2006 NPRM entitled "New Entrant Safety Assurance Process

Thursday,
December 21, 2006

Part II

Department of
Transportation
Federal Motor Carrier Safety
Administration

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49 CFR Parts 365, 385, 387, and 390
New Entrant Safety Assurance Process;
Proposed Rule

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Federal Register / Vol. 71, No. 245 / Thursday, December 21, 2006 / Proposed Rules

DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety
Administration

[Docket No. FMCSA–2001–11061]
RIN 2126–AA59

New Entrant Safety Assurance Process
Federal Motor Carrier Safety
Administration (FMCSA), DOT.
ACTION: Notice of Proposed Rulemaking
(NPRM); request for comments.

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AGENCY:

SUMMARY: FMCSA proposes changes to
the New Entrant Safety Assurance
Process that would raise the standard of
compliance for passing the new entrant
safety audit. The agency has identified
11 regulations that it believes are
essential elements of basic safety
management controls necessary to
operate in interstate commerce and
proposes that failure to comply with any
one of the 11 regulations would result
in automatic failure of the audit. Under
this proposal, carriers would also be
subject to the current safety audit
evaluation criteria in Appendix A of
part 385. Additionally, if a roadside
inspection discloses certain violations,
the new entrant would be subject to
expedited actions to correct these
deficiencies. The agency proposes to
eliminate Form MCS–150A—Safety
Certification for Application for USDOT
Number. The agency also intends to
check compliance with the Americans
with Disabilities Act and certain
household goods-related requirements
in the new entrant safety audit, if they
apply to the new entrant’s operation.
However, failure to comply with these
requirements would not impact the
outcome of the safety audit. These
changes would not impose additional
operational requirements on any new
entrant carrier. All new entrants would
continue to receive educational
information on how to comply with the
safety regulations and be given an
opportunity to correct any deficiencies
found. FMCSA recognizes many new
entrants are small businesses that are
unaware of these requirements and
continue to need the agency’s
assistance. Finally, FMCSA would make
clarifying changes to some of the
existing new entrant regulations and
establish a separate new entrant
application procedure and safety
oversight program for non-North
America-domiciled motor carriers.
FMCSA believes this proposal would
improve its ability to identify at-risk
new entrant carriers and ensure

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We must receive your comments
by February 20, 2007.
ADDRESSES: You may submit comments,
identified by DOT DMS Docket Number
FMCSA–2001–11061, by any of the
following methods:
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• Agency Web site: http://
dms.dot.gov. Follow the instructions for
submitting comments on the DOT
electronic docket site.
• Fax: 1–202–493–2251.
• Mail: Docket Management Facility;
U.S. Department of Transportation, 400
Seventh Street, SW., Nassif Building,
Room PL–401, Washington, DC 20590–
0001.
• Hand Delivery: Room PL–401 on
the plaza level of the Nassif Building,
400 Seventh Street, SW., Washington,
DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal
Holidays.
Instructions: All submissions received
must include the agency name and
docket number or Regulatory
Identification Number (RIN) for this
rule. All comments received will be
posted without change to http://
dms.dot.gov, including any personal
information provided. For detailed
instructions on submitting comments
and additional information on the
rulemaking process, see the ‘‘Public
Participation’’ heading of the
SUPPLEMENTARY INFORMATION section of
this document. For a summary of DOT’s
Privacy Act Statement or information on
how to obtain a complete copy of DOT’s
Privacy Act Statement please see the
‘‘Privacy Act’’ heading under
Rulemaking Analyses and Notices.
Docket: For access to the docket to
read background documents or
comments received, go to http://
dms.dot.gov at any time or to Room PL–
401 on the plaza level of the Nassif
Building, 400 Seventh Street, SW.,
Washington, DC, between 9 am and 5
pm, Monday through Friday, except
Federal Holidays.
FOR FURTHER INFORMATION CONTACT: Mr.
Arturo H. Ramirez, (202) 366–8088,
Chief, Enforcement and Compliance
Division, Federal Motor Carrier Safety
Administration (MC–ECE), 400 Seventh
Street, SW., Washington, DC 20590–
0001. Office hours are from 7:45 a.m. to
4:15 p.m., ET, Monday through Friday,
except Federal holidays.
SUPPLEMENTARY INFORMATION:
DATES:

49 CFR Parts 365, 385, 387, and 390

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deficiencies in basic safety management
controls are corrected before the new
entrant is granted permanent
registration.

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Public Participation: The DMS is
available 24 hours each day, 365 days
each year. You can get electronic
submission and retrieval help and
guidelines under the ‘‘help’’ section of
the DMS web site. If you want us to
notify you of receiving your comments,
please include a self-addressed,
stamped envelope or postcard or print
the acknowledgement page that appears
after submitting comments on-line.
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.
Legal Basis for the Rule
Title 49 U.S.C. 31144 requires the
Secretary of Transportation (Secretary)
to determine whether an owner or
operator is fit to operate safely. Section
210 of the Motor Carrier Safety
Improvement Act of 1999 [Public Law
106–159, 113 Stat. 1764, December 9,
1999] (MCSIA) added § 31144(g) 1
directing the Secretary to establish
regulations to require each owner and
operator granted new operating
authority to undergo a safety review
within 18 months of starting operations.
In issuing these regulations, the
Secretary was required to: (1) Establish
the elements of the safety review,
including basic safety management
controls; (2) consider their effects on
small businesses; and (3) consider
establishing alternate locations where
such reviews may be conducted for the
convenience of small businesses. The
Secretary was also required to phase in
the new entrant safety review
requirements in a manner that takes into
account the availability of certified
motor carrier safety auditors. Congress
mandated increased oversight of new
entrants because studies indicated these
operators had a much higher rate of
non-compliance with basic safety
management requirements and were
subject to less oversight than established
operators.
In addition to expanding the
Secretary’s authority under § 31144,
Section 210 of MCSIA was a specific
statutory directive consistent with the
more general pre-existing legal authority
provided by the Motor Carrier Safety
1 MCSIA originally codified section 31144(g) as
§ 31144(c) and directed that it be added at the end
of 49 U.S.C. 31144 following preexisting
subsections (c), (d), and (e). Section 4114(c)(1) of
the Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users
(Public Law 109–59, 119 Stat. 1144, August 10,
2005) (SAFETEA-LU) recodified this provision as
§ 31144(g).

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Act of 1984 (the 1984 Act) [49 U.S.C.
App. 2505 (1988)], which requires the
Secretary to prescribe regulations on
commercial motor vehicle safety. The
regulations required by the 1984 Act
must prescribe minimum safety
standards for commercial motor
vehicles (CMVs). At a minimum, the
regulations shall ensure: (1) CMVs are
maintained, equipped, loaded, and
operated safely; (2) the responsibilities
imposed on operators of CMVs do not
impair their ability to operate the
vehicles safely; (3) the physical
condition of operators of CMVs is
adequate to enable them to operate the
vehicles safely; and (4) the operation of
CMVs does not have a deleterious effect
on the physical condition of the
operators (49 U.S.C. 31136(a)).
This NPRM proposes changes to the
New Entrant Safety Assurance Process
to improve the agency’s ability to
identify at-risk new entrant motor
carriers through screening and ensure
deficiencies are corrected before
granting them permanent registration.
As such, it implements the § 31136(a)(1)
mandate that FMCSA regulations ensure
CMVs are maintained and operated
safely. It does not propose any new
operational responsibilities on drivers
pursuant to §§ 31136(a)(2)–(4).
Regulatory History
In response to the MCSIA statutory
mandate, on May 13, 2002, FMCSA
published an interim final rule (IFR)
titled New Entrant Safety Assurance
Process (67 FR 31978), which became
effective January 1, 2003. Although
operating authority has generally been
construed in the past to mean
registration of for-hire carriers subject to
the jurisdiction transferred from the
former Interstate Commerce
Commission following enactment of the
ICC Termination Act of 1995 [Public
Law 104–88, 109 Stat. 888, December
29, 1995] (ICCTA), FMCSA interpreted
Section 210 of MCSIA as extending this
concept to all carriers subject to Federal
safety jurisdiction (see 67 FR 31979,
May 13, 2002). For this reason, FMCSA
applied the New Entrant Safety
Assurance Process to all domestic and
Canada-domiciled new entrants,
regardless of whether they needed to
register with FMCSA under 49 U.S.C.
13901. Mexico-domiciled new entrants
are covered under a separate application
process and safety monitoring system
(see 67 FR 12652, 67 FR 12701, and 67
FR 12757 published March 19, 2002).
Under the current New Entrant Safety
Assurance Process, FMCSA provides
applicants with an application package
including, upon request, educational
and technical assistance materials. The

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applicant must complete the
application, including Form MCS–
150A—Safety Certification for
Application for USDOT Number, which
requires the carrier to certify procedures
are in place for basic safety management
controls. Following completion of the
application forms, FMCSA registers the
new entrant and assigns a United States
Department of Transportation (USDOT)
Number. For-hire motor carriers, unless
providing transportation exempt from
ICCTA registration requirements, also
are required to obtain FMCSA operating
authority under 49 U.S.C. 13902, prior
to commencing operations. The new
entrant safety monitoring period begins
when FMCSA issues the new entrant
provisional registration via a USDOT
Number and continues for 18 months.
To maintain its provisional registration,
a new entrant must comply with all
FMCSA regulations and applicable
hazardous materials regulations.
Within the first 18 months of a new
entrant’s operation, FMCSA will
conduct a safety audit (SA) of the
carrier’s operations to educate the
carrier on compliance with the Federal
Motor Carrier Safety Regulations
(FMCSRs) and Hazardous Materials
Regulations (HMRs) and to determine if
the carrier is exercising basic safety
management controls as defined in 49
CFR 385.3. An SA is not a compliance
review. It does not result in a safety
rating. These terms are defined in
§ 385.3.
During the SA, FMCSA gathers
information by reviewing the carrier’s
compliance with ‘‘acute’’ and ‘‘critical’’
provisions of the FMCSRs and
applicable HMRs. Acute regulations are
those where the consequences of noncompliance are so severe as to require
immediate corrective actions by a motor
carrier, regardless of the overall basic
safety management controls of the motor
carrier (e.g., allowing a driver with a
suspended license to operate a vehicle).
Critical regulations are defined as those
where noncompliance relates to
management or operational controls and
are indicative of breakdowns in a
carrier’s management controls (e.g.,
allowing a driver to operate a vehicle
before his/her medical exam). Parts of
the FMCSRs and HMRs having similar
characteristics are combined together
into six regulatory areas called
‘‘factors.’’ The SA scoring evaluates
each of the following factors and
determines the adequacy of the carrier’s
safety management controls based on
this evaluation. The six factors are:
Factor 1—General: Parts 387 and 390.
Factor 2—Driver: Parts 382, 383, and
391.

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Factor 3—Operational: Parts 392 and
395.
Factor 4—Vehicle: Parts 393 and 396
and inspection data for the last 12
months.
Factor 5—Hazardous Materials: Parts
171, 177, 180 and 397.
Factor 6—Accident: Recordable
Accident Rate per Million Miles.
For each instance of noncompliance
with an acute regulation, 1.5 points are
assessed against the carrier. For each
instance of noncompliance with a
critical regulation, 1 point is assessed.
For factors 1–5, if the combined
violations of acute and critical
regulations for each factor are equal to
three or more points, the carrier is
determined not to have basic safety
management controls for that individual
factor. If the recordable accident rate
(factor 6) is greater than 1.7 recordable
accidents per million miles for an urban
carrier (1.5 for all other carriers), the
carrier is determined to have inadequate
basic safety management controls (i.e.,
the carrier fails the factor). If the
carrier’s accident rate is anywhere
between zero and 1.5 (1.7 for urban
carriers), the carrier is considered to
have adequate safety management
controls in factor 6. A new entrant fails
the SA if it fails three or more separate
factors. Currently, FMCSA is studying a
new approach to assessing the severity
of violations as part of its announced
CSA 2010 initiative (69 FR 51748). This
initiative may ultimately replace the
‘‘acute and critical’’ methodology
described here.
If the SA discloses the new entrant’s
basic safety management controls are
adequate, the carrier retains the new
entrant registration and continues to be
monitored until the end of the 18-month
period. FMCSA will grant permanent
registration only if the new entrant
successfully completes the monitoring
period. If the basic safety management
controls are inadequate, the new entrant
is given an opportunity to correct the
deficiencies. To provide that
opportunity, FMCSA notifies the new
entrant that unless the deficiencies are
remedied, the registration will be
revoked in 45 days (for carriers using
passenger vehicles with a capacity to
transport 16 or more passengers or
vehicles transporting hazardous
materials as defined under 49 CFR
§ 383.5) or 60 days (for all other new
entrants). FMCSA may extend the
compliance period if it determines the
new entrant is making a good faith effort
to remedy the problems. If, within the
45 or 60 days, the new entrant fails to
respond to the notice or fails to correct
the deficiencies, FMCSA issues an out-

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of-service order prohibiting further
operations in interstate commerce and
revokes the new entrant registration.

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Discussion of the Proposed Rule
FMCSA decided to publish an NPRM
rather than a final rule because today’s
action proposes substantive changes to
the May 13, 2002 IFR. These proposals
would benefit from further notice and
comment before promulgation as a final
rule. Following is a discussion of these
proposed changes.
Strengthening the Safety Audit
In FY 2000, FMCSA published a
report titled ‘‘Analysis of New Entrant
Motor Carrier Safety Performance and
Compliance Using SafeStat,’’ which
compared the safety performance of new
entrant carriers to that of experienced
carriers. A copy of the report is in the
docket for this rule. The report
indicated new entrant carriers had
significantly higher crash involvement
than experienced carriers. New entrant
carriers had significantly worse driver
safety compliance and performance
compared to experienced carriers. To a
lesser degree, new entrant carrier
vehicle safety compliance and
performance were also worse than for
experienced carriers. For these reasons,
FMCSA intends to ensure all new
entrant carriers have basic safety
programs and controls in place before
granting permanent registration.
In response to comments to the 2002
IFR (see the section below titled
‘‘Discussion of Comments’’), as well as
feedback from FMCSA field staff and
State partners administering the New
Entrant Safety Assurance Process, the
Administrator convened an internal
working group in the summer of 2003 to
review and improve the process. The
working group identified 11 regulatory
violations which reflect a clear lack of
basic safety management controls yet
are not properly weighted by the
existing SA. Under the current system,
a new entrant could commit one of
these 11 violations and still pass the SA.
The group recommended that FMCSA
strengthen the SA pass/fail criteria to
give more appropriate weight to these
11 basic safety management
requirements and clarify several vague
regulatory requirements.
Based on this recommendation,
FMCSA proposes that committing any
one of the following 11 regulatory
violations would result in an automatic
failure of the SA:
1. § 382.115(a)/§ 382.115(b)—Failing
to implement an alcohol and/or
controlled substances testing program
(domestic and foreign motor carriers,
respectively).

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2. § 382.211—Using a driver who has
refused to submit to an alcohol or
controlled substances test required
under part 382.
3. § 382.215—Using a driver known to
have tested positive for a controlled
substance.
4. § 383.37(a)—Knowingly allowing,
requiring, permitting, or authorizing an
employee with a commercial driver’s
license which is suspended, revoked, or
canceled by a State or who is
disqualified to operate a commercial
motor vehicle.
5. § 383.51(a)—Knowingly allowing,
requiring, permitting, or authorizing a
driver to drive who is disqualified to
drive a commercial motor vehicle.
6. § 387.7(a)—Operating a motor
vehicle without having in effect the
required minimum levels of financial
responsibility coverage.
7. § 391.15(a)—Using a disqualified
driver.
8. § 391.11(b)(4)—Using a physically
unqualified driver.
9. § 395.8(a)—Failing to require a
driver to make a record of duty status.
10. § 396.9(c)(2)—Requiring or
permitting the operation of a
commercial motor vehicle declared
‘‘out-of-service’’ before repairs are made.
11. § 396.17(a)—Using a commercial
motor vehicle not periodically
inspected.
The agency believes carriers
committing these violations do not have
the basic safety management controls in
place to safely operate in interstate
commerce. The working group
identified, and FMCSA accepted, these
11 infractions because they are so basic
to ensuring safety that no carrier should
be allowed to operate if any of these
violations are found and not corrected.
For example, implementation of an
alcohol and controlled substances
testing program is a fundamental
requirement for any interstate carrier. A
carrier that has implemented a program
to ensure its drivers do not operate after
testing positive for drugs or alcohol will
reduce the risk of that carrier/driver
being involved in a fatal accident.
Allowing drivers who refuse to submit
to drug or alcohol testing to drive
indicates the carrier does not have an
effective drug and alcohol testing
program. Similarly, only qualified
drivers should be permitted to drive. A
carrier does not exercise sufficient
safety management controls if it uses
drivers who are disqualified from
operating a CMV, physically
unqualified, or who have had their
commercial driver’s license suspended,
revoked, or canceled.
Additionally, the primary mission of
the agency is to reduce crashes, injuries

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and fatalities involving large trucks and
buses. For this mission to succeed,
carriers must operate safe vehicles. To
accomplish this, vehicles must be
periodically inspected and kept in safe
operating condition. Therefore, a new
entrant would fail the safety audit if it
does not inspect its vehicles
periodically or operates any vehicle
declared out-of-service before making
the required repairs.
Further, driver fatigue has been
identified as a contributing factor in
many CMV crashes. To achieve the
highest level of safety, carriers must
have a system to safeguard the public
against fatigued drivers by ensuring
their drivers adhere to the agency’s
hours-of-service limitations. Hours-ofservice violations comprise the largest
percentage of driver out-of-service
violations at the roadside. One effective
safety management control for
preventing fatigued drivers from
operating a CMV is to have in place a
system requiring drivers to submit
records of duty status or other records,
as appropriate. This recordkeeping
requirement is fundamental to an
effective driver monitoring system.
Finally, the agency believes it is
essential for the traveling public to
receive adequate compensation for
personal injuries or property damage
caused by CMVs operating on the
highways. Therefore, carriers lacking
required minimum financial
responsibility would not be permitted to
operate.
FMCSA emphasizes that the purpose
of the proposed revision is to improve
the safety management of new entrants,
not to remove them from operations.
The agency believes the regulations
identified above are evidence of
whether a new entrant has a systemic
program to ensure it has the basic safety
management controls to operate in
interstate commerce.
As discussed above, when a new
entrant fails an audit, even for one of the
automatic failures described above, it
will be afforded due process and given
time to correct its failures and improve
its safety management controls. This
proposal emphasizes FMCSA’s
commitment to highway safety and
would allow the agency to ensure new
entrants are not permitted to operate
without first correcting serious
deficiencies in a timely manner.
FMCSA believes it is incumbent upon
all new entrant carriers to be informed
about, and familiar with, the FMCSRs
prior to receiving a safety audit. To this
end, FMCSA provides outreach and
educational materials to carriers to help
them prepare for the audit. Carriers
discovered to have committed one of the

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11 violations identified above, after
having been informed of the need to
comply prior to receiving permanent
registration, and found to have not
corrected the deficiency, will not be
permitted to continue to operate.
Establishing these 11 violations as
grounds for failing the safety audit
would promote public safety by
encouraging new entrants to correct
serious deficiencies in their safety
management controls and reducing the
number of potentially unsafe carriers
operating on the nation’s highways.
It should be noted that most of these
11 regulations correspond to
requirements necessary for Mexicodomiciled long-haul carriers to obtain
authority to operate in the United
States, as established by Congress under
Section 350(a)(1)(B) of the Fiscal Year
2002 DOT Appropriations Act [Public
Law 107–87, Title III, sec. 350, 115 Stat.
864, Dec. 18, 2001]. The requirements
applicable to Mexico-domiciled longhaul carriers are:
• Verification of a controlled
substances and alcohol testing program
consistent with 49 CFR part 40;
• Verification of a carrier’s system of
compliance with hours-of-service rules,
including hours-of-service records;
• Verification of proof of financial
responsibility;
• An evaluation of that motor
carrier’s safety inspection, maintenance,
and repair facilities or management
systems, including verification of
records of periodic vehicle inspections;
and
• Verification of drivers’
qualifications, including a required
commercial driver’s license.
Expedited Action
Under existing § 385.307(a), having
‘‘an accident rate or driver or vehicle
violation rate that is higher than the
industry average for similar motor
carrier operations’ triggers an expedited
SA or compliance review of the new
entrant. (The reference to a ‘‘driver or
vehicle violation rate’’ is an error and
should read ‘‘driver or vehicle out-ofservice rate.’’) The agency proposes to
replace the abbreviated expedited action
provisions under § 385.307(a) with the
same ‘‘Expedited Action’’ provisions
applicable to Mexico-domiciled carriers
under § 385.105. As the agency stated in
proposing the expedited action
provisions for Mexico-domiciled
carriers, we believe these violations
pose the greatest threat to public safety
and raise serious questions about a
carrier’s willingness and ability to
conduct safe operations. See 66 FR
22416 (May 3, 2001). In addition to
identifying potentially unsafe new

