Document ID: FMCSA-2011-0259-0001
Agency: fmcsa
Document Type: Proposed Rule
Title: Amendment to Agency Rules of Practice
Posted Date: 2011-12-13T05:00Z

[Federal Register Volume 76, Number 239 (Tuesday, December 13, 2011)]
[Proposed Rules]
[Pages 77458-77465]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-31858]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Part 386

[Docket No. FMCSA-2011-0259]
RIN 2126-AB38

Amendment to Agency Rules of Practice

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: FMCSA proposes to amend its Rules of Practice for Motor 
Carrier, Intermodal Equipment Provider, Broker, Freight Forwarder, and 
Hazardous Materials Proceedings in three respects. First, the Agency 
proposes to clarify that paying the full proposed civil penalty in an 
enforcement proceeding, either in response to a Notice of Claim (NOC) 
or later in the proceeding, would not allow respondents to unilaterally 
avoid an admission of liability for the violations charged. Second, 
FMCSA proposes to establish procedures for issuing out-of-service 
orders to motor carriers, intermodal equipment providers, brokers, and 
freight forwarders it determines are reincarnations of other entities 
with a history of failing to comply with statutory or regulatory 
requirements. These procedures would provide for administrative review 
before the out-of-service order takes effect. Finally, the Agency 
proposes procedures for consolidating Agency records of reincarnated 
companies with their predecessor entities.

DATES: Comments must be received on or before January 12, 2012.

ADDRESSES: You may submit comments identified by Docket Number FMCSA-
2011-0259 using any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the online instructions for submitting comments.
     Mail: Docket Management Facility, U.S. Department of 
Transportation, 1200 New Jersey Avenue SE., West Building, Ground 
Floor, Room W12-140, Washington, DC 20590-0001.
     Hand Delivery or Courier: West Building, Ground Floor, 
Room W12-140, 1200 New Jersey Avenue SE., between 9 a.m. and 5 p.m. 
E.T., Monday through Friday, except Federal holidays.
     Fax: (202) 493-2251.
    To avoid duplication, please use only one of these four methods. 
See the ``Public Participation and Request for Comments'' portion of 
the SUPPLEMENTARY INFORMATION section

[[Page 77459]]

below for instructions on submitting comments. Comments received after 
the comment closing date will be included in the docket, and we will 
consider late comments to the extent practicable. FMCSA may, however, 
issue a final rule at any time after the close of the comment period.

FOR FURTHER INFORMATION CONTACT: Sabrina Redd, Office of Chief Counsel, 
Federal Motor Carrier Safety Administration, 1200 New Jersey Avenue 
SE., Washington, DC 20590-0001, by telephone at (202) 366-6424 or via 
email at Sabrina.redd@dot.gov. Office hours are from 9 a.m. to 5 p.m. 
ET, Monday through Friday, except Federal holidays. If you have 
questions on viewing or submitting material to the docket, contact 
Renee V. Wright, Program Manager, Docket Operations, telephone (202) 
366-9826.

SUPPLEMENTARY INFORMATION: 

Table of Contents for Preamble

I. Public Participation and Request for Comments
    A. Submitting Comments
    B. Viewing Comments and Documents
    C. Privacy Act
II. Legal Basis for the Rulemaking
III. Background
    A. Section 386.18
    B. Section 386.73
IV. Discussion of Proposed Rule
    A. Section 386.18
    B. Section 386.73
V. Regulatory Analyses

I. Public Participation and Request for Comments

    FMCSA encourages you to participate in this rulemaking by 
submitting comments and related materials. All comments received will 
be posted without change to http://www.regulations.gov and will include 
any personal information you provide.

A. Submitting Comments

    If you submit a comment, please include the docket number for this 
rulemaking (FMCSA-2011-0259), 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 FMCSA can contact you if there are 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 
``Proposed Rules,'' insert ``FMCSA 2011-0259'' 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 comment 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 your 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 the proposed rule based on your comments.

B. Viewing Comments and Documents

    To view comments, as well as documents mentioned in this preamble, 
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-2011-0259'' and click 
``Search.'' Next, click the ``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 Department of Transportation 
West Building, 1200 New Jersey Avenue SE., Washington, DC 20590, 
between 9 a.m. and 5 p.m. ET, Monday through Friday, except Federal 
holidays.

C. Privacy Act

    Anyone is able to search the electronic form of all comments 
received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review the 
Department of Transportation's (DOT's) Privacy Act Statement for the 
Federal Docket Management System published in the Federal Register on 
January 17, 2008 (73 FR 3316), or you may visit http://edocket.access.gpo.gov/2008/pdf/E8-785.pdf.

