arise out of the show cause order. This 
would include administrative review or rescission proceedings under 
this proposed rule.
    Under paragraph (d), the Agency Official who issued the order would 
review all responses. After reviewing the responses, the Agency 
Official would either enter an order revoking the motor carrier's 
operating authority registration or terminating the proceeding. If the 
Agency Official issues an order revoking operating authority 
registration, the motor carrier and the intervening person would within 
15 days of service have the right to seek administrative review of the 
order by the Assistant Administrator of the order. The effective date 
of the order would be stayed if either the motor carrier or intervening 
person seeks review, unless the Assistant Administrator finds good 
cause not to stay the order. If neither the motor carrier nor the 
intervening person seeks review, the order would become a Final Agency 
Order 20 days after being served. Failure to submit a petition for 
review would constitute a waiver of the right to contest the order. An 
order revoking registration under this section would remain in effect 
and prevent the motor carrier from obtaining new registration until 
that order is rescinded in accordance with Sec.  385.917. Paragraph (e) 
would provide that any party seeking review under this section must 
follow the procedures set forth in Sec.  385.913(e).

Section 385.917

    Section 385.917 would permit the motor carriers as well as 
intervening persons to file petitions for rescission of an order issued 
under this proposed rule suspending or revoking the motor carrier's 
operating authority registration. Rescission would be appropriate when 
a motor carrier or intervening person has taken action to correct the 
deficiencies that resulted in the suspension or revocation. Motor 
carriers or intervening persons could seek rescission of an order in 
addition to, or in lieu of, seeking administrative review. However, any 
person who does not intervene under Sec. Sec.  385.913(c) and/or 
385.915(c) would have waived the right to petition for rescission.
    Paragraph (b) would require that the petition be made in writing to 
the Agency Official who suspended or revoked the operating authority 
registration. Paragraph (c) would require the petitioning motor carrier 
or intervening person to include a copy of the order suspending or 
revoking the registration, a statement identifying the corrective 
action taken, and supporting documentation. Paragraph (d) would give 
the Agency Official 60 days in which to issue a written decision that 
includes the factual and legal basis for that decision.
    Paragraph (e) provides that, if the Agency Official grants the 
petition, the order rescinding the suspension or revocation would be a 
Final Agency Order. A motor carrier that obtains an order rescinding an 
order of suspension could resume operations without seeking additional 
authorization, as long as it was otherwise eligible under FMCSA's 
regulations. A motor carrier whose order of revocation is rescinded, 
however, must reapply for and receive operating authority registration 
as a new entrant under 49 CFR part 385 before resuming operations.
    Paragraph (f) would provide that if the Agency Official denied the 
petition for rescission, the motor carrier or intervening person could 
petition the Assistant Administrator for administrative review of this 
decision. Motor carriers or intervening persons would be required to 
serve a petition for review with the Assistant Administrator within 15 
days after service of the order denying the petition for rescission. 
The petitioner would be required to identify the disputed factual or 
procedural issues relevant to the denial of the petition for rescission 
and would not be permitted to challenge the underlying suspension or 
revocation order. Paragraph (g) would give the Assistant Administrator 
60 days to issue a written

[[Page 67619]]

decision, which would become the Final Agency Order.

Section 385.919

    Section 385.919 would clarify that orders issued under the proposed 
rule would not amend or supersede existing FMCSA orders, prohibitions, 
or requirements. Orders issued under the new rule would be separate 
from and in addition to existing orders, prohibitions, or requirements. 
Rescission of an order suspending or revoking operating authority 
registration under this proposed rule would not affect other suspension 
or revocation orders either pending or in effect at the time of 
rescission. Once an order is rescinded, a motor carrier would not be 
able to resume operations unless it was otherwise eligible under 
FMCSA's regulations and was in compliance with any other orders issued 
by the Agency.

Section 385.921

    Section 385.921 would clarify that existing statutory civil and 
criminal penalties and sanctions could apply to motor carriers subject 
to enforcement under this proposed rule. These motor carriers could be 
subject to civil and criminal penalties, regardless of whether the 
Agency Official determines that suspension, revocation, or other 
remedial action is appropriate. A motor carrier that takes corrective 
action after receiving notice of a show cause order, but before a final 
order is entered, would not necessarily avoid civil or criminal 
penalties. An intervening person or any other person whose conduct 
precipitates an enforcement action would not be subject to civil or 
criminal penalties under this section, if that person does not hold 
operating authority registration. Currently, maximum civil penalties 
for violations of Subchapter III of Title 49, United States Code (which 
includes section 31135) are $11,000 per violation. The criminal 
penalties for knowingly and willfully violating Subchapter III include 
up to one year's imprisonment and a fine not to exceed $25,000.

