Document ID: FMCSA-2019-0075-0014
Agency: fmcsa
Document Type: Rule
Title: Passenger Carrier No-Defect Driver Vehicle Inspection Reports
Posted Date: 2020-08-18T04:00Z

[Federal Register Volume 85, Number 160 (Tuesday, August 18, 2020)]
[Rules and Regulations]
[Pages 50787-50793]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-15667]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Part 396

[Docket No. FMCSA-2019-0075]
RIN 2126-AC29

Passenger Carrier No-Defect Driver Vehicle Inspection Reports

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

ACTION: Final rule.

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SUMMARY: FMCSA rescinds the requirement that drivers of passenger-
carrying commercial motor vehicles (CMVs) operating in interstate 
commerce submit, and motor carriers retain, driver-vehicle inspection 
reports (DVIRs) when the driver has neither found nor been made aware 
of any vehicle defects or deficiencies (no-defect DVIRs). This final 
rule removes an information collection burden without adversely 
impacting safety.

DATES: Effective September 17, 2020.

FOR FURTHER INFORMATION CONTACT: Mr. Jos[eacute] Cestero, Vehicle and 
Roadside Operations Division, Federal Motor Carrier Safety 
Administration, 1200 New Jersey Avenue SE, Washington, DC 20590-0001, 
(202) 366-5541, jose.cestero@dot.gov.

I. Rulemaking Documents

A. Availability of Rulemaking Documents

    For access to docket FMCSA-2019-0075 to read background documents 
and comments received, go to http://www.regulations.gov/#!docketDetail;D=FMCSA-2019-0075 at any time, or to Docket Operations 
at U.S. Department of Transportation, Room W12-140, 1200 New Jersey 
Avenue SE, Washington, DC 20590, between 9 a.m. and 5 p.m., Monday 
through Friday, except Federal holidays.

B. 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.

II. Executive Summary

    This rule affects all passenger carriers currently subject to 49 
CFR 396.11, Driver vehicle inspection reports (DVIR). As a result of 
the Agency's ongoing effort to evaluate existing regulations for 
necessity and effectiveness, FMCSA rescinds the requirement that 
drivers of passenger-carrying commercial motor vehicles (CMVs) 
operating in interstate commerce submit, and motor carriers retain, 
DVIRs when the driver has neither found nor been made aware of any 
vehicle defects or deficiencies (no-defect DVIRs). This final rule 
removes an information collection burden without impacting safety 
adversely.

Benefits and Costs

    Current regulations require drivers employed by passenger 
carriers--except drivers for private (nonbusiness) passenger carriers, 
driveaway-towaway operations, or those operating only one CMV--to 
report on the DVIR any vehicle defects noted or discovered during a 
driving day that would affect the safe operation of the CMV or result 
in a mechanical breakdown. Drivers must submit this report to the 
employing passenger carrier so that repairs can be made. Prior to this 
final rule, Sec.  396.11(a)(2) required drivers of passenger-carrying 
CMVs to file the DVIR even if there were no vehicle defects to report. 
Motor carriers were required to maintain the original DVIR, the 
certification of repairs, and the certification of the driver's review 
for 3 months from the date the written report was prepared. This final 
rule eliminates the need for a driver to file, and a motor carrier to 
maintain, a no-defect DVIR.
    The Agency estimates that passenger-carrying CMV drivers spend 
approximately 2.4 million hours each year completing no-defect DVIRs, 
and that the final rule will result in potential cost savings of $74 
million per year. There is no discernible safety benefit to this no 
defect DVIR burden. The Agency estimates that this rulemaking will 
result in reduced government-imposed costs, and therefore is a 
deregulatory action under Executive Order (E.O.) 13771, ``Reducing 
Regulation and Controlling Regulatory Costs'' (issued January 30, 2017, 
and published February 3, 2017, at 82 FR 9339).

III. Legal Basis for the Rulemaking

    This final rule is based on the authority of the Motor Carrier Act 
of 1935 (1935 Act) (49 U.S.C. 31502(b)) and the Motor Carrier Safety 
Act of 1984 (1984 Act) (49 U.S.C. 31136(a)), both of which are broadly 
discretionary.
    The 1935 Act provides that the Secretary of Transportation 
(Secretary) may prescribe requirements for the following:
     Qualifications and maximum hours of service of employees 
of, and safety of operation and equipment of, a motor carrier (section 
31502(b)(l)) and
     Qualifications and maximum hours of service of employees 
of, and standards of equipment of, a motor private carrier, when needed 
to promote safety of operation (section 31502(b)(2)).
    This rulemaking is based on the Secretary's authority under section 
31502(b)(1) and (2).
    The 1984 Act authorizes the Secretary to regulate drivers, motor 
carriers, and vehicle equipment. Section 31136(a)