II. Legal Basis for the Rulemaking

    Congress delegated certain powers to regulate interstate commerce 
to DOT in numerous pieces of legislation, most notably in section 6 of 
the Department of Transportation Act (DOT Act) (Pub. L. 89-670, 80 
Stat. 931 (1966)). Section 6(e)(6)(C) of the DOT Act transferred to DOT 
the authority of the Interstate Commerce Commission (ICC) to regulate 
the qualifications and maximum hours of service of motor carrier 
employees, the safety of operations, and the equipment of motor 
carriers in interstate commerce. This authority, first granted to the 
ICC in the Motor Carrier Act of 1935 (Pub. L. 74-255, 49 Stat. 543), 
now appears in chapter 315 of title 49 of the U.S. Code. The 
regulations issued under this authority became known as the Federal 
Motor Carrier Safety Regulations (FMCSRs), appearing generally at 49 
CFR parts 350-399. The administrative powers to enforce chapter 315 
were also transferred from the ICC to the DOT in 1966 and appear in 
chapter 5 of title 49 of the U.S. Code. The Secretary of DOT delegated 
oversight of these provisions to the Federal Highway Administration 
(FHWA), the predecessor agency to FMCSA.
    Between 1984 and 1999, a number of statutes added to FHWA's 
authority. Various statutes authorize the enforcement of the FMCSRs, 
the Hazardous Materials Regulations (HMRs), and the Federal Motor 
Carrier Commercial Regulations (FMCCRs) and provide both civil and 
criminal penalties for violations. These statutes include the Motor 
Carrier Safety Act of 1984 (Pub. L. 98-554, 98 Stat. 2832), codified at 
49 U.S.C. chapter 311, subchapter III; the Commercial Motor Vehicle 
Safety Act of 1986 (Pub. L. 99-570, 100 Stat. 3207-170), codified at 49 
U.S.C. chapter 313; the Hazardous Materials Transportation Uniform 
Safety Act of 1990 (Pub. L. 101-615, 104 Stat. 3244), codified at 49 
U.S.C. chapter 51; and the ICC Termination Act of 1995 (Pub. L. 104-88, 
109 Stat. 803), codified at 49 U.S.C. chapters 135-149. In practice, 
when circumstances dictate that an enforcement action be instituted, 
FMCSA typically seeks civil penalties. The Rules of Practice apply to 
the administrative adjudication of civil penalties assessed for 
violations of the FMCSRs, the HMRs, and the FMCCRs.

III. Background

A. Section 386.18

    On May 18, 2005, FMCSA published a comprehensive revision of its 
Rules of Practice, which are contained in 49 CFR part 386 (70 FR 
28467). The revision was intended to increase the efficiency of Agency 
administrative enforcement procedures, enhance due process, improve 
public understanding of the Agency's procedures, and accommodate recent 
programmatic changes.
    Under Sec.  386.11(c) of the Rules of Practice, civil penalty 
enforcement proceedings are initiated through

[[Page 77460]]

service of an NOC, which is usually issued by the FMCSA Division 
Administrator for the State in which the respondent maintains its 
principal place of business. The NOC, which is usually based on a 
compliance review or other type of investigation or enforcement 
intervention, sets forth the provisions of law allegedly violated by 
the respondent and underlying facts pertinent to the alleged 
violations; proposes a civil penalty; and provides information 
regarding the time, form, and manner whereby the respondent may pay, 
contest, or otherwise seek resolution of the claim. Prior to 2005, the 
Rules of Practice were silent on whether payment of the proposed civil 
penalty in response to the NOC or at a subsequent stage of the 
proceeding constituted an admission of the violations alleged in the 
NOC.
    The 2005 revision of the Rules of Practice added a new Sec.  386.18 
titled ``Payment of the claim.'' This section provides:

    (a) Payment of the full amount claimed may be made at any time 
before issuance of a Final Agency Order. After the issuance of a 
Final Agency Order, claims are subject to interest, penalties, and 
administrative charges in accordance with 31 U.S.C. 3717; 49 CFR 
part 89; and 31 CFR 901.9.
    (b) If respondent elects to pay the full amount as its response 
to the Notice of Claim, payment must be served upon the Field 
Administrator at the Service Center designated in the Notice of 
Claim within 30 days following service of the Notice of Claim. No 
written reply is necessary if respondent elects the payment option 
during the 30-day reply period. Failure to serve full payment within 
30 days of service of the Notice of Claim when this option has been 
chosen may constitute a default and may result in the Notice of 
Claim, including the civil penalty assessed by the Notice of Claim, 
becoming the Final Agency Order in the proceeding pursuant to Sec.  
386.14(c).
    (c) Unless objected to in writing, submitted at the time of 
payment, payment of the full amount in response to the Notice of 
Claim constitutes an admission by the respondent of all facts 
alleged in the Notice of Claim. Payment waives respondent's 
opportunity to further contest the claim, and will result in the 
Notice of Claim becoming the Final Agency Order.