Section 385.923

    Section 385.923 would provide that the regulations governing the 
service of documents and the computation of time at 49 CFR Sec. Sec.  
386.6 and 386.8 would apply to proceedings under this proposed rule.

Appendix A to Part 386--Penalty Schedule; Violations of Notices and 
Orders

    This proposed rule would add a new paragraph (i) to Appendix A to 
Part 386, establishing a penalty of up to $11,000 for each day that a 
motor carrier operated in violation of an order suspending or revoking 
operating authority registration under this proposed rule based on 49 
U.S.C. 521(b)(2)(A), as adjusted for inflation by the Federal Civil 
Penalties Inflation Adjustment Act of 1990, as amended by the Debt 
Collection Improvement Act of 1996.

Rulemaking Analyses

Executive Order 12866 (Regulatory Planning and Review) as Supplemented 
by E.O. 13563 and DOT Regulatory Policies and Procedures

    This action does not meet the criteria for a significant regulatory 
action, either as specified in Executive Order 12866 as supplemented by 
Executive Order 13563 (76 FR 3821, January 18, 2011) or within the 
meaning of the DOT regulatory policies and procedures (44 FR1103, 
February 26, 1979). The estimated economic costs of the rule do not 
exceed the $100 million annual threshold nor does the Agency expect the 
rule to have substantial Congressional or public interest. Therefore, 
this rule has not been formally reviewed by the Office of Management 
and Budget.
    FMCSA assessed the potential costs associated with this proposed 
rule. While there should be no cost associated with this rule, there 
could potentially be cost associated with the transfer to other firms 
of assets from motor carriers that have had their operating authority 
registration suspended or revoked, but found these costs to be 
insignificant. Moreover, these transfer costs could have been avoided 
by complying with the FMCSRs or declining to mask or otherwise conceal 
evidence of noncompliance with the FMCSRs. Motor carriers that have 
their operating authority registration suspended or revoked would lose 
revenue, but this revenue would be reallocated to other firms.

Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) 
requires Federal agencies to consider the effects of the regulatory 
action on small business and other small entities and to minimize any 
significant economic impact. The term ``small entities'' comprises 
small businesses and not-for-profit organizations that are 
independently owned and operated and are not dominant in their fields, 
and governmental jurisdictions with a population of less than 
50,000.\2\
---------------------------------------------------------------------------

    \2\ Regulatory Flexibility Act (5 U.S.C. 601 et seq.) see 
National Archives at http://www.archives.gov/federal-register/laws/regulaotry-flexibility/601.html.
---------------------------------------------------------------------------

    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 businesses. Under the Regulatory 
Flexibility Act, as amended by the Small Business Regulatory 
Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857), the 
proposed rule is not expected to have a significant economic impact on 
a substantial number of small entities. Consequently, I certify the 
proposed action would not have a significant economic impact on a 
substantial number of small entities. FMCSA invites comment from 
members of the public who believe there will be a significant impact 
either on small businesses or on governmental jurisdictions with a 
population of less than 50,000.

Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement 
Fairness Act of 1996 (Pub. L. 104-121), FMCSA wants to assist small 
entities in understanding this proposed rule so that they can better 
evaluate its effects on them 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, Juan Moya, 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 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).

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

[[Page 67620]]

$143.1 million (which is the value of $100 million in 2010 after 
adjusting for inflation) or more in any 1 year. Though this proposed 
rule would not result in such expenditure, FMCSA discusses the effects 
of this rule elsewhere in this preamble.

