[Federal Register Volume 76, Number 71 (Wednesday, April 13, 2011)]
[Notices]
[Pages 20807-20819]
[FR Doc No: 2011-8846]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No FMCSA-2011-0097]

Pilot Program on NAFTA Long-Haul Trucking Provisions

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

ACTION: Notice; request for public comment.

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SUMMARY: The Federal Motor Carrier Safety Administration (FMCSA)
announces its proposal for the initiation of a United States-Mexico
cross-border long-haul trucking pilot program to test and demonstrate
the ability of Mexico-based motor carriers to operate safely in the
United States beyond the municipalities and commercial zones along the
United States-Mexico border. The pilot program is part of FMCSA's
implementation of the North American Free Trade Agreement (NAFTA)
cross-border long-haul trucking provisions. This pilot program would
allow Mexico-domiciled motor carriers to operate throughout the United
States for up to 3 years. U.S.-domiciled motor carriers would be
granted reciprocal rights to operate in Mexico for the same period.
Participating Mexican carriers and drivers would be required to comply
with all applicable U.S. laws and regulations, including those
concerned with motor carrier safety, customs, immigration, vehicle
registration and taxation, and fuel taxation. The safety of the
participating carriers would be tracked closely by FMCSA with input
from a Federal Advisory Committee.

DATES: Comments must be received on or before May 13, 2011.

ADDRESSES: You may submit comments identified by Docket Number FMCSA-
2011-0097 using any one of the following methods:

     Federal eRulemaking Portal: http://www.regulations.gov.
Follow the online instructions for submitting comments.
     Fax: 1-202-493-2251.
     Mail: Docket Management Facility, (M-30), U.S. Department
of Transportation (DOT), 1200 New Jersey Avenue, SE., West Building,
Ground Floor, Room 12-140, Washington, DC 20590-0001.
     Hand Delivery: Same as mail address above, between 9 a.m.
and 5 p.m., ET, Monday through Friday, except Federal holidays. The
telephone number is<PHONE_NUMBER>.

To avoid duplication, please use only one of these four methods. All
submissions must include the Agency name and docket number for this
notice. See the ``Public Participation'' heading below for instructions
on submitting comments and additional information.
    Note that all comments received, including any personal information
provided, will be posted without change to http://www.regulations.gov.
Please see the ``Privacy Act'' heading below.
    Docket: For access to the docket to read background documents or
comments received, go to http://www.regulations.gov at any time or to
Room W12-140 on the ground floor of the DOT Headquarters Building at
1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m.,
ET, Monday through Friday, except Federal holidays.
    Privacy Act: Anyone is able to search the electronic form of all
comments received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review DOT's
Privacy Act System of Records Notice for the DOT Federal Docket
Management System published in the Federal Register on January 17, 2008
(73 FR 3316), or you may visit http://edocket.access.gpo.gov/2008/pdf/E8-785.pdf.
    Public Participation: The http://www.regulations.gov Web site is
generally 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 http://www.regulations.gov Web site. Comments
received after the comment closing date will be included in the docket,
and will be considered to the extent practicable.

FOR FURTHER INFORMATION CONTACT: Marcelo Perez, Federal Motor Carrier
Safety Administration, 1200 New Jersey Avenue, SE., Washington, DC
20590-0001. Telephone<PHONE_NUMBER>, ext 228; e-mail
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Legal Basis

    Section 6901(a) of the U.S. Troop Readiness, Veterans' Care,
Katrina Recovery, and Iraq Accountability Appropriations Act, 2007
[Pub. L. 110-28, 121 Stat. 112, 183, May 25, 2007] provides that before
DOT may obligate or expend any funds to grant authority for Mexico-
domiciled trucks to engage in cross-border long-haul operations, DOT
must first test granting such authority through a pilot program that
meets the standards of 49 U.S.C. 31135(c). In accordance with 49 U.S.C.
31315(c), the Secretary of Transportation has general authority to have
safety measures ``that are designed to achieve a level of safety that
is equivalent to, or greater than, the level of safety that would
otherwise be achieved * * *.''
    In a pilot program, DOT collects specific data for evaluating
alternatives to the regulations or innovative approaches to safety
while ensuring that the goals of the regulations are satisfied. A pilot
program may not last more than 3 years, and the number of participants
in a pilot program must be large enough to ensure statistically valid
findings. Pilot programs must include an oversight plan to ensure that
participants comply with the terms and conditions of participation, and
procedures to protect the health and safety of study participants and
the general public. A pilot program may be initiated only after DOT
publishes a detailed description of it in the Federal Register and
provides an opportunity for public comment. This notice and request for
public comment complies with this requirement. While, a pilot program
may provide temporary regulatory relief from one or more regulations to
a person or class of persons subject to the regulations, or a person or
class of persons who intends to engage in an activity that would be
subject to the regulations, in this pilot program DOT does not propose
to exempt or relieve Mexico-domiciled motor carriers from any safety
regulation. Mexico-domiciled motor carriers participating in the
program will be required to comply with the existing motor carrier
safety regulatory regime plus certain additional requirements
associated with acceptance into and participation in the program.
    Section 350 of the Department of Transportation and Related
Agencies Appropriations Act, 2002 [Pub. L. 107-87, 115 Stat. 833, 864,
December 18, 2001] (section 350) prohibited FMCSA from using funds made
available in that Act to review or process applications from Mexico-
domiciled motor carriers to operate beyond limited commercial zones
along the United States-Mexico border until certain preconditions and
safety requirements were met. The terms of section 350 have been
reenacted in each subsequent DOT appropriations act. Section 350
required FMCSA to perform a pre-authorization safety audit (PASA) of
any Mexico-domiciled carrier before that carrier is allowed to engage
in long-haul operations in the United States. Vehicles the carrier will
operate beyond the commercial zones of the United States-Mexico border
that do not already have a Commercial Vehicle Safety Alliance (CVSA)
decal would be required to be inspected, and any vehicle that did not
display a decal would be required to pass an inspection at the border
port of entry before being allowed to proceed. DOT was also directed to
give a distinctive identification number to each Mexico-domiciled
carrier that would operate beyond the border commercial zones to assist
inspectors in enforcing motor carrier safety regulations. Additionally,
every driver that will operate in the United States must have a valid
commercial driver's license issued by Mexico. Section 350 also required
DOT's Office of the Inspector General (OIG) to conduct a comprehensive
review of the adequacy of inspection capacity, information
infrastructure, enforcement capability and other specific factors
relevant to safe operations by Mexico-domiciled carriers, and required
the Secretary of Transportation to address the OIG's findings and
certify that the opening of the border poses no safety risk. The OIG
was also directed to conduct similar reviews at least annually
thereafter. A number of the section 350 requirements were addressed by
FMCSA in rulemakings published on March 19, 2002 (67 FR 12653, 67 FR
12702, 67 FR 12758, 67 FR 12776) and on May 13, 2002 (67 FR 31978).
    Section 136 of the Transportation, Housing and Urban Development,
and Related Agencies Appropriations Act, 2009 [Division I of the
Omnibus Appropriations Act, 2009, Pub. L., 111-8, 123 Stat. 524, 932,
March 11, 2009] prohibited DOT from expending funds made available in
that Act to establish, implement or continue a cross-border motor
carrier pilot program to allow Mexican-domiciled motor carriers to
operate beyond the border commercial zones. The Transportation, Housing
and Urban Development, and Related Agencies Appropriations Act, 2010
[Division A of the Consolidated