    In a number of enforcement proceedings, respondents have paid the 
full amount of the claim with written objection, either in their reply 
to the NOC or at a later stage of the proceeding. In such cases, the 
respondents argued that payment with written objection terminates the 
proceeding without an admission of liability. The FMCSA Field 
Administrators, who are responsible for prosecuting enforcement 
proceedings before the Agency, contended that respondents could not 
unilaterally terminate an enforcement proceeding without an admission 
of liability by making full payment.
    In a case decided on November 3, 2010, In the Matter of Homax Oil 
Sales, Inc., Docket No. FMCSA-2006-26000, Order Denying Petition for 
Reconsideration (Homax), FMCSA's Assistant Administrator reasoned that 
allowing respondents to unilaterally terminate proceedings by paying 
the proposed penalty in full and lodging an objection under Sec.  
386.18(c) would be contrary to the Agency's enforcement policy and 
section 222 of the Motor Carrier Safety Improvement Act, which requires 
that the Agency assess the maximum statutory penalty for each violation 
of law by any person ``who is found to have committed a pattern of 
violations of critical or acute regulations issued to carry out such a 
law or to have previously committed the same or related violation of 
critical or acute regulations issued to carry out such a law.'' The 
Assistant Administrator concluded that if a carrier is allowed to 
unilaterally terminate an enforcement proceeding without an admission, 
the case cannot count as prior history for future civil penalty 
calculations under 49 U.S.C. 521(b)(2)(D), which requires the Agency to 
consider a respondent's history of prior offenses in addition to 
several other factors, as well as under section 222 of MCSIA. Allowing 
unilateral termination of a proceeding by a respondent without an 
admission would permit carriers with abundant financial resources to 
repeatedly violate the Agency's regulations without running the risk of 
facing escalating civil penalties despite a history of noncompliance 
with the regulations. The Assistant Administrator acknowledged that the 
regulatory text of Sec.  386.18(c) is less than clear regarding the 
consequences of full payment with written objection and recommended 
that the meaning of this paragraph be clarified through rulemaking.
    As was noted in Homax, in an April 1996 Notice of Proposed 
Rulemaking (NPRM), FHWA proposed the following language with respect to 
the full payment issue:

    363.105(c): Unless otherwise provided in writing by mutual 
consent of the parties, payment and/or compliance with the order 
constitutes an admission of all facts alleged in the notice of 
violation [called a notice of claim under the current Rules of 
Practice] and a waiver of the respondent's opportunity to contest 
the claim, and results in the notice of violation becoming the final 
agency order. (61 FR 18865, Apr. 29, 1996)

    FHWA's reasoning for this language was that ``future agency 
enforcement actions may be based on, and certain consequences may flow 
from, prior and continued violations of the safety regulations.'' (61 
FR 18875-76, Apr. 29, 1996).
    FMCSA revised this proposal, renumbered as Sec.  386.18(c), in an 
October 2004 Supplemental Notice of Proposed Rulemaking (SNPRM) (69 FR 
61628, Oct. 20, 2004) to read as follows:

    (c) Unless objected to in writing, payment of the full amount in 
its reply constitutes an admission by the respondent of all facts 
alleged in the notice of claim. Payment waives respondent's 
opportunity to further contest the claim, and will result in the 
notice of claim becoming the final agency order.

This proposed change was intended to make ``it clear that, unless the 
parties otherwise agree in writing, respondent's payment of the full 
claim amount as its reply to the notice of claim constitutes an 
admission.'' (69 FR 61622).
    The final rule published on May 18, 2005 (70 FR 28467), adopted 
this provision with little change. In the 2010 Homax Order, the 
Assistant Administrator concluded that, notwithstanding the removal of 
the language requiring mutual consent of the parties from the 
regulatory text, the Agency intended to adopt the mutual consent 
requirement originally proposed in 1996.
    In a subsequent case, In the Matter of Associated Pipe Contractors, 
Inc., Docket No. FMCSA-2008-0159, Order Terminating Proceeding and 
Closing Docket, January 10, 2011, the Agency addressed the implications 
of full payment of the proposed civil penalty at any time before 
issuance of a Final Agency Order, in accordance with Sec.  386.18(a). 
In Associated Pipe Contractors, the carrier paid the full penalty with 
written objection several months after contesting the NOC and 
requesting administrative adjudication. Section 386.18(a), which 
applies to this situation rather than Section 386.18(c), is silent 
regarding whether a carrier can unilaterally terminate an enforcement 
proceeding without an admission of liability under these circumstances. 
The Agency concluded that the same concerns expressed in the Homax 
decision apply to such a payment and that Sec.  386.18(a) should be 
clarified to be consistent with that decision.