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entrant carriers, expanding the
expedited action provisions would also
make the treatment of Mexico-domiciled
new entrants and all other new entrants
more uniform.
This change would improve the New
Entrant Safety Assurance Process by
tightening scrutiny of new entrants
before and after the safety audit. New
entrants discovered with these
violations could be identified during a
roadside inspection or by any other
means even if the agency had not yet
conducted a safety audit.
Discovery of certain violations during
a roadside inspection or by any other
means would subject the new entrant to
expedited action. If the carrier had not
already submitted to an audit, the
carrier would be flagged for review as
soon as practicable. If the carrier already
had submitted to an audit before
discovery of an ‘‘expedited action
violation,’’ FMCSA would send the
carrier a letter requesting evidence of
corrective action within 30 days of the
notice or the carrier’s registration would
be revoked. Additionally, if FMCSA
determined the violation warranted a
more thorough review of the carrier’s
operation, the agency would schedule a
compliance review. The following
actions would trigger expedited action
against the motor carrier:
• Using a driver who does not have
a valid commercial driver’s license.
• Operating vehicles that have been
placed out-of-service for violations of
the Federal Motor Carrier Safety
Regulations or compatible State laws
and regulations without taking
necessary corrective action.
• Being involved in, through action or
omission, a hazardous materials
incident involving—
• A highway route controlled
quantity of certain radioactive
materials (Class 7).
• Any quantity of certain explosives
(Class 1, Division 1.1, 1.2, or 1.3).
• Any quantity of certain poison
inhalation hazard materials (Zone A
or B).
• Being involved in, through action or
omission, two or more hazardous
materials incidents involving hazardous
materials other than those listed above.
• Using a driver who tests positive for
controlled substances or alcohol or who
refuses to submit to required drug or
alcohol tests.
• Operating a motor vehicle that is
not insured as required.
• Having a driver or vehicle out-ofservice rate of 50 percent or more based
on at least three inspections within a
consecutive 90-day period.
The last item above would replace the
‘‘vehicle or driver violation rate that is

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higher than the industry average for
similar motor carrier operations’’
requirement under § 385.307. From an
operational standpoint, the ‘‘50 percent
or more threshold’’ would provide for
more effective and efficient monitoring
of new entrant performance because it is
a non-subjective and easily measured
rate.
Applicability of Proposed Requirements
to Current New Entrants
The changes in today’s notice of
proposed rulemaking, if promulgated as
a final rule, would apply to motor
carriers still subject to the current new
entrant safety monitoring process on the
final rule’s effective date. Assuming all
changes are adopted, these new entrants
would be subject to expedited
enforcement action for committing any
of the seven violations or actions
identified under the section ‘‘Expedited
Action.’’ If a current new entrant has not
had a safety audit prior to the final rule
effective date, it would be audited in
accordance with the safety audit
procedures adopted in the final rule,
including the applicable 11 automatic
failure factors identified under the
section ‘‘Strengthening the Safety
Audit.’’ However, the automatic failure
factors would not be retroactively
applied to safety audits completed prior
to the final rule’s effective date. The
safety audit outcomes determined prior
to the final rule’s effective date would
remain unchanged by the final rule.
Form MCS–150A—Safety Certification
for Application for USDOT Number
The purpose of the MCS–150A is for
a new entrant to certify it has a system
in place to ensure compliance with the
FMCSRs and applicable HMRs.
However, based on the SAs conducted
to date, FMCSA has found many new
entrants certified on the MCS–150A
they are knowledgeable about the
FMCSRs and applicable HMRs and have
in place the safety management controls
necessary to conduct interstate
operations, but are not, in fact, in
compliance with the FMCSRs and
applicable HMRs. Therefore, while the
intent of the MCS–150A is valid, in
practice it fails. Consequently, FMCSA
is proposing to eliminate the form.
Conforming amendments are proposed
to eliminate mention of the MCS–150A
throughout the regulations.
Timing of Administrative Reviews
The administrative review provisions
in current § 385.327 are ambiguous with
respect to the time during which a
carrier is allowed to file a request for
administrative review and when it must
file a request for administrative review,

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if it wants the review to be completed
before its registration is revoked.
FMCSA is proposing to revise the
section to clarify that, if a new entrant
disagrees with the findings of an SA, the
new entrant must file a request for an
administrative review within 90 days of
the date of the notice of audit failure or
within 90 days of the notice of its
corrective action being insufficient.
However, if a new entrant wants a
decision before the revocation takes
effect, the new entrant must file a
request for review within 15 days of the
date of the notice of audit failure.
Requests filed after 15 days will be
considered, but it is possible the
revocation would take effect before the
administrative review process is
completed, even if the new entrant
eventually prevails and its registration
is restored.
‘‘Chameleon’’ Carriers
The agency is concerned about
carriers attempting to evade
enforcement actions and/or out-ofservice orders issued against them by reregistering as new entrants and
operating as different entities under new
USDOT Numbers. We call these entities
‘‘chameleon’’ carriers.
Such a carrier might attempt to
conceal its former identity by leaving
blank the response to items 16 and 17
on the ‘‘Motor Carrier Identification
Number—Application for USDOT
Number’’ (Form MCS–150). Items 16
and 17 of the MCS–150 request the
carrier’s USDOT Number or MC or MX
Number. In other cases, the carrier may
attempt to hide the fact that its USDOT
Number is revoked by falsifying the
response to item 28 on the MCS–150,
which asks whether the carrier’s
USDOT Number registration is currently
revoked by FMCSA, and if so, requires
the carrier to list this number. Item 30
on the MCS–150 requires the carrier to
certify the information provided on the
MCS–150 is true, correct and complete.
Unfortunately, some carriers
deliberately fail to disclose information
regarding their history in order to evade
civil penalties assessed against the
company or to circumvent out-of-service
orders and other operational restrictions
by obtaining new USDOT Numbers.
Often these chameleon carriers go
undetected until the agency conducts an
SA or compliance review.
The agency is committed to ensuring
only safe carriers are permitted to
continue operating on our nation’s
highway. FMCSA has the authority to
correct, modify, or revoke new entrant
registration issued inadvertently, or
obtained by fraud, misrepresentation or
other wrongful means. Proposed

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§ 385.306 clarifies what action may be
taken against any carrier not providing
truthful and complete information on its
MCS–150.
If a carrier obtains a new USDOT
Number after being ordered to cease
operations based on a failed safety
audit, prior Unsatisfactory rating, failure
to pay a civil penalty or any other
reason, and the information is
discovered after the carrier received
another USDOT Number, the agency
will revoke the carrier’s new registration
and may also take additional
enforcement action against the carrier. If
a carrier obtains a new USDOT Number,
but was not subject to an outstanding
order to cease operations under a
previous number, the agency may
determine the new USDOT Number
should not be revoked and, instead, link
the history of the two companies by
identifying in our database the new
USDOT Number as the primary active
number. The old USDOT Number
would be listed in the database as one
under which the carrier has also done
business, and its safety history,
including enforcement actions against
the carrier, would be imputed to the
new entity.
A carrier that ceased interstate
operations and wishes to reapply should
submit an updated MCS–150 and list its
old USDOT Number when applying.
The agency would reactivate the
USDOT Number upon approval of the
application.
Reapplication Process
Current § 385.329(a) states a new
entrant whose new entrant registration
has been revoked and whose operations
have been placed out-of-service must
wait 30 days after the revocation date to
reapply. Current § 385.329(b) states the
motor carrier will be required to initiate
the application process ‘‘from the
beginning,’’ demonstrate it has corrected
the deficiencies resulting in revocation,
and otherwise ensure it has adequate
basic safety management controls. Some
have interpreted ‘‘from the beginning’’
to mean the carrier must resubmit all
documents submitted when the new
entrant initially applied for new entrant
registration and, if the application is
accepted, undergo another SA and
receive a new USDOT Number. The
agency proposes to address the
reapplication issue by establishing two
separate procedures based upon what
caused the revocation.
Under proposed § 385.329(b), a new
entrant whose registration is revoked for
failing the safety audit would reapply by
submitting an updated Form MCS–150
and providing evidence of corrective
action (which FMCSA would review for

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adequacy). If FMCSA concludes the reapplicant has taken adequate corrective
action, it would grant the application
and the re-applicant would not be
subject to a second SA. The carrier
would remain a new entrant, retain the
same USDOT Number and continue to
be monitored for 18 months from the
date the new application is approved.
For-hire motor carriers must also
reapply for operating authority under 49
U.S.C. § 13902, if their operating
authority was revoked.
If FMCSA revokes a new entrant’s
registration because it refused to submit
to an audit, the new entrant would be
required to submit an updated MCS–
150, retain the same USDOT Number,
and submit to an SA as soon as
practicable once the new application is
approved. FMCSA intends to flag these
carriers so they will receive an SA as
soon as practicable once they reenter the
program. In all instances, a carrier
reapplying for new entrant authority
would be prohibited from operating in
interstate commerce until its new
application is approved. As in the case
above, a new 18-month monitoring
period would start upon approval of the
new application.
To retain historical information on a
revoked new entrant’s past performance,
FMCSA would require the new entrant
to retain the same USDOT Number
when reapplying for registration. This is
consistent with what FMCSA has done
in the past and is currently doing
whenever a carrier is placed out-ofservice and subsequently remedies
whatever deficiencies resulted in the
out-of-service order.
Household Goods
Currently, the SA does not evaluate
compliance with FMCSA’s household
goods (HHG) regulations (49 CFR part
375). In order to strengthen its oversight
of the HHG industry, FMCSA is
proposing to include questions
regarding HHG requirements in the
audit. Because the HHG requirements
are not safety related, however, FMCSA
would not count the answers toward the
pass/fail determination. Instead, any
violations found would be enforced
through other means (e.g., a compliance
review).
Americans With Disabilities Act
The SA also does not evaluate
compliance by passenger carriers with
the Americans with Disabilities Act of
1990 [Public Law 101–336, 104 Stat.
327, July 26, 1990] (ADA). DOT
regulations at 49 CFR part 37 prohibit
discrimination against individuals with
disabilities in the provision of
transportation services, and require

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certain vehicles to be readily accessible
to and usable by such individuals. In
order to strengthen its oversight over
ADA issues, FMCSA is proposing to
include questions regarding ADA
compliance in audits of new entrant
passenger carriers. As with violations of
the HHG requirements, FMCSA would
not count the answers toward the pass/
fail determination. Instead, any
violations found would be enforced by
forwarding apparent violations to the
U.S. Department of Justice or, if the
carrier is a recipient of DOT financial
assistance, through DOT administrative
enforcement action.

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Other Changes
Today’s proposal would amend
§ 385.319, which concerns the new
entrant’s responsibilities for remedying
deficient safety management practices
discovered during the safety audit. It
adds an additional category of passenger
carriers to the description of which
carriers must remedy deficiencies
within 45 days of notification by
FMCSA—new entrants that haul
passengers in a vehicle used or designed
to transport between 9 and 15
passengers for compensation.2 The
corrective action periods in § 385.319(c)
were modeled after the 45- and 60-day
effective dates of Unsatisfactory safety
ratings in 49 CFR 385.11. Section 385.11
subjects all motor carriers transporting
passengers by CMV to the 45-day
requirement, including CMVs designed
to transport between 9 and 15
passengers for compensation. The May
2002 IFR inadvertently failed to apply
the 45-day requirement to small vehicle
passenger carriers, subjecting them
instead to the 60-day period applicable
to property carriers not hauling
hazardous materials requiring
placarding. We propose to amend
§ 385.319(c), as well as §§ 385.323,
385.325, and 385.327 to make them
consistent with § 385.11. Section
385.319 has also been rewritten to cross
reference the definition of CMVs
relating to hazardous materials carriers
in 49 CFR 390.5 for purposes of
consistency.
Current § 385.337(a) states: ‘‘The
initial refusal to permit an SA to be
2 Under existing FMCSA regulations, most of the
FMCSRs do not apply to the transportation of
passengers in such vehicles within a 75 air-mile
radius of the driver’s work reporting location, or
when the carrier is not directly compensated. See
49 CFR § 390.3(f)(6). However, section 4136 of
SAFETEA–LU eliminated the 75 air-mile distance
limitation. Therefore, all carriers transporting
passengers in CMVs designed to carry between 9
and 15 passengers will be subject to the new entrant
requirements, provided such carriers are directly
compensated. In a separate rulemaking, § 390.3(f)(6)
will be amended to achieve consistency with this
statutory change.

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performed may subject the new entrant
to the penalty provisions in 49 U.S.C.
§ 521(b)(2)(A).’’ The term ‘‘initial’’
before the word ‘‘refusal’’ unnecessarily
limits FMCSA’s ability to impose
penalties against recalcitrant carriers.
Therefore, FMCSA is proposing to
remove the word ‘‘initial’’ before the
word ‘‘refusal’’; this change would
permit FMCSA to consider any refusal
as a basis for imposing penalties.
The New Entrant Safety Assurance
Process and Non-North AmericaDomiciled Motor Carriers
Congress ratified the Central
American Free Trade Agreement in the
summer of 2005. In preparation for
implementation of this treaty, FMCSA
examined the agency’s programs to
ensure that any CMVs entering the
United States from Central American
countries were operating safely. Central
American motor carriers, and indeed
any motor carrier from a country other
than the United States, Canada, or
Mexico (non-North America-domiciled
motor carriers), are not covered by
FMCSA’s existing New Entrant
oversight programs. There are 64
carriers from Central American
countries that have registered with the
agency to operate CMVs in the United
States.
The registered Central American
carriers are domiciled in Guatemala, El
Salvador, Belize, Honduras, Panama,
and Nicaragua. The average vehicle fleet
size for these carriers is one or two
tractor-trailers. Sixty-three of the 64
carriers classified their operations as
private motor carriers of property. A
single carrier listed its operation type as
private motor carrier of passengers
(business). Most of the Central
American carriers contracted with the
same processing agent located in
Brownsville, Texas, to file the USDOT
Number application with FMCSA. Each
of the carriers, including the passenger
carrier, listed general freight or motor
vehicles as its cargo type.
FMCSA has considered several
options for a safety monitoring process
for non-North America-domiciled motor
carriers, including (1) subjecting them to
the safety monitoring process for
Mexico-domiciled carriers; (2)
subjecting them to the New Entrant
Safety Assurance Process for U.S. and
Canada-domiciled carriers; or (3)
developing an alternate oversight
program compatible with existing
regulatory authority.
The safety monitoring system for
Mexico-domiciled carriers is based
upon standards set out in the NAFTA

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Arbitral Panel Report 3 dated February
6, 2001, and the provisions of Section
350 of the FY 2002 Department of
Transportation Appropriations Act. The
NAFTA Arbitral Panel (the Panel) noted
that: (1) The United States is not
required to treat applications from
Mexico-domiciled trucking firms in
exactly the same manner as applications
from U.S. or Canadian firms, as long as
they are reviewed on a case by case
basis; and (2) given the different
enforcement mechanisms in place in the
United States and Mexico, it may be
justifiable for the United States to
address legitimate safety concerns
through different methods of ensuring
compliance with the U.S. regulatory
regime. Similarly, the Panel found it
may not be unreasonable for the United
States to implement different
procedures with respect to service
providers from another NAFTA country
if necessary to ensure compliance with
its own local standards by these service
providers.
Mexico’s motor carrier safety
regulatory system lacks several of the
components that are central to the U.S.
system. As the Panel found, the U.S. is
responsible for the safe operation of
motor carriers within U.S. territory,
regardless of the carriers’ country of
origin, and FMCSA believes we must
ensure each carrier is safe to protect
U.S. highway users. The safety
monitoring process for Mexicodomiciled carriers provides FMCSA
with the necessary level of assurance, in
a manner consistent with the Panel’s
findings, and the relevant provisions of
NAFTA. It ensures that Mexican motor
carriers seeking U.S. operating authority
are capable of complying with the U.S.
safety regulatory regime.
The New Entrant Safety Assurance
Process for U.S. and Canada-domiciled
carriers is based upon an in-depth
understanding of the safety systems in
each country and a long history of crossborder truck and bus operations.
Because FMCSA lacks understanding
and experience with the safety systems
of Central American and other nonNorth American countries, the agency
deems it appropriate to adopt an
alternate method of overseeing the
compliance and safety of non-North
America-domiciled-motor carriers. The
alternate oversight method for nonNorth America-domiciled motor carriers
is similar to FMCSA’s oversight program
for Mexico-domiciled motor carriers. It
also is consistent with sec. 210(a) of
MCSIA because it would require a safety
3 In the Matter of Cross-Border Trucking Services,
Secretariat File No. USA–MEX–98–2008–01, Final
Panel, (February 6, 2001).

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review of a new entrant non-North
America-domiciled motor carrier within
the first 18 months of operations.
FMCSA would implement the minimum
requirements provision of sec. 210(b) for
these carriers through Form OP–
1(NNA). Because sec. 210(a) of MCSIA
requires the Secretary to issue
regulations mandating safety reviews of
all new entrant carriers, today’s action
proposes such regulations for non-North
America-domiciled motor carriers. Due
to FMCSA’s lack of knowledge
regarding the safety regimes of their
home countries (as opposed to Canada
and Mexico), FMCSA will use
experience gained through the alternate
oversight safety monitoring system to
determine whether further regulatory
changes may be appropriate in the
future. The agency requests information
on the safety systems of Central
American and other non-North
American countries.
Monitoring the Safety of Existing NonNorth America-Domiciled Motor
Carriers
FMCSA will educate, review and
monitor the 64 registered non-North
America-domiciled motor carriers and
any additional non-North American
carriers issued a USDOT Number prior
to the effective date of any final rule
promulgated for today’s notice of
proposed rulemaking. Compliance
reviews will be conducted within three
months on all existing non-North
America-domiciled motor carriers to
assess their compliance with U.S.
regulations. With respect to additional
non-North America-domiciled carriers
that register with FMCSA before the
effective date of any final rule
promulgated for today’s notice of
proposed rulemaking, FMCSA will (1)
manually review each application for
USDOT Number (Form MCS–150) filed
by non-North America-domiciled motor
carriers to ensure they are complete and
accurate; and (2) conduct a compliance
review of these carriers within 6–12
months of issuing a USDOT Number
registration and/or operating authority.
FMCSA will monitor all non-North
America-domiciled motor carriers for
violations of the 11 regulations that the
agency considers as minimum standards
for safe operations (the same violations
proposed as automatic failure factors in
this NPRM) and conduct an expedited
compliance review of any non-North
America-domiciled motor carrier when
a violation of these regulations is
discovered. While the consequences of
undergoing a compliance review and
failing a new entrant safety audit may be
somewhat different (civil penalties, a
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out-of-service order resulting from a
compliance review compared to
proposed revocation of new entrant
operating authority resulting from a new
entrant safety audit), FMCSA believes
conducting a compliance review is an
equivalent level of oversight due to its
comprehensive nature, the resultant
safety rating for the carrier, and the
possibility of civil penalties. In
addition, non-North America-domiciled
motor carriers would be subject to the
same cross-border inspections as
Mexico-domiciled carriers. Vehicles
operated by non-North Americadomiciled motor carriers will be subject
to the same inspection standards as
other CMVs entering or operating within
the United States and will be inspected
at the U.S.-Mexico international border
unless displaying a valid safety decal.
Through the agency’s process of
gathering information on non-North
America-domiciled motor carriers,
another group of carriers from Central
America has been identified. This group
of carriers allegedly drives or flies
drivers into interior States to purchase
used tractor/trailers, school buses, farm
equipment, and other vehicles. These
vehicles are transported to Central
America through the United States and
Mexico without proper registration,
insurance or licensing. This migration of
exports from the United States is
funneled primarily through one
location—the Los Indios Port of Entry to
Mexico.
To address this situation, FMCSA will
initially educate southbound non-North
America-domiciled motor carriers by
providing warnings and informing them
of the requirements for complying with
the Federal Motor Carrier Safety
Regulations. Following the educational
period, FMCSA will perform periodic
compliance strike force activities
targeting non-registered southbound
traffic at the Los Indios Port of Entry to
Mexico. Non-compliant carriers will
receive enforcement action ranging from
roadside inspection citations to placing
drivers and vehicles out of service, if
warranted. FMCSA requests comments
on this alternate oversight system for
non-North America-domiciled motor
carriers.
Proposed Registration and Safety
Monitoring Process for Non-North
America-Domiciled Motor Carriers
Applying for a USDOT Number
Today’s action proposes regulations
governing the registration and safety
monitoring of new entrant non-North
America-domiciled motor carriers. The
proposals are discussed as follows:

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A. Proposed Application Process for
Non-North America-Domiciled Motor
Carriers
B. Proposed New Form—OP–1(NNA) for
Non-North America-Domiciled Motor
Carriers Requesting New Entrant
Registration
C. Proposed Safety Monitoring System
for Non-North America-Domiciled
Motor Carriers.
A. Proposed Application Process for
Non-North America-Domiciled Motor
Carriers
FMCSA proposes to add a new
subpart H to part 385 to address the
specific requirements of the application
process for all non-North Americadomiciled motor carriers applying for a
USDOT Number. First, proposed
§ 385.601 explains that subpart H would
apply to any non-North Americadomiciled motor carrier that wants to
operate within the United States to
provide transportation of property or
passengers in interstate commerce.
Proposed § 385.603 requires these
applicants to file—
• Proposed Form OP–1(NNA)—
Application for U.S. Department of
Transportation (USDOT) Registration by
Non-North America-Domiciled Motor
Carriers,
• Form MCS–150—Motor Carrier
Identification Report, and
• A notification of the means used to
designate process agents.
The application would need to be
filled out in English and be complete to
be considered. Information on obtaining
applications is also provided.
Proposed Form OP–1(NNA) would
serve the dual purpose as being an
application for new entrant registration
(for all non-North America-domiciled
carriers) and operating authority (for forhire carriers subject to the requirements
of 49 CFR part 365). Together with the
MCS–150, the OP–1(NNA) would
provide a more complete picture of the
carrier’s operational characteristics as
well as its safety compliance and other
key information than could be obtained
through either form alone.
FMCSA would not impose a
registration fee for new entrant
registration unless the applicant also
requires operating authority under part
365, for which an application fee is
charged. Under FMCSA’s current
regulations, a non-North Americadomiciled for-hire carrier of non-exempt
commodities must submit Form OP–1
and pay a $300 application fee.
Conforming amendments are proposed
to §§ 365.101 and 365.105 to clarify that
a non-North America-domiciled motor
carrier would request operating
authority by using Form OP–1(NNA)

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Federal Register / Vol. 71, No. 245 / Thursday, December 21, 2006 / Proposed Rules
and consequently be subject to the
application fee.
Form MCS–150 would be used to
obtain a USDOT Number. Conforming
amendments have been made to
proposed § 390.19 to require a nonNorth America-domiciled motor carrier
to file the MCS–150 before beginning
operations within the United States and
to submit an updated form every 24
months after issuance of a USDOT
Number.
Form BOC–3. The non-North
America-domiciled motor carrier
additionally would be required to notify
the agency regarding designation of
process agents by either: (1) Submission
in the application package of Form
BOC–3—Designation of Agents-Motor
Carriers, Brokers and Freight
Forwarders, or (2) a letter stating that
the applicant will use a process agent
that will submit the Form BOC–3
electronically.
Proposed § 385.605 would require a
non-North America-domiciled carrier to
use only drivers who possess a valid
commercial driver’s license and to
subject those drivers to drug and alcohol
testing as required under 49 CFR part
382. Acceptable commercial driver’s
licenses would include: (1) A CDL, (2)
Canadian commercial driver’s license or
(3) a Licencia de Federal de Conductor
issued by Mexico. FMCSA believes the
CDL and corresponding drug and
alcohol testing requirements are
justified because drivers’ licenses issued
by the various non-North American
countries may not meet FMCSA
standards or State licensing standards
regarding commercial motor vehicles
not requiring a CDL.
In proposed § 385.607, FMCSA
explains how the agency would process
an application for new entrant
registration filed by a non-North
America-domiciled motor carrier. To the
extent practicable, the agency would
validate the accuracy of information and
certifications with data in its databases,
and the databases of the governments of
the country where the carrier’s principal
place of business is located. FMCSA
would not grant new entrant registration
unless the carrier passes a preauthorization safety audit (discussed
later in this section). The criteria
governing the pre-authorization safety
audit are fully explained in a new
Appendix to part 385, subpart H, which
is modeled after the pre-authorization
safety audit for certain Mexicodomiciled carriers.
After completing the preauthorization safety audit, FMCSA
would issue a USDOT Number if the

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applicant passes the audit.4 However,
the applicant will not be authorized to,
and must not, begin operating within
the United States unless it has filed
evidence of financial responsibility
pursuant to 49 CFR part 387 and
designated a process agent.
The proposed Appendix to 49 CFR
part 385, subpart H, sets forth criteria
governing the pre-authorization safety
audit. During the pre-authorization
safety audit, FMCSA would validate the
accuracy of information provided in the
application and determine whether the
carrier has basic safety management
controls necessary to ensure safe
operations. FMCSA would gather
information by reviewing a motor
carrier’s compliance with ‘‘acute’’ and
‘‘critical’’ regulations in the FMCSRs
and HMRs. As stated under the
discussion of the New Entrant Safety
Assurance Process for U.S. and Canadadomiciled carriers, FMCSA is studying
a new approach to assessing the severity
of violations as part of its announced
CSA 2010 initiative. This initiative may
ultimately replace the ‘‘acute and
critical’’ methodology described in the
Appendix to part 385, subpart H.
Conforming amendments are
proposed for §§ 387.7 and 387.31 to
require all non-North Americadomiciled motor carriers—private and
for-hire—to maintain and file evidence
of financial responsibility with the
agency as a condition of registration.
FMCSA believes conditioning
registration upon receipt of evidence of
financial responsibility is appropriate
for all non-North America-domiciled
motor carriers because the financial
responsibility standards within their
countries of domicile may not meet U.S.
Federal and State requirements. Section
4120 of The Safe, Accountable, Flexible,
Efficient Transportation Equity Act: A
Legacy for Users (SAFETEA–LU) [Pub.
L. 109–59, 119 Stat. 1762, August 10,
2005] created new Sections 31138(c)(4)
and 31139(c) in title 49 of the U.S. Code,
authorizing FMCSA to require filing of
evidence of financial responsibility by
private property and passenger motor
carriers under its jurisdiction. However,
only those private motor carriers
domiciled in non-North American
countries would be subject to financial
responsibility filing requirements under
this proposal. FMCSA plans to address
the issue of extending financial
responsibility requirements to U.S. and
4 Applications by for-hire carriers subject to part
365 would also be subject to a 10-day protest
period. In such cases, a USDOT Number would not
be issued until after the protest period has elapsed
and any protests filed have been denied.

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76737

Canada-domiciled private motor carriers
in a separate rulemaking.5
The new entrant registration would
not become permanent unless the
carrier successfully completes the
proposed 18-month safety monitoring
system proposed under new subpart I to
part 385. Successful completion of the
safety monitoring system includes
having each CMV operated in the
United States pass a North American
Standard commercial motor vehicle
inspection every 90 days (as indicated
by issuance of a valid safety decal for
each of these vehicles) and obtaining a
Satisfactory safety rating as a result of
the required compliance review.
Under proposed § 385.609, the
applicant must notify FMCSA within 45
days of any changes or corrections to
certain key information in the Form OP–
1(NNA) or the Form BOC–3—the form
used to designate a process agent.
Failure to do so would be grounds for
revocation or suspension of its new
entrant registration.
B. Proposed New Form—OP–1(NNA) for
Non-North America-Domiciled Motor
Carriers Requesting New Entrant
Registration
Proposed Form OP–1(NNA) and its
instructions are based extensively on
the OP–1(MX) form with certain
modifications applicable to non-North
America-domiciled applicants.
Proposed Section I of the form solicits
information about the applicant’s name,
address, official representative, and
form of business. Proposed Section IA
would require the applicant to disclose
any existing operations in the United
States, including whether it had
previously applied for a USDOT
Number. Proposed Section II solicits
information about any relationships or
affiliations with other entities registered
with FMCSA or its predecessor
agencies. This information would help
FMCSA verify the applicant’s domicile
in a non-North American country and
determine whether the applicant holds
similar registration in its country of
domicile. Information regarding
registration with the applicant’s country
of domicile would enable FMCSA to
confirm motor carrier safety issues with
its licensing authority.
Under proposed Section III of the
form, the applicant would identify the
type(s) of registration requested. FMCSA
would require a separate filing fee for
each type of registration requested.
Section 4303(f) of SAFETEA-LU
5 Mexico-domiciled private carriers are subject to
the same financial responsibility filing
requirements as U.S. for-hire carriers pursuant to 49
U.S.C. 13902(g).

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imposed a January 1, 2007, deadline for
the agency to modify carrier
registrations for non-exempt for-hire
motor carriers under 49 U.S.C. chapter
139 to eliminate distinctions between
common and contract carriers.
Accordingly, FMCSA has removed the
common and contract carrier
designations from the description of
types of registration under proposed
Section III and modified the proposed
instructions for Section III to explain
which for-hire registrations require a
registration fee.
Proposed Section IV notifies the
applicant of financial responsibility
requirements. Consistent with long-haul
Mexico-domiciled new entrants, all
non-North America-domiciled
applicants (private and for-hire) would
be required to file evidence of financial
responsibility with the agency as a
condition of registration. FMCSA also
proposes making the cargo insurance
requirement for non-North Americadomiciled motor carriers consistent
with what was proposed in the Unified
Registration System NPRM (70 FR
28990 published May 19, 2005). The
May 19, 2005, NPRM proposes that only
household goods carriers must maintain
and file evidence of cargo insurance
with the agency. FMCSA would modify
proposed Form OP–1(NNA) if the
Unified Registration System final rule
results in different cargo insurance
requirements.
Under proposed Section V, the
applicant would certify and substantiate
that it has a system in place to ensure
compliance with applicable
requirements covering driver
qualifications, hours of service, drug
and alcohol testing, vehicle condition,
accident monitoring, and hazardous
material transportation. Substantiation
would be in the form of narrative
responses describing how the applicant
will monitor hours of service, how it
will maintain an accident register and
how it will monitor accidents. FMCSA
would also require that the applicant
include the names of individuals in
charge of its safety program and drug
and alcohol testing and identify specific
locations where the applicant maintains
current FMCSRs. Information obtained
under Section V would enable FMCSA
to evaluate, upon initial application, the
safety compliance program of the
applicant. FMCSA would reject an
application that could not offer a
specific, unambiguous plan to ensure
compliance.
Proposed Section VI of the form
would include new registration
requirements for motor carriers of
household goods created under Section
4204 of SAFETEA–LU. Section 4204

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amended 49 U.S.C. 13902(a) to require
such an applicant to: (1) Provide
evidence of participation in an
arbitration program and a copy of its
notice to shippers about the availability
of binding arbitration; (2) identify its
tariff and provide a copy of the notice
of the availability of the tariff for
inspection; (3) certify it has read, and is
willing to comply with all U.S. Federal
laws regarding consumer protection,
estimating, consumers’ rights and
responsibilities, and options for limiting
liability for loss and damage; and (4)
disclose certain financial, operational
and familial relationship with any other
entity involved in the transportation of
household goods within 3 years of the
proposed date of registration.
Proposed Section VII would require
the applicant to specify the scope of
registration, indicating intended
principal border crossing points.
Under proposed Section VIII, the
applicant would be required to make
specific certifications regarding
compliance with laws of the United
States. The applicant would need to
affirm its willingness and ability to
provide the proposed service and to
comply with all pertinent statutory and
regulatory requirements. Certifications
under proposed Section VIII would
remind the applicant of statutory and
regulatory responsibilities which, if
neglected or violated, might subject the
applicant to disciplinary or corrective
action by FMCSA. The applicant would
need to confirm its understanding that
its process agent is deemed its official
representative within the United States
for receipt of filings and notices relating
to the administrative and judicial
process in connection with enforcement
of Federal statutes and regulations.
Finally, the applicant would need to
certify that it is not currently
disqualified from operating a
commercial motor vehicle in the United
States.
Proposed Section IX, the final section
of the form, includes the applicant’s
oath attesting to the accuracy and
truthfulness of application responses
and certification of compliance with
certain U.S. Federal and State laws
regarding distribution or possession of
controlled substances.
C. Proposed Safety Monitoring System
for Non-North America-Domiciled
Motor Carriers
Today’s action proposes a new
subpart I to part 385 covering the
proposed safety monitoring system for
non-North America-domiciled new
entrants.

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Proposed § 385.701 defines the
following terms used in new subpart I
to part 385:
(1) Compliance review has the same
meaning as in 49 CFR § 385.3.
(2) New entrant registration is the
provisional registration under 49 CFR
part 385, subpart H that FMCSA grants
to a non-North America-domiciled
motor carrier to provide interstate
transportation within the United States.
It will be revoked if the registrant is not
assigned a Satisfactory safety rating
following a compliance review
conducted during the safety monitoring
period established in subpart I.
(3) Non-North America-domiciled
motor carrier means a motor carrier of
property or passengers whose principal
place of business is located in a country
other than the United States, Canada or
Mexico.
Proposed § 385.703 describes
elements of the safety monitoring
system for non-North Americadomiciled new entrant motor carriers.
The safety monitoring system would
include roadside monitoring and a
compliance review within 18 months of
receiving a USDOT Number.
Additionally, the non-North Americadomiciled carrier would be required—
throughout the 18-month safety
monitoring period and for three years
after its new entrant registration
becomes permanent—to display on each
CMV in its fleet that is operated within
the United States, a valid safety
inspection decal. The safety inspection
decal would only be valid for three
months.
Under proposed § 385.705, a nonNorth America-domiciled motor carrier
found in violation of the seven listed
serious violations or infractions would
be subject to expedited enforcement
action. Such actions would include an
expedited compliance review or, in the
alternative, a demand that the carrier
demonstrate in writing that it has taken
immediate corrective action. The
proposed infractions parallel those
proposed for U.S. and Canadadomiciled motor carriers and those
already applicable to Mexico-domiciled
carriers. The section clarifies what
constitutes a valid commercial driver’s
license. The type of action taken by
FMCSA in response to any violations
would depend upon the specific
circumstances of the violations.
Proposed § 385.705(b) warns that
failure to respond to a request for a
written response demonstrating
corrective action within 30 days would
result in suspension of new entrant
registration until the required showing
of corrective action is made.

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Proposed § 385.705(c) emphasizes
that a carrier that successfully responds
to a demand for corrective action under
this section still would need to undergo
a compliance review during the 18month safety monitoring period if it had
not already done so.
Under proposed § 385.707, FMCSA
explains potential outcomes of the
compliance review—a Satisfactory,
Conditional, or Unsatisfactory rating—
and FMCSA follow-up actions in
response to each rating. The proposed
section would require the compliance
review to be conducted consistent with
existing FMCSA safety fitness
evaluation procedures under 49 CFR
part 385, Appendix B. These are the
same criteria in use for U.S., Canada and
Mexico-domiciled carriers.
FMCSA sets forth under proposed
§ 385.709 the specific time frames for
suspension and revocation of new
entrant registration. We believe the
proposed procedures strike an
appropriate balance between the need to
protect the public from potentially
unsafe carriers and preservation of the
carrier’s due process rights.
Proposed § 385.711 sets forth
procedures for requesting administrative
review of the agency’s safety rating or its
decision to suspend or revoke new
entrant registration. The request must
explain the error it believes FMCSA
committed and a list of all factual and
procedural issues in dispute. In
addition, the carrier must include any
information or documents that support
its argument. Following the
administrative review, which would be
conducted by the FMCSA Associate
Administrator for Enforcement and
Program Delivery, the agency would
notify the carrier of its decision. This
decision would constitute the agency’s
final action. Administrative review
would be completed in no more than 10
days after the request is received.
Under proposed § 385.713, a nonNorth America-domiciled carrier whose
registration has been revoked would be
prohibited from re-applying for new
entrant registration for at least 30 days
after the date of revocation. When
reapplying, the non-North Americadomiciled motor carrier again would be
required to pass a pre-authorization
safety audit. The carrier would need to
demonstrate to the FMCSA’s satisfaction
that it has corrected the deficiencies that
resulted in revocation of its registration
and that it otherwise has effectively
functioning basic safety management
systems in place. If the application is
approved, the carrier’s USDOT
Number—linked to its previous safety
record—would be reactivated; a new
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this way, the agency could maintain a
complete safety record of the non-North
America-domiciled motor carrier.
Proposed § 385.715 provides that the
safety monitoring period for non-North
America-domiciled motor carriers
would last for at least 18 months from
the date it was issued a USDOT
Number.6 If, at the conclusion of the
18-month safety monitoring period, the
carrier has received a Satisfactory safety
rating and is not currently under a
notice from FMCSA to remedy
deficiencies in its basic safety
management practices, the carrier’s
registration would become permanent.
If the carrier is under a notice to
remedy deficiencies in its basic safety
management practices, the safety
monitoring period would be extended—
and its new entrant designation would
continue—until FMCSA determines the
carrier is complying with the Federal
safety regulations or revokes its
registration under § 385.709.
If FMCSA is unable to conduct a
compliance review within the 18-month
period, proposed § 385.715(c) would
extend the safety monitoring period
until such time as the agency completes
and evaluates a review.
Proposed § 385.717 emphasizes that
the non-North America-domiciled motor
carrier also would be subject to the same
general safety fitness procedures in 49
CFR part 385, subpart A, and to
compliance and enforcement
procedures applicable to all carriers
regulated by the FMCSA.
Proposed § 390.19 explains filing
procedures for the MCS–150 in greater
detail and would subject non-North
America-domiciled motor carriers to the
biennial update requirement.
Additionally, § 390.19(h)(2) proposes a
technical correction documenting the
existing requirement for a Mexicodomiciled long-haul motor carrier to
successfully complete a preauthorization safety audit prior to being
issued a USDOT Number.
Discussion of Comments
FMCSA received 29 responses to the
IFR from 19 commenters. The
commenters were five trade
associations, four safety consultants,
two public interest groups, three private
citizens, a State police department, a
safety enforcement organization, an
occupational health private practice, a
union, and a professional association.
Five commenters made multiple
submissions.
6 If a carrier’s USDOT Number was revoked and
reinstated under the provisions of proposed
§ 385.713, the 18-month period would run from the
date of reinstatement.

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General Comments. In general, the
comments were supportive of the new
entrant requirements in the IFR. The
American Trucking Associations (ATA),
American Society of Safety Engineers
(ASSE), Commercial Vehicle Safety
Alliance (CVSA), Consolidated Safety
Systems (CSS), Daecher Consulting
Group, Inc. (Daecher), the Independent
Truckers and Drivers Association
(ITDA), the National Private Truck
Council (NPTC), the Indiana State
Police, Schroeder & Associates, the
International Brotherhood of Teamsters
(IBT) and Tran Services generally
supported the IFR and offered
comments to improve the rulemaking.
The Canadian Trucking Alliance (CTA)
supported the IFR to the extent it
applies equally to Canada- and U.S.domiciled carriers. CVSA stated the
SA—if properly implemented and
accompanied by CDL reforms,
technology and increased traffic
enforcement—will have a dramatic and
measurable impact on safety. CVSA
submitted a petition to delay the
implementation of the New Entrant
Safety Assurance Process until States
receive adequate funding and after
certain procedural issues relating to the
process are resolved.
Several commenters opposed the IFR
for various reasons. Advocates for
Highway and Automobile Safety
(AHAS) and Public Citizen opposed the
agency’s decision to publish an IFR
instead of a notice of proposed
rulemaking. Both urged the agency to
permit full public involvement in the
New Entrant Safety Assurance Process
rulemaking. AHAS indicated the quality
of FMCSA regulatory drafting and
publication would be improved by
providing sufficient documentation of
agency reasoning and decisions in its
final regulations. Public Citizen stated
the New Entrant Safety Assurance
Process is rooted in self-reporting and
devoid of meaningful oversight.
According to Public Citizen, only an
extremely negligent new entrant would
be denied operating authority under this
process. Public Citizen urged the agency
to:
• Permit full public involvement in
the New Entrant rulemaking.
• Eliminate from the process all
requirements for uncorroborated selfreporting.
• Make a proficiency examination,
and third-party, in-person verification of
regulatory compliance and knowledge,
prerequisites for granting operating
authority.
• Develop a plan that assures the SA
will be conducted within an 18-month
time period.