[[Page 50788]]

requires the Secretary to publish regulations on CMV safety. 
Specifically, the Act sets forth minimum safety standards to ensure 
that: (1) CMVs are maintained, equipped, loaded, and operated safely 
(section 31136(a)(l)); (2) the responsibilities imposed on operators of 
CMVs do not impair their ability to operate the vehicles safely 
(section 31136(a)(2)); (3) the physical condition of CMV operators is 
adequate to enable them to operate the vehicles safely (section 
31136(a)(3)); (4) the operation of CMVs does not have a deleterious 
effect on the physical condition of the operators (section 
31136(a)(4)); and (5) an operator of a commercial motor vehicle is not 
coerced by a motor carrier, shipper, receiver, or transportation 
intermediary to operate a commercial motor vehicle in violation of a 
regulation promulgated under this section, or chapter 51 or chapter 313 
of this title (section 31136(a)(5)). The 1984 Act grants the Secretary 
broad power in carrying out motor carrier safety statutes and 
regulations to ``prescribe recordkeeping and reporting requirements'' 
and to ``perform other acts the Secretary considers appropriate'' 
(section 31133(a)(8) and (10)).
    This rule implements, in part, the Administrator's authority under 
section 31136(a)(l) to ensure that CMVs are maintained, equipped, 
loaded, and operated safely. The final rule is also based on the broad 
recordkeeping and implementation authority of section 31133(a)(8) and 
(10). This final rule addresses only CMV equipment and reporting 
requirements. It does not address the question whether drivers' 
responsibilities affect their ability to operate CMVs safely (section 
31136(a)(2)). The provisions of the 1984 Act dealing with the physical 
condition of drivers (section 31136(a)(3) and (4)) do not apply.
    Finally, to ensure that operators of CMVs are not coerced by motor 
carriers, shippers, receivers, or transportation intermediaries to 
operate a CMV in violation of a regulation, the rule eliminates only 
the requirement that drivers of passenger-carrying CMVs prepare no-
defect DVIRs; it retains the rule requiring reports when there are 
defects or deficiencies, as well as the requirement for motor carriers 
to take appropriate action on receipt of the report. Because the rule 
removes a regulatory burden criticized by both drivers and motor 
carriers (and irrelevant to passenger brokers or tour groups), there is 
virtually no possibility that the driver of a passenger-carrying CMV 
would be coerced to violate the rule itself. A passenger carrier may 
require a driver to continue filing no-defect DVIRs, even in the 
absence of a regulatory requirement, as a condition of employment to 
perform duties not required by part 396, which would therefore not 
constitute coercion to violate a safety regulation.

IV. Discussion of Proposed Rulemaking and Comments

A. Proposed Rulemaking

    On November 12, 2019, FMCSA published in the Federal Register a 
notice of proposed rulemaking (NPRM) titled ``Passenger Carrier No-
Defect Driver Vehicle Inspection Reports'' (84 FR 60990). The NPRM 
proposed to rescind the requirement that drivers of passenger-carrying 
CMVs operating in interstate commerce submit, and motor carriers 
retain, DVIRs when the driver has neither found nor been made aware of 
any vehicle defects or deficiencies. The proposal, adopted by this 
final rule, would remove an information collection burden without 
adversely impacting safety.

B. Comments and Responses

    FMCSA solicited comments to the NPRM for a 60-day period, ending on 
January 13, 2020. The Agency received a total of 12 comments from: 
United Motorcoach Association (UMA), Western Trails Charter & Tours 
(Western Trails), Freedom Excursions by Scully (Freedom Excursions), 
Coach USA, American Bus Association (ABA), and seven individuals. No 
public meeting was requested or held.
Comments Supporting the Proposal
    Eight commenters favored the proposal. Most pointed to the 
potential savings in time and paperwork.
    UMA supported the proposed rule, stating that ``Elimination of this 
burdensome regulation will readily reduce regulatory cost with no 
discernable reduction of safety in the passenger carrier industry.'' 
UMA added that, while some passenger carriers will continue to require 
drivers to prepare and submit no-defect DVIRs, elimination of the 
regulatory requirement to do so will improve the effectiveness of 
investigations and safety audits because enforcement personnel will not 
have to review no-defect DVIRs.
    Western Trails and four individuals stated that the rule would 
eliminate an unnecessary paperwork burden that has little safety 
benefit.\1\ Freedom Excursions noted that requiring a DVIR only when 
defects or deficiencies are noted will allow the company to focus on 
safety sensitive issues.
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    \1\ One of the individual commenters also raised concerns that 
are outside the scope of this rulemaking.
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    ABA stated that ``In general, we support the elimination of 
unnecessary administrative burdens for motorcoach and other passenger 
carriers, which DVIRs appear to present,'' and noted that ``the 
retention of unnecessary and non-actionable documentation is a burden 
ripe for evaluation under the U.S. Department's new final rule 
codifying reforms to the Department's rulemaking procedures.'' \2\
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    \2\ In its comments to the docket, ABA also noted that it 
``shares some of the safety concerns raised by other commenters,'' 
and requested that FMCSA reopen the comment period for an additional 
30 days. FMCSA declined to reopen the comment period.
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Comments Opposed to the Proposal
    Coach USA did not support the proposed rule, stating that it will 
continue to require its drivers to prepare and submit no-defect DVIRs 
and will continue to retain those DVIRs, regardless of FMCSA's 
decision. Coach USA stated if a driver is not required to complete and 
submit a DVIR, it has no way of confirming that the driver completed 
the required vehicle inspections. Coach USA noted that eliminating the 
requirement to prepare no-defect DVIRs ``would leave a significant gap 
in Coach USA's vehicle maintenance process through which vehicle 
condition information (even a lack of defects/deficiencies) is directly 
communicated by drivers to dispatch/maintenance operations.''
    Additionally, Coach USA contends that drivers may become complacent 
with respect to performing the required inspections if the requirement 
to prepare a no-defect DVIR is eliminated, and that ``the DVIR serves a 
vital recordkeeping purpose to document drivers' completion of all 
required inspections.'' Coach USA expressed concerns that other 
passenger carriers may not retain no-defect DVIRs, and that a resulting 
increase in bus crashes could negatively affect the public's perception 
of the bus industry.
    One individual commenter indicated that the failure to generate no-
defect DVIRs in the passenger-carrier industry, where a CMV is often 
operated by several drivers in a single day, would make it difficult to 
identify the driver who failed to file a DVIR when a defect is 
discovered at the end of the day. Because of this difference in 
operations, the commenter suggested eliminating no-defect DVIRs only 
where one driver operates the same vehicle for consecutive days.
    Two individual commenters cited concerns that eliminating no-defect