B. Section 386.73

    FMCSA has determined that a number of motor carriers have submitted 
new applications for registration, often under a new name, in order to 
continue operating after having been placed out of service for safety-
related reasons; to avoid paying civil penalties; to

[[Page 77461]]

circumvent denial of operating authority based on a determination that 
they are not fit, willing, or able to comply with the applicable 
statutes or regulations; or to otherwise avoid a negative compliance 
history. Other motor carriers attempt to avoid enforcement or negative 
compliance history by creating or using an affiliated company under 
common operational control. They then shift customers, vehicles, 
drivers, and other operational activities to that affiliated company 
when FMCSA places one of the commonly controlled companies out-of-
service. The practice of ``reincarnating'' as a new carrier or 
operating affiliated companies to circumvent Agency enforcement actions 
and avoid a negative compliance history or enforcement action creates 
an unacceptable risk of harm to the public because it results in the 
continued operation of at-risk carriers and thwarts FMCSA's ability to 
carry out its safety mission.
    The danger posed by ``reincarnation'' became evident following a 
fatal bus crash in Sherman, Texas in 2008. Investigation revealed that 
the carrier involved did not have operating authority from FMCSA, but 
had an application for authority pending with the Agency. FMCSA 
determined that the carrier was a reincarnation of another bus company 
that had recently been placed out of service. Following the Sherman, 
Texas bus crash, FMCSA began a vetting process that involves a 
comprehensive review of applications for passenger-carrier operating 
authority to determine whether the applicants are reincarnations or 
affiliates of other motor carriers with negative compliance histories 
or are otherwise not fit, willing, and able to comply with the 
applicable regulations. Although the vetting program is a significant 
improvement to the operating authority review process, it is not a 
complete solution to the reincarnation problem. Accordingly, FMCSA 
proposes new procedures to prohibit reincarnated or affiliated carriers 
from successfully evading accountability for their compliance history.
    FMCSA is empowered to suspend, amend, or revoke a motor carrier's 
registration for willful failure to comply with applicable safety 
regulations, an FMCSA order, or a condition of its registration 
pursuant to 49 U.S.C. 13905. Motor carriers that obtain registration by 
creating a new company or an affiliate company with a new registration 
for the purpose of avoiding FMCSA orders, regulations, or enforcement 
action procure the registration by fraud--by knowingly misrepresenting 
and/or withholding material information. FMCSA has authority to 
sanction these motor carriers, which have already demonstrated an 
unwillingness or inability to comply with applicable safety 
regulations, by suspending, amending, or revoking their registration 
and/or by imposing applicable civil penalties.
    While the FMCSA has existing authority to address the practice of 
reincarnation or affiliation to avoid compliance, the FMCSRs do not 
include an efficient procedure to sanction and deter the conduct. The 
FMCSRs also do not contain a procedure by which FMCSA can consolidate 
motor carrier compliance records once FMCSA determines that a motor 
carrier has reincarnated or is operating affiliated companies for the 
purpose of avoiding enforcement action or a negative compliance 
history. Further, the FMCSRs do not include a procedure by which motor 
carriers can expeditiously contest FMCSA's determination that a motor 
carrier is a reincarnation or affiliate of another motor carrier.

IV. Discussion of Proposed Rule

A. Section 386.18

    FMCSA proposes to amend 49 CFR 386.18(a) and (c) to clarify that 
payment of the full amount of the proposed civil penalty constitutes an 
admission of all facts alleged in the NOC, unless otherwise agreed by 
both the respondent and FMCSA. The mutual consent provision will give 
FMCSA Field Administrators the discretion to permit payment without an 
admission of liability in appropriate cases, such as first-time 
inadvertent minor violations where the respondent demonstrates a 
sincere intent to comply in the future. Payment without written 
objection will continue to be considered as an admission of liability. 
If payment is tendered with a written objection, it will still be 
treated as an admission of liability unless the Field Administrator 
responsible for prosecuting the case agrees in writing that payment 
will not be treated as an admission. Respondents, therefore, should 
contact the appropriate FMCSA Service Center to seek the necessary 
written consent if they are considering paying the penalty with written 
objection.

B. Section 386.73

    FMCSA proposes to revise its Rules of Practice to address 
operational reincarnation or affiliation by adding a new Sec.  386.73. 
This new section would establish flexible, efficient procedures to 
address entities that attempt to reincarnate or operate affiliated 
entities for the purpose of evading FMCSA Orders, avoiding statutory 
and regulatory compliance, or concealing a history of non-compliance. 
The proposed procedures would more fully implement the Agency's current 
authority to prohibit unsafe entities from operating while, at the same 
time, providing due process for companies that seek to challenge a 
finding that they are a reincarnated or affiliated company.
    The purpose of this proposed new section is to provide a mechanism 
to prevent motor carriers, intermodal equipment providers, brokers, and 
freight forwarders, from creating new or multiple business identities 
to avoid statutory or regulatory requirements, FMCSA Orders and 
enforcement actions, or a negative compliance history. The rule would 
authorize FMCSA to issue out-of-service orders to motor carriers, 
intermodal equipment providers, brokers, and freight forwarders 
determined to be reincarnated or operating as affiliates to avoid 
enforcement action or negative compliance and it would provide a 
mechanism for administrative review of such orders. The rule would also 
establish procedures to consolidate the compliance records of motor 
carriers, intermodal equipment providers, brokers, and freight 
forwarders determined to be reincarnated or affiliated entities.