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• Establish stricter penalties for
noncompliant motor carriers.
The Transportation Lawyers
Association (TLA) commented the IFR
fails to meet the statutory requirement
of ensuring a carrier is knowledgeable
about its safety responsibilities prior to
commencing operations. ‘‘FMCSA
proposes nothing in this proceeding that
will reduce the ‘safety learning curve’
before a new carrier begins operating.’’
TLA contended that safety certifications
and educational and technical
assistance materials have been used by
the agency for many years and have
already proven inadequate.
FMCSA Response: In a letter dated
April 11, 2003, the agency denied the
CVSA petition to delay implementation
of the New Entrant Safety Assurance
Process until January 2004 and
addressed CVSA concerns, including
those related to adequate State funding
for implementing the new entrant
process, adequate training for State and
Federal personnel charged with
conducting safety audits, and
recognition of Canadian and current
State new entrant programs. A copy of
the letter is in the docket to this rule.
In developing this proposal, FMCSA
fully considered all comments to the
May 2002 IFR and has adopted some of
the recommendations. In response to
complaints about self-certifications, this
NPRM would eliminate the Form MCS–
150A because safety audits have
confirmed carrier certifications on the
MCS–150A and findings at the carrier’s
place of business are not always
consistent (See the ‘‘Form MCS–150A’’
subheading). Later in this section under
applicable subject headings, the agency
addresses specific concerns from AHAS,
TLA and Public Citizen regarding the
use of proficiency examinations (see the
‘‘Proficiency Examinations’’
subheading) and plans to improve the
educational and technical assistance
(ETA) materials by including
information on how to comply with the
regulations (see the ‘‘ETA Materials’’
subheading). The rule provides
additional details about the scoring
methodology and how the agency
intends to strengthen the New Entrant
Safety Assurance Process under the
previous section titled ‘‘Discussion of
the Proposed Rule’’ under the
‘‘Strengthening the Safety Audit’’
subheading.
Timing of the SA and 18-month
monitoring period. Several commenters
took issue with the timing of the SA and
the 18-month monitoring period. ASSE
stated that the 18-month period is too
long, Daecher contended that a 6-month
period would be adequate, and
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best time to conduct an audit is within
6 to 9 months of beginning operations.
Only CSS agreed that an 18-month
period may be necessary to effectively
evaluate a carrier from a regulatory
perspective because it affords the carrier
an opportunity to execute certain
requirements. The Indiana State Police
recommended having a certified
FMCSA representative conduct the SA
within 30 days of issuance of the
USDOT Number and CVSA advocated a
face-to-face meeting with the new
entrant at the time of the application.
FMCSA Response: As noted above, 49
U.S.C. 31144(g)(1) requires FMCSA to
establish an 18-month period within
which new entrant safety reviews must
be conducted. Furthermore, as a
practical matter, FMCSA believes
carriers will not have sufficient records
to allow the agency to review and
evaluate the adequacy of a carrier’s
basic safety management controls until
the carrier has been operating for
approximately 3 months.
Scope of the Audit. Some commenters
took issue with the SA itself and
recommended broadening the scope of
the audit to address more than just
compliance issues. ATA recommended
including such topics as employee
hiring, bonus and incentive programs,
employee training, quality control and
safety meetings. CVSA recommended
including a CVSA Level 1 or Level 5
inspection on as many of the carrier’s
vehicles as possible.
FMCSA Response: FMCSA proposes
broadening the scope of the audit to
include additional areas over which it
has jurisdiction, such as operating
authority, and household goods and
ADA regulatory compliance. However,
as noted previously, only safety-related
questions would count toward the pass/
fail determination. The agency also
proposes to strengthen the audit by
making specific violations, such as
operating without a required CDL, result
in automatic failure of the audit.
Currently, the SA involves a Level 1 or
5 inspection of a sample of the carrier’s
vehicles. If there are insufficient
vehicles on site at the time of the audit,
the auditor completes the audit and
documents why he/she was unable to
conduct the inspections.
Safety Audit and Corrective Actions.
Public Citizen opposed having a new
entrant self-certify regarding corrective
action for deficiencies revealed during
the SA and asserted FMCSA should
require in-person verification of
corrective action. The Teamsters urged
the agency to immediately suspend any
new entrant found to be lacking basic
safety management controls during the
SA until it has demonstrated corrective

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action to the satisfaction of FMCSA. The
Indiana State Police urged FMCSA to
place both the vehicle and driver out-ofservice until corrective action is taken if
a carrier is found to be operating
without USDOT new entrant
registration.
FMCSA Response: The current
regulations under § 385.319 provide that
FMCSA must notify a carrier of any
inadequacies found during an SA and
advise the carrier what actions it must
take to remedy the inadequacies to
avoid having its registration revoked.
The carrier must submit written
evidence of corrections taken, and
FMCSA reserves the right to determine
whether they are adequate. FMCSA is
required to provide the carrier with
official notice of the deficiencies and
the opportunity to correct them. The
carrier must respond with more than a
self-certifying statement. For example,
acceptable demonstration of corrective
action for a carrier found to not have a
drug and alcohol testing program would
be evidence documenting membership
in a consortium. Under § 385.325, if a
carrier does not demonstrate corrective
action acceptable to FMCSA, the agency
would revoke its new entrant
registration and issue an out-of-service
order. If the carrier is found to be
operating a CMV in violation of an outof-service order, under § 385.331, it
might be fined up to $11,000 per
violation in accordance with 49 U.S.C.
521(b)(2)(A) and 49 CFR part 386,
Appendix B (a)(3).
Form MCS–150A. Several commenters
encouraged FMCSA to eliminate the
MCS–150A. ATA contended that many
of the certification statements on the
form are already collected on the
registration application and suggested
we retain and incorporate certification
statements 18 and 19 into the MCS–150.
ITDA urged FMCSA to require each new
applicant to provide a written plan
demonstrating the applicant’s
knowledge of motor carrier safety
regulations and its ability to safely
operate a trucking business. Public
Citizen regarded the certifications on
the MCS–150A as uncorroborated
declarations by the applicant.
FMCSA Response: FMCSA agrees the
MCS–150A is not producing the
intended results. FMCSA’s review of the
New Entrant Safety Assurance Process
has verified many new entrants are
falsely certifying to having safety
management controls when they are not
actually in place. The agency proposes
to eliminate Form MCS–150A.
Proficiency Examination. Several
commenters opposed FMCSA’s decision
to not require a proficiency examination
for new entrants. AHAS argued the IFR

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does not adequately consider the use of
a proficiency examination to measure
new entrant safety. CSS supported the
use of a proficiency examination as a
component of the New Entrant Safety
Assurance Process and offered to
discuss its current program with the
Department of Defense (DOD) and
associated procedures with FMCSA.
CVSA stated that in addition to using
enhanced, comprehensive educational
and technical assistance materials,
FMCSA should administer a proficiency
examination to measure a new entrant’s
knowledge of Federal motor carrier
safety standards. According to CVSA, a
new entrant’s self-certification alone is
insufficient proof of adequate systems to
assure compliance with the FMCSRs.
Daecher asserted that giving ETA
materials to a carrier does not ensure the
carrier will read and understand the
information. It encouraged FMCSA to
use a proficiency examination to ensure
the carrier has knowledge of the
regulations and related safety
information. Public Citizen urged the
agency to make a proficiency
examination a prerequisite for receiving
operating authority. According to Public
Citizen, the examination would be a far
more comprehensive evaluation of
regulatory knowledge than certifications
made on the MCS–150A.
FMCSA Response: The agency
believes the planned enhancements to
the ETA materials, as discussed in
greater detail below, would provide
most carriers with sufficient
understanding of applicable regulations
and assistance on how to comply with
the applicable FMCSRs and HMRs and
that a proficiency examination is not
necessary. However, the agency
recognizes knowledge alone does not
ensure a carrier is in satisfactory
compliance with the regulations. Only a
review of the carrier’s records and
systems could demonstrate such
compliance.
ETA Materials. Several commenters
addressed the subject of educational and
technical materials for new entrants.
AHAS and ATA complained FMCSA
has not provided an opportunity for
public review and comment on those
educational and technical assistance
materials new entrant carriers will
receive. They suggested the agency
place the ETA materials in the
rulemaking docket or direct readers to
where on the agency web site they can
be obtained. CTA recommended
revising the ETA materials to generally
and clearly acknowledge distinctions
between U.S. and Canadian rules.
According to CTA, this would warn new
entrants that rules can, and do, vary
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one operates. ITDA urged FMCSA to
establish a process that encourages a
new entrant to seek information and
guidance and makes that information
and guidance easily accessible. A
private citizen recommended classroom
instruction for new entrants.
FMCSA Response: FMCSA agrees the
ETA materials need to be updated to
better inform new entrants about
regulatory requirements and how to
comply fully with the requirements. The
ETA materials are an integral
component of the entire New Entrant
Safety Assurance Process. One of the
reasons stated in the March 2002 IFR for
not initiating a proficiency exam was
FMCSA’s belief that the educational and
technical assistance provided to new
entrants would ensure they understood
the applicable safety regulations.
However, it is apparent many new
entrants are not fully compliant and one
of the reasons is because the ETA
materials are not as comprehensive as
they need to be. FMCSA plans to review
all ETA materials provided to new
entrants and improve the quality,
content, and format of the material.
The agency believes enhanced ETA
materials, including a new entrant
safety assurance compact disc, would
substantially increase a new entrant’s
awareness of carrier responsibilities
before beginning operations and would,
to a great extent, make them proficient
in those requirements. FMCSA further
believes the anticipated benefits of the
enhanced ETA materials more than
justify associated agency costs. FMCSA
has determined the contents of these
materials are not subject to notice and
comment because they do not establish
standards or procedures, but will place
a copy of the updated ETA materials in
the docket to this rule for inspection
upon completion.
Safety Monitoring During the 18month Period. ATA requested specific
details about how the agency intends to
monitor new entrants during the 18month period. Section 385.307(a) states:
‘‘[t]he new entrant’s roadside safety
performance will be closely monitored
to ensure the new entrant has basic
safety management controls that are
operating effectively.’’ ATA believed
this is insufficient information
concerning how the agency will monitor
new entrants during the 18-month
period. CSS and CVSA supported
development of a unique registration
and USDOT Number to identify new
entrants that have not yet passed the
SA.
FMCSA Response: FMCSA would
continue to monitor a new entrant’s onroad performance using agency
information systems and roadside

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inspections. Although the agency does
not identify a new entrant that has not
yet passed an SA by assigning a unique
USDOT Number, FMCSA is able to
target such new entrants for an SA or
roadside inspection using information
systems such as SafeStat, the Inspection
Selection System (ISS) and the Motor
Carrier Management Information System
(MCMIS).
Safety Audit. Other commenters
stated FMCSA should disclose the SA
Evaluation Criteria, Forms, and
Monitoring Procedures. Both ATA and
AHAS requested the SA evaluation
criteria be placed in the rulemaking
docket for review and comment, and
complained that FMCSA has not
disclosed the criteria by which a new
entrant will be evaluated.
FMCSA Response: Appendix A to 49
CFR part 385 explains the SA evaluation
criteria, including the source of the data
and how FMCSA determines whether a
new entrant has basic safety
management controls.
Reciprocity. CTA urged FMCSA to
exempt from the SA audit requirement
Canada-domiciled new entrant carriers
that have undergone a provincial facility
audit during the 18-month monitoring
period.
FMCSA Response: Although FMCSA
is engaged in ongoing discussion with
its Canadian partners concerning the
New Entrant Safety Assurance Process,
today’s rulemaking is not proposing an
exemption for a Canada-domiciled new
entrant carrier that has passed a
provincial facility audit for several
reasons. First, 49 U.S.C. 31144(g)(1)
specifies the regulation must require
each new entrant to undergo the safety
review (audit) within the first 18
months of beginning operations. The
statutory language provides no authority
to exempt new entrants, including
Canada-domiciled carriers that have
successfully undergone a provincial
facility audit, from the SA. Furthermore,
the Canadian provincial facility audit
fails to address all of the elements of the
new entrant SA. For example, Canada
does not require a carrier to have a
controlled substance and alcohol testing
program for its drivers. FMCSA could
verify a Canada-domiciled carrier is
aware of, and in compliance with, the
agency’s controlled substances and
alcohol testing requirements only by
conducting a new entrant SA under part
385. Moreover, § 31148(b) requires the
SA to be conducted by: (1) A motor
carrier safety auditor certified under
FMCSA regulations or (2) a Federal or
State employee who on the date of the
enactment of § 31148(b) was qualified to
perform such an audit or review.

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Canadian provincial officials may not
meet these qualifications.
Alternate Locations for Audits. The
IFR also requested comments on the
advisability of conducting some SAs at
alternate locations. ATA agreed the use
of locations other than the carrier’s
place of business for the SA may be
beneficial, but recommended that
alternate location scheduling remain
optional and used at the discretion of
the motor carrier scheduled for the
audit. CVSA commented that the
primary value of the SA is the
personalized evaluation and education
provided by the safety professional and
did not believe an adequate audit could
be conducted in a group setting. CVSA
supported conducting the SA on-site at
the new entrant’s place of business. CSS
also opposed the use of alternate
locations for the SA. Although
acknowledging there are obvious
economies associated with this
approach, CSS contended that the
effectiveness and desired results would
be significantly reduced, particularly if
the primary focus of the SA is to assess
the new entrant’s safety management
controls. Public Citizen acknowledged
that conducting multiple audits
simultaneously might expedite the
number of audits conducted and ease
agency backlog. However, Public Citizen
contends a new entrant may be reluctant
to fully participate in the process for
fear of exposing potential vulnerabilities
to its competitors. Another commenter
stated that effective group audits are not
possible because carrier operational
types are so varied. Tran Services
applauded the use of alternate locations
to simultaneously provide educational
and technical assistance to multiple
new entrant carriers, but opposed
conducting SAs in such a setting. The
new entrant would need to bring along
too many records, and FMCSA may be
unable to provide an individual carrier
the individual attention necessary to
determine if the carrier is in
compliance.
FMCSA Response: FMCSA has
carefully considered the feasibility of
conducting group audits. The agency
believes group audits may present an
excellent opportunity to simultaneously
provide many new entrants with
educational and technical assistance in
a classroom setting while auditing the
systems and records of individual new
entrants in a private, one-on-one setting.
However, experience has shown group
audits are only beneficial in select
situations, depending on many factors
including, but not limited to, the
number of new entrants within the
given geographical area. For this reason,

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FMCSA conducts group audits only in
those areas where practicable.
Currently, an SA provides education
and technical assistance to a motor
carrier that has recently begun
operations. In addition, the SA provides
FMCSA with the opportunity to ensure
the carrier’s compliance with applicable
Federal safety regulations. Normally, an
SA would take from 2 to 4 hours to
complete. Unlike the in-depth
compliance review for motor carriers
that are not in the new entrant program,
the SA focuses on education. By
conducting these audits at the carrier’s
place of business rather than in a
classroom setting, auditors gain a
broader perspective of the company’s
structure and level of compliance with
Federal safety regulations.
Use of Private Contractors to Conduct
Safety Audits. The IFR requested
comments on whether private
contractors certified by FMCSA should
conduct SAs. AHAS, ASSE, ATA,
CVSA, CSS, Daecher, The Indiana State
Police, Public Citizen, Schroeder &
Associates, and Tran Services supported
the use of qualified, private contractors
to conduct SAs. AHAS asserted that use
of private contractors would ‘‘provide
an opportunity to boost the annual
numbers and percentages of motor
carriers that are inspected and audited
for safety adequacy.’’ AHAS
acknowledged that substantial
safeguards must be built in order to
avoid the possibility of fraud and other
abuses.
According to ASSE, a certified safety
professional (CSP) with appropriate
transportation experience would be well
qualified to perform the audits without
further designation. ASSE
recommended the final rule allow the
use of private auditors who must be
accredited by either the Council on
Engineering and Scientific Specialties
Board or the National Commission on
Certifying Agency (NCCA), two
nationally recognized independent
accrediting bodies overseeing
professional safety designations for
safety, health and environmental
professionals who are qualified to
perform audits such as the new entrant
SA.
ATA recommended that private
contractors receive the same training as
Federal and State investigators and use
identical audit and data collection
techniques. ATA asserted that industry
support of the use of private contractors
is contingent upon strict oversight of
their work. ATA urged FMCSA to
address the use of private contractors for
SAs in a notice outlining proposed
contractor training, auditing procedures

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and software, and how the Government
will measure program effectiveness.
CSS believed that its own experiences
in conducting inspections for DOD
support its position that ‘‘there are
many well trained and qualified
transportation safety professionals in
the private sector.’’
Indiana State Police supported the use
of FMCSA-certified private contractors
to conduct abbreviated SAs before the
carrier begins operations. Indiana
asserted these contractors could provide
the basic educational and technical
guidance in a classroom setting when
the USDOT Number would be granted.
Indiana stated the private contractor
could bill the new entrant for these
services, resulting in a cost savings to
FMCSA.
Schroeder & Associates supported the
use of private contractors and suggested
adopting the expertise levels described
in FMCSA’s March 19, 2002, IFR titled
Certification of Safety Auditors, Safety
Investigators, and Safety Inspectors (67
FR 12775) as the standard for such
contractors. Schroeder suggested that
FMCSA certify individuals, not
companies, for conducting the SAs.
They also suggested that the agency
could model the certification for private
contractors after the former Interstate
Commerce Commission Practitioner
certification process, including
minimum education and employment
standards and a comprehensive 8-hour
essay examination. Schroeder further
recommended that the FMCSA SA
course be accessible to non-government
personnel with a waiver for those who
successfully test out of the course.
Lastly, they recommended FMCSA
require private contractors to conduct a
minimum of 12 inspections annually to
maintain certification.
Tran Services asserted Federal, State
and private contractors should be
identically certified to ensure
uniformity. Tran Services, and other
private companies, already provide
safety services, including ‘‘mock DOT
audits’’ to help companies achieve and
maintain compliance. ITDA opposed the
use of private contractor inspectors, and
stated that only Federal and State
inspectors should conduct the SA at this
time. ITDA believes that only after the
New Entrant Safety Assurance Process
is fully implemented and there is
sufficient experience with the process
should FMCSA consider the use of
private contractor inspectors.
The IBT interpreted sec. 211 of
MCSIA as prohibiting the use of a
private contractor to grant operating
authority to a carrier and that the SA
falls within that prohibition. IBT stated
the SA is an integral part of the

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procedure for obtaining permanent
operating authority, and is a
precondition for such authority. IBT
contended that SAs are so closely linked
with the grant of permanent operating
authority that allowing private
contractors to conduct SAs would be a
de facto impermissible delegation of
authority.
Due to the anticipated strain on
Federal and State enforcement
resources, CVSA recommended the
agency use private contractors to
conduct SAs. CVSA argued, given their
limited resources, Federal and State
officials should not weaken efforts to
conduct compliance reviews, roadside
inspections, and traffic enforcement to
implement the New Entrant Safety
Assurance Process. CVSA made the
following specific recommendations
regarding the use of private contractors:
• Use only properly trained and
certified individuals;
• Exclude the results of private
contractor audits when determining a
carrier’s safety rating or for enforcement
purposes; and
• Prohibit private contractors from
conducting roadside inspections.
CVSA also recommended FMCSA
conduct a multi-State, private contractor
pilot program modeled after Canada’s
third-party auditor pilot program.
Daecher believed FMCSA should
exclusively use qualified private
auditors to conduct the SAs because it
is a more easily managed and cost
effective option. According to Daecher,
current FMCSA resources are
insufficient to handle the anticipated
number of new entrants; opting not to
use private contractors would be
detrimental to the New Entrant Safety
Assurance Process and prohibit review
of each new entrant within the 18month monitoring period. Daecher
recommended establishing a
certification program for private
contractors to conduct both safety audits
and compliance reviews.
FMCSA Response: Annually,
approximately 48,000 motor carriers
register with FMCSA to become new
entrants. Federal and State compliance
officers are able to conduct SAs on
many of these carriers, but not all of
them. To increase the number of new
entrants inspected and monitored for
safety compliance under the New
Entrant Safety Assurance Process,
FMCSA has been using private
contractors to conduct safety audits
since January 2004.
FMCSA has built into its contracts
with private contractors effective
safeguards against fraud and other
abuses. The contractors are required to
follow the same policies and procedures

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followed by Federal and State safety
auditors. In addition, FMCSA closely
monitors the activities of private
contractors by obtaining monthly
activity reports and reviewing their
internal administrative procedures.
FMCSA is requiring all individuals
performing a privately contracted safety
audit to be certified following the same
guidelines applicable to Federal and
State safety auditors. They must meet
the same minimum qualifications as
Federal and State safety auditors,
including certain education and
experience requirements, as well as
testing through the FMCSA
International Training Division located
in Arlington, VA. Private contractors
must also pass the same proficiency
exams given to Federal and State safety
auditors and renew their certification
annually. The maintenance of
certification requirement currently
includes performing a minimum of 24
SAs each year.
Completed SAs performed by private
contractors receive the same scrutiny as
those performed by Federal and State
auditors. Although private contractors
perform SAs, the results of any audit are
not final until reviewed by FMCSA,
thus ensuring Federal oversight of the
program.
Since the SA does not result in a
safety rating for the motor carrier being
audited, private contractor SAs are not
used to determine a carrier’s safety
rating. A safety rating is only issued
upon completion of a compliance
review. Compliance reviews are only
conducted by Federal or State personnel
and cannot be performed by a private
contractor.
FMCSA agrees that private industry
offers many trained and qualified
individuals who can be utilized to
ensure public safety. The agency
acknowledges the strain brought to bear
upon Federal and State resources due to
the large number of incoming new
entrant motor carriers annually
registering with FMCSA and hopes to
mitigate the situation by continuing to
use private contractors.
Rulemaking Analyses and Notices
Executive Order 12866 (Regulatory
Planning and Review) and DOT
Regulatory Policies and Procedures
FMCSA has preliminarily determined
this proposed rule is a significant
regulatory action within the meaning of
Executive Order 12866 and the U.S.
Department of Transportation’s
regulatory policies and procedures
(DOT Order 2100.5 dated May 22, 1980;
44 FR 11034, February 26, 1979). While
the costs of this NPRM would not

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76743

exceed the $100 million annual
threshold as defined in Executive Order
12866, FMCSA believes the subject of
new entrant motor carrier requirements
generates considerable public interest
and therefore is significant. FMCSA has
analyzed the costs and benefits, as
discussed below, and has preliminarily
determined this proposed rule would
not be economically significant. This
NPRM has been reviewed by the Office
of Management and Budget (OMB).
A number of studies, some of which
were sponsored by FMCSA or its
predecessor agency, have evaluated the
safety experience of new entrants. While
the studies differ in emphasis and some
particulars, they all demonstrate new
entrants have higher crash rates than
more established carriers and are less
likely to comply with Federal
regulations.
As explained previously, this
rulemaking makes a number of revisions
to how the agency monitors and
evaluates new entrant motor carriers
operating in the United States, and how
these carriers apply for authority. The
rulemaking also establishes procedures
for the oversight of non-North American
motor carriers. Only a very small
number of non-North American carriers
are currently operating in the United
States, and we do not expect this
number to grow appreciably in the
future.
OMB guidance states that the agency’s
analyses should ‘‘focus on benefits and
costs that accrue to citizens and
residents of the United States.’’ 7 The
analysis of costs is based on the total
number of new entrants registering with
FMCSA. This rule would impose costs
on a small number of Canada-domiciled
and non-North America-domiciled
motor carriers operating in the United
States. The difference between
including and excluding non-North
America-domiciled carriers is
imperceptible after rounding. To obtain
cost estimates for the U.S.-domiciled
motor carriers, one should reduce the
estimates presented by 3.5 percent. Most
of the foreign carriers involved are
domiciled in Canada.
The costs associated with the
FMCSRs, HMRs, or the New Entrant
Safety Assurance Process IFR should
not be counted as a cost of this NPRM
because these costs were already
counted when the various measures
were first promulgated. Thus, there are
no societal costs associated with the
proposed changes. We are not proposing
any substantive changes to the
7 OMB, Circular A–4, September 2003, page 15.
Available online at http://www.whitehouse.gov/
omb/circulars/a004/a-4.pdf.