[[Page 50789]]

DVIRs may lead to a greater potential for civil liability if there is 
no documentation that vehicles were inspected properly and safe to 
operate.
    FMCSA Response. The fundamental requirement of the Federal Motor 
Carrier Safety Regulations (FMCSRs) is for motor carriers to ensure 
that their CMVs are in safe and proper operating condition at all 
times. Drivers and motor carriers have long been required to share the 
safety responsibility both for operating CMVs and for assessing their 
condition and documenting deficiencies and subsequent repairs. Section 
392.7(a) states that ``[n]o commercial motor vehicle shall be driven 
unless the driver is satisfied that the following parts and accessories 
are in good working order.'' Section 393.1(b)(1) provides that 
``[e]very motor carrier and its employees must be knowledgeable of and 
comply with the requirements and specifications of this part,'' and 
Sec.  393.1(c) states that no motor carrier may operate a commercial 
motor vehicle, or cause or permit such vehicle to be operated, unless 
it is equipped in accordance with the requirements and specifications 
of the part. Section 396.3(a)(1) requires that ``[p]arts and 
accessories shall be in safe and proper operating condition at all 
times.'' Section 396.11(a) states that every motor carrier must 
``require its drivers to report, and every driver shall prepare a 
report in writing at the completion of each day's work on each vehicle 
operated,'' covering a specific list of parts and accessories. Section 
396.11(c) states that prior to requiring or permitting a driver to 
operate a vehicle, every motor carrier or its agent shall repair any 
defect or deficiency listed on the driver vehicle inspection report 
which would be likely to affect the safety of operation of a vehicle.
    FMCSA emphasizes that the Agency is not foregoing the fundamental 
requirements of part 393, Parts and Accessories Necessary for Safe 
Operation, nor is it changing any other element of the inspection, 
repair, and maintenance requirements of part 396. Drivers are still 
required to perform pre-trip evaluations of equipment condition and 
complete DVIRs if any defects or deficiencies are discovered or 
reported during the day's operations. Motor carriers are still required 
to have systematic inspection, repair, and maintenance (including 
preventative maintenance) programs and to maintain records to prove 
measures are being taken to reduce, to the extent practicable the risk 
of mechanical problems occurring while the vehicle is in operation. In 
addition, motor carriers are still required to review DVIRs that list 
defects or deficiencies and to take appropriate action before the 
vehicle is dispatched again. The Agency retains the requirement that 
carriers complete periodic or annual inspections and maintain 
documentation for the individuals who perform periodic inspections and 
brake-related inspection, repair, and maintenance tasks. Furthermore, 
these CMVs remain subject to inspections.
    Importantly, FMCSA did not propose to prohibit passenger carriers 
from requiring their drivers to prepare DVIRs, even when the driver has 
no vehicle defects to report. All motor carriers, including passenger 
carriers, are free to continue to require no-defect DVIRs.
    Coach USA's concern about a possible reduction in safety, resulting 
from the failure of drivers to conduct required inspections and thus 
failing to detect unsafe conditions, is like concerns noted in 
opposition to the 2014 rule \3\ that eliminated the requirement for no-
defect DVIRs for property-carrying vehicles. As noted in the NPRM for 
this rule, FMCSA reviewed available data spanning several years on 
vehicle out-of-service rates for both trucks and passenger-carrying 
vehicles, including data before and after implementation of the 2014 
final rule. FMCSA's Motor Carrier Management Information System (MCMIS) 
data show that the vehicle out-of-service rate for trucks is 
consistently about 21 percent annually--both before and after 
implementation of the 2014 final rule. While the Agency received 
several public comments to the NPRM for that rule (78 FR 48125, Aug. 7, 
2013), expressing concern that eliminating the requirement for no-
defect DVIRs would result in (1) a reduced level of safety and 
maintenance and (2) a higher percentage of vehicle violations and out-
of-service orders, the data show that the vehicle out-of-service rate 
for trucks has remained nearly constant before and after implementation 
of the 2014 rule.
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    \3\ 79 FR 75437, Dec. 18, 2014. To view the rule, its associated 
documentation, and the comments received go to https://www.regulations.gov/docket?D=FMCSA-2012-0336.
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    The MCMIS data also show that the vehicle out-of-service rate for 
passenger-carrying vehicles is approximately 6.6 percent annually--