National Environmental Policy Act and Clean Air Act

    FMCSA analyzed this NPRM for the purpose of the National 
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.) and 
determined under its environmental procedures Order 5610.1, published 
February 24, 2004 (69 FR 9680), that this proposed action does not have 
any effect on the quality of the environment. Therefore, this NPRM is 
categorically excluded from further analysis and documentation in an 
environmental assessment or environmental impact statement under FMCSA 
Order 5610.1, paragraph 6(u) of Appendix 2. The Categorical Exclusion 
under paragraph 6(u) relates to regulations implementing ``Motor 
carrier identification and registration reports * * *'', which is the 
focus of this rulemaking. A Categorical Exclusion determination is 
available for inspection or copying in the regulations.gov Web site 
listed under ADDRESSES.
    In addition to the NEPA requirements to examine impacts on air 
quality, the Clean Air Act (CAA) as amended (42 U.S.C. 7401 et seq.) 
also requires FMCSA to analyze the potential impact of its actions on 
air quality and to ensure that FMCSA actions conform to State and local 
air quality implementation plans. No additional contributions to air 
emissions are expected from this rule and FMCSA expects the rule to not 
be subject to the Environmental Protection Agency's General Conformity 
Rule (40 CFR parts 51 and 93).
    FMCSA seeks comment on these determinations.

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).

Executive Order 12630 (Taking of Private Property)

    This proposed rule would not effect a taking of private property or 
otherwise have taking implications under Executive Order 12630, 
Governmental Actions and Interference with Constitutionally Protected 
Property Rights.

Executive Order 12988 (Civil Justice Reform)

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

Executive Order 13045 (Protection of Children)

    Executive Order 13045, ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (April 23, 1997, 62 FR 19885), requires 
that agencies issuing economically significant rules, which also 
concern an environmental health or safety risk that an Agency has 
reason to believe may disproportionately affect children, must include 
an evaluation of the environmental health and safety effects of the 
regulation on children. Section 5 of Executive Order 13045 directs an 
Agency to submit for a covered regulatory action an evaluation of its 
environmental health or safety effects on children. The FMCSA has 
preliminarily determined that this proposed rule is not a covered 
regulatory action as defined under Executive Order 13045. This 
determination is based upon the fact that this proposed rule is not 
economically significant under Executive Order 12866, because the 
changes proposed in this rule would not have an impact of $100 million 
or more in any given year. In addition, this proposal would not 
constitute an environmental health risk or safety risk that would 
disproportionately affect children.

Executive Order 13132 (Federalism)

    A rule has implications for federalism under Executive Order 13132, 
Federalism, if it has a substantial direct effect on State or local 
governments and would either preempt State law or impose a substantial 
direct cost of compliance on States or localities. FMCSA has analyzed 
this proposed rule under that Order and has determined that it does not 
have implications for federalism.

Executive Order 12372 (Intergovernmental Review)

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

Executive Order 13211 (Energy Supply, Distribution, or Use)

    The FMCSA has analyzed this proposed rule under Executive Order 
13211, ``Actions Concerning Regulations That Significantly Affect 
Energy Supply, Distribution, or Use.'' This proposal is not a 
significant energy action within the meaning of section 4(b) of the 
Executive Order. This proposal is a procedural action, is not 
economically significant, and would not have a significant adverse 
effect on the supply, distribution, or use of energy.

Privacy Impact Analysis

    FMCSA conducted a Privacy Threshold Analysis for the NPRM and 
determined that the rulemaking has privacy implications that will be 
addressed by modifying the following two documentations: FMCSA 
Enforcement Management Information System (EMIS), Privacy Impact 
Assessment (PIA) and DOT/FMCSA 002 System of Records Notice (SORN) for 
Motor Carrier Safety Proposed Civil and Criminal Enforcement Cases. 
These documents have been placed in the docket.

List of Subjects

49 CFR Part 385

    Administrative practice and procedure, Highway safety, Mexico, 
Motor carriers, Motor vehicle safety, Reporting and recordkeeping 
requirements.

49 CFR Part 386

    Administrative practice and procedure, Brokers, Freight forwarders, 
Hazardous materials transportation, Highway safety, Motor carriers, 
Motor vehicle safety, Penalties.

    For the reasons stated in the preamble, FMCSA proposes to amend 
title 49 CFR, Code of Federal Regulations, chapter III, to read as 
follows:

PART 385--SAFETY FITNESS PROCEDURES

    1. The authority citation for part 385 is revised to read as 
follows:

    Authority: 49 U.S.C. 113, 504, 521(b), 5105(e), 5109, 13901-
13905, 14701, 31133, 31135, 31136, 31137(a), 31144, 31148, and 
31502; Sec. 113(a), Pub. L. 103-311; Sec. 408, Pub. L. 104-88; Sec. 
350, Pub. L. 107-87; and 49 CFR 1.86.