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operational regulatory requirements;
motor carriers, including new entrants,
are already required to comply with
these regulations. Therefore, this
proposal would not place any new
substantive burdens upon new entrants
or any other entity. Rather, as explained
above, the proposed changes would
make the enforcement of existing
requirements more rigorous. Any motor
carrier already complying with the
FMCSRs and HMRs would not face any
change in practices. This proposal
would include modest administrative
costs for carriers to become aware of the
new consequences for failing to comply
with existing requirements.
Between 1995 and 2002, an average of
47,535 8 new entrants began operations
annually. We assumed this number
would remain constant. As noted above,
this NPRM would not impose any new
operational requirements on new
entrants. The only truly new cost
involved would be the cost to motor
carriers of becoming aware of new
requirements when this NPRM is
promulgated as a final rule. We assumed
it would take an extra hour for the
appropriate motor carrier official of each
new entrant to study the new
requirements and discern how to best
comply with them. Using Bureau of
Labor Statistics 9 (BLS) estimates for
hourly wages for Transportation
Managers of $33.50 and 31.5 percent
employment benefits, we obtain an
hourly compensation of $44.05.
Assuming learning the new audit
consequences takes an hour per firm, we
estimate a cost of $2.1 million annually.
As noted above, this NPRM proposes
eliminating the Form MCS–150A
because of its ineffectiveness in
ensuring an understanding of required
basic safety management controls. We
assume the elimination of this form
would save new entrants 10 minutes
each. Using a clerical wage of $14 per
hour, this provision would save new
entrants $111,000 annually. The net
administrative cost of this proposed rule
to new entrants is thus $2.0 million per
year.
Alternative Analysis
We do not believe this proposed rule
would impose significant costs or
benefits other than those intended and
counted in the IFR. As explained
previously, this proposed rule would
not introduce any new requirements.
All carriers, including new entrants,
8 These estimates were derived from data
contained in the Motor Carrier Management
Information System (MCMIS).
9 See the Bureau of Labor Statistics Web site
http://www.bls.gov/oes/2003/may/oes_11Ma.htm
dated May 2003.

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already are required to comply with the
FMCSRs and applicable HMRs,
including all the standards that would
be checked during the safety audit.
Therefore, the costs and benefits of the
audit should not be ascribed to this
NPRM; these costs and benefits were
included when these regulations were
initially promulgated, so including them
now would be double counting.
However, we did attempt to measure
these costs and benefits. While they are
not properly part of this proposed rule,
the information may prove useful for
decision makers. This section therefore
provides an alternate description of the
impact of this proposal.
We calculated the number of crashes
that must be avoided to make this
proposed rule cost beneficial, meaning
the benefits would exceed the costs. We
first converted crashes into dollar values
to allow for comparison with the cost
figures, based on work by Zaloshnja et
al. They estimated the cost of an average
police-reported crash involving trucks
with a gross vehicle weight rating of
more than 10,000 pounds was $59,153
in 2000 dollars.10 FMCSA adjusted this
figure to 2004 dollars based on the Gross
Domestic Product Deflator, which yields
a value of $65,183.
New entrant carriers are involved in
more crashes than more experienced
carriers. According to a 2000 Volpe
study, new entrants (defined as motor
carriers registered for less than 2 years)
were more frequently assessed to have
Safety Evaluation Area scores in the
worst quartile.11 In fact, new entrants
were about twice as likely to have an
Accident SEA score of 75 or above.
Therefore, Volpe concludes, SafeStat
results show new entrants to have
significantly lower levels of safety
compliance and performance. The
overall motor carrier crash rate from
MCMIS is 0.75 crashes per million
vehicle miles of travel (MVMT), while
the new entrant crash rate is 25 percent
higher, 0.94 per MVMT.
The net cost of this proposed rule is
$2.0 million per year. For this proposed
rule to be cost beneficial, it would have
to deter 31 crashes ($2.0 million/
$65,183), or one fatal crash.12
10 Based

on Revised Costs of Large Truck- and
Bus-Involved Crashes, by Eduard Zaloshnja, Ted
Miller, and Rebecca Spicer (National Technical
Information Service, Springfield, VA), 2002.
11 Volpe Center, Analysis of New Entrant Motor
Carriers Safety Performance and Compliance Using
SafeStat, March 2000, pp. 3–2, 3–7, and 5–4.
12 For economic evaluations in the Department of
Transportation, the value of a statistical life is to be
$3.0 million. However, since there cannot be
fractional fatal crashes, we round up to one.

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Alternative Costs Associated With
Proposed Changes to Safety Audit
Scoring System
As of October 2004, 33,787 new
entrant SAs had been completed. Only
253 of new entrants audited under the
program failed the SA under the
existing scoring criteria, which is only
0.75 percent of those receiving an SA.
Had the list of proposed automatic
failure criteria been incorporated into
our regulations at the time these audits
were conducted, 19,559 of the audited
carriers would have failed, almost 58
percent of those audited. Therefore, the
proposed scoring change would have
resulted in an additional 19,306 new
entrant carriers failing the audit (19,559
¥ 253 = 19,306). On an annual basis,
this translates to 27,162 carriers failing
the audit under the new criteria if there
is no change in carrier behavior.13
However, it is unlikely the number of
carriers that would fail the audit or
whose new entrant authority would be
revoked would be this large. The cost of
not correcting violations of the 11
automatic failure provisions is currently
low. New entrants cited for one of these
violations are not placed out of service.
In fact, it is possible for new entrants to
continue operating for some time before
remedying their violations. This
proposal would dramatically raise the
cost of failing to comply with these
provisions, with violators possibly
losing their authority and being placed
out of business. Raising the cost of not
correcting a violation, therefore, would
encourage new entrants to comply with
the regulatory requirements, either
before they are audited or after they fail
the audit.
We believe new entrants would be
sensitive to the increased cost of
violations and would respond
accordingly. We assume half of the new
entrants that would otherwise be put
out of service instead would adjust their
practices and behavior to comply with
the regulations. We assume of the
27,162 new entrants failing one or more
of the automatic failure criteria, 13,581
would be placed out of service, and
13,581 would make whatever changes
are necessary to continue operations.
These costs are now discussed in turn.
Alternative Cost of Replacing New
Entrants 14
As discussed in footnote 14, we
assume that non-compliant carriers will
13 (19,559

¥ 253) * (47,535/33,787) = 27,162.
all non-compliant carriers will be replaced
by other new entrants. It is possible that carriers
already in operation will absorb freight or
passengers previously transported by firms placed
out of service. Although it is possible existing
14 Not

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be replaced by other new entrants.
These replacement new entrants could
purchase equipment from out-of-service
carriers, so the cost of equipment and
facilities is a transfer between entities.
The absolute costs of starting these new
firms would include fees for
application, licensing, registration,
surveying potential markets,
advertisements, training, and
transactions costs for transferring assets.
Our all-inclusive estimate for these costs
is $4,000 per carrier replaced in this
fashion. Therefore, replacing the 13,581
carriers that would be placed out of
service would yield a total cost of $54.3
million annually.
Alternative Cost for New Entrants That
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As discussed above, the costs and
benefits of complying with the FMCSRs
and HMRs (if applicable) are not
attributable to this proposal since we are
not proposing to change existing
operational requirements. However, this
evaluation also includes an estimate of
costs and benefits assuming these were
new requirements. These estimates are
presented to assist decision makers in
considering the impacts of this
proposal. While these estimates do not
represent the real costs of this proposal,
they illustrate possible impacts of this
proposal.
New entrants that change their
practices and remain in service would
also face some costs. The cost of coming
into compliance would vary, depending
on a number of factors, including the
size of the new entrant and the specific
regulation (or regulations) violated. We
conservatively assume the average cost
for carriers failing one of the 11
automatic failure criteria but desiring to
carriers may be able to operate more efficiently by
increasing existing load factors, they may also have
to divert vehicles and drivers from other loads or
buy/hire new ones to provide the service. To
provide a conservative estimate, we assume the cost
of these resources will be mostly the same whether
the loads are carried by existing carriers expanding
or transferring capacity or by new entrants coming
into the market to meet this demand. The only
differences would be registration and licensing
costs. We assume that there is no possibility that
the replacing firm is the non-compliant firm
repackaged as a new firm. Without this illegal
practice, the replacing firm would either be a
completely new motor carrier or an existing motor
carrier expanding its operation. Since there is not
a big difference, we choose to report the larger of
the two cost possibilities.

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continue operations would be $1,000.
Therefore, the total cost for these 13,581
new entrants would be approximately
$13.6 million.
The maximum cost of this proposed
rule is estimated at approximately $67.9
million per year ($54.3 million + $13.6
million). The ten-year undiscounted
cost would be almost $679 million,
while the discounted cost would be
$477 million.
Alternative Benefits
The theoretical benefits accrue from
removing the least safe carriers from the
road and replacing them with safer
carriers. This change would result in a
difference in expected crashes. Using
the Compliance Review Impact
Assessment Model, we assumed each
failing new entrant removed and
replaced would have had a crash rate of
1.13 crashes per million vehicle miles
traveled (MVMT), which is 50 percent
higher than the crash rate for
established motor carriers. According to
MCMIS, new entrants average 400,000
VMT per year. We assume freight that
had been carried by closed carriers
would be carried by replacement new
entrants. According to MCMIS, new
entrants have an overall crash rate of
0.94 crashes per MVMT. Therefore,
closing unsafe carriers results in a 17
percent reduction in the per million
mile crash rate ((1.13–0.94)/1.13).
We estimate new entrants eventually
placed out of service or required to
modify their operations are currently
involved in approximately 11,200
baseline crashes annually. This is the
sum of two calculations. For carriers
that would be placed out of service, the
calculation is the sum of 13,581 new
entrants times 400,000 miles per new
entrant times 1.13 crashes per MVMT.
The calculation is similar for new
entrants that continue operations,
except their crash rate is 0.94 crashes
per MVMT.
Closing 13,581 carriers would result
in almost 1,020 fewer crashes in the first
year, 967 in the second year (since 5
percent of the closed carriers would
have gone out of business in any case),
and fewer each succeeding year.
However, an additional 13,581 carriers
would be closed in each succeeding
year, so the total crashes deterred by
closing carriers increases over the
analysis period as the reduction caused

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76745

by the 5 percent business failure rate
would be more than offset by the
additional carriers closed each year.
Over 10 years, more than 48,000 crashes
would be deterred by placing unsafe
carriers out of service.
The SAs also would reduce crashes
among those new entrants allowed to
continue operations after coming into
compliance. Over 10 years, almost 5,700
crashes would be deterred from carriers
that take action to remedy violations.
For both classes of carriers, the SAs
would result in 54,000 fewer crashes
over 10 years.
As noted above, the average cost of a
motor-carrier-involved crash is $65,183.
By deterring 54,000 crashes, this
proposed rule thus would yield a 10year savings of $3.5 billion
undiscounted. At a 7 percent discount
rate, this would translate into a benefit
of $2.3 billion. Most of these benefits
would come from the crash reduction of
closed carriers. This benefit would
greatly exceed the costs described
previously. The discounted ten-year net
benefit of this NPRM would be $1.8
billion, and the benefit cost ratio would
be 4.8 to 1.
Paperwork Reduction Act
Under the Paperwork Reduction Act
of 1995 (PRA) (44 U.S.C. § 3501, et seq.),
Federal agencies must obtain approval
from OMB for each collection of
information they conduct, sponsor, or
require through regulations. FMCSA has
determined there are three currently
approved information collections that
would be affected by this NPRM: (1)
OMB Control No. 2126–0013 titled
‘‘Motor Carrier Identification Report’’
(FMCSA Forms MCS–150, MCS–150A,
and MCS–150B), approved at 74,896
burden hours through July 31, 2007; (2)
OMB Control No. 2126–0015 titled
‘‘Designation of Agents, Motor Carriers,
Brokers and Freight Forwarders
(FMCSA Form BOC–3) approved at
5,000 burden hours through April 30,
2008; and (3) OMB Control No 2126–
0016 titled ‘‘Licensing Applications for
Motor Carrier Operating Authority’’
(FMCSA Forms OP–1, OP–1 (FF), OP–
1 (MX) and OP–1 (P), approved at
55,738 burden hours through August 31,
2008. Table 1 depicts the current and
proposed burden hours associated with
the information collections.

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TABLE 1.—CURRENT AND PROPOSED INFORMATION COLLECTION BURDENS
Burden hours
currently
approved

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OMB approval No.

Burden hours
proposed

Change

2126–0013 ...................................................................................................................................
2126–0015 ...................................................................................................................................
2126–0016 ...................................................................................................................................

74,896
5,000
55,738

66,977
5,002
55,786

–7,919
2
48

Net Change ..........................................................................................................................

........................

........................

¥7,869

The following is an explanation of
how each of the information collections
shown above would be affected by this
proposal.
OMB Control No. 2126–0013. This
NPRM would eliminate the requirement
for new entrants to complete the Form
MCS–150A (Safety Certification for
Applications for USDOT Number)
because it does not provide the
certification intended. Proposed
amendments to 49 CFR part 385,
subpart E—Hazardous Materials Safety
Permits would remove references to the
MCS–150A and would not impact the
MCS–150B in any way. The estimated
annual paperwork burden for this
information collection would be 66,977
hours [74,896 currently approved
annual burden hours ¥ 7,923 (47,535
new entrants × 10 minutes/60 minutes
to complete the MCS–150A form) + 4
(12 non-America-domiciled motor
carriers × 20 minutes/60 minutes to
complete the Form MCS–150) = 66,977].
OMB Control No. 2126–0015. The
non-North America-domiciled motor
carriers would also be required to notify
the agency regarding designation of
process agents by either: (1) submission
in the application package of Form
BOC–3 (Designation of Agents, Motor
Carriers, Brokers and Freight
Forwarders), or (2) a letter stating that
the applicant will use a process agent
that will submit the Form BOC–3
electronically. The estimated annual
paperwork burden for this information
collections would be 5,002 hours [5,000
currently approved annual burden
hours + 2 hours (12 new entrant nonNorth America-domiciled motor carriers
× 10 minutes/60 minutes to complete
Form BOC–3) = 5,002 hours].
OMB Control No. 2126–0016. The
proposed rule would create a new Form
OP–1(NNA) titled ‘‘Application for U.S.
Department of Transportation (USDOT)
Registration by Non-North AmericaDomiciled Motor Carriers.’’ A non-North
America-domiciled motor carrier is one
whose principal place of business is
located in a country other than the
United States, Canada or Mexico. These
entities would use the OP–1(NNA)
when requesting either a USDOT new

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entrant registration as a private or
exempt for-hire carrier or operating
authority as a non-exempt for-hire
carrier. The estimated annual
paperwork burden for this information
collection would be 55,786 hours
[55,738 currently approved annual
burden hours + 48 hours (12 new
entrant non-North America-domiciled
motor carriers × 4 hours to complete
Form OP–1(NNA)) = 55,786 hours].
The proposals in this NPRM, affecting
three currently-approved information
collections, would result in a net
decrease of 7,869 burden hours in the
agency’s information collection budget.
FMCSA requests comments on: (1)
whether the collection of information is
necessary or useful for the agency to
meet its goal of reducing truck crashes,
(2) the accuracy of the estimated
information collection burden; (3) ways
to enhance the quality, utility, and
clarity of the information collected; and
(4) ways to minimize the information
collection burden on respondents,
including the use of automated
collection techniques or other forms of
information technology.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA),
as amended by the Small Business
Regulatory Enforcement and Fairness
Act (SBREFA), requires Federal agencies
to analyze the impact of rulemakings on
small entities, unless the agency
certifies the proposed rule will not have
a significant economic impact on a
substantial number of small entities.
FMCSA believes these proposals do not
meet the threshold values for requiring
a full-blown regulatory flexibility
analysis. Nonetheless, because of the
public interest in these proposals, we
have prepared a regulatory analysis and
placed a copy in the docket to this
NPRM. The initial regulatory flexibility
analysis (IRFA) for the proposed rule is
set forth below.
(1) A description of the reasons why
action by the agency is being
considered. FMCSA implemented the
New Entrant Safety Assurance Process
in January 2003. Under the program, a
carrier receives new entrant registration

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and must undergo an 18-month
monitoring period, including an SA.
During the audit, FMCSA verifies the
carrier has in place basic safety
management controls and identifies any
areas needing correction. A new entrant
is granted permanent registration only
after successfully completing the SA
and the 18-month monitoring period.
The agency received numerous
comments to the May 2002 IFR
announcing the New Entrant Safety
Assurance Process, including
recommendations for improvement and
alternatives to the program. By late
summer 2003, the agency and its State
partners had collected sufficient data
and had sufficient experience
administering the program to assess its
effectiveness. The Administrator formed
a working group comprised of field and
Headquarters staff to conduct a program
review. This group identified several
key improvements to clarify, strengthen
and correct the new entrant regulations.
Today’s action proposes measures to
make the New Entrant Safety Assurance
Process better. It also proposes a
separate new entrant application
procedure and safety oversight program
for non-North America-domiciled motor
carriers.
(2) A succinct statement of the
objectives of, and legal basis for, the
proposed rule. Section 210 of MCSIA
required the Secretary of Transportation
to establish regulations specifying
minimum requirements for motor
carriers seeking to operate in interstate
commerce for the first time to ensure
such carriers are knowledgeable about
applicable Federal motor carrier safety
standards. MCSIA also directed the
Secretary to require, by regulation, that
each motor carrier granted new
operating authority undergo an SA
within the first 18 months of operations.
MCSIA also required the Secretary to
establish the elements of the safety
review, including basic safety
management controls, to consider the
effect the regulations would have on
small businesses and to consider
establishing alternate locations where
the review may be conducted for the
convenience of the small businesses.