consistently less than one-third of the corresponding vehicle out-of-
service rate for trucks. From this data, it is clear that motor 
carriers of passengers--because of the nature of their operations and 
the sensitive cargo they transport--have established and implemented 
comprehensive inspection, repair and maintenance programs that help 
ensure that their vehicles are in safe and proper operating condition 
at a rate that far exceeds that of other CMVs. As noted above, 
implementation of the 2014 rule eliminating no-defect DVIRs for trucks 
has not resulted in a reduced level of maintenance and safety or a 
higher percentage of vehicle and out-of-service violations. Given that 
passenger-carrying vehicles have a significantly lower vehicle out-of-
service rate generally, the Agency does not believe that extending to 
them the same relief from the preparation and retention of no-defect 
DVIRs will result in any degradation in safety.
    FMCSA recognizes that passenger-carrying CMVs are often operated by 
several drivers in a single day, but Sec.  396.11(a) requires every 
driver to (1) perform a post-trip inspection of each vehicle operated 
during the day and (2) prepare a DVIR, if defects or deficiencies are 
discovered by or reported to the driver. The Agency does not believe 
that amendments are necessary to address operating scenarios in which a 
CMV is operated by multiple drivers in a single day.
    With respect to the concerns about civil liability, FMCSA 
emphasizes that it is not eliminating the fundamental requirements of 
part 393, Parts and Accessories Necessary for Safe Operation, nor is it 
changing any other element of the inspection, repair, and maintenance 
requirements of part 396. The rule does not change the requirement for 
CMV drivers to conduct pre- and post-trip vehicle inspections, nor does 
it change the requirement for CMV drivers to report defects or 
deficiencies that were found by or reported to them.
Review of Last DVIR (49 CFR 396.13(b))
    UMA commented that Sec.  396.13(b) requires that, before driving a 
motor vehicle, a driver must ``review the last driver vehicle 
inspection report.''
    FMCSA notes that this requirement was established at a time when a 
DVIR was required at the completion of every day, regardless of whether 
defects or deficiencies were discovered by or reported to the driver. 
However, with the adoption of this final rule, a DVIR from the previous 
trip will now be available for review by a driver prior to operation of 
a vehicle only if (1) defects or deficiencies were discovered by or 
reported to the previous driver or (2) a motor carrier voluntarily opts 
to require its drivers to prepare no-defect DVIRs. Given that a large 
percentage of vehicles may not have a DVIR from the previous trip for a 
driver to review prior to operation, FMCSA is amending Sec.  396.13(b) 
to clarify that before driving

[[Page 50790]]

a motor vehicle, a driver shall review the DVIR if required by Sec.  
396.11(a)(2)(i).

V. 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.

VI. Section-By-Section Analysis

    This final rule amends the last sentence in 49 CFR 396.11(a)(2) 
that currently provides that the driver of a passenger-carrying CMV 
subject to this regulation must prepare a report even if no defect or 
deficiency is discovered by or reported to the driver; the drivers of 
all other commercial motor vehicles are not required to prepare a 
report if no defect or deficiency is discovered by or reported to the 
driver. FMCSA revises the sentence to provide that drivers are not 
required to prepare a report if no defect or deficiency is discovered 
by or reported to the driver. This final rule also amends 49 CFR 
396.13(b) to require drivers, before driving a motor vehicle, to 
``[r]eview the driver vehicle inspection report if required by Sec.  
396.11(a)(2)(i).''

VII. Regulatory Analyses

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

    Under section 3(f) of E.O. 12866 (58 FR 51735, October 4, 1993), 
Regulatory Planning and Review, as supplemented by E.O. 13563 (76 FR 
3821, January 21, 2011), Improving Regulation and Regulatory Review, 
this final rule does not require an assessment of potential costs and 
benefits under section 6(a)(3) of E.O. 12866. Accordingly, the Office 
of Management and Budget has not reviewed it under these Orders. In 
addition, this rule is not significant within the meaning of DOT 
regulations (49 CFR 5.13(a)).
Baseline for the Analysis
    Under Sec.  396.11, interstate passenger carriers (except private 
(nonbusiness) carriers, driveaway-towaway operations, or those 
operating only one CMV) must require their drivers to prepare a DVIR at 
the completion of work each day for each vehicle operated that covers 
at a minimum:

 Service brakes including trailer brake connections
 Parking brake
 Steering mechanism
 Lighting devices and reflectors
 Tires
 Horn
 Windshield wipers
 Rear vision mirrors
 Coupling devices
 Wheels and rims
 Emergency equipment.