Appropriations Act, 2010, Pub. L. 111-117, 123 Stat. 3034, December 16,
2009] did not bar DOT or FMCSA from using funds on a cross-border long-
haul program, but, pursuant to section 135 (123 Stat. at 3053) did
continue the requirements of section 350. FMCSA continues to operate
under the terms and conditions in its fiscal year 2010 appropriations
act, as extended under various short-term continuing resolutions.
    Section 6901 of the U.S. Troop Readiness, Veterans' Care, Katrina
Recovery, and Iraq Accountability Appropriations Act, 2007 also
provides that simultaneous and comparable authority to operate within
Mexico must be made available to U.S. carriers. Further, before the
required pilot program may begin, the Department's OIG must submit a
report to Congress verifying that DOT has complied with the
requirements of section 350(a), and DOT must take any actions that are
necessary to address issues raised by the OIG and must detail those
actions in a report to Congress. Section 6901 also directed the OIG to
submit an interim report to Congress 6 months after the initiation of a
cross-border long-haul Mexican trucking pilot program and a final
report after the pilot program is completed. The statute further
specified that the report address the program's adequacy as a test of
safety. Also as a precondition to beginning the pilot program, section
6901 requires that DOT provide an opportunity for public comment by
publishing in the Federal Register information on the PASA's conducted.
DOT must also publish for comment the standards that will be used to
evaluate the pilot program, as well as a list of Federal motor carrier
safety laws and regulations, including commercial driver's license
requirements, for which the Secretary of Transportation will accept
compliance with corresponding Mexican law or regulation as the
equivalent to compliance with the U.S. law or regulation including an
analysis of how the corresponding United States and Mexican laws and
regulations differ. Further discussion of relevant U.S. and Mexican
safety laws and regulations is provided in the section of this notice
entitled ``List of Federal Motor Carrier Safety Laws and Regulations
for Which FMCSA Will Accept Compliance with a Corresponding Mexican Law
or Regulation.''