    2. Add a new subpart K, consisting of Sec. Sec.  385.901 through 
385.923, to read as follows:

Subpart K--Pattern or Practice of Safety Violations by Motor Carrier 
Management
385.901 Applicability.
385.903 Definitions.
385.905 Suspension or revocation of registration.
385.907 Regulatory noncompliance.

[[Page 67621]]

385.909 Pattern or practice of avoiding, masking, or concealing.
385.911 Common ownership, management, control or familial 
relationship.
385.913 Suspension proceedings.
385.915 Revocation proceedings.
385.917 Petitions for rescission.
385.919 Other orders unaffected.
385.921 Penalties.
385.923 Service and computation of time.

Subpart K--Pattern or Practice of Safety Violations by Motor 
Carrier Management

Sec.  385.901  Applicability.

    The requirements in this subpart apply to for-hire motor carriers, 
employers, officers and persons registered under 49 U.S.C. 13902, 49 
CFR part 365, and 49 CFR part 368. When used in this subpart, the term 
``motor carrier'' includes all for-hire motor carriers, employers, 
officers and other persons, however designated, that are registered 
under 49 U.S.C. 13902, 49 CFR part 365, and 49 CFR part 368.

Sec.  385.903  Definitions.

    As used in this subpart:
    Agency Official means the Director of FMCSA's Office of Enforcement 
and Compliance or his or her designee.
    Officer means an owner, director, chief executive officer, chief 
operating officer, chief financial officer, safety director, vehicle 
maintenance supervisor, and driver supervisor of a motor carrier, 
regardless of the title attached to those functions, and any person, 
however designated, exercising controlling influence over the 
operations of a motor carrier.

Sec.  385.905  Suspension or revocation of registration.

    (a) General. (1) If a motor carrier engages or has engaged in a 
pattern or practice of avoiding compliance, or masking or otherwise 
concealing noncompliance, with regulations on commercial motor vehicle 
safety under this subchapter, FMCSA may suspend or revoke the motor 
carrier's registration.
    (2) If a motor carrier permits any person to exercise controlling 
influence over the motor carrier's operations and that person engages 
in or has engaged in a pattern or practice of avoiding compliance, or 
masking or otherwise concealing noncompliance, with regulations on 
commercial motor vehicle safety under this subchapter while acting on 
behalf of any motor carrier, FMCSA may suspend or revoke the motor 
carrier's registration.
    (3) If two or more motor carriers use common ownership, common 
management, common control, or common familial relationship to enable 
any or all such motor carriers to avoid compliance, or mask or 
otherwise conceal noncompliance with regulations under this subchapter, 
FMCSA may suspend or revoke the motor carriers' registrations.
    (b) Determination. (1) The Agency Official may issue an order to 
revoke or suspend a motor carrier's registration, or require compliance 
with this subpart, upon a determination that the motor carrier engages 
or has engaged in a pattern or practice of avoiding regulatory 
compliance or masking or otherwise concealing regulatory noncompliance.
    (2) The Agency Official may issue an order to revoke or suspend a 
motor carrier's registration, or require compliance with this subpart, 
upon a determination that the motor carrier permitted a person to 
exercise controlling influence over the motor carrier's operations if 
that person engages in or has engaged in a pattern or practice of 
avoiding regulatory compliance or masking or otherwise concealing 
regulatory noncompliance.
    (3) The Agency Official may issue an order to revoke or suspend two 
or more motor carriers' registrations, or require compliance with this 
subpart, upon a determination that the motor carriers use or have used 
common ownership, common management, common control, or common familial 
relationships to enable any or all such motor carriers to avoid 
compliance, or to mask or otherwise conceal noncompliance with 
regulations under this subchapter.

Sec.  385.907  Regulatory noncompliance.