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Federal Register / Vol. 71, No. 245 / Thursday, December 21, 2006 / Proposed Rules
An IFR, with request for comments,
was published May 13, 2002, and
became effective January 1, 2003. The
IFR established new minimum
requirements for all applicant motor
carriers domiciled in the United States
and Canada seeking to operate in
interstate commerce. Under the IFR, all
new entrants, regardless of whether they
need to register with FMCSA under 49
U.S.C. 13901, are required to complete
a Form MCS–150A—Safety Certification
for Applications for USDOT Number.
Additionally, during the initial 18month period of operations, FMCSA
would evaluate the new entrant’s safety
management practices through an SA
and monitor its on-road performance
prior to granting the new entrant
permanent registration. The objective of
this NPRM is to enhance the safety of
new entrants and thereby reduce the
number of crashes which involve these
carriers.
(3) A description of and, where
feasible, an estimate of the number of
small entities to which the proposed
rule would apply. The trucking
industry, and to a lesser extent the bus
industry, is populated by several very
large firms and many small firms. We
believe most motor carriers start small.
The proposed rule would cover all U.S.
and Canada-domiciled carriers and a
very small number of motor carriers
domiciled outside of North America.
FMCSA estimated in the regulatory
evaluation accompanying this proposal
that an average of 47,535 motor carriers
entered the industry each year from
1995–2002 seeking interstate authority.
Roughly 23,400 of these new entrants
are estimated to be non-exempt for-hire
carriers that must register under 49
U.S.C. 13901, 20,300 are estimated to be
exempt for-hire and private carriers not
subject to § 13901, and the roughly
3,800 remaining new registrants are of
other types (including 1,922 brokers/
freight forwarders, 1,200 Mexicodomiciled commercial zone carriers,
and 664 other carriers). These estimates
were derived from data contained in the
Motor Carrier Management Information
System (MCMIS).
The Regulatory Flexibility Act
requires Federal agencies to analyze the
impact of proposed and final rules on
small entities. Small Business
Administration (SBA) regulations (13
CFR part 121) define a ‘‘small entity’’ in
the motor carrier industry by average
annual receipts, which are currently set
at $23.5 million per firm. FMCSA
estimated based upon the 1997
Economic Census (U.S. Census Bureau),
North American Industrial
Classification System (NAICS) Code 484
‘‘Truck Transportation’’ segments, the

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number of small trucking entities
potentially affected by our proposed
rules. There are 100,048 for-hire
trucking firms within NAICS Code 484.
Of these, 75,491, or roughly 75 percent,
had annual receipts of less than $21.5
million. While SBA has changed its size
definitions, updated data is not yet
available. Therefore, this analysis uses
the old definition. The actual percent of
small businesses is probably somewhat
greater than our estimate, but the
difference is not likely to be significant.
Because FMCSA does not have annual
sales data on private carriers, the agency
assumed the revenue and operations
characteristics of the private new
entrant firms would be similar to those
of new entrant for-hire carriers. Using
these assumptions, the agency estimates
almost 35,651 of the total 47,535 new
entrants (or 75 percent) are considered
small entities. This assumption is
generally consistent with an alternative,
industry-based approach used to
estimate the number of small trucking
firms, where size is defined by the
number of power units (i.e., tractors or
single-unit trucks) owned or leased by
motor carriers. Also, MCMIS data
indicate 80 percent of new entrant
motor carriers within the industry
owned or leased six or fewer power
units.
(4) A description of the proposed
reporting, recordkeeping and other
compliance requirements of the
proposed rule, including an estimate of
the classes of small entities which
would be subject to the requirements
and the type of professional skills
necessary for preparation of the report
or record. Except for a small number of
non-North America-domiciled motor
carriers, this proposed rule would
impose no additional reporting,
recordkeeping, or other compliance
requirement beyond those currently
required of all motor carriers. This
proposed rule would change the
consequences for violating certain
existing safety rules. Indeed, this
proposed rule eliminates one form, the
MC–150A, integrating a few of the data
elements from the MC–150A into Form
MC–150. Therefore, there will be one
less form for motor carriers to complete.
(5) An identification, to the extent
practicable, of all Federal rules, which
may duplicate, overlap, or conflict with
the proposed rule. FMCSA is not aware
of any areas where this proposed rule
would duplicate, overlap, or conflict
with any other Federal rules. However,
under a separate rulemaking (a notice of
proposed rulemaking titled Unified
Registration System published in the
May 19, 2005, Federal Register at 70 FR
28989), the agency is proposing to unify

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76747

three of its information systems for
motor carriers into a single, on-line
replacement system. The ‘‘replacement
system’’ NPRM proposes a more
streamlined registration process. The
USDOT Number registration process for
new entrants would be included in the
replacement system NPRM.
The replacement system rulemaking
is a very complex undertaking and
would address the USDOT Number,
financial responsibility and commercial
aspects of registration; it only touches
on ministerial aspects of the New
Entrant Safety Assurance Process.
Today’s proposed rule covers the
complete New Entrant Safety Assurance
Process, not just registration. It is for
these reasons the agency is pursuing
these efforts in separate rulemakings.
The agency would address any impacts
to administrative elements of the New
Entrant Safety Assurance Process when
the proposed rule announcing the
replacement system is promulgated as a
final rule.
Accordingly, FMCSA preliminarily
determines the proposed action
discussed in this document would not
have a significant economic impact on
a substantial number of small entities.
Privacy Impact Analysis
FMCSA conducted a privacy impact
assessment of this proposed rule as
required by Section 522(a)(5) of the FY
2005 Omnibus Appropriations Act, Pub.
L. 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
proposed rule on the privacy of
information in an identifiable form and
related matters. The entire privacy
impact assessment is available in the
docket for this proposal.
Unfunded Mandates Reform Act
This proposed rule would not impose
a Federal mandate resulting in the net
expenditures by State, local, or tribal
governments, in the aggregate, or by the
private sector, of $120.7 million or more
in any one year. 2 U.S.C. 1531, et seq.
National Environmental Policy Act
FMCSA has analyzed this proposed
rule for the purpose of the National
Environmental Policy Act of 1969
(NEPA) (42 U.S.C. 4321, et seq.) and has
determined under the agency’s National
Environmental Policy Act Implementing
Procedures, FMCSA Order 5610.1C
(published at 69 FR 9680, March 1,
2004, with an effective date of
March 30, 2004) this proposed action is
categorically excluded under Appendix
2, paragraph 6.f of the Order from
further environmental documentation.
That categorical exclusion relates to

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Federal Register / Vol. 71, No. 245 / Thursday, December 21, 2006 / Proposed Rules

establishing regulations implementing
the following activities, whether
performed by FMCSA or by States
pursuant to the Motor Carrier Safety
Assistance Program (MCSAP), which
provides financial assistance to States to
reduce the number and severity of
crashes and hazardous materials
incidents involving commercial motor
vehicles: (1) Driver/vehicle inspections;
(2) traffic enforcement; (3) safety audits;
(4) compliance reviews; (5) public
education and awareness; and (6) data
collection; and provides reimbursement
for the expenses listed under paragraphs
6.d(i) through 6.d(v). This action
proposes amendments to the New
Entrant Safety Assurance Process for
carriers newly registering to operate in
interstate commerce. The agency
believes the proposed action would
include no extraordinary circumstances
having any effect on the quality of the
environment.
FMCSA has also analyzed this
proposal under section 176(c) of the
Clean Air Act (CAA), as amended (42
U.S.C. 7401 et seq.), and implementing
regulations promulgated by the
Environmental Protection Agency. We
performed a conformity analysis of the
CAA according to the procedures
outlined in appendix 14 of FMCSA
Order 5610.1C. This proposed rule
would not result in any emissions
increase, nor would it have any
potential to result in emissions above
the general conformity rule’s de minimis
emission threshold levels. Moreover, it
is reasonably foreseeable the proposed
rule change would not increase total
CMV mileage, change the routing of
CMVs, change how CMVs operate, or
change the CMV fleet-mix of motor
carriers. This proposed action would
revise the program for assuring the
safety of new entrant motor carriers.
Executive Order 12988 (Civil Justice
Reform)
This proposed action meets
applicable standards in sections 3(a)
and 3(b)(2) of Executive Order 12988,
Civil Justice Reform, to minimize
litigation, eliminate ambiguity, and
reduce burden.

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We have analyzed this proposed rule
under Executive Order 13045,
‘‘Protection of Children from
Environmental Health Risks and Safety
Risks.’’ This proposed rule does not
concern a risk to environmental health
or safety that would disproportionately
affect children.

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This proposed rule would not effect a
taking of private property or otherwise
have taking implications under
Executive Order 12630, Governmental
Actions and Interference with
Constitutionally Protected Property
Rights.
Executive Order 13132 (Federalism)
This proposed action has been
analyzed in accordance with the
principles and criteria contained in
Executive Order 13132 dated August 4,
1999, and it has been preliminarily
determined this proposed action would
not have a substantial direct effect or
sufficient federalism implications on
States, limiting the policymaking
discretion of the States. Nothing in this
document would directly preempt any
State law or regulation. It would not
impose additional costs or burdens on
the States. This proposed action would
not have a significant effect on the
States’ ability to execute traditional
State governmental functions. To the
extent that States incur costs for
conducting these SAs, they would be
reimbursed 100 percent with Federal
funds under MCSAP.
Executive Order 12372
(Intergovernmental Review)
The regulations implementing
Executive Order 12372 regarding
intergovernmental consultation on
Federal programs and activities do not
apply to this program.
Executive Order 13211 (Energy Supply,
Distribution, or Use)
This proposed action is not a
significant energy action within the
meaning of section 4(b) of the Executive
Order because it is not economically
significant and is not likely to have a
significant adverse effect on the supply,
distribution, or use of energy.
Privacy Act

Executive Order 13045 (Protection of
Children)

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Executive Order 12630 (Taking of
Private Property)

Anyone is able to search the
electronic form of all comments
received into any of our dockets by the
name of the individual submitting the
comment (or signing the comment, if
submitted on behalf of an association,
business, labor union, etc.). You may
review DOT’s complete Privacy Act
Statement in the Federal Register
published on April 11, 2000 (Volume
65, Number 70; Pages 19477–78) or you
may visit http://dms.dot.gov.

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List of Subjects
49 CFR Part 365
Administrative practice and
procedure, Brokers, Buses, Freight
forwarders, Motor carriers, Moving of
household goods, Reporting and
recordkeeping requirements.
49 CFR Part 385
Administrative practice and
procedure, Highway safety, Motor
carriers, Motor vehicle safety, Reporting
and recordkeeping requirements.
49 CFR Part 387
Buses, Freight, Freight forwarders,
Hazardous materials transportation,
Highway safety, Insurance,
Intergovernmental relations, Motor
carriers, Motor vehicle safety, Moving of
household goods, Penalties, Reporting
and recordkeeping requirements, Surety
bonds.
49 CFR Part 390
Highway safety, Intermodal
transportation, Motor carriers, Motor
vehicle safety, reporting and
recordkeeping requirements.
For the reasons stated in the
preamble, the Federal Motor Carrier
Safety Administration proposes to
amend title 49, Code of Federal
Regulations, chapter III, subchapter B as
set forth below:
PART 365—RULES GOVERNING
APPLICATIONS FOR OPERATING
AUTHORITY
1. The authority citation for part 365
continues to read as follows:
Authority: 5 U.S.C. 553 and 559; 16 U.S.C.
1456; 49 U.S.C. 13101, 13301, 13901–13906,
14708, 31138, and 31144; 49 CFR 1.73.

2. Amend § 365.101 by adding a new
paragraph (i) to read as follows:
§ 365.101
rules.

Applications governed by these

*

*
*
*
*
(i) Applications for non-North
America-domiciled motor carriers to
operate in foreign commerce as for-hire
motor carriers of property and
passengers within the United States.
3. Amend § 365.105 by revising
paragraph (a) to read as follows:
§ 365.105 Starting the application process:
Form OP–1.

(a) All applicants must file the
appropriate form in the OP–1 series,
effective [effective date of final rule].
Form OP–1 for motor property carriers
and brokers of general freight and
household goods; Form OP–1(P) for
motor passenger carriers; Form OP–
1(FF) for freight forwarders of

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Federal Register / Vol. 71, No. 245 / Thursday, December 21, 2006 / Proposed Rules
household goods; Form OP–1(MX) for
Mexico-domiciled motor property
carriers, including household goods and
motor passenger carriers; and Form OP–
1(NNA) for non-North Americadomiciled motor property and motor
passenger carriers. A separate filing fee
in the amount set forth at 49 CFR
360.3(f)(1) is required for each type of
authority sought in each transportation
mode.
*
*
*
*
*
PART 385—SAFETY FITNESS
PROCEDURES
4. The authority citation continues to
read as follows:
Authority: 49 U.S.C. 113, 504, 521(b),
5105(e), 5109, 5113, 13901–13905, 31136,
31144, 31148, and 31502; sec. 350 of Pub. L.
107–87; and 49 CFR 1.73.
§ 385.305

[Amended]

5. Amend § 385.305 to remove
paragraph (b)(3) and to redesignate
paragraph (b)(4) as (b)(3).
6. Add § 385.306 to subpart D to read
as follows:
§ 385.306 What are the consequences of
furnishing misleading information or
making a false statement in connection with
the registration process?

A carrier that furnishes false or
misleading information, or conceals
material information in connection with
the registration process, is subject to the
following actions:
(a) Revocation of registration.
(b) Assessment of the civil and/or
criminal penalties prescribed in 49
U.S.C. 521 and 49 U.S.C. chapter 149.
7. Amend § 385.307 to revise
paragraph (a) to read as follows:
§ 385.307 What happens after a motor
carrier begins operations as a new entrant?

*

*
*
*
*
(a) The new entrant’s roadside safety
performance will be closely monitored
to ensure the new entrant has basic
safety management controls that are
operating effectively.
*
*
*
*
*
8. Add § 385.308 to subpart D to read
as follows:

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§ 385.308
action?

What will cause an expedited

(a) A new entrant that commits any of
the following actions, identified through
roadside inspections or by any other
means, may be subjected to an
expedited safety audit or a compliance
review or may be required to submit a
written response demonstrating
corrective action:
(1) Using drivers to operate a
commercial motor vehicle as defined

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under § 383.5 without a valid
commercial driver’s license. An invalid
commercial driver’s license includes
one that is falsified, revoked, expired, or
missing a required endorsement.
(2) Operating vehicles that have been
placed out of service for violations of
the Federal Motor Carrier Safety
Regulations or compatible State laws
and regulations without taking
necessary corrective action.
(3) Involvement in a hazardous
materials incident, due to carrier act or
omission, involving any of the
following:
(i) A highway route controlled
quantity of a Class 7 (radioactive)
material as defined in § 173.403 of this
title.
(ii) Any quantity of a Class 1, Division
1.1, 1.2, or 1.3 explosive as defined in
§ 173.50 of this title.
(iii) Any quantity of a poison
inhalation hazard Zone A or B material
as defined in §§ 173.115, 173.132, or
173.133 of this title.
(4) Involvement in two or more
hazardous materials incidents, due to
carrier act or omission, involving any
hazardous material not identified in
paragraph (a)(3) of this section and
defined in chapter I of this title.
(5) Using a driver who tests positive
for controlled substances or alcohol or
who refuses to submit to required
controlled substances or alcohol tests.
(6) Operating a motor vehicle that is
not insured as required by part 387 of
this chapter.
(7) Having a driver or vehicle out-ofservice rate of 50 percent or more based
upon at least three inspections
occurring within a consecutive 90-day
period.
(b) If a new entrant that commits any
of the actions listed in paragraph (a) of
this section:
(1) Has not had a safety audit or
compliance review, FMCSA will
schedule the new entrant for a safety
audit as soon as practicable.
(2) Has had a safety audit or
compliance review, FMCSA will send
the new entrant a notice advising it to
submit evidence of corrective action
within 30 days of the service date of the
notice.
(c) FMCSA may schedule a
compliance review of a new entrant that
commits any of the actions listed in
paragraph (a) of this section at any time
if it determines the violation warrants a
thorough review of the new entrant’s
operation.
(d) Failure to respond within 30 days
of the notice to an agency demand for
a written response demonstrating
corrective action will result in the

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76749

revocation of the new entrant’s
registration.
9. Revise § 385.319 to read as follows:
§ 385.319 What happens after completion
of the safety audit?

(a) Upon completion of the safety
audit, the auditor will review the
findings with the new entrant.
(b) Pass. If FMCSA determines the
safety audit discloses the new entrant
has adequate basic safety management
controls, the agency will provide the
new entrant written notice as soon as
practicable, but not later than 45 days
after completion of the safety audit, that
it has adequate basic safety management
controls. The new entrant’s safety
performance will continue to be closely
monitored for the remainder of the 18month period of new entrant
registration.
(c) Fail. If FMCSA determines the
safety audit discloses the new entrant’s
basic safety management controls are
inadequate, the agency will provide the
new entrant written notice, as soon as
practicable, but not later than 45 days
after the completion of the safety audit,
that its USDOT new entrant registration
will be revoked and its operations
placed out-of-service unless it takes the
actions specified in the notice to remedy
its safety management practices.
(1) 60-day corrective action
requirement. All new entrants, except
those specified in paragraph (c)(2) of
this section, must take the specified
actions to remedy inadequate safety
management practices within 60 days of
the date of the notice.
(2) 45-day corrective action
requirement. The new entrants listed
below must take the specified actions to
remedy inadequate safety management
practices within 45 days of the date of
the notice:
(i) A new entrant that transports
passengers in a CMV designed or used
to transport between 9 and 15
passengers (including the driver) for
direct compensation.
(ii) A new entrant that transports
passengers in a CMV designed or used
to transport more than 15 passengers
(including the driver).
(iii) A new entrant that transports
hazardous materials in a CMV as
defined in paragraph (4) of the
definition of a ‘‘Commercial Motor
Vehicle’’ in § 390.5 of this subchapter.
10. Revise § 385.321 to read as
follows:

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§ 385.321 What failures of safety
management practices disclosed by the
safety audit will result in a notice to a new
entrant that its DOT new entrant registration
will be revoked?

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(a) General. The failures of safety
management practices consist of a lack
of basic safety management controls as
described in Appendix A of this part or
failure to comply with one or more of
the regulations set forth in paragraph (b)
of this section and will result in a notice
to a new entrant that its DOT new
entrant registration will be revoked.
(b) Automatic failure of the audit. A
new entrant will automatically fail the
safety audit if found in violation of any
one of the following 11 regulations:
(1) § 382.115(a) or (b)—Failing to
implement an alcohol and/or controlled
substances testing program (domestic
and foreign motor carriers, respectively).
(2) § 382.211—Using a driver who has
refused to submit to an alcohol or
controlled substances test required
under part 382.
(3) § 382.215—Using a driver known
to have tested positive for a controlled
substance.
(4) § 383.37(a)—Knowingly allowing,
requiring, permitting, or authorizing an
employee with a commercial driver’s
license which is suspended, revoked, or
canceled by a State or who is
disqualified to operate a commercial
motor vehicle.
(5) § 383.51(a)—Knowingly allowing,
requiring, permitting, or authorizing a
driver who is disqualified to drive a
commercial motor vehicle.
(6) § 387.7(a)—Operating a motor
vehicle without having in effect the
required minimum levels of financial
responsibility coverage.
(7) § 391.15(a)—Using a disqualified
driver.
(8) § 391.11(b)(4)—Using a physically
unqualified driver.
(9) § 395.8(a)—Failing to require a
driver to make a record of duty status.
(10) § 396.9(c)(2)—Requiring or
permitting the operation of a motor
vehicle declared ‘‘out-of-service’’ before
repairs are made.
(11) § 396.17(a)—Using a commercial
motor vehicle not periodically
inspected.
11. Revise § 385.323 to read as
follows:
§ 385.323 May FMCSA extend the period
under § 385.319(c) for a new entrant to take
corrective action to remedy its safety
management practices?

(a) FMCSA may extend the 60-day
period in § 385.319(c)(1) for up to an
additional 60 days provided FMCSA
determines the new entrant is making a
good faith effort to remedy its safety
management practices.

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(b) FMCSA may extend the 45-day
period in § 385.319(c)(2) for up to 10
days if the new entrant has submitted
evidence that corrective actions have
been taken pursuant to § 385.319(c) and
the agency needs additional time to
determine the adequacy of the
corrective action.
12. Amend § 385.325 to revise
paragraph (b) to read as follows:
§ 385.325 What happens after a new
entrant has been notified under § 385.319(c)
to take corrective action to remedy its
safety management practices?

(a) * * *
(b) If a new entrant, after being
notified that it is required to take
corrective action to improve its safety
management practices, fails to submit a
written response demonstrating
corrective action acceptable to FMCSA
within the time specified in § 385.319,
including any extension of that period
authorized under § 385.323, FMCSA
will revoke its new entrant registration
and issue an out-of-service order
effective on:
(1) Day 61 from the notice date for
new entrants subject to § 385.319(c)(1).
(2) Day 46 from the notice date for
new entrants subject to § 385.319(c)(2).
(3) If an extension has been granted
under § 385.323, the day following the
expiration of the extension date.
*
*
*
*
*
13. Revise § 385.327 to read as
follows:
§ 385.327 May a new entrant request an
administrative review of a determination of
a failed safety audit?