Background

    Before 1982, Mexico- and Canada-domiciled motor carriers could
apply to the Interstate Commerce Commission (ICC) for authority to
operate within the United States. As a result of complaints that U.S.
motor carriers were not allowed the same access to Mexican and Canadian
markets that carriers from those nations enjoyed in this country, the
Bus Regulatory Reform Act of 1982 imposed a moratorium on the issuance
of new operating authority to motor carriers domiciled, or owned or
controlled by persons domiciled in Canada or Mexico. While the
disagreement with Canada was quickly resolved, the issue of trucking
reciprocity with Mexico was not.
    Currently, most Mexican carriers are allowed to operate only within
the border commercial zones extending up to 25 miles into the United
States. Every year Mexico-domiciled commercial motor vehicles (CMVs)
cross into the United States about 4.5 million times. Mexico granted
reciprocal authority to 10 U.S.-domiciled motor carriers to operate
throughout Mexico during the time of FMCSA's previous demonstration
project conducted between September 2007 and March 2009. Four of these
motor carriers continue to operate in Mexico.
    Trucking issues at the United States-Mexico border were not fully
addressed until NAFTA was negotiated in the early 1990s. NAFTA required
the United States to incrementally lift the moratorium on licensing
Mexico-domiciled motor carriers to operate beyond the commercial zones.
On January 1, 1994, the President modified the moratorium and the ICC
began accepting applications from Mexico-domiciled passenger carriers
to conduct international charter and tour bus operations in the United
States. On December 13, 1995, the ICC published a rule and a revised
application form for the processing of Mexico-domiciled property
carrier applications (Form OP-1(MX)) (60 FR 63981). The ICC rules
anticipated the implementation of the second phase of NAFTA, providing
Mexican motor carriers of property with access to California, Arizona,
New Mexico and Texas, and the third phase, providing access throughout
the United States. However, at the end of 1995, the United States
announced an indefinite delay in opening the border to long-haul
Mexican CMVs.
    In 1998, Mexico filed a claim against the United States, claiming
that the United States' refusal to grant authority to Mexican trucking
companies constituted a breach of the obligations in the NAFTA. On
February 6, 2001, the Arbitration Panel issued its final report and
ruled in Mexico's favor, concluding that the United States was in
breach of its obligations, and Mexico could impose tariffs on U.S.
exports to Mexico up to an amount commensurate with the loss of
business resulting from the lack of U.S. compliance. The Panel noted
that the United States could establish a safety oversight regime to
ensure the safety of Mexican carriers entering the United States, but
that the safety oversight regime could not be discriminatory and must
be justified by safety data.
    After the Administration announced its intent to resume the process
for opening the border in 2001, Congress included section 350 in the
Department of Transportation and Related Agencies Appropriations Act,
2002, as discussed in the ``Legal Basis'' section above.
    In November 2002, former Secretary of Transportation Norman Mineta
certified, as required by section 350(c)(2), that authorizing Mexico-
domiciled motor carrier operations beyond the border commercial zones
does not pose an unacceptable safety risk to the American public. Later
that month, the President modified the moratorium to permit Mexico-
domiciled motor carriers to provide cross-border cargo and scheduled
passenger transportation beyond the border commercial zones.
(Memorandum of November 27, 2002, for the Secretary of Transportation,
``Determination under the Interstate Commerce Commission Termination
Act of 1995,'' 67 FR 71795, December 2, 2002). The Secretary's
certification was made in response to the June 25, 2002, DOT OIG report
on the implementation of safety requirements at the United States-
Mexico border. In a January 2005 follow-up report, the OIG concluded
that FMCSA had sufficient staff, facilities, equipment, and procedures
in place to substantially meet the eight section 350 requirements that
the OIG was required to review. The above reports are available in the
docket to this notice.
    Former Secretary of Transportation Mary E. Peters and Mexico's
former Secretaria de Comunicaciones y Transportes (SCT) Luis
T[eacute]llez Kuenzler announced a demonstration project to implement
certain trucking provisions of NAFTA on February 23, 2007. The
demonstration project was initiated on September 6, 2007, after the DOT
complied with a number of conditions imposed by section 6901 of the
U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq
Accountability Act, 2007, as discussed further in the ``Legal Basis''
section above. The demonstration project was initially expected to last
1 year (see 72 FR 23883, May 1, 2007). On August 6, 2008, FMCSA
announced that the demonstration project was being

extended from 1 year to the full 3 years allowed by section
31315(c)(2)(A) of title 49 United States Code (73 FR 45796) after
Secretaries Peters and T[eacute]llez exchanged letters on the
extension.
    On March 11, 2009, President Obama signed into law the Omnibus
Appropriations Act, 2009. Section 136 of the Transportation, Housing
and Urban Development, and Related Agencies Appropriations Act, 2009
(Division I, title I of the Omnibus Appropriations Act, 2009) provides
that:

    [N]one of the funds appropriated or otherwise made available
under this Act may be used, directly or indirectly, to establish,
implement, continue, promote, or in any way permit a cross-border
motor carrier pilot program to allow Mexican-domiciled motor
carriers to operate beyond the commercial zones along the
international border between the United States and Mexico, including
continuing, in whole or in part, any such program that was initiated
prior to the date of the enactment of this Act.

(123 Stat. at 932).

    In accordance with section 136, FMCSA terminated the cross-border
demonstration project that began on September 6, 2007. The Agency
ceased processing applications by prospective project participants and
took other necessary steps to comply with the provision. (74 FR 11628,
March 18, 2009).
    On March 19, 2009, Mexico announced that it was exercising its
rights under the 2001 NAFTA Arbitration Panel decision to impose
retaliatory tariffs for the failure to allow Mexico-domiciled carriers
to provide long-haul service into the United States. The tariffs affect
approximately 90 U.S. export commodities at an estimated annual cost of
$2.4 billion. The President directed DOT to work with the Office of the
U.S. Trade Representative and the Department of State, along with
leaders in Congress and Mexican officials, to propose legislation
creating a new cross-border trucking project, to address the legitimate
safety concerns of Congress while fulfilling our obligations under
NAFTA. Secretary of Transportation Ray LaHood met with numerous members
of Congress to gather their input. FMCSA tasked the Motor Carrier
Safety Advisory Committee (MCSAC) with providing advice and guidance on
essential elements that the Agency should consider when drafting
proposed legislation to permit Mexico-domiciled trucks beyond the
commercial zones along the United States-Mexico border. The MCSAC final
report on this tasking is available on FMCSA's MCSAC Web page at http://mcsac.fmcsa.dot.gov/Reports.htm. Additionally, DOT formed a team to
draft principles that would guide the creation of the draft
legislation.
    The President signed the DOT Fiscal Year (FY) 2010 Appropriations
Act December 16, 2009. As mentioned previously in the ``Legal Basis''
section, unlike the previous year's appropriations, this Act did not
prohibit the use of fiscal year 2010 funds on a cross border long-haul
program. However, it continues the requirements of section 350 and
section 6901 of Public Law 110-28. FMCSA continues to operate under the
terms and conditions in its FY 2010 appropriations act, as extended
under various short-term continuing resolutions.
    On April 12, 2010, Secretary LaHood met with Mexico's former
Secretary of Communications and Transport, Juan Molinar Horcasitas, and
announced a plan to establish a working group to consider the next
steps in implementing a cross-border trucking program. On May 19, 2010,
President Obama and Mexico's President Felipe Calderon Hinojosa issued
a joint statement acknowledging that safe, efficient, secure, and
compatible transportation is a prerequisite for mutual economic growth.
They committed to continue their countries' cooperation in system
planning, operational coordination, and technical cooperation in key
modes of transportation.
    On January 6, 2011, Secretary LaHood shared with Congress and the
Government of Mexico an initial concept document for a cross-border
long-haul Mexican trucking pilot program that prioritizes safety, while
satisfying the U.S.' international obligations. Also, on the same day,
the Department posted the concept documents on its Web site for public
viewing. See http://www.dot.gov/affairs/2011/dot0111.html. The initial
concept document was the starting point for renewed negotiations with
Mexico. Discussions with the Government of Mexico commenced on January
18, 2011. The preliminary agreement between DOT and the Secretariat of
Communications and Transport is reflected in the program description
and details provided below.
    On March 3, 2011, President Obama met with Mexico's President
Calderon and announced that there is a clear path forward to resolving
the trucking between the United States and Mexico.