    A motor carrier or person acting on behalf of a motor carrier 
avoids regulatory compliance or masks or otherwise conceals regulatory 
noncompliance by, independently or on behalf of another motor carrier, 
failing to or concealing failure to:
    (a) Comply with statutory or regulatory requirements prescribed 
under 49 U.S.C., Chapter 311, subchapter III;
    (b) Comply with an FMCSA or State order issued to redress 
violations of a statutory or regulatory requirement prescribed under 49 
U.S.C., Chapter 311, subchapter III;
    (c) Pay a civil penalty assessed for a violation of a statutory or 
regulatory requirement prescribed under 49 U.S.C., Chapter 311, 
subchapter III; or
    (d) Respond to an enforcement action for a violation of a statutory 
or regulatory requirement prescribed under 49 U.S.C., Chapter 311, 
subchapter III.

Sec.  385.909  Pattern or practice of avoiding, masking or concealing.

    The Agency Official may determine that a motor carrier or person 
acting on behalf of a motor carrier engages or has engaged in a pattern 
or practice of avoiding regulatory compliance, or masking or otherwise 
concealing regulatory noncompliance for purposes of this subpart, by 
considering, among other things, the following factors, which, in the 
case of persons acting on behalf of a motor carrier, may be related to 
conduct undertaken on behalf of any motor carrier:
    (a) The frequency, remoteness in time, or continuing nature of the 
conduct;
    (b) The extent to which the regulatory violations caused by the 
conduct create a risk to safety;
    (c) The degree to which the conduct has affected the safety of 
operations, including taking into account any crashes, deaths, or 
injuries associated with the conduct;
    (d) Whether the motor carrier or person acting on a motor carrier's 
behalf knew or should have known that the conduct violated applicable 
statutory or regulatory requirements;
    (e) Pending or closed enforcement actions, if any;
    (f) Whether the motor carrier or person acting on a motor carrier's 
behalf engaged in the conduct for the purpose of avoiding compliance or 
masking or otherwise concealing noncompliance; and
    (g) In the case of a person acting on a motor carrier's behalf, the 
extent to which the person exercises a controlling influence on the 
motor carrier's operations.

Sec.  385.911  Common ownership, management, control or familial 
relationship.

    (a) The Agency Official may determine that two or more motor 
carriers have common ownership, common management, common control or 
common familial relationship if there is substantial continuity between 
the motor carriers such that one is merely a continuation of the other.
    (b) In making the determination in paragraph (a) of this section, 
the Agency Official may consider, among other things, the following 
factors:
    (1) Whether a new or affiliated motor carrier was used for the 
purpose of avoiding compliance or masking or otherwise concealing 
noncompliance with the regulations prescribed under 49 U.S.C., Chapter 
311, subchapter III. In weighing this factor, the Agency Official may 
consider the stated business purpose for the creation of the new or 
affiliated motor carrier;

[[Page 67622]]

    (2) The motor carriers' safety performance histories, including, 
among other things, safety violations and enforcement actions, if any;
    (3) Consideration exchanged for assets sold or transferred between 
motor carriers;
    (4) Dates the motor carriers were created, dissolved or ceased 
operations;
    (5) Commonality of shareholders, investors, officers, managers and 
employees;
    (6) The relationships, if any, between the motor carriers' 
shareholders, investors, officers, managers, employees or other 
persons;
    (7) Commonality or proximity of physical or mailing addresses, 
telephone, fax numbers, or email addresses;
    (8) Identity of motor vehicle equipment;
    (9) Continuity of liability insurance policies or commonality of 
coverage under such policies;
    (10) Continuation of facilities and other physical assets;
    (11) Continuity or commonality of nature and scope of operations, 
including customers for whom transportation is provided; and
    (12) Continuation or commonality of advertising, corporate name, or 
other acts through which the motor carriers hold themselves out to the 
public.

Sec.  385.913  Suspension proceedings.