(a) If a new entrant receives a notice
under § 385.319(c) that its new entrant
registration will be revoked, it may
request FMCSA to conduct an
administrative review if it believes
FMCSA has committed an error in
determining that its basic safety
management controls are inadequate.
The request must:
(1) Be made to the Field
Administrator of the appropriate
FMCSA Service Center.
(2) Explain the error the new entrant
believes FMCSA committed in its
determination.
(3) Include a list of all factual and
procedural issues in dispute and any
information or documents that support
the new entrant’s argument.
(b) FMCSA may request that the new
entrant submit additional data and
attend a conference to discuss the
issue(s) in dispute. If the new entrant
does not attend the conference or does
not submit the requested data, FMCSA
may dismiss the new entrant’s request
for review.

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(c) A new entrant must submit a
request for an administrative review
within one of the following time
periods:
(1) If it does not submit evidence of
corrective action under § 385.319(c),
within 90 days after the date it is
notified that its basic safety
management controls are inadequate.
(2) If it submits evidence of corrective
action under § 385.319(c), within 90
days after the date it is notified that its
corrective action is insufficient and its
basic safety management controls
remain inadequate.
(d) If a new entrant wants to assure
that FMCSA will be able to issue a final
written decision before the prohibitions
outlined in § 385.325(c) take effect, the
new entrant must submit its request no
later than 15 days from the date of the
notice that its basic safety management
controls are inadequate. Failure to
submit the request within this 15-day
period may result in revocation of new
entrant authority and issuance of an outof-service order before completion of
administrative review.
(e) FMCSA will complete its review
and notify the new entrant in writing of
its decision within:
(1) 45 days after receiving a request
for review from a new entrant that is
subject to § 385.319(c)(1).
(2) 30 days after receiving a request
for review from a new entrant that is
subject to § 385.319(c)(2).
(f) The Field Administrator’s decision
constitutes the final agency action.
(g) Notwithstanding this subpart, a
new entrant is subject to the suspension
and revocation provisions of 49 U.S.C.
13905 for violations of DOT regulations
governing motor carrier operations.
14. Revise § 385.329 to read as
follows:
§ 385.329 May a new entrant that has had
its DOT new entrant registration revoked
and its operations placed out of service
reapply?

(a) A new entrant whose DOT new
entrant registration has been revoked,
and whose operations have been placed
out of service by FMCSA, may reapply
for new entrant authority no sooner than
30 days after the date of revocation.
(b) If the DOT new entrant registration
was revoked because of a failed safety
audit, the new entrant must do all of the
following:
(1) Submit an updated MCS–150.
(2) Submit evidence that it has
corrected the deficiencies that resulted
in revocation of its registration and will
otherwise ensure that it will have basic
safety management controls in effect.
(3) Begin the 18-month new entrant
monitoring cycle again as of the date the
re-filed application is approved.

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(c) If the DOT new entrant registration
was revoked because FMCSA found that
the new entrant had failed to submit to
a safety audit, it must do all of the
following:
(1) Submit an updated MCS–150.
(2) Begin the 18-month new entrant
monitoring cycle again as of the date the
re-filed application is approved.
(3) Submit to a safety audit upon
request.
(d) If the new entrant is a for-hire
carrier subject to the registration
provisions under 49 U.S.C. 13901 and
also has had its operating authority
revoked, it must re-apply for operating
authority as set forth in part 365 of this
title.
15. Revise § 385.331 to read as
follows:
§ 385.331 What happens if a new entrant
operates a CMV after having been issued an
order placing its interstate operations out of
service?

A new entrant that operates a CMV in
violation of an out-of-service order is
subject to the penalty provisions in
U.S.C. 521(b)(2)(A) for each offense as
adjusted for inflation by 49 CFR part
386, Appendix B.
16. Amend § 385.337 to revise
paragraph (a) to read as follows:
§ 385.337 What happens if a new entrant
refuses to permit a safety audit to be
performed on its operations?

(a) If a new entrant refuses to permit
a safety audit to be performed on its
operations, FMCSA will provide the
carrier with written notice that its
registration will be revoked and its
operations placed out of service unless
the new entrant agrees in writing,
within 10 days from the service date of
the notice, to permit the safety audit to
be performed. The refusal to permit a
safety audit to be performed may subject
the new entrant to the penalty
provisions of 49 U.S.C. 521(b)(2)(A), as
adjusted for inflation by 49 CFR part
386 Appendix B.
*
*
*
*
*
17. Amend § 385.405 to revise
paragraph (a) to read as follows:

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§ 385.405 How does a motor carrier apply
for a safety permit?

(a) Application form(s). (1) To apply
for a new safety permit or renewal of the
safety permit, a motor carrier must
complete and submit Form MCS–150B,
Combined Motor Carrier Identification
Report and HM Permit Application.
(2) The Form MCS–150B will also
satisfy the requirements for obtaining
and renewing a USDOT Number; there
is no need to complete Form MCS–150,
Motor Carrier Identification Report.
*
*
*
*
*

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18. Amend § 385.421 by revising
paragraph (a)(2) to read as follows:
§ 385.421 Under what circumstances will a
safety permit be subject to revocation or
suspension by FMCSA?

(a) * * *
(2) A motor carrier provides any false
or misleading information on its
application (Form MCS–150B) or as part
of updated information it is providing
on Form MCS–150B (see § 385.405(d)).
*
*
*
*
*
19. Amend part 385 by adding a new
subpart H consisting of new §§ 385.601
through 385.609 and an Appendix to
subpart H to read as follows:
Subpart H—Special Rules for New Entrant
Non-North America-Domiciled Carriers
Sec.
385.601 Scope of rules.
385.603 Application.
385.605 New entrant registration driver’s
license and drug and alcohol testing
requirements.
385.607 FMCSA action on the application.
385.609 Requirement to notify FMCSA of
change in applicant information.
Appendix to Subpart H of Part 385—
Explanation of Pre-Authorization Safety
Audit Evaluation Criteria for Non-North
America-Domiciled Motor Carriers

Subpart H—Special Rules for New
Entrant Non-North America-Domiciled
Carriers
§ 385.601

Scope of rules.

The rules in this subpart govern the
application by a non-North Americadomiciled motor carrier to provide
transportation of property and
passengers in interstate commerce in the
United States.
§ 385.603

Application.

(a) Each applicant applying under this
subpart must submit an application that
consists of:
(1) Form OP–1(NNA)—Application
for U.S. Department of Transportation
(USDOT) Registration by Non-North
America-Domiciled Motor Carriers;
(2) Form MCS–150—Motor Carrier
Identification Report; and
(3) A notification of the means used
to designate process agents, either by
submission in the application package
of Form BOC–3—Designation of AgentsMotor Carriers, Brokers and Freight
Forwarders or a letter stating that the
applicant will use a process agent
service that will submit the Form
BOC–3 electronically.
(b) The Federal Motor Carrier Safety
Administration (FMCSA) will only
process an application if it meets the
following conditions:
(1) The application must be
completed in English;

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(2) The information supplied must be
accurate, complete, and include all
required supporting documents and
applicable certifications in accordance
with the instructions to Form
OP–1(NNA), Form MCS–150 and Form
BOC–3; and
(3) The application must be signed by
the applicant.
(c) An applicant must submit the
application to the address provided in
Form OP–1(NNA).
(d) An applicant may obtain the
application forms from any FMCSA
Division Office or download them from
the FMCSA Web site at: http://
www.fmcsa.dot.gov/forms/forms.htm.
§ 385.605 New entrant registration driver’s
license and drug and alcohol testing
requirements.

(a) A non-North America-domiciled
motor carrier must use only drivers who
possess a valid commercial driver’s
license—a CDL, Canadian Commercial
Driver’s License, or Mexican Licencia de
Federal de Conductor—to operate its
vehicles in the United States.
(b) A non-North America-domiciled
motor carrier must subject each of the
drivers described in paragraph (a) of this
section to drug and alcohol testing as
prescribed under part 382 of this
subchapter.
§ 385.607 FMCSA action on the
application.

(a) FMCSA will review and act on
each application submitted under this
subpart in accordance with the
procedures set out in this part.
(b) FMCSA will validate the accuracy
of information and certifications
provided in the application by checking,
to the extent available, data maintained
in databases of the governments of the
country where the carrier’s principal
place of business is located and the
United States.
(c) Pre-authorization safety audit.
Every non-North America-domiciled
motor carrier that applies under this
part must satisfactorily complete an
FMCSA-administered safety audit
before FMCSA will grant new entrant
registration to operate in the United
States. The safety audit is a review by
FMCSA of the carrier’s written
procedures and records to validate the
accuracy of information and
certifications provided in the
application and determine whether the
carrier has established or exercises the
basic safety management controls
necessary to ensure safe operations.
FMCSA will evaluate the results of the
safety audit using the criteria in the
Appendix to this subpart.
(d) Applications of non-North
America-domiciled motor carriers

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requesting for-hire operating authority
under part 365 of this chapter may be
protested under § 365.109(b). Such
carriers will be granted new entrant
registration after successful completion
of the pre-authorization safety audit and
the expiration of the protest period,
provided the application is not
protested. If a protest to the application
is filed with FMCSA, new entrant
registration will be granted only if
FMCSA denies or rejects the protest.
(e) If FMCSA grants new entrant
registration to the applicant, it will
assign a distinctive USDOT Number that
identifies the motor carrier as
authorized to operate in the United
States. In order to initiate operations in
the United States, a non-North Americadomiciled motor carrier with new
entrant registration must:
(1) Have its surety or insurance
provider file proof of financial
responsibility in the form of certificates
of insurance, surety bonds, and
endorsements, as required by
§ 387.7(e)(2), § 387.31(e)(2) and
§ 387.301 of this subchapter, as
applicable; and
(2) File a hard copy of, or have its
process agent(s) electronically submit,
Form BOC–3—Designation of Agents—
Motor Carriers, Brokers and Freight
Forwarders, as required by part 366 of
this subchapter.
(f) A non-North America-domiciled
motor carrier must comply with all
provisions of the safety monitoring
system in part 385, subpart I of this
subchapter, including successfully
passing North American Standard
commercial motor vehicle inspections at
least every 90 days and having safety
decals affixed to each commercial motor
vehicle operated in the United States as
required by § 385.703(c) of this
subchapter.
(g) FMCSA may remove a non-North
America-domiciled carrier’s new entrant
designation no earlier than 18 months
after the date its USDOT Number is
issued and only after successful
completion to the satisfaction of FMCSA
of the safety monitoring system for nonNorth America-domiciled carriers set
out in part 385, subpart I of this
subchapter. Successful completion
includes obtaining a Satisfactory safety
rating as the result of a compliance
review.
§ 385.609 Requirement to notify FMCSA of
change in applicant information.

(a)(1) A motor carrier subject to this
subpart must notify FMCSA of any
changes or corrections to the
information the Form BOC–3—
Designation of Agents—Motor Carriers,
Brokers and Freight Forwarders that

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occur during the application process or
after having been granted new entrant
registration.
(2) A motor carrier subject to this
subpart must notify FMCSA of any
changes or corrections to the
information in Sections I, IA or II of
Form OP–1(NNA)—Application for U.S.
Department of Transportation (USDOT)
Registration by Non-North AmericaDomiciled Motor Carriers that occurs
during the application process or after
having been granted new entrant
registration.
(3) A motor carrier must notify
FMCSA in writing within 45 days of the
change or correction to information
under subparagraphs (a)(1) or (a)(2) of
this section.
(b) If a motor carrier fails to comply
with paragraph (a) of this section,
FMCSA may suspend or revoke its new
entrant registration until it meets those
requirements.
Appendix to Subpart H of Part 385—
Explanation of Pre-Authorization
Safety Audit Evaluation Criteria for
Non-North America-Domiciled Motor
Carriers
I. General
(a) FMCSA will perform a safety audit of
each non-North America-domiciled motor
carrier before granting the carrier new entrant
registration to operate within the United
States.
(b) FMCSA will conduct the safety audit at
a location specified by the FMCSA. All
records and documents must be made
available for examination within 48 hours
after a request is made. Saturdays, Sundays,
and Federal holidays are excluded from the
computation of the 48-hour period.
(c) The safety audit will include:
(1) Verification of available performance
data and safety management programs;
(2) Verification of a controlled substances
and alcohol testing program consistent with
part 40 of this title;
(3) Verification of the carrier’s system of
compliance with hours-of-service rules in
part 395 of this subchapter, including
recordkeeping and retention;
(4) Verification of proof of financial
responsibility;
(5) Review of available data concerning the
carrier’s safety history, and other information
necessary to determine the carrier’s
preparedness to comply with the Federal
Motor Carrier Safety Regulations, parts 382
through 399 of this subchapter, and the
Federal Hazardous Material Regulations,
parts 171 through 180 of this title;
(6) Inspection of available commercial
motor vehicles to be used under new entrant
registration, if any of these vehicles have not
received a decal required by § 385.703(c) of
this subchapter;
(7) Evaluation of the carrier’s safety
inspection, maintenance, and repair facilities
or management systems, including
verification of records of periodic vehicle
inspections;

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(8) Verification of drivers’ qualifications,
including confirmation of the validity of the
CDL, Canadian Commercial Driver’s License,
or Mexican Licencia de Federal de
Conductor, as applicable, of each driver the
carrier intends to assign to operate under its
new entrant registration; and
(9) An interview of carrier officials to
review safety management controls and
evaluate any written safety oversight policies
and practices.
(d) To successfully complete the safety
audit, a non-North America-domiciled motor
carrier must demonstrate to FMCSA that it
has the required elements in paragraphs
(c)(2), (3), (4), (7), and (8) above and other
basic safety management controls in place
which function adequately to ensure
minimum acceptable compliance with the
applicable safety requirements. FMCSA
developed ‘‘safety audit evaluation criteria,’’
which uses data from the safety audit and
roadside inspections to determine that each
applicant for new entrant registration has
basic safety management controls in place.
(e) The safety audit evaluation process
developed by FMCSA is used to:
(1) Evaluate basic safety management
controls and determine if each non-North
America-domiciled carrier and each driver is
able to operate safely in the United States;
and
(2) Identify motor carriers and drivers who
are having safety problems and need
improvement in their compliance with the
FMCSRs and the HMRs, before FMCSA
issues new entrant registration to operate
within the United States.
II. Source of the Data for the Safety Audit
Evaluation Criteria
(a) The FMCSA’s evaluation criteria are
built upon the operational tool known as the
safety audit. FMCSA developed this tool to
assist auditors and investigators in assessing
the adequacy of a non-North Americadomiciled carrier’s basic safety management
controls.
(b) The safety audit is a review of a nonNorth America-domiciled motor carrier’s
operation and is used to:
(1) Determine if a carrier has the basic
safety management controls required by 49
U.S.C. 31144; and
(2) In the event that a carrier is found not
to be in compliance with applicable FMCSRs
and HMRs, the safety audit can be used to
educate the carrier on how to comply with
U.S. safety rules.
(c) Documents such as those contained in
driver qualification files, records of duty
status, vehicle maintenance records, and
other records are reviewed for compliance
with the FMCSRs and HMRs. Violations are
cited on the safety audit. Performance-based
information, when available, is utilized to
evaluate the carrier’s compliance with the
vehicle regulations. Recordable accident
information is also collected.
III. Overall Determination of the Carrier’s
Basic Safety Management Controls
(a) The carrier will not receive new entrant
registration if FMCSA cannot:
(1) Verify a controlled substances and
alcohol testing program consistent with part
40 of this title;

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(2) Verify a system of compliance with the
hours-of-service rules of this subchapter,
including recordkeeping and retention;
(3) Verify proof of financial responsibility;
(4) Verify records of periodic vehicle
inspections; and
(5) Verify the qualifications of each driver
the carrier intends to assign to operate
commercial motor vehicles in the United
States, as required by parts 383 and 391 of
this subchapter, including confirming the
validity of each driver’s CDL, Canadian
Commercial Driver’s License, or Mexican
Licencia de Federal de Conductor, as
appropriate.
(b) If FMCSA confirms each item under
III(a)(1) through (5) above, the carrier will
receive new entrant registration, unless
FMCSA finds the carrier has inadequate basic
safety management controls in at least three
separate factors described in part IV below.
If FMCSA makes such a determination, the
carrier’s application for new entrant
registration will be denied.
IV. Evaluation of Regulatory Compliance
(a) During the safety audit, FMCSA gathers
information by reviewing a motor carrier’s
compliance with ‘‘acute’’ and ‘‘critical’’
regulations of the FMCSRs and HMRs.
(b) Acute regulations are those where
noncompliance is so severe as to require
immediate corrective actions by a motor
carrier regardless of the overall basic safety
management controls of the motor carrier.
(c) Critical regulations are those where
noncompliance relates to management and/or
operational controls. These are indicative of
breakdowns in a carrier’s management
controls.
(d) The list of the acute and critical
regulations, which are used in determining if
a carrier has basic safety management
controls in place, is included in Appendix B,
VII, List of Acute and Critical Regulations to
part 385 of this subchapter.
(e) Noncompliance with acute and critical
regulations are indicators of inadequate
safety management controls and usually
higher than average accident rates.
(f) Parts of the FMCSRs and the HMRs
having similar characteristics are combined
together into six regulatory areas called
‘‘factors.’’ The regulatory factors, evaluated
on the adequacy of the carrier’s safety
management controls, are:
(1) Factor 1—General: Parts 387 and 390;
(2) Factor 2—Driver: Parts 382, 383 and
391;
(3) Factor 3—Operational: Parts 392 and
395;
(4) Factor 4—Vehicle: Parts 393, 396 and
inspection data for the last 12 months;
(5) Factor 5—Hazardous Materials: Parts
171, 177, 180 and 397; and
(6) Factor 6—Accident: Recordable
Accident Rate per Million Miles.
(g) For each instance of noncompliance
with an acute regulation, 1.5 points will be
assessed.
(h) For each instance of noncompliance
with a critical regulation, 1 point will be
assessed.
(i) Vehicle Factor. (1) When at least three
vehicle inspections are recorded in the Motor
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(MCMIS) during the twelve months before
the safety audit or performed at the time of
the review, the Vehicle Factor (part 396) will
be evaluated on the basis of the Out-ofService (OOS) rates and noncompliance with
acute and critical regulations. The results of
the review of the OOS rate will affect the
Vehicle Factor as follows:
(i) If the motor carrier has had at least three
roadside inspections in the twelve months
before the safety audit, and the vehicle OOS
rate is 34 percent or higher, one point will
be assessed against the carrier. That point
will be added to any other points assessed for
discovered noncompliance with acute and
critical regulations of part 396 to determine
the carrier’s level of safety management
control for that factor.
(ii) If the motor carrier’s vehicle OOS rate
is less than 34 percent, or if there are less
than three inspections, the determination of
the carrier’s level of safety management
controls will only be based on discovered
noncompliance with the acute and critical
regulations of part 396.
(2) Over two million inspections occur on
the roadside each year in the United States.
This vehicle inspection information is
retained in the MCMIS and is integral to
evaluating motor carriers’ ability to
successfully maintain their vehicles, thus
preventing them from being placed OOS
during roadside inspections. Each safety
audit will continue to have the requirements
of part 396, Inspection, Repair, and
Maintenance, reviewed as indicated by the
above explanation.
(j) Accident Factor. (1) In addition to the
five regulatory factors, a sixth factor is
included in the process to address the
accident history of the motor carrier. This
factor is the recordable accident rate, which
the carrier has experienced during the past
12 months. Recordable accident, as defined
in 49 CFR 390.5, means an accident
involving a commercial motor vehicle
operating on a public road in interstate or
intrastate commerce which results in a
fatality; a bodily injury to a person who, as
a result of the injury, immediately receives
medical treatment away from the scene of the
accident; or one or more motor vehicles
incurring disabling damage as a result of the
accident requiring the motor vehicle to be
transported away from the scene by a tow
truck or other motor vehicle.
(2) Experience has shown that urban
carriers, those motor carriers operating
entirely within a radius of less than 100 air
miles (normally urban areas), have a higher
exposure to accident situations because of
their environment and normally have higher
accident rates.
(3) The recordable accident rate will be
used in determining the carrier’s basic safety
management controls in Factor 6, Accident.
It will be used only when a carrier incurs two
or more recordable accidents within the 12
months before the safety audit. An urban
carrier (a carrier operating entirely within a
radius of 100 air miles) with a recordable rate
per million miles greater than 1.7 will be
deemed to have inadequate basic safety
management controls for the accident factor.
All other carriers with a recordable accident
rate per million miles greater than 1.5 will be

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deemed to have inadequate basic safety
management controls for the accident factor.
The rates are the result of roughly doubling
the United States national average accident
rate in Fiscal Years 1994, 1995, and 1996.
(4) FMCSA will continue to consider
preventability when a new entrant contests
the evaluation of the accident factor by
presenting compelling evidence that the
recordable rate is not a fair means of
evaluating its accident factor. Preventability
will be determined according to the
following standard: ‘‘If a driver, who
exercises normal judgment and foresight,
could have foreseen the possibility of the
accident that in fact occurred, and avoided it
by taking steps within his/her control which
would not have risked causing another kind
of mishap, the accident was preventable.’’
(k) Factor Ratings
(1) The following table shows the five
regulatory factors, parts of the FMCSRs and
HMRs associated with each factor, and the
accident factor. Each carrier’s level of basic
safety management controls with each factor
is determined as follows:
(i) Factor 1—General: Parts 390 and 387;
(ii) Factor 2—Driver: Parts 382, 383, and
391;
(iii) Factor 3—Operational: Parts 392 and
395;
(iv) Factor 4—Vehicle: Parts 393, 396 and
the Out of Service Rate;
(v) Factor 5—Hazardous Materials: Part
171, 177, 180 and 397; and
(vi) Factor 6—Accident: Recordable
Accident Rate per Million Miles;
(2) For paragraphs IV (k)(1)(i) through (v)
(Factors 1 through 5), if the combined
violations of acute and or critical regulations
for each factor is equal to three or more
points, the carrier is determined not to have
basic safety management controls for that
individual factor.
(3) For paragraphs IV (k)(1)(vi), if the
recordable accident rate is greater than 1.7
recordable accidents per million miles for an
urban carrier (1.5 for all other carriers), the
carrier is determined to have inadequate
basic safety management controls.
(l) Notwithstanding FMCSA verification of
the items listed in part III (a)(1) through (5)
above, if the safety audit determines the
carrier has inadequate basic safety
management controls in at least three
separate factors described in part III, the
carrier’s application for new entrant
registration will be denied. For example,
FMCSA evaluates a carrier finding:
(1) One instance of noncompliance with a
critical regulation in part 387 scoring one
point for Factor 1;
(2) Two instances of noncompliance with
acute regulations in part 382 scoring three
points for Factor 2;
(3) Three instances of noncompliance with
critical regulations in part 396 scoring three
points for Factor 4; and
(4) Three instances of noncompliance with
acute regulations in parts 171 and 397
scoring four and one-half (4.5) points for
Factor 5.
Under this example, the carrier will not
receive new entrant registration because it
scored three or more points for Factors 2, 4,
and 5 and FMCSA determined the carrier had

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inadequate basic safety management controls
in at least three separate factors.