Pilot Program Description

    Duration. As specified in section 31315(c)(2)(A) of title 49,
United States Code, the scheduled life of this pilot program will not
exceed 3 years.
    Staged pilot program. The Mexico-domiciled motor carriers that
participate in this pilot program would proceed through a series of
stages prior to issuance of a permanent operating authority. Stage 1
would begin when the motor carrier is issued a provisional operating
authority. The motor carrier's vehicles and drivers would be inspected
each time they enter the United States for at least 3 months. This
initial 3-month period may be extended if the motor carrier does not
receive at least three vehicle inspections. FMCSA would also conduct an
evaluation of the motor carrier's performance during Stage 1. This
evaluation is described more fully later in this notice.
    After a minimum of 3 months of operations in Stage 1, Mexico-
domiciled carriers may be permitted to proceed to Stage 2 of the pilot
program after FMCSA completes an evaluation of each carrier's
performance in Stage 1. During Stage 2, the motor carrier's vehicles
would be inspected at a rate comparable to other Mexico-domiciled motor
carriers that cross the United States-Mexico border. The motor
carrier's safety data would be monitored to assure the motor carrier is
operating in a safe manner. The motor carrier would continue to operate
under a provisional operating authority. Within 18 months after a
Mexico-domiciled motor carrier is issued provisional operating
authority, FMCSA would conduct a compliance review on the motor
carrier. If the motor carrier obtains a satisfactory safety rating, has
no pending enforcement or safety improvement actions, and has operated
under its provisional operating authority for at least 18 months, the
provisional operating authority will become permanent, moving the
carrier into Stage 3. If the motor carrier obtains a less than
satisfactory safety rating, FMCSA would take action as required by 49
CFR part 385 to suspend and/or revoke the motor carrier's operating
authority.
    Stage 3 of the pilot program would begin for each motor carrier
upon eceipt of permanent operating authority. The motor carrier must
continue to operate in accordance with the Federal Motor Carrier Safety
Regulations (FMCSRs) and the requirements set forth in this notice.
    Reciprocity with Mexico. Consistent with section 6901(a)(3) of
Public law 110-28, FMCSA will not grant operating authority to Mexico-
domiciled motor carriers to operate beyond the U.S. municipalities and
commercial zones along the United States-Mexico border unless the
Government of Mexico simultaneously permits comparable