    (a) General. The Agency Official may issue an order to suspend a 
motor carrier's registration based on a determination made in 
accordance with Sec.  385.905.
    (b) Commencement of proceedings. The Agency Official commences a 
proceeding under this section by issuing an order, to the motor carrier 
and, if the proceeding is based on the conduct of another person, by 
also serving a copy on the person alleged to have engaged in the 
pattern or practice that resulted in a proceeding instituted under this 
section, which:
    (1) Provides notice that the Agency is considering whether to 
suspend the motor carrier's registration;
    (2) Provides notice of the factual and legal basis for the order;
    (3) Directs the motor carrier to show good cause within 30 days why 
its registration should not be suspended;
    (4) Informs the motor carrier that its response to the show cause 
order must be in writing and include all documentation, if any, the 
motor carrier wants considered;
    (5) Informs the motor carrier of the address and name of the person 
to whom the response should be directed and served;
    (6) Provides notice to the person(s) who are alleged to have 
engaged in the pattern or practice that resulted in the proceeding 
instituted under this section, if any, of their right to intervene in 
the proceeding; and
    (7) Informs the motor carrier that its registration will be 
suspended on the 35th day after service of the order, if the motor 
carrier or an intervening person does not respond to the order.
    (c) Right of individual person(s) to intervene. A person(s) alleged 
to have engaged in the pattern or practice that resulted in a 
proceeding instituted under this section may intervene in the 
proceeding. The person(s) may--but are not required to--serve a 
separate response and supporting documentation to an order served under 
paragraph (b) of this section, within 30 days of being served with the 
order. Failure to timely serve a response constitutes waiver of the 
right to intervene.
    (d) Review of response. The Agency Official will review the 
responses to the order to show cause and determine whether the motor 
carrier's registration should be suspended.
    (1) The Agency Official may take the following actions:
    (i) If the Agency Official determines that the motor carrier's 
registration should be suspended, he or she will enter an order 
suspending the registration;
    (ii) If the Agency Official determines that it is not appropriate 
to suspend the motor carrier's registration, he or she may enter an 
order directing the motor carrier to correct the compliance 
deficiencies; or
    (iii) If the Agency Official determines the motor carrier's 
registration should not be suspended and a compliance order is not 
warranted, he or she will enter an order terminating the proceeding.
    (2) If the Agency Official issues an order to suspend the motor 
carrier's registration, the order will:
    (i) Provide notice to the motor carrier and any intervening 
person(s) of the right to petition the Assistant Administrator for 
administrative review of the order within 15 days of service of the 
order suspending registration;
    (ii) Provide notice that a timely petition for administrative 
review will stay the effective date of the order unless the Assistant 
Administrator orders otherwise for good cause; and
    (iii) Provide notice that failure to timely petition for 
administrative review constitutes waiver of the right to contest the 
order suspending the registration and will result in the order becoming 
a Final Agency Order 20 days after it is served.
    (e) Administrative review. The motor carrier or the intervening 
person(s) may petition the Assistant Administrator for review of an 
order issued under this section. The petition must be in writing and 
served on the Assistant Administrator, Federal Motor Carrier Safety 
Administration, 1200 New Jersey Ave. SE., Washington, DC 20590-0001, 
Attention: Adjudications Counsel or by electronic mail to 
FMCSA.Adjudication@dot.gov. A copy of the petition must also be served 
on the Agency Official.
    (1) A petition for review must be served within 15 days of the 
service date of the order for which review is requested. Failure to 
timely request review waives the right to review.
    (2) A petition for review must include:
    (i) A copy of the order in dispute;
    (ii) A copy of the petitioner's response to the order in dispute, 
with supporting documents if any;
    (iii) A statement of all factual and procedural issues in dispute; 
and
    (iv) Written argument in support of the petitioner's position 
regarding the procedural or factual issues in dispute.
    (3) The Agency Official may serve a response to the petition for 
review no later than 15 days following service of the petition.
    (4) The Assistant Administrator may ask the parties to submit 
additional information or attend a conference to facilitate review.
    (5) The Assistant Administrator will issue a written decision on 
the petition for review within 30 days of the close of the time period 
for serving a response to the petition for review or the date of 
service of the response, whichever is earlier.
    (6) If a petition for review is timely served in accordance with 
this section, the disputed order is stayed, pending the Assistant 
Administrator's review. The Assistant Administrator may enter an order 
vacating the automatic stay in accordance with the following 
procedures:
    (i) The Agency Official may file a motion to vacate the automatic 
stay demonstrating good cause why the order should not be stayed. The 
Agency Official's motion must be in writing, state the factual and 
legal basis for the motion, be accompanied by affidavits or other 
evidence relied on, and be served on the petitioner and Assistant 
Administrator.
    (ii) The petitioner may file an answer in opposition, accompanied 
by affidavits or other evidence relied on. The answer must be served 
within 10 days of service of the motion.