    The report must list any defect or deficiency discovered by or 
reported to the driver which would affect the safety of operation or 
result in mechanical breakdown. The driver of a passenger-carrying 
vehicle must prepare and submit the report even if no defect or 
deficiency is identified and the carrier must retain the report for 3 
months from the date the written report was prepared.
    Passenger carriers have used various means of compliance with this 
requirement including paper DVIRs and associated processes for tracking 
and filing (e.g., separating DVIRs that identify defects from those 
that do not; maintaining separate files of each) and electronic systems 
for completing a DVIR and retaining the record.\4\
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    \4\ J.J. Keller provides a sample paper report available at 
https://www.jjkellertraining.com/Samples/28146JJKMotor_Coach_Vehicle_InspectionsDEMO/story_content/external_files/DVIR.pdf. A wide variety of vendors supply electronic 
DVIR systems, such as https://www.teletracnavman.com/our-solutions/compliance/dvir, https://www.verizonconnect.com/resources/article/electronic-inspection-form-dvir/, and https://fleetrevolution.com/fleetrevolution-bus-dvir.
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    FMCSA does not have information on the ratio of electronic versus 
paper-based DVIR processes used by passenger carriers. Regardless of 
the means of compliance, the burden associated with the requirement to 
complete no-defect DVIRs is estimated at 155 seconds per report in the 
most recent approved supporting statement for Information Collection 
Request (ICR), Office of Management and Budget (OMB) control number 
2126-0003.
    The supporting statement to the ICR estimated that there are 
247,496 passenger-carrying CMVs in operation and subject to the DVIR 
requirements. As such, the no-defect DVIR rule imposes a substantial 
time and paperwork burden on passenger carriers with no discernible 
safety benefit.
Costs
    In 2014, the Agency estimated cost savings associated with 
eliminating the requirement for no-defect DVIRs for property-carrying 
CMVs. As that rule is analogous to this final rule, the analysis 
follows the same approach. The Agency's 2018 approved supporting 
statement for ICR 2126-0003 states that there are 247,496 passenger-
carrying CMVs for which DVIRs must be prepared, submitted, and 
reviewed.
    Consistent with the methodology of the supporting statement and the 
2014 analysis, the Agency assumes that each of these vehicles is used 
65 percent of the days of the year, and that 95 percent of DVIRs are 
no-defect DVIRs for which it estimated a burden of 155 seconds. 
Therefore, the Agency estimated a paperwork burden of 2,401,747 hours 
[247,496 vehicles x (0.65 x 365) x 0.95 x 155 = 8,646,288,229 seconds 
or 2,401,747 hours]. Using a labor rate of $31 per hour,\5\ the Agency 
estimates a potential cost savings of $74 million per year, assuming 
all carriers choose to realize these cost savings and eliminate no-
defect DVIRs.
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    \5\ This wage is specific to bus drivers. Note that this rate 
differs from that used in the approved supporting statement which 
reflected the wage for a business operations specialist in the truck 
transportation industry.
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    Therefore, this final rule will result in potential cost savings of 
$74 million per year (Table 1).

               Table 1--Calculation of Annual Cost Savings
------------------------------------------------------------------------
                        Variable                               Value
------------------------------------------------------------------------
Number of CMVs..........................................         247,496
Frequency of daily usage................................             65%
Frequency of no-defect DVIRs............................             95%
Time to complete a no-defect DVIR (seconds).............             155
Total time saved (hours)................................       2,401,747
Wage rate (per hour) \1\................................             $31
  Total savings.........................................     $73,665,012
------------------------------------------------------------------------
\1\ The mean hourly wage national estimate for occupational code 53-
  3021, Bus Drivers, Transit and Intercity is $21.47. Source: Bureau of
  Labor Statistics (BLS). 2019. May 2018 National Industry-Specific
  Occupational Employment and Wage Estimates. https://www.bls.gov/oes/2018/may/oes533021.htm. The wage rate is scaled up using the following
  formula: 21.47 / 0.7. This reflects an estimate of the total labor
  costs; wages and salaries accounted for 70.0% of total employee cost
  for private industry workers in December 2018 (BLS, 2019; https://www.bls.gov/news.release/archives/ecec_03192019.pdf).