V. Regulatory Analyses

Executive Order (E.O.) 12866 (Regulatory Planning and Review) and DOT 
Regulatory Policies and Procedures

    FMCSA has determined that this proposed rule is not a significant 
regulatory action within the meaning of Executive Order (E.O.) 12866, 
as supplemented by E.O. 13563 (76 FR 3821, January 21, 2011), or within 
the meaning of DOT regulatory policies and procedures. The estimated 
cost of the proposed rule is not expected to exceed the $100 million 
annual threshold for economic significance, therefore, any costs 
associated with the rule are expected to be minimal. Moreover, the 
Agency does not expect the proposed rule to generate substantial 
Congressional or public interest. The proposed rule would not impose 
new requirements upon carriers and thus should result in minimal to no 
economic burdens. The revisions clarify existing rules and implement 
procedures that would not require a change in the business practices of 
already compliant carriers.

Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612) requires 
Federal

[[Page 77462]]

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 business 
and not-for-profit organizations that are independently owned and 
operated and are not dominant in their fields and governmental 
jurisdictions with populations of less than 50,000.\1\ 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.
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    \1\ Regulatory Flexibility Act (5 U.S.C. 601 et seq.) see 
National Archives at http://www.archives.gov/federal-register/laws/regulatory-flexibility/601.html.
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    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. Payment of 
claims and admissions of liability reflect current FMCSA policy, as 
discussed in the background section, and therefore this rule would not 
disproportionately impact small entities. Even before the current 
policy was enunciated through administrative adjudication, this portion 
of the rule did not have a significant impact. From 2008 through 2011, 
the Agency adjudicated only six cases in which the respondent motor 
carrier paid a civil penalty with written objection, which indicates 
the minimal impact the rule would have.
    FMCSA estimates that fewer than 50 carriers annually would be 
affected by the proposed rule as it pertains to reincarnated or 
affiliated carriers. Consequently, I certify that the proposed action 
would not have a significant economic impact on a substantial number of 
small entities.

Assistance for Small Entities

    In accordance with section 213(a) of the Small Business Regulatory 
Enforcement Fairness Act of 1996, FMCSA wants to assist small entities 
in understanding this proposed rule so that they can better evaluate 
its effects on themselves and participate in the rulemaking initiative. 
If the proposed rule would affect your small business, organization, or 
governmental jurisdiction and you have questions concerning its 
provisions or options for compliance, please consult the FMCSA point of 
contact, Sabrina Redd, listed in the FOR FURTHER INFORMATION CONTACT 
section of this proposed rule. FMCSA will not retaliate against small 
entities that question or complain about this proposed rule or any 
policy or action of the Agency.
    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).

Unfunded Mandates Reform Act

    This rulemaking would not impose an unfunded Federal mandate, as 
defined by the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532 et 
seq.), that would result in the expenditure by State, local, and Tribal 
governments, in the aggregate, or by the private sector, of $141.3 
million (which is the value of $100 million in 2010 after adjusting for 
inflation) or more in any 1 year.

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 has determined that this proposal would not have 
substantial direct effects on States, nor would it limit the 
policymaking discretion of States. Nothing in this document preempts 
any State law or regulation.

Indian Tribal Governments

    This proposed rule does not have Tribal implications under E.O. 
13175, Consultation and Coordination with Indian Tribal Governments, 
because it would 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.

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), 
Federal agencies must obtain approval from the Office of Management and 
Budget (OMB) for each collection of information they conduct, sponsor, 
or require through regulations. FMCSA has determined that there is no 
new information collection requirement associated with this proposed 
rule.