authority to be granted to U.S.-domiciled motor carriers to transport
international cargo in Mexico.
    Previous Demonstration Program Participants. A Mexico-domiciled
motor carrier that participated in the 2007-2009 demonstration project
and operated under provisional operating authority in that pilot would
receive credit for the amount of time it operated under authority in
calculating the 18 month provisional operating authority period.
    Hazardous Materials and Passenger Transportation. Consistent with
section 6901(d) of Public Law 110-28, operating authority granted under
the pilot program excludes the transportation of placardable quantities
of hazardous materials and passengers. Hazardous materials means any
material that has been designated as hazardous under 49 U.S.C. 5103 and
is required to be placarded under subpart F of 49 CFR part 172.
    Drivers and Vehicles. Mexico-domiciled motor carriers participating
in the pilot program would designate the vehicles and drivers they wish
to use in the pilot program. All designated vehicles and drivers must
be approved by FMCSA prior to the participating motor carrier using the
vehicles or drivers for transportation beyond the commercial zones
along the United States-Mexico border. The requirements for FMCSA
approval of drivers and vehicles are described in this notice.
    License Checks.--In compliance with section 350(a)(3), FMCSA will
ensure that at least 50 percent of participating drivers' licenses are
checked when crossing the border. This may be accomplished during Level
I, II or III inspections.
    International Cargo. The operating authority granted under this
pilot program would authorize the motor carrier to transport
international cargo in the United States. As specified in 49 CFR
365.501(b), Mexico-domiciled carriers participating in the pilot
program may not provide point-to-point transportation services,
including express delivery services, within the United States for goods
other than international cargo. Therefore, a carrier that would provide
point-to-point transportation services in the United States would be
operating beyond the scope of its operating authority and would be in
violation of 49 CFR 392.9a(a). Additionally, participating motor
carriers must comply with regulations prohibiting the transportation of
domestic cargo (cabotage) including, but not limited to, 19 CFR 123.14
(U.S. Customs and Border Protection regulations concerning entry of
foreign-based trucks, buses, and taxicabs in international traffic) and
8 CFR 214.2(b)(4)(i)(E)(1) (U.S. Department of Homeland Security (DHS)
regulations concerning cabotage. (See further discussion below under
the section entitled ``Point-to-Point Transportation Prohibited.'').
    Security Screening. FMCSA would submit information on the applicant
motor carriers and their drivers designated for long-haul operations in
the pilot program to DHS for security screening. Motor carriers and/or
drivers that fail DHS's security screening would not be eligible for
participation in the pilot program. Reasons a motor carrier or driver
may not pass DHS security screening may include: Providing false or
incomplete information; conviction of any criminal offense or pending
criminal charges or outstanding warrants; violation of any customs,
immigration or agriculture regulations or laws; the carrier or driver
is the subject of an ongoing investigation by any Federal, State or
local law enforcement agency; the motor carrier or driver is
inadmissible to the United States under immigration regulations,
including applicants with approved waivers of inadmissibility or parole
documentation; DHS is not satisfied concerning the motor carrier's or
driver's low-risk status; DHS cannot determine an applicant's criminal,
residence or employment history; or the motor carrier or driver is
subject to National Security Entry Exit Registration System or other
special registration programs.
    Liability Insurance. Mexico-domiciled motor carriers participating
in the pilot program must maintain a certificate of insurance or surety
bond on file with FMCSA, as prescribed in 49 CFR 387.313, throughout
the pilot program. The insurance or surety bond must be underwritten by
a U.S. insurance or surety bond company.
    Commercial Vehicle Safety Alliance Safety (CVSA) Decal. The motor
carrier must maintain a valid CVSA decal on each vehicle it enrolls in
this pilot program in accordance with 49 CFR 365.511.
    Emission Control Label. Any vehicle with a diesel engine to be used
by a motor carrier in this pilot program must have an emission control
label as described in 40 CFR 86.007-35 that indicates the engine
conforms to the U.S. Environmental Protection Agency (EPA) regulations
applicable to 1998 or later. Alternatively, the motor carrier may
present documentation from the engine manufacturer indicating the
engine conforms to the EPA regulations applicable to 1998 or later.
    Federal Motor Vehicle Safety Standard (FMVSS). Any vehicle used by
a motor carrier in this pilot program must display a FMVSS
certification label or Canadian Motor Vehicle Safety Standard (CMVSS)
certification label affixed by the original vehicle manufacturer at the
time the vehicle was built. Alternatively, a motor carrier may use a
vehicle manufactured for use in Mexico that does not possess an FMVSS
or CMVSS label, if the vehicle is of model year 1996 or newer and it is
equipped with all the safety equipment and features required by the
FMVSSs in effect on the date of manufacture, such as automatic slack
adjusters and antilock braking systems (ABS) if applicable. Information
available to FMCSA from the Truck Manufacturers Association (TMA)
indicates that most trucks manufactured in Mexico since 1993 were built
to the FMVSSs, even if they were not specifically certified as such.
(70 FR 50273) A copy of TMA's letter that provided this information is
available in the docket for this notice.
    Electronic Monitoring Device. FMCSA would equip each vehicle
approved for use by Mexico-domiciled motor carriers in this pilot
program with an electronic monitoring device such as a global
positioning system and/or electronic on board recording device. As part
of participating in this pilot program, the device must be operational
on the vehicle throughout the duration of the pilot program.
    General Qualifications of Drivers. A driver may not participate in
this pilot program unless the driver can read and speak the English
language sufficiently to understand highway traffic signs and signals
in the English language, to respond to official inquiries, and to make
entries on reports and records required by FMCSA.
    Environmental Review. FMCSA will prepare an Environmental
Assessment (EA) for this pilot program prior to its commencement and
seek comments on the draft EA in accordance with the National
Environmental Policy Act, as amended (42 U.S.C. 4321 et seq.).
    Measures To Protect the Health and Safety of the Public. The FMCSA
has developed an extensive oversight system to protect the health and
safety of the public and FMCSA will apply it to Mexico-domiciled motor
carriers. These measures are outlined in 49 CFR parts 350-396 and
include providing grants to States for commercial vehicle enforcement
activities, regulations outlining the application procedures,
regulations explaining how FMCSA will

assess safety ratings and civil penalties as well as amounts of
possible civil penalties, insurance requirements, drug and alcohol
testing requirements, commercial driver's license (CDL) requirements,
general operating requirements, driver qualification requirements,
vehicle parts and maintenance requirements, and hours-of-service
requirements. These requirements apply to Mexico-domiciled carriers
operating in this pilot program, just as they do to any commercial
motor vehicle, driver, or carrier operating in the United States. The
description below focuses on the main features of FMCSA's system to
protect the health and safety of the public that are unique to this
pilot program, but is not intended to imply that all regulations
outlined above do not apply at all times.
    Other Federal and State Laws and Regulations. Mexico-domiciled
motor carriers participating in the pilot program are required to
comply with all applicable Federal and State laws and regulations
including, but not limited to, vehicle size and weight, environmental,
tax, and vehicle registration requirements.

Process for Applying for OP-1(MX) Operating Authority

    The process for applying for participation in the pilot program
begins with a 28-page application that gathers specific information
about the carrier, its affiliations, its insurance, its safety
programs, and its compliance with U.S. laws. In addition to providing
general information, the carrier must complete up to 35 safety and
compliance certifications and provide information regarding its systems
for monitoring hours of service and crashes and complying with DOT drug
and alcohol testing requirements.
    To participate in the pilot program, a Mexico-domiciled motor
carrier must, pursuant to existing regulations, submit (1) Form OP-
1(MX), ``Application to Register Mexican Carriers for Motor Carrier
Authority to Operate Beyond U.S. Municipalities and Commercial Zones on
the U.S.-Mexico Border''; (2) Form MCS-150, the ``Motor Carrier
Identification Report''; and (3) notification of the means used to
designate agents for service of legal process, either by submitting
Form BOC-3, ``Designation of Agents--Motor Carriers, Brokers and
Freight Forwarders,'' or a letter stating that the applicant will use a
process agent service that will submit Form BOC-3 electronically. The
forms are available on the Internet at http://www.fmcsa.dot.gov/forms/print/r-l-forms.htm.
    FMCSA would compare the information and certifications provided in
the application with information maintained in databases of the
governments of Mexico and the United States. The appropriate fee must
be submitted, as applicable.
    FMCSA developed special rules that govern Mexico-domiciled motor
carriers during the application process and for several years after
receiving OP-1(MX) operating authority. They are codified in 49 CFR
365.501 through 365.511. These rules impose requirements on Mexico-
domiciled motor carriers in addition to those imposed on U.S.-domiciled
motor carriers seeking operating authority.