    In the 2019 NPRM, the Agency acknowledged that some carriers might 
continue to require their drivers to submit no-defect DVIRs, thereby 
lowering the estimated cost savings. The Agency received feedback from 
one commenter, Coach USA, indicating it would continue to require no-
defect DVIRs. FMCSA has opted to present the impact on cost savings of 
Coach USA's decision for illustrative purposes only. The Agency 
considered adjusting the total estimate of cost savings from this

[[Page 50791]]

rule to account for this comment. However, the change in impact would 
be de minimis, as illustrated below, and FMCSA believes this would add 
a level of complexity to the analysis that implies a greater degree of 
precision than which is possible. While it is possible that other 
carriers may also continue to require no-defect DVIRs, the Agency did 
not receive feedback in response to the NPRM to inform any changes to 
that assumption in this analysis.
    Coach USA indicated that it operates 2,800 motorcoaches. Using the 
same formula described above with an updated population of 244,696 
vehicles (247,496 - 2,800 = 244,696), we estimate the paperwork burden 
at 2,374,575 hours.\6\ Using the labor rate above of $31, the total 
cost savings in this example would be $72,831,617 (a difference of 
$833,395), or $73 million, rounded.
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    \6\ 244,696 vehicles x (0.65 x 365) x 0.95 x 155 = 8,548,470,054 
seconds or 2,374,575 hours.
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Benefits
    The final rule benefits relate to the change in crash risk, if any, 
that would result from allowing a defect-based DVIR approach. The 
Agency has no information to suggest that preparation, submission, and 
review of no-defect DVIRs produce a greater level of safety than that 
of a defect-based approach. Further, no degradation in safety 
attributable to the 2014 elimination of the no-defect DVIR requirement 
for trucks has been observed. Both the baseline approach and the 
defect-based approach ensure that vehicles are inspected so that 
defects are noted and addressed. Therefore, the Agency estimates that 
this final rule will maintain the same level of safety.
B. E.O. 13771 Reducing Regulation and Controlling Regulatory Costs
    E.O. 13771, Reducing Regulation and Controlling Regulatory Costs, 
was issued on January 30, 2017 (82 FR 9339, Feb. 3, 2017). E.O. 13771 
requires that, for every one new regulation issued by an Agency, at 
least two prior regulations be identified for elimination, and that the 
cost of planned regulations be prudently managed and controlled through 
a budgeting process. Final implementation guidance addressing the 
requirements of E.O. 13771 was issued by OMB on April 5, 2017. The OMB 
guidance defines what constitutes an E.O. 13771 regulatory action and 
an E.O. 13771 deregulatory action, provides procedures for how agencies 
should account for the costs and cost savings of such actions, and 
outlines various other details regarding implementation of E.O. 13771. 
An E.O. 13771 deregulatory action is defined as ``an action that has 
been finalized and has total costs less than zero.'' This final rule 
has a total cost less than zero, and therefore is an E.O. 13771 
deregulatory action.\7\
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    \7\ Executive Office of the President. Office of Management and 
Budget. Memorandum M-17-21. Guidance implementing Executive Order 
13771. April 5, 2017. Q4 on page 4.
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    The present value of the cost savings of this rule, measured on an 
infinite time horizon at a 7 percent discount rate, expressed in 2016 
dollars, and discounted to 2020 (the year the rule goes into effect and 
cost savings would first be realized), is $1 billion. On an annualized 
basis, these cost savings are $71 million. For E.O. 13771 accounting, 
the April 5, 2017, OMB guidance requires that agencies also calculate 
the costs and cost savings discounted to year 2016.\8\ In accordance 
with this requirement, the present value of the cost savings of this 
rule, measured on an infinite time horizon at a 7 percent discount 
rate, expressed in 2016 dollars, and discounted to 2016, is $771 
million. On an annualized basis, these cost savings are $54 million.
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    \8\ Executive Office of the President. Office of Management and 
Budget. Memorandum M-17-21. Guidance Implementing Executive Order 
13771. April 5, 2017. Q25 on page 11.
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C. Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801, et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a ``major rule,'' as defined by 5 U.S.C. 804(2).\9\
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    \9\ A ``major rule'' means any rule that the Administrator of 
Office of Information and Regulatory Affairs at the Office of 
Management and Budget 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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D. Regulatory Flexibility Act (Small Entities)