20. Amend part 385 by adding a new
Subpart I consisting of new §§ 385.701
through 385.717 to read as follows:
Subpart I—Safety Monitoring System for
Non-North America-Domiciled Carriers
Sec.
385.701 Definitions.
385.703 Safety monitoring system.
385.705 Expedited action.
385.707 The compliance review.
385.709 Suspension and revocation of nonNorth America-domiciled carrier
registration.
385.711 Administrative review.
385.713 Reapplying for new entrant
registration.
385.715 Duration of safety monitoring
system.
385.717 Applicability of safety fitness and
enforcement procedures.

Subpart I—Safety Monitoring System
for Non-North American Carriers
§ 385.701

Definitions.

Compliance review means a
compliance review as defined in § 385.3
of this part.
New entrant registration means the
provisional registration under part 385,
subpart H of this subchapter that
FMCSA grants to a non-North Americadomiciled motor carrier to provide
interstate transportation within the
United States. It will be revoked if the
registrant is not assigned a Satisfactory
safety rating following a compliance
review conducted during the safety
monitoring period established in this
subpart.
Non-North America-domiciled motor
carrier means a motor carrier of
property or passengers whose principal
place of business is located in a country
other than the United States, Canada or
Mexico.

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§ 385.703

Safety monitoring system.

(a) General. Each non-North Americadomiciled carrier new entrant will be
subject to an oversight program to
monitor its compliance with applicable
Federal Motor Carrier Safety
Regulations (FMCSRs), Federal Motor
Vehicle Safety Standards (FMVSSs), and
Hazardous Materials Regulations
(HMRs).
(b) Roadside monitoring. Each nonNorth America-domiciled carrier new
entrant will be subject to intensified
monitoring through frequent roadside
inspections.
(c) Safety decal. Each non-North
America-domiciled carrier must have on
every commercial motor vehicle it
operates in the United States a current
decal attesting to a satisfactory North
American Standard Commercial Vehicle

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inspection by a certified FMCSA or
State inspector pursuant to 49 CFR
§ 350.201(k). This requirement applies
during the new entrant operating period
and for three years after the carrier’s
registration becomes permanent
following removal of its new entrant
designation.
(d) Compliance review. FMCSA will
conduct a compliance review on a nonNorth America-domiciled carrier within
18 months after FMCSA issues the
carrier a USDOT Number.
§ 385.705

Expedited action.

(a) A non-North America-domiciled
motor carrier committing any of the
following actions identified through
roadside inspections, or by any other
means, may be subjected to an
expedited compliance review, or may be
required to submit a written response
demonstrating corrective action:
(1) Using drivers not possessing, or
operating without, a valid CDL,
Canadian Commercial Driver’s License,
or Mexican Licencia Federal de
Conductor. An invalid commercial
driver’s license includes one that is
falsified, revoked, expired, or missing a
required endorsement.
(2) Operating vehicles that have been
placed out of service for violations of
the Federal Motor Carrier safety
regulations without taking the necessary
corrective action.
(3) Involvement in, due to carrier act
or omission, a hazardous materials
incident within the United States
involving:
(i) A highway route controlled
quantity of a Class 7 (radioactive)
material as defined in § 173.403 of this
title;
(ii) Any quantity of a Class 1, Division
1.1, 1.2, or 1.3 explosive as defined in
§ 173.50 of this title; or
(iii) Any quantity of a poison
inhalation hazard Zone A or B material
as defined in §§ 173.115, 173.132, or
173.133 of this title.
(4) Involvement in, due to carrier act
or omission, two or more hazardous
material incidents occurring within the
United States and involving any
hazardous material not listed in
paragraph (a)(3) of this section and
defined in chapter I of this title.
(5) Using a driver who tests positive
for controlled substances or alcohol or
who refuses to submit to required
controlled substances or alcohol tests.
(6) Operating within the United States
a motor vehicle that is not insured as
required by part 387 of this chapter.
(7) Having a driver or vehicle out-ofservice rate of 50 percent or more based
upon at least three inspections

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occurring within a consecutive 90-day
period.
(b) Failure to respond to an agency
demand for a written response
demonstrating corrective action within
30 days will result in the suspension of
the carrier’s new entrant registration
until the required showing of corrective
action is submitted to the FMCSA.
(c) A satisfactory response to a written
demand for corrective action does not
excuse a carrier from the requirement
that it undergo a compliance review
during the new entrant registration
period.
§ 385.707

The compliance review.

(a) The criteria used in a compliance
review to determine whether a nonNorth America-domiciled new entrant
exercises the necessary basic safety
management controls are specified in
Appendix B to this part.
(b) Satisfactory Rating. If FMCSA
assigns a non-North America-domiciled
carrier a Satisfactory rating following a
compliance review conducted under
this subpart, FMCSA will provide the
carrier written notice as soon as
practicable, but not later than 45 days
after the completion of the compliance
review. The carrier’s registration will
remain in provisional status and its onhighway performance will continue to
be closely monitored for the remainder
of the 18-month new entrant registration
period.
(c) Conditional Rating. If FMCSA
assigns a non-North America-domiciled
carrier a Conditional rating following a
compliance review conducted under
this subpart, it will initiate a revocation
proceeding in accordance with
§ 385.709 of this subpart. The carrier’s
new entrant registration will not be
suspended prior to the conclusion of the
revocation proceeding.
(d) Unsatisfactory Rating. If FMCSA
assigns a non-North America-domiciled
carrier an Unsatisfactory rating
following a compliance review
conducted under this subpart, it will
initiate a suspension and revocation
proceeding in accordance with
§ 385.709 of this subpart.
§ 385.709 Suspension and revocation of
non-North America-domiciled carrier
registration.

(a) If a carrier is assigned an
‘‘Unsatisfactory’’ safety rating following
a compliance review conducted under
this subpart, FMCSA will provide the
carrier written notice, as soon as
practicable, that its registration will be
suspended effective 15 days from the
service date of the notice unless the
carrier demonstrates, within 10 days of
the service date of the notice, that the

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compliance review contains material
error.
(b) For purposes of this section,
material error is a mistake or series of
mistakes that resulted in an erroneous
safety rating.
(c) If the carrier demonstrates that the
compliance review contained material
error, its new entrant registration will
not be suspended. If the carrier fails to
show a material error in the compliance
review, FMCSA will issue an Order:
(1) Suspending the carrier’s new
entrant registration and requiring it to
immediately cease all further operations
in the United States; and
(2) Notifying the carrier that its new
entrant registration will be revoked
unless it presents evidence of necessary
corrective action within 30 days from
the service date of the Order.
(d) If a carrier is assigned a
‘‘Conditional’’ rating following a
compliance review conducted under
this subpart, the provisions of
paragraphs (a) through (c) of this section
will apply, except that its new entrant
registration will not be suspended under
paragraph (c)(1) of this section.
(e) If a carrier subject to this subpart
fails to provide the necessary
documents for a compliance review
upon reasonable request, or fails to
submit evidence of the necessary
corrective action as required by
§ 385.705 of this subpart, FMCSA will
provide the carrier with written notice,
as soon as practicable, that its new
entrant registration will be suspended
15 days from the service date of the
notice unless it provides all necessary
documents or information. This
suspension will remain in effect until
the necessary documents or information
are produced and:
(1) The carrier is rated Satisfactory
after a compliance review; or
(2) FMCSA determines, following
review of the carrier’s response to a
demand for corrective action under
§ 385.705, that the carrier has taken the
necessary corrective action.
(f) If a carrier commits any of the
actions specified in § 385.705(a) of this
subpart after the removal of a
suspension issued under this section,
the suspension will be automatically
reinstated. FMCSA will issue an Order
requiring the carrier to cease further
operations in the United States and
demonstrate, within 15 days from the
service date of the Order, that it did not
commit the alleged action(s). If the
carrier fails to demonstrate that it did
not commit the action(s), FMCSA will
issue an Order revoking its new entrant
registration.
(g) If FMCSA receives credible
evidence that a carrier has operated in

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violation of a suspension order issued
under this section, it will issue an Order
requiring the carrier to show cause,
within 10 days of the service date of the
Order, why its new entrant registration
should not be revoked. If the carrier fails
to make the necessary showing, FMCSA
will revoke its registration.
(h) If a non-North America-domiciled
motor carrier operates a commercial
motor vehicle in violation of a
suspension or out-of-service order, it is
subject to the penalty provisions in 49
U.S.C. 521(b)(2)(A), as adjusted by
inflation, not to exceed amounts for
each offense under part 386, Appendix
B of this subchapter.
(i) Notwithstanding any provision of
this subpart, a carrier subject to this
subpart is also subject to the suspension
and revocation provisions of 49 U.S.C.
13905 for repeated violations of DOT
regulations governing its motor carrier
operations.
§ 385.711

Administrative review.

(a) A non-North America-domiciled
motor carrier may request FMCSA to
conduct an administrative review if it
believes FMCSA has committed an error
in assigning a safety rating or
suspending or revoking the carrier’s
new entrant registration under this
subpart.
(b) The carrier must submit its request
in writing, in English, to the Associate
Administrator for Enforcement and
Program Delivery, Federal Motor Carrier
Safety Administration, 400 Seventh
Street, SW., Washington DC 20590.
(c) The carrier’s request must explain
the error it believes FMCSA committed
in assigning the safety rating or
suspending or revoking the carrier’s
new entrant registration and include
any information or documents that
support its argument.
(d) FMCSA will complete its
administrative review no later than 10
days after the carrier submits its request
for review. The Associate
Administrator’s decision will constitute
the final agency action.
§ 385.713 Reapplying for new entrant
registration.

(a) A non-North America-domiciled
motor carrier whose provisional new
entrant registration has been revoked
may reapply for new entrant registration
no sooner than 30 days after the date of
revocation.
(b) The non-North America-domiciled
motor carrier will be required to initiate
the application process from the
beginning. The carrier will be required
to demonstrate how it has corrected the
deficiencies that resulted in revocation
of its registration and how it will ensure

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that it will have adequate basic safety
management controls. It will also have
to undergo a pre-authorization safety
audit.
§ 385.715
system.

Duration of safety monitoring

(a) Each non-North Americadomiciled carrier subject to this subpart
will remain in the safety monitoring
system for at least 18 months from the
date FMCSA issues its new entrant
registration, except as provided in
paragraphs (c) and (d) of this section.
(b) If, at the end of this 18-month
period, the carrier’s most recent safety
rating was Satisfactory and no
additional enforcement or safety
improvement actions are pending under
this subpart, the non-North Americadomiciled carrier’s new entrant
registration will become permanent.
(c) If, at the end of this 18-month
period, FMCSA has not been able to
conduct a compliance review, the
carrier will remain in the safety
monitoring system until a compliance
review is conducted. If the results of the
compliance review are satisfactory, the
carrier’s new entrant registration will
become permanent.
(d) If, at the end of this 18-month
period, the carrier’s new entrant
registration is suspended under
§ 385.709(a) of this subpart, the carrier
will remain in the safety monitoring
system until FMCSA either:
(1) Determines that the carrier has
taken corrective action; or
(2) Completes measures to revoke the
carrier’s new entrant registration under
§ 385.709(c) of this subpart.
§ 385.717 Applicability of safety fitness
and enforcement procedures.

At all times during which a non-North
America-domiciled motor carrier is
subject to the safety monitoring system
in this subpart, it is also subject to the
general safety fitness procedures
established in subpart A of this part and
to compliance and enforcement
procedures applicable to all carriers
regulated by the FMCSA.
21. Amend Appendix A to part 385,
section III to add new paragraph (i) to
read as follows:
Appendix A to Part 385—Explanation
of Safety Audit Evaluation Criteria
*

*

*

*

*

III. Determining if the Carrier Has Basic
Safety Management Controls

*

*

*

*

*

(i) FMCSA also gathers information on
compliance with applicable household goods
and Americans with Disabilities Act of 1990
requirements, but failure to comply with
these requirements does not affect the

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determination of the adequacy of basic safety
management controls.

*

*

*

*

*

PART 387—MINIMUM LEVELS OF
FINANCIAL RESPONSIBILITY FOR
MOTOR CARRIERS
22. The authority citation for part 387
continues to read as follows:
Authority: 49 U.S.C. 13101, 13301, 13906,
14701, 31138, and 31139; and 49 CFR 1.73.

23. Amend § 387.7 by revising
paragraph (e) to read as follows:
§ 387.7

Financial responsibility required.

*

*
*
*
*
(e)(1) The proof of minimum levels of
financial responsibility required by this
section shall be considered public
information and be produced for review
upon reasonable request by a member of
the public.
(2) In addition to maintaining proof of
financial responsibility as required by
subparagraph (d) of this section, nonNorth America-domiciled private and
for-hire motor carriers shall file
evidence of financial responsibility with
FMCSA in accordance with the
requirements of subpart C of this part.
*
*
*
*
*
24. Amend § 387.31 by revising
paragraph (e) to read as follows:
§ 387.31

Financial responsibility required.

*

*
*
*
*
(e)(1) The proof of minimum levels of
financial responsibility required by this
section shall be considered public
information and be produced for review
upon reasonable request by a member of
the public.
(2) In addition to maintaining proof of
financial responsibility as required by
subparagraph (d) of this section, nonNorth America-domiciled private and
for-hire motor carriers shall file
evidence of financial responsibility with
FMCSA in accordance with the
requirements of subpart C of this part.
*
*
*
*
*

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PART 390—FEDERAL MOTOR
CARRIER SAFETY REGULATIONS;
GENERAL
25. The authority citation for part 390
continues to read as follows:
Authority: 49 U.S.C. 508, 13301, 13902,
31133, 31136, 31502, 31504, and sec. 204,
Pub. L. 104–88, 109 Stat. 803, 941 (49 U.S.C.
701 note); sec. 114, Pub. L. 103–311, 108 Stat.
1673, 1677; sec. 217, Pub. L. 106–159, 113
Stat. 1748, 1767; and 49 CFR 1.73.

26. Revise § 390.19 to read as follows:

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§ 390.19

Motor carrier identification report.

(a) Applicability. Each motor carrier
must file the Form MCS–150 or Form
MCS–150B with FMCSA as follows:
(1) A U.S., Canada-, Mexico-, or nonNorth America-domiciled motor carrier
conducting operations in interstate
commerce must file a Motor Carrier
Identification Report, Form MCS–150.
(2) A motor carrier conducting
operations in intrastate commerce and
requiring a Safety Permit under 49 CFR
part 385, subpart E of this chapter must
file the Combined Motor Carrier
Identification Report and HM Permit
Application, Form MCS–150B.
(b) Filing schedule. Each motor carrier
must file the appropriate form under
paragraph (a) of this section at the
following times:
(1) Before it begins operations; and
(2) Every 24 months, according to the
following schedule:
USDOT Number
ending in
1
2
3
4
5
6
7
8
9
0

.........................
.........................
.........................
.........................
.........................
.........................
.........................
.........................
.........................
.........................

Must file by last day of
January.
February.
March.
April.
May.
June.
July.
August.
September.
October.

(3) If the next-to-last digit of its
USDOT Number is odd, the motor
carrier shall file its update in every oddnumbered calendar year. If the next-tolast digit of the USDOT Number is even,
the motor carrier shall file its update in
every even-numbered calendar year.
(c) Availability of forms. The forms
described under paragraph (a) of this
section and complete instructions are
available from the FMCSA Web site at
http://www.fmcsa.dot.gov for (Keyword
‘‘MCS–150,’’ or ‘‘MCS–150B’’) from all
FMCSA Service Centers and Division
offices nationwide; or by calling 1–800–
832–5660.
(d) Where to file. The required form
under paragraph (a) of this section must
be filed with FMCSA Office of
Information Management. The form may
be filed electronically according to the
instructions at the agency’s web site, or
it may be sent to Federal Motor Carrier
Safety Administration, Office of
Information Technology, MC–RIO, 400
Seventh Street, SW, Washington, DC
20590.
(e) Special instructions for for-hire
motor carriers. A for-hire motor carrier
should submit the Form MCS–150, or
Form MCS–150B, along with its
application for operating authority

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(Form OP–1, OP–1(MX), OP–1(NNA) or
OP–2), to the appropriate address
referenced on that form, or may submit
it electronically or by mail separately to
the address mentioned in paragraph (d)
of this section.
(f) Only the legal name or a single
trade name of the motor carrier may be
used on the forms under paragraph (a)
of this section (Form MCS–150 or MCS–
150B).
(g) A motor carrier that fails to file the
form required under paragraph (a) of
this section, or furnishes misleading
information or makes false statements
upon the form, is subject to the
penalties prescribed in 49 U.S.C.
521(b)(2)(B).
(h)(1) Upon receipt and processing of
the form described in paragraph (a) of
this section, FMCSA will issue the
motor carrier an identification number
(USDOT Number).
(2) The following applicants must
additionally pass a pre-authorization
safety audit as described below before
being issued a USDOT Number:
(i) A Mexico-domiciled motor carrier
seeking to provide transportation of
property or passengers in interstate
commerce between Mexico and points
in the United States beyond the
municipalities and commercial zones
along the United States-Mexico
international border must pass the preauthorization safety audit under
§ 365.507 of this subchapter. The agency
will not issue a USDOT Number until
expiration of the protest period
provided in § 365.115 of this subchapter
or—if a protest is received—after
FMCSA denies or rejects the protest.
(ii) A non-North America-domiciled
motor carrier seeking to provide
transportation of property or passengers
in interstate commerce within the
United States must pass the preauthorization safety audit under
§ 385.607(c) of this subchapter. If the
carrier also requests operating authority
under part 365 of this chapter, the
agency will not issue a USDOT Number
until expiration of the protest period
or—if a protest is received—after
FMCSA denies or rejects the protest.
(3) The motor carrier must display the
number on each self-propelled CMV, as
defined in § 390.5, along with the
additional information required by
§ 390.21.
(i) A motor carrier that registers its
vehicles in a State that participates in
the Performance and Registration
Information Systems Management
(PRISM) program (authorized under
section 4004 of the Transportation
Equity Act for the 21st Century [(Pub. L.
105–178, 112 Stat. 107]) is exempt from
the requirements of this section,

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provided it files all the required
information with the appropriate State
office.

Issued on: December 11, 2006.
John H. Hill,
Administrator.
Note: The following form will not appear
in the Code of Federal Regulations.

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BILLING CODE 4910–EX–C

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