Pre-Authorization Safety Audit

    A Mexico-domiciled carrier must satisfactorily complete the FMCSA-
administered PASA required under FMCSA regulations before it is granted
provisional authority to operate in the United States beyond the border
commercial zones. The PASA is a review of the carrier's safety
management systems including written procedures and records to validate
the accuracy of the information and certifications provided in the
application. The PASA will determine whether the carrier has
established and exercises the basic safety management controls
necessary to ensure safe operations. The carrier would not be granted
provisional operating authority if FMCSA determines that its safety
management controls are inadequate, using the standards in Appendix A
to subpart E of 49 CFR part 365. Vehicles designated for cross-border
long-haul operations within the United States would be inspected; if
the vehicle passes the inspection, a CVSA decal would be affixed by the
inspector.
    Each PASA would be conducted in accordance with 49 CFR part 365.
The carrier would be denied provisional operating authority if FMCSA
cannot:
    1. Verify available performance data and safety management
programs.
    2. Verify the existence of a controlled substances and alcohol
testing program consistent with 49 CFR part 40. FMCSA would ensure that
the carrier has information on collection sites and laboratories it
intends to use.
    3. Verify a system of compliance with hours-of-service rules in 49
CFR part 395, including recordkeeping and retention.
    4. Verify the carrier has the ability to obtain financial
responsibility as required by 49 CFR part 387, including the ability to
obtain insurance in the United States.
    5. Verify records of periodic vehicle inspections, as required by
49 CFR part 396.
    6. Verify that each driver the carrier intends to assign to operate
under the pilot program meets the requirements of 49 CFR parts 383 and
391. This would include confirmation of the validity of each driver's
Licencia Federal de Conductor (LF) through the Mexican driver license
information system and a check of the Mexican State licensing records
and the Commercial Driver's License Information System (CDLIS) for
violations, suspensions, etc.
    7. Review of available data concerning safety history and other
information necessary to determine familiarity with and preparedness to
comply with the FMCSRs and Federal Hazardous Materials Regulations that
apply to the transportation of non-placardable hazardous materials.
    8. Evaluate safety inspection, maintenance, and repair facilities
or management systems, including verification of records of periodic
vehicle inspections.
    9. Inspect each vehicle the carrier intends to operate under the
pilot program unless the vehicle has received and displays a current
CVSA decal.
    10. Interview carrier officials to review safety management
controls and evaluate any written safety oversight policies and
practices.
    11. Obtain any other information required by the FMCSA to complete
the PASA.
    Applicant carriers would designate and identify drivers and
vehicles that will perform cross-border long-haul operations in the
pilot program.\1\ FMCSA would verify driver qualifications, including
confirming the validity of the driver's LF and review any Federal and
State driver license history for traffic violations that would
disqualify the driver for operations in the United States. FMCSA would
also conduct an English Language Proficiency assessment of each
participating driver to ensure compliance with 49 CFR 391.11(b)(2). The
assessment would be conducted orally, in English, and would include a
test on knowledge of U.S. traffic signs.
---------------------------------------------------------------------------

    \1\ Carriers' selection of specific vehicles to participate is
limited to the new program only. Once the new program ends, carriers
will not have the option of selecting specific vehicles. Instead,
all vehicles that may enter the United States for carriers with OP-1
authority will be required to comply with all FMCSRs.
---------------------------------------------------------------------------

    At the time of the PASA, FMCSA will inspect participating vehicles
to determine whether they:
    a. Comply with the FMVSSs; and

    b. Display an EPA emission control label indicating the engine
conforms to the EPA regulations applicable to 1998 or later.
Alternatively, the Mexico-domiciled motor carrier can present documents
from the engine manufacturer indicating the engine conforms to the EPA
regulations applicable to 1998 or later.
    FMCSA will also obtain the following information but will not
consider the information in its evaluation of the motor carrier for
entry into the program:
    a. Whether environmental post-treatment equipment or other
emissions-related equipment has been installed on any vehicle
designated for participating in the pilot program; and
    b. The primary ports of entry the applicant Mexico-domiciled motor
carrier intends to use. (There is no restriction on which ports of
entry the carrier may use during the program. This information would be
used to allocate FMCSA resources.)

Issuance of Operating Authority

    If a carrier successfully completes the PASA and FMCSA approves its
application, the Agency will publish a summary of the application as a
provisional grant of authority in the FMCSA Register, at http://li-public.fmcsa.dot.gov/LIVIEW/pkg_html.prc_limain. In addition, FMCSA
will publish comprehensive data and information on the PASAs conducted
of Mexico-domiciled motor carriers that are granted authority to
operate beyond the commercial zones on the U.S. Mexico border. However,
no carrier would be authorized to conduct any cross-border long-haul
transportation until it has made the insurance filings required by 49
CFR 365.507(e)(1) and designated a process agent as required by 49 CFR
365.503(a)(3). Additionally, no Mexico-domiciled motor carrier will be
authorized to operate beyond the commercial zones of the United States-
Mexico border until this notice-and-comment procedure is completed.
    Upon granting provisional operating authority, FMCSA will assign a
unique USDOT Number, including an ``X'' suffix, which identifies the
CMVs authorized to operate beyond the municipalities and commercial
zones on the United States-Mexico border.