[[Page 67623]]

    (iii) The Assistant Administrator will issue a decision on the 
motion to vacate within 10 days of the close of the time period for 
serving the answer to the motion. The 30-day period for review of the 
petition for review in paragraph (e)(5) of this section is tolled from 
the time the Agency Official's motion to lift a stay is served until 
the Assistant Administrator issues a decision on the motion.
    (7) The Assistant Administrator's decision on a petition for review 
of an order issued under this section constitutes the Final Agency 
Order.

Sec.  385.915  Revocation proceedings.

    (a) General. The Agency Official may issue an order to revoke a 
motor carrier's registration, if he or she determines that the motor 
carrier has willfully violated an order issued under Sec.  
385.913(d)(1)(i) or (ii), for a period of at least 30 days.
    (b) Commencement of proceedings. The Agency Official may commence a 
proceeding under this section by issuing an order to the motor carrier 
and serving a copy on the person(s), if any, who intervened under Sec.  
385.913(c). The order must:
    (1) Provide notice that the Agency is considering whether to revoke 
the motor carrier's registration;
    (2) Provide notice of the factual and legal basis for the order;
    (3) Direct the motor carrier to show good cause within 30 days why 
registration should not be revoked;
    (4) Inform the motor carrier that the response to the show cause 
order must be in writing and include all documentation, if any, the 
motor carrier wants considered;
    (5) Inform the motor carrier of the address and name of the person 
to whom the response should be directed and served;
    (6) Provide notice to the person(s), if any, who have intervened 
under Sec.  385.913(c) of their right to intervene in the proceeding; 
and
    (7) Inform the motor carrier that its registration will be revoked 
on the 35th day after service of the order if the motor carrier or an 
intervening person does not respond to the order.
    (c) Right of individual person(s) to intervene. The person(s) who 
exercised their right to intervene under Sec.  385.913(c) may--but are 
not required to--serve a separate response and supporting documentation 
to an order served under paragraph (b) of this section, within 30 days 
of being served with the order. Failure to timely serve a response 
constitutes waiver of the right to intervene. A person who did not 
intervene under Sec.  385.913(c) may not intervene under this section.
    (d) Review of response. The Agency Official will review the 
responses to the order to show cause and determine whether the motor 
carrier's registration should be revoked.
    (1) The Agency Official will take one of the following actions:
    (i) If the Agency Official determines the motor carrier's 
registration should be revoked, he or she will enter an order revoking 
the motor carrier's registration; or
    (ii) If the Agency Official determines the motor carrier's 
registration should not be revoked, he or she will enter an order 
terminating the proceeding.
    (2) If the Agency Official issues an order to revoke the motor 
carrier's registration, the order will:
    (i) Provide notice to the motor carrier and any intervening 
person(s) of the right to petition the Assistant Administrator for 
review of the order within 15 days of service of the order revoking the 
motor carrier's registration;
    (ii) Provide notice that a timely petition for review will stay the 
effective date of the order unless the Assistant Administrator orders 
otherwise for good cause; and
    (iii) Provide notice that failure to timely petition for review 
constitutes waiver of the right to contest the order revoking the motor 
carrier's registration and will result in the order becoming a Final 
Agency Order 20 days after it is served.
    (iv) Provide notice that a Final Agency Order revoking the motor 
carrier's registration will remain in effect and bar approval of any 
subsequent application for registration until rescinded by the Agency 
Official pursuant to Sec.  385.917.
    (e) Administrative review. The motor carrier or an intervening 
person may petition the Assistant Administrator for review of an order 
issued under this section by following the procedures set forth in 
Sec.  385.913(e).

Sec.  385.917  Petitions for rescission.