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) 
requires Federal agencies to consider the effects of a 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.
    Accordingly, DOT policy requires an analysis of the impact of all 
regulations on small entities, and mandates that agencies try to 
minimize any adverse effects on these entities. Under the Regulatory 
Flexibility Act, as amended by the Small Business Regulatory 
Enforcement Fairness Act of 1996 (SBREFA) (Pub. L. 104-121, 110 Stat. 
857), the Agency estimates this final rule will have a positive 
economic impact on small entities in the form of cost savings through 
the elimination of 2.4 million paperwork burden hours, or 155 seconds 
per report.
    In the Initial Regulatory Flexibility Analysis (IRFA) to the 
proposed rule, FMCSA invited comment from members of the public who 
believed the proposed action would create a significant impact either 
on small businesses or on governmental jurisdictions with a population 
of less than 50,000. No comments were submitted by these entities to 
indicate that this reduction of 155 seconds is significant.
    As stated in the IRFA of the proposed rule, the Agency does not 
have data on company affiliations, NAICS (North American Industry 
Classification System) codes, revenues, or employees with which to 
determine how many of these carriers are small entities, or to directly 
estimate the rule's impact on them. Therefore, FMCSA examined the 
impact to small entities using a conservative per-vehicle approach 
illustrated below.
    FMCSA estimates that the average savings per vehicle will be $298 
per year. The total savings of burden hours for this rule is 2,401,747, 
which applies to 247,496 vehicles. With an average annual time savings 
of 9.7 hours per vehicle (2,401,747 hours / 247,496 vehicles), we 
estimate the average annual cost savings to be $298 per vehicle (9.7 
hours x wage rate of $31).\10\
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    \10\ Id. at 16.
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    Assuming drivers work 8 hours per day for 65 percent of the days in 
a year,\11\ their compensation (at $31 per hour) would be approximately 
$58,000 per year. Therefore, a single vehicle would need to generate a 
minimum of $58,000 per year in revenue in order to break even with 
driver wages and benefits. This is a conservatively low

[[Page 50792]]

estimate of annual revenue generated per vehicle, as it is insufficient 
to cover the carrier's overhead, vehicle purchase or financing costs, 
maintenance and repair costs, and fuel expenses, and it provides no 
profit margin to the carrier.
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    \11\ Consistent with the methodology of the supporting statement 
and the 2014 analysis, the Agency assumes that each of these 
vehicles is used 65 percent of the days of the year. Eight hours per 
day is a conservative assumption as drivers may drive more than 8 
hours per day, but the Agency chose this lesser value to demonstrate 
that the impact of the cost savings is not significant even for 
small entities that do not maximize available driver hours.
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    Using the low-range estimate of $58,000/year, if the average 
savings per vehicle is $298 per year, this final rule will produce 
savings of no more than 0.5 percent ($298 / $58,000) of the average 
annual revenue needed to support one employee.
    The RFA does not define a threshold for determining whether a 
specific regulation results in a significant impact. However, the SBA 
(Small Business Administration), in guidance to government agencies, 
provides some objective measures of significance that the agencies can 
consider using.\12\ One measure that could be used to illustrate a 
significant impact is labor costs, specifically, if the cost of the 
regulation exceeds 1 percent of the average annual revenues of small 
entities in the sector.
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    \12\ SBA, Office of Advocacy. ``A Guide for Government Agencies. 
How to Comply with the Regulatory Flexibility Act.'' 2017. Available 
at: https://www.sba.gov/sites/default/files/advocacy/How-to-Comply-with-the-RFA-WEB.pdf (accessed on May 7, 2020).
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    Given the average annual per-vehicle impact of $298, a small entity 
would need to have average annual revenues of less than $29,800 per 
vehicle to experience an impact greater than 1 percent of average 
annual revenue, which is an average annual revenue that is smaller than 
would be required for a firm to support one employee. The savings of 
$298 per vehicle relative to minimum necessary revenues of $58,000 per 
vehicle represent 0.5 percent, and as such, are below a 1 percent 
threshold of significance. Consequently, I certify that this action 
will not have a significant economic impact on a substantial number of 
small entities.

E. Assistance for Small Entities

    In accordance with section 213(a) of the SBREFA, FMCSA wants to 
assist small entities in understanding this final rule so they can 
better evaluate its effects on themselves and participate in the 
rulemaking initiative. If the final rule will affect your small 
business, organization, or governmental jurisdiction and you have 
questions concerning its provisions or options for compliance; please 
consult the person listed under FOR FURTHER INFORMATION CONTACT.
    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.

F. 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 $165 million (which is the 
value equivalent of $100 million in 1995, adjusted for inflation to 
2018 levels) or more in any one year. Though this final rule would not 
result in such an expenditure, the Agency does discuss its effects 
elsewhere in this preamble.

G. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires 
FMCSA to consider the impact of paperwork and other information 
collection burdens imposed on the public. This rule reduces the burden 
hours for the ``Inspection, Repair, and Maintenance'' ICR, OMB control 
number 2126-0003. This ICR comprises ten individual information 
collections, each corresponding to a different area of the inspection, 
repair, and maintenance requirements. This rule affects only the ICR 
section dealing with burden hours associated with no-defect DVIRs for 
passenger-carrying vehicles.
    In 2018, based on data from its MCMIS and Licensing and Insurance 
Systems, FMSCA concluded that there were 247,496 passenger-carrying 
CMVs. Consistent with past analyses of this ICR, the Agency assumed 
that these CMVs are used on average 65 percent of the year.
    FMCSA has divided the DVIR process into two steps. The Agency 
estimated that the first step, filling out a DVIR, to takes 2 minutes, 
30 seconds. The Agency estimated that the second step, reviewing and 
signing a DVIR, to takes 20 seconds, when defects are reported, and 5 
seconds when no defects are reported. When there are no defects to 
note, there is nothing to review on the DVIR, and the form requires 
only a signature. The Agency estimates that 5 percent of DVIRs note 
defects and 95 percent of DVIRs note no defects.
    This rule eliminates the burden hours associated with no-defect 
DVIRs for passenger-carrying CMVs, resulting in an annual reduction of 
2,401,747 burden hours (247,496 CMVs x 65% utilization x 365 days x 95% 
of CMVs x 155 seconds / 3,600 seconds per hour). The monetary value of 
this annual burden reduction, calculated using an hourly labor cost of 
$31, is $73,665,012 million (2,401,747 hours x $31, per hour).