Termination of the Pilot Program

    The pilot program would operate for up to 3 years from the date
FMCSA grants the first provisional certificate, unless the Agency
collects sufficient data to draw statistically valid conclusions before
3 years elapse or if it is determined the continuation of the pilot
program would not be consistent with the goals and objectives of the
pilot, in which case the pilot may be terminated earlier.
    Provisional or permanent operating authority may be suspended or
revoked at any time during the pilot program if FMCSA determines that
the carrier has failed to comply with the terms and conditions of the
pilot program or if the carrier's safety performance does not meet the
standards established in 49 CFR part 385. Operating authority may also
be suspended or revoked if the motor carrier is found to have
transported passengers or placardable quantities of hazardous materials
in the United States, or is operating beyond the scope of its operating
authority.

Operating in the United States Under OP-1(MX) Provisional Operating
Authority

    Mexico-domiciled motor carriers with provisional operating
authority are subject to the enhanced safety monitoring program of 49
CFR part 385, subpart B, and would be monitored on an on-going basis.
Carriers committing any violations specified in 49 CFR 385.105(a) and
identified through roadside inspections, or other means, may be subject
to a compliance review, required to submit documentation of corrective
action, and/or subject to enforcement action.

Permanent Operating Authority

    Mexico-domiciled carriers that receive a satisfactory rating after
a compliance review, complete at least 18 months of operation, and have
no pending enforcement or safety improvement actions, are eligible for
permanent authority in the pilot program. To maintain permanent
authority, carriers must comply with all FMCSRs and continue to renew
the CVSA safety decal every 90 days for 3 years. During the duration of
the pilot program, carriers must update driver and vehicle records with
FMCSA. Any additional vehicles or drivers the motor carrier wishes to
include in the pilot program must be approved by FMCSA before the
carrier may use the driver or vehicle for long-haul transportation.
    Mexico-domiciled carriers that participate are eligible to convert
their permanent authority granted during the pilot program to standard
permanent authority, similar to U.S.-domiciled carriers, upon the
completion of the pilot program. FMCSA intends this to be an
administrative process that would occur once the pilot program ends.

Point-to-Point Transportation Prohibited

    Mexico-domiciled motor carriers are also subject to DHS and DOT
cabotage requirements and are prohibited from providing domestic point-
to-point transportation while operating in the United States. Vehicles
and drivers violating the prohibition on domestic point-to-point
transportation will be placed out of service under the DOT regulations
and may be subject to civil penalties. DHS may also prohibit the driver
from entering the United States in the future. FMCSA, in coordination
with the International Association of Chiefs of Police (IACP),
developed and is providing training to State and local law enforcement
agencies on the cabotage requirements.

Monitoring, Oversight and Enforcement

    FMCSA would monitor the operational safety of all Mexico-domiciled
motor carriers participating in the pilot program. To accomplish this,
FMCSA would work closely with State CMV safety agencies, the lead Motor
Carrier Safety Assistance Program agencies, IACP, CVSA, DHS, and
others. Field monitoring would include inspections of vehicles,
verification of compliance with the terms of the motor carrier's
operating authority, driver license checks, crash reporting, and
initiation of enforcement actions, when appropriate.
    Monitoring and oversight of carriers and drivers participating in
the pilot program would vary depending on the experience and safety
record of the carrier. Stage 1 of the program would require the motor
carrier's participating trucks and drivers to be inspected every time a
vehicle crosses the border northbound. Stage 1 vehicles must display
current CVSA decals.
    Carriers would progress to Stage 2 only after FMCSA evaluates the
performance of the carrier during Stage 1. A carrier will be permitted
to progress to Stage 2 in the pilot program if FMCSA determines that
the carrier has out-of-service rates that are at or below the U.S.
national averages and its Safety Management System (SMS) scores for
trucks operating in the pilot program are below the FMCSA threshold
levels. Once a motor carrier is in Stage 2, inspections at the border
crossings would be at a rate similar to that of other Mexico-domiciled
motor carriers that cross the United States-Mexico border. Stage 2
vehicles still must display current CVSA decals.
    After the motor carrier successfully completes a compliance review
and receives a satisfactory rating within 18

months of beginning cross-border long-haul operations, and completes 18
months of operation with provisional operating authority, the motor
carrier would be granted permanent authority. The vehicles and drivers
would be inspected at the border crossings at the same rate as
commercial zone carriers. CMVs operating in the United States must
display current CVSA decals for 3 years from the date the carrier is
granted permanent operating authority.
    All participating long-haul vehicles must have a FMCSA-issued
electronic monitoring device installed and activated at all times.
These devices would allow FMCSA to monitor compliance with pilot
program requirements, including hours of service requirements and
domestic point-to-point transportation prohibitions.
    Monitoring would also include electronic data collection and
analysis. Data collected as a result of field monitoring and other
activities would be entered into FMCSA databases and made available for
public review on FMCSA's Web site. The data would be tracked and
analyzed to identify potential compliance and safety issues.
Appropriate action would be taken to resolve identified compliance and
safety issues. This could include suspension, revocation of operating
authority, or the initiation of other enforcement action against a
motor carrier or driver. FMCSA will conduct ongoing monitoring to
determine if the pilot program is having adverse effects on motor
carrier safety.
    Enforcement is a key component of the monitoring and oversight
effort. FMCSA is providing ongoing training and guidance to Federal and
State auditors, inspectors and investigators to ensure the adequacy of
their knowledge and understanding of the pilot program and the
procedures for taking enforcement actions against carriers or drivers
participating in the pilot.
    To ensure carrier compliance with operating authority limitations,
including the prohibition of domestic point-to-point transportation of
cargo in the United States, FMCSA and IACP developed and implemented a
training program that provides State and local officials detailed
information on cabotage regulations and enforcement procedures.
    FMCSA would require roadside enforcement officers to follow DHS
guidance concerning the enforcement of DHS cabotage regulations. This
material is incorporated into the CVSA North American Standard
Inspection Course and previously provided to roadside enforcement
officers.
    FMCSA will also monitor the insurance filings of participating
carriers to ensure that there are no lapses in coverage.