    (a) A motor carrier or intervening person may submit a petition for 
rescission of an order suspending or revoking registration under this 
subpart based on action taken to correct the deficiencies that resulted 
in the suspension or revocation.
    (b) A petition for rescission must be made in writing to the Agency 
Official.
    (c) A petition for rescission must include a copy of the order 
suspending or revoking the motor carrier's registration, a factual 
statement identifying all corrective action taken, and copies of 
supporting documentation.
    (d) The Agency Official will issue a written decision on the 
petition within 60 days of service of the petition. The decision will 
state the factual and legal basis for the decision.
    (e) If the Agency Official grants the petition, the written 
decision is the Final Agency Order. Rescinding an order revoking a 
motor carrier's registration does not have the effect of reinstating 
the revoked registration. In order to resume operations in interstate 
commerce, the motor carrier whose registration was revoked must reapply 
for registration as a new entrant under 49 CFR part 385 and comply with 
all applicable new entrant requirements.
    (f) If the Agency Official denies the petition, the petitioner may 
submit a petition for review of the denial with the Assistant 
Administrator, Federal Motor Carrier Safety Administration, 1200 New 
Jersey Ave. SE., Washington, DC 20590-0001, Attention: Adjudication 
Counsel, or by electronic mail to FMCSA.Adjudication@dot.gov. The 
petition for review of the denial must be served within 15 days of the 
service of the decision denying the petition for rescission. The 
petition for review must identify the disputed factual or procedural 
issues with respect to the denial of the petition for rescission. The 
petition for review may not, however, challenge the basis of the 
underlying suspension or revocation order.
    (g) The Assistant Administrator will issue a written decision on 
the petition for review within 60 days. The Assistant Administrator's 
decision constitutes the Final Agency Order.

Sec.  385.919  Other orders unaffected.

    If a motor carrier subject to an order issued under this subpart is 
or becomes subject to any other order, prohibition, or requirement of 
the FMCSA, an order issued under this subpart is in addition to, and 
does not amend or supersede the other order, prohibition, or 
requirement. A motor carrier subject to an order issued under this 
subpart remains subject to the suspension and revocation provisions of 
49 U.S.C. 13905 for violations of regulations governing their 
operations.

Sec.  385.921  Penalties.

    (a) Any motor carrier that the Agency determines engages or has 
engaged in a pattern or practice of avoiding regulatory compliance or 
masking noncompliance or violates an order issued under this subpart 
shall be subject to the civil or criminal penalty provisions of 49 
U.S.C. 521(b) and applicable regulations.

[[Page 67624]]

    (b) Any motor carrier who permits the exercise of controlling 
influence over its operations by any person that the Agency determines, 
under this subpart, engages in or has engaged in a pattern or practice 
of avoiding regulatory compliance or masking noncompliance while acting 
on behalf of any motor carrier, shall be subject to the civil or 
criminal penalty provisions of 49 U.S.C. 521(b) and applicable 
regulations.
    (c) Any two or more motor carriers that the Agency determines, 
under this subpart, use or have used common ownership, common 
management, common control, or common familial relationships to enable 
such motor carriers to avoid compliance, or mask or otherwise conceal 
noncompliance, shall be subject to the civil or criminal penalty 
provisions of 49 U.S.C. 521(b) and applicable regulations.

Sec.  385.923  Service and computation of time.

    Service of documents and computations of time will be made in 
accordance with Sec. Sec.  386.6 and 386.8 of this subchapter.

PART 386--RULES OF PRACTICE FOR MOTOR CARRIER, INTERMODAL EQUIPMENT 
PROVIDER, BROKER, FREIGHT FORWARDER, AND HAZARDOUS MATERIALS 
PROCEEDINGS

    3. The authority citation for part 386 is revised to read as 
follows:

    Authority: 49 U.S.C. 113, chapters 5, 51, 59, 131-141, 145-149, 
311, 313, and 315; Sec. 204, Pub. L. 104-88, 109 Stat. 803, 941 (49 
U.S.C. 701 note); Sec. 217, Pub. L. 105-159, 113 Stat. 1748, 1767; 
Sec. 206, Pub. L. 106-159, 113 Stat. 1763; subtitle B, title IV of 
Pub. L. 109-59; 49 CFR 1.86 and 1.87; and Sec. 32112, Pub. L. 112-
141.

    4. In Appendix A to Part 386, add a new paragraph IV.j. to read as 
follows:

Appendix A to Part 386--Penalty Schedule; Violations of Notice and 
Orders

* * * * *
    IV. * * *
    j. Violation--Conducting operations during a period of 
suspension or revocation under Sec. Sec.  385.913 or 385.915.
    Penalty--Up to $11,000 for each day that operations are 
conducted during the suspension or revocation period.

    Issued on: October 31, 2012 .
Anne S. Ferro,
Administrator.
[FR Doc. 2012-27569 Filed 11-9-12; 8:45 am]
BILLING CODE 4910-EX-P