H. 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 rule 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.

I. Privacy

    The Consolidated Appropriations Act, 2005,\13\ requires the Agency 
to conduct a privacy impact assessment (PIA) of a regulation that will 
affect the privacy of individuals. This rule would not require the 
collection of personally identifiable information (PII). The supporting 
PIA, available for review in the docket, gives a full and complete 
explanation of FMCSA practices for protecting PII in general and 
specifically in relation to this final rule.
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    \13\ Public Law 108-447, 118 Stat. 2809, 3268, note following 5 
U.S.C. 552a (Dec. 4, 2014).
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    The Privacy Act (5 U.S.C. 552a) applies only to Federal agencies 
and any non-Federal agency which receives records contained in a system 
of records from a Federal agency for use in a matching program.
    The E-Government Act of 2002,\14\ requires Federal agencies to 
conduct a PIA for new or substantially changed technology that 
collects, maintains, or disseminates information in an identifiable 
form. No new or substantially changed technology will collect, 
maintain, or disseminate information as a result of this rule.

[[Page 50793]]

Accordingly, FMCSA has not conducted a PIA.
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    \14\ Public Law 107-347, sec. 208, 116 Stat. 2899, 2921 (Dec. 
17, 2002).
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    Additionally, the Agency submitted a Privacy Threshold Assessment 
to evaluate the risks and effects the rulemaking might have on 
collecting, storing, and sharing personally identifiable information. 
The DOT Privacy Office has determined that this rulemaking does not 
create a privacy risk.

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

    This 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.

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

    The National Technology Transfer and Advancement Act (NTTAA) (15 
U.S.C. 272 note) 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 final rule does 
not use technical standards. Therefore, FMCSA did not consider the use 
of voluntary consensus standards.

L. National Environmental Policy Act of 1969 (NEPA).

    FMCSA analyzed this final rule consistent with the NEPA (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 
(Mar. 1, 2004)), Appendix 2, paragraph (6)(aa). The Categorical 
Exclusion (CE) in paragraph (6)(aa) relates to regulations requiring 
motor carriers, drivers, and others to ``inspect, repair, and provide 
maintenance for every CMV used on a public road,'' which is the focus 
of this rule. The requirements in this rule are covered by this CE, 
there are no extraordinary circumstances present, and the action does 
not have the potential to significantly affect the quality of the 
environment.

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

    FMCSA has analyzed this proposed rule under E.O. 13211, Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. FMCSA 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.E.O.

List of Subjects in 49 CFR Part 396

    Highway safety, Motor carriers, Motor vehicle safety, Reporting and 
recordkeeping requirements.
    Accordingly, FMCSA amends 49 CFR part 396 as follows:

PART 396-INSPECTION, REPAIR, AND MAINTENANCE

0
1. The authority citation for part 396 continues to read as follows:

    Authority:  49 U.S.C. 504, 31133, 31136, 31151, 31502; sec. 
32934, Pub. L. 112-141, 126 Stat. 405, 830; sec. 5524, Pub. L. 114-
94, 129 Stat. 1312, 1560; and 49 CFR 1.87.

0
2. Revise Sec.  396.l l(a)(2)(i) to read as follows:

Sec.  396.11   Driver vehicle inspection report(s).

    (a) * * *
    (2) Report content. (i) The report must identify the vehicle and 
list any defect or deficiency discovered by or reported to the driver 
which would affect the safety of operation of the vehicle or result in 
its mechanical breakdown. If a driver operates more than one vehicle 
during the day, a report must be prepared for each vehicle operated. 
Drivers are not required to prepare a report if no defect or deficiency 
is discovered by or reported to the driver.
* * * * *

0
3. Revise Sec.  396.13(b) and (c) to read as follows:

Sec.  396.13  Driver inspection.

* * * * *
    (b) Review the last driver vehicle inspection report if required by 
Sec.  396.11(a)(2)(i); and
    (c) Sign the report to acknowledge that the driver has reviewed it 
and that there is a certification that the required repairs have been 
performed. The signature requirement does not apply to listed defects 
on a towed unit which is no longer part of the vehicle combination.

    Issued under authority delegated in 49 CFR 1.87.
James A. Mullen,
Deputy Administrator.

[FR Doc. 2020-15667 Filed 8-17-20; 8:45 am]
BILLING CODE 4910-EX-P