National Environmental Policy Act

    FMCSA analyzed this NPRM for the purpose of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and 
determined this action is categorically excluded from further analysis 
and documentation in an environmental assessment or environmental 
impact statement under FMCSA Order 5610.1(69 FR 9680, March 1, 2004), 
Appendix 2, paragraphs (6)(u)(1), (6)(u)(2), and (6)(y)(7). The 
Categorical Exclusion (CE) in paragraph (6)(u)(1) addresses rules 
concerning compliance with regulations; the CE in paragraph (6)(u)(2) 
addresses regulations assessing civil penalties; and the CE in 
paragraph (6)(y)(7) addresses rules for record keeping. The various 
proposals in this rule are covered by one or a combination of these 
three CEs. Therefore, this proposed action does not have any effect on 
the quality of the environment. The Categorical Exclusion determination 
is available for inspection or copying in the Regulations.gov Web site 
listed under ADDRESSES.
    FMCSA also analyzed this rule under the Clean Air Act, as amended 
(CAA), section 176(c) (42 U.S.C. 7401 et seq.), and implementing 
regulations promulgated by the Environmental Protection Agency. 
Approval of this action is exempt from the CAA's general conformity 
requirement since it does not affect direct or indirect emissions of 
criteria pollutants.

E.O. 13211 (Energy Effects)

    FMCSA has analyzed this proposed rule under E.O. 13211, Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. The Agency has determined that it is not a 
``significant energy action'' under that order because it is not a 
``significant regulatory action'' under E.O. 12866 and is not likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy. Therefore, no Statement of Energy Effects is required.

E.O. 13045 (Protection of Children)

    E.O. 13045, Protection of Children from Environmental Health Risks 
and Safety Risks (62 FR 19885, Apr. 23, 1997), requires agencies 
issuing ``economically significant'' rules, if the regulation also 
concerns an environmental health or safety risk that an agency has 
reason to believe may disproportionately affect children, to include an 
evaluation of the regulation's environmental health and safety effects 
on children. As discussed previously,

[[Page 77463]]

this proposed rule is not economically significant. Therefore, no 
analysis of the impacts on children is required. In any event, we do 
not anticipate that this regulatory action could in any respect present 
an environmental or safety risk that could disproportionately affect 
children.

E.O. 12988 (Civil Justice Reform)

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

E.O. 12630 (Taking of Private Property)

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

National Technology Transfer and Advancement Act (Technical Standards)

    The National Technology Transfer and Advancement Act (15 U.S.C. 272 
note) requires Federal agencies proposing to adopt Government technical 
standards to consider whether voluntary consensus standards are 
available. If the Agency chooses to adopt its own standards in place of 
existing voluntary consensus standards, it must explain its decision in 
a separate statement to OMB. This rule does not propose to adopt any 
technical standards.

Privacy Impact Assessment

    FMCSA conducted a privacy impact assessment of this rule as 
required by section 522(a)(5) of the FY 2005 Omnibus Appropriations 
Act, Public Law 108-447, 118 Stat. 3268 (Dec. 8, 2004) [set out as a 
note to 5 U.S.C. 552a]. The assessment considers any impacts of the 
rule on the privacy of information in an identifiable form and related 
matters. FMCSA has determined this rule would have no privacy impacts.

List of Subjects in 49 CFR Part 386

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

    In consideration of the forgoing, FMCSA is proposed to amend 49 CFR 
part 386 as follows:

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

    1. The authority citation for part 386 will continue 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; and 49 CFR 1.45 and 1.73.

    2. Amend Sec.  386.18 by revising paragraphs (a) and (c) to read as 
follows:

Sec.  386.18  Payment of the claim.

    (a) Payment of the full amount claimed may be made at any time 
before issuance of a Final Agency Order and will constitute an 
admission of liability by the respondent of all facts alleged in the 
Notice of Claim, unless the parties agree in writing that payment shall 
not be treated as an admission. After the issuance of a Final Agency 
Order, claims are subject to interest, penalties, and administrative 
charges, in accordance with 31 U.S.C. 3717; 49 CFR part 89; and 31 CFR 
901.9.
* * * * *
    (c) Unless otherwise agreed in writing by the parties, payment of 
the full amount in response to the Notice of Claim constitutes an 
admission of liability by the respondent of all facts alleged in the 
Notice of Claim. Payment waives respondent's opportunity to further 
contest the claim and will result in the Notice of Claim becoming the 
Final Agency Order.
    3. Add Sec.  386.73 to read as follows:

Sec.  386.73  Operations Out-of-Service and Record Consolidation 
Proceedings (Reincarnated Carriers).

    (a) Out of Service Order. An FMCSA Field Administrator or the 
Director of FMCSA's Office of Enforcement and Compliance (Director) may 
issue an out-of-service order to prohibit a motor carrier, intermodal 
equipment provider, broker, or freight forwarder from conducting 
operations subject to FMCSA jurisdiction upon a determination by the 
Field Administrator or Director that the motor carrier, intermodal 
equipment provider, broker, or freight forwarder or an officer, 
employee, agent, or authorized representative of such an entity, 
operated or attempted to operate a motor carrier, intermodal equipment 
provider, broker, or freight forwarder under a new identity or as an 
affiliated entity to:
    (1) Avoid complying with an FMCSA Order;
    (2) Avoid complying with a statutory or regulatory requirement;
    (3) Avoid paying a civil penalty;
    (4) Avoid responding to an enforcement action; or
    (5) Avoid being linked with a negative compliance history.
    (b) Record Consolidation Order. In addition to, or in lieu of, an 
out-of-service order issued under this section, the Field Administrator 
or Director may issue an order consolidating the records maintained by 
FMCSA concerning the current motor carrier, intermodal equipment 
provider, broker, and freight forwarder, or an affiliated motor 
carrier, intermodal equipment provider, broker, or freight forwarder 
and its previous incarnation, for all purposes, upon a determination 
that the motor carrier, intermodal equipment provider, broker, and 
freight forwarder or officer, employee, agent, or authorized 
representative of the same, operated or attempted to operate a motor 
carrier, intermodal equipment provider, broker, or freight forwarder 
under a new identity or as an affiliated entity to:
    (1) Avoid complying with an FMCSA Order;
    (2) Avoid complying with a statutory or regulatory requirement;
    (3) Avoid paying a civil penalty;
    (4) Avoid responding to an enforcement action; or
    (5) Avoid being linked with a negative compliance history.
    (c) Standard. The Field Administrator or Director may determine 
that a motor carrier, intermodal equipment provider, broker, or freight 
forwarder is reincarnated if there is substantial continuity between 
the entities such that one is merely a continuation of the other. The 
Field Administrator or Director may determine that a motor carrier, 
intermodal equipment provider, broker, or freight forwarder is an 
affiliate if the business operations are under common ownership and/or 
common control. In making this determination, the Field Administrator 
or Director may consider, among other things, the following factors:
    (1) Whether the new or affiliated entity was created for the 
purpose of evading statutory or regulatory requirements, an FMCSA 
order, enforcement action, or negative compliance history; in weighing 
this factor, the Field Administrator or Director may consider the 
stated business purpose for the creation of the new or affiliated 
entity.
    (2) Consideration exchanged for assets purchased or transferred;

[[Page 77464]]

    (3) Dates of company creation and dissolution or cessation of 
operations;
    (4) Commonality of ownership between the current and former company 
or between current companies;
    (5) Commonality of officers and management personnel;
    (6) Identity of physical or mailing addresses, telephone, fax 
numbers, or email addresses;
    (7) Identity of motor vehicle equipment;
    (8) Continuity of liability insurance policies or commonality of 
coverage under such policies;
    (9) Commonality of drivers and other employees;
    (10) Continuation of carrier facilities and other physical assets;
    (11) Continuity or commonality of nature and scope of operations, 
including customers for whom transportation is provided;
    (12) Advertising, corporate name, or other acts through which the 
company holds itself out to the public; and
    (13) History of safety violations and pending orders or enforcement 
actions of the Secretary.
    (d) Evaluating Factors. The Field Administrator or Director may 
examine, among other things, the company management structures, 
financial records, corporate filing records, asset purchase or transfer 
and title history, employee records, insurance records, and any 
information related to the general operations of the entities involved.
    (e) Effective Dates. An order issued under this section becomes the 
Final Agency Order and is effective on the 21st day after it is served 
unless a request for administrative review is served and filed as set 
forth in paragraph (f) of this section. Any motor carrier, intermodal 
equipment provider, broker, or freight forwarder that fails to comply 
with any prohibition or requirement set forth in an order issued under 
this section is subject to the applicable penalty provisions for each 
instance of noncompliance.
    (f) Commencement of Proceedings. The Field Administrator or 
Director may commence proceedings under this section by issuing an 
order that:
    (1) Provides notice of the factual and legal basis of the order;
    (2) In the case of an out-of-service order, identifies the 
operations prohibited by the order;
    (3) In the case of an order that consolidates records maintained by 
FMCSA, identifies the previous entity and current or affiliated motor 
carriers, intermodal equipment providers, brokers, or freight 
forwarders whose records will be consolidated;
    (4) Provides notice that the order is effective upon the 21st day 
after service;
    (5) Provides notice of the right to petition for administrative 
review of the order and that a timely petition will stay the effective 
date of the order unless the Assistant Administrator orders otherwise 
for good cause; and
    (6) Provides notice that failure to timely request administrative 
review of the order constitutes waiver of the right to contest the 
order and will result in the order becoming a Final Agency Order 21 
days after it is served.
    (g) Administrative Review. A motor carrier, intermodal equipment 
provider, broker, or freight forwarder issued an order under this 
section may petition for administrative review of the order. A petition 
for administrative review is limited to contesting factual or 
procedural errors in the issuance of the order under review and may not 
be submitted to demonstrate corrective action. A petition for 
administrative review that does not identify factual or procedural 
errors in the issuance of the order under review will be dismissed. 
Petitioners seeking to demonstrate corrective action may do so by 
submitting a Petition for Rescission under paragraph (h) of this 
section.
    (1) A petition for administrative review 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 for administrative 
review must also be served on the Field Administrator or Director who 
issued the order at the physical address or electronic mail account 
identified in the order.
    (2) A petition for administrative review must be served within 15 
days of the date the Field Administrator or Director served the order 
issued under this section. Failure to timely request administrative 
review waives the right to administrative review and constitutes an 
admission to the facts alleged in the order.
    (3) A petition for administrative review must include:
    (i) A copy of the order in dispute; and
    (ii) A statement of all factual and procedural issues in dispute.
    (4) If a petition for administrative review is timely served and 
filed, the petitioner may supplement the petition by serving 
documentary evidence and/or written argument that supports its position 
regarding the procedural or factual issues in dispute no later than 30 
days from the date the disputed order was served. The supplementary 
documentary evidence or written argument may not expand the issues on 
review and need not address every issue identified in the petition. 
Failure to timely serve supplementary documentary evidence and/or 
written argument constitutes a waiver of the right to do so.
    (5) The Field Administrator or Director must serve written argument 
and supporting documentary evidence, if any, in defense of the disputed 
order no later than 15 days following the service of the petition for 
administrative review.
    (6) The Assistant Administrator may ask the parties to submit 
additional information or attend a conference to facilitate 
administrative review.
    (7) The Assistant Administrator will issue a written decision on 
the request for administrative review within 30 days of the close of 
the time period for the Field Administrator or the Director to serve 
written argument and supporting documentary evidence in defense of the 
order, or the actual filing of such written argument and documentary 
evidence, whichever is earlier.
    (8) If a petition for administrative review is timely served and 
filed in accordance with this section, the disputed order is stayed 
pending the Assistant Administrator's review, unless the Assistant 
Administrator orders otherwise for good cause shown.
    (9) The Assistant Administrator's decision on a petition for 
administrative review of an order issued under this section constitutes 
the Final Agency Order.
    (h) Petition for Rescission. A motor carrier, intermodal equipment 
provider, broker, or freight forwarder may petition to rescind an order 
issued under this section if action has been taken to correct the 
deficiencies that resulted in the order.
    (1) A petition for rescission must be made in writing to the Field 
Administrator or Director who issued the order.
    (2) A petition for rescission must include a copy of the order 
requested to be rescinded, a factual statement identifying all 
corrective action taken, and copies of supporting documentation.
    (3) Upon request and for good cause shown, the Field Administrator 
or Director may grant the petitioner additional time, not to exceed 45 
days, to complete corrective action initiated at the time the petition 
for rescission was filed.
    (4) The Field Administrator or Director will issue a written 
decision on the petition for rescission within 60

[[Page 77465]]

days of service of the petition. The written decision will include the 
factual and legal basis for the determination.
    (5) If the Field Administrator or Director grants the request for 
rescission, the written decision is the Final Agency Order.
    (6) If the Field Administrator or Director denies the request for 
rescission, the petitioner may file a petition for administrative 
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 administrative review of 
the denial must be served and filed within 15 days of the service of 
the decision denying the request for recession. The petition for 
administrative review must identify the disputed factual or procedural 
issues with respect to the denial of the petition for rescission. The 
petition may not, however, challenge the underlying basis of the order 
for which rescission was sought.
    (7) The Assistant Administrator will issue a written decision on 
the petition for administrative review of the denial of the petition 
for rescission within 60 days. The Assistant Administrator's decision 
constitutes the Final Agency Order.
    (i) Other Orders Unaffected. If a motor carrier, intermodal 
equipment provider, broker, or freight forwarder subject to an order 
issued under this section is or becomes subject to any other order, 
prohibition, or requirement of the FMCSA, an order issued under this 
section is in addition to, and does not amend or supersede such other 
order, prohibition, or requirement. A motor carrier, intermodal 
equipment provider, broker, or freight forwarder subject to an order 
issued under this section remains subject to the suspension and 
revocation provisions of 49 U.S.C. 13905 for violations of regulations 
governing their operations.
    (j) Inapplicability of Subparts. Subparts B, C, D, and E, except 
Sec.  386.67, do not apply to this section.
    4. Amend Appendix A to 49 CFR part 386, section IV, by 
redesignating existing paragraph (h) as paragraph (i) and adding a new 
paragraph (h) to read as follows:

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

* * * * *
    IV. * * *
    h. Violation--Operating in violation of an order issued under 
Sec.  386.73.
    Penalty--Up to $16,000 per day the operation continues after the 
effective date and time of the out-of-service order.
* * * * *

    Issued on: December 7, 2011.
Anne S. Ferro,
Administrator.

[FR Doc. 2011-31858 Filed 12-12-11; 8:45 am]
BILLING CODE P