List of Federal Motor Carrier Safety Laws and Regulations for Which
FMCSA Will Accept Compliance With a Corresponding Mexican Law or
Regulation

    The Secretary of Transportation will accept only three areas of
Mexican regulations as being equivalent to U.S. regulations. The first
area is the set of regulations governing Mexican Commercial Driver's
Licenses (CDL). The United States' acceptance of a Mexican LF dates
back to November 21, 1991, when the Federal Highway Administrator
determined that the Mexican CDLs are equivalent to the standards of the
U.S. regulations and entered into a Memorandum of Understanding (MOU)
with Mexico.
    FMCSA is in the process of updating this MOU.\2\ As part of this
process, on February 17, 2011, representatives from FMCSA, CVSA and the
American Association of Motor Vehicle Administrators visited a Mexican
driver license facility, medical qualification facility, and test and
inspection location. During these site visits FMCSA and its partner
organizations observed Mexico to have rigorous requirements for
knowledge and skills testing that are similar to those in the United
States. In addition, Mexico requires that all new commercial drivers
undergo training prior to testing and requires additional retraining
each time the license is renewed. In contrast, U.S. regulations do not
currently require any specific training prior to testing for, or
renewal of, a U.S. CDL.
---------------------------------------------------------------------------

    \2\ FMCSA notes it is also updating a similar MOU with Canada.
---------------------------------------------------------------------------

    Mexico will disqualify a driver's LF for safety infractions or
testing positive for the use of drugs. Because Mexico's
disqualification standards are not identical to U.S. standards, FMCSA
has developed a system to monitor the performance of Mexico-licensed
drivers while operating in the United States and to disqualify these
drivers if they incur violations that would result in a U.S. driver's
license being suspended. In addition, the United States has access to
traffic violation data for violations that occur in Mexico and are
associated with the Mexican LF. Finally, FMCSA would require that any
driver designated by a Mexico-domiciled carrier for long-haul
transportation provide the United States with a copy of the driving
record for any Mexican State driver's license he or she may also hold.
FMCSA would combine any violations from the driver's record in the
United States, the driver's Mexican federal record, and the driver's
Mexican State record to determine if the driver would be disqualified
from driving under the standards set forth in 49 CFR 383.51. Therefore,
FMCSA is not relying solely on Mexico's disqualification standards, but
is imposing its own standards in addition to any disqualifications that
may be taken by the Mexican government.
    Second, the Secretary of Transportation will also consider that
physical examinations conducted by Mexican doctors and drug testing
specimens collected by Mexican medical collection facilities are
equivalent to the process for examinations conducted, and test
specimens collected, in the United States. In Mexico, in order to
obtain the LF a driver must meet the requirements established by the
Ley de Caminos, Puentes y Autotransporte Federal (LCPAF or Roads,
Bridges and Federal Motor Carrier Transportation Act) Article 36, and
Reglamento de Autotransporte Federal y Servicios Auxiliares (RAFSA, or
Federal Motor Carrier Transportation Act) Article 89, which states that
a Mexican driver must pass the medical examination required by Mexico's
Transport and Communications Ministry (SCT), Directorship General of
Protection and Prevention Medicine in Transportation (DGPMPT). This is
the same medical exam performed on applicants in all modes of
transportation (airline pilots, merchant mariners, and locomotive
operators). The medical examination may be completed by government
doctors or certified private physicians.
    FMCSA examined the Mexican medical fitness for duty requirements
and has found that the Mexican physical qualification regulations are
more prescriptive, detailed, and stricter than those in the United
States. For example, Mexican regulations address body mass index,
cancers and tumors, skin and appendages, psychiatric and psychological
disorders, and have specific standards for evaluation of the ear, nose
and throat and the genitourinary system. These are all areas for which
the United States has no regulatory standards. The only notable
difference involves vision. Mexico only requires red color vision while
the United States requires a color vision test for at least red, green,
and yellow. FMCSA believes that, taken as a whole, Mexico's medical
regulations are comparable to those in the United States, and provide a
level of safety at least equivalent to the U.S. regulations. FMCSA also
notes that Mexico's

medical examinations are performed almost exclusively by physicians at
Mexican government facilities, and when performed by private doctors,
those doctors are specifically approved by the SCT.
    Third, controlled substances testing in Mexico is conducted by
personnel from SCT. DOT and SCT have implemented a MOU, under which
Mexico has agreed to collect drug testing specimens using U.S. specimen
collection procedures, including chain of custody requirements, and
U.S. collection forms to ensure the integrity of the sample. DOT has
translated its drug testing collection forms into Spanish as part of
this MOU. Although most Mexican carriers that participated in the
previous pilot program sent its drivers to U.S. collection facilities,
the Secretary of Transportation would accept a drug test using a
specimen collected in Mexico using our forms and procedures. Samples
collected in Mexico would be tested at laboratories located in the
United States that are certified by the Department of Health and Human
Services under its National Laboratory Certification Program.
    Table 1 below outlines the specific U.S. and Mexican regulations in
the three areas where the Mexican regulations or processes are being
accepted as meeting U.S. requirements.

                                 Table 1
------------------------------------------------------------------------
         Description              United States            Mexico
------------------------------------------------------------------------
Drug and Alcohol Testing       49 CFR part   Reglamento
 Procedures--Random Testing..  382.                  del Servicio de
                                                     Medicina Preventiva
                                                     del Transporte.
                                                     Requires
                                                     random drug testing
                                                     by motor carrier at
                                                     a 50 percent rate.
                                                     Government
                                                     conducts random
                                                     drug testing at
                                                     terminals, ports of
                                                     entry, and specific
                                                     areas along
                                                     corridors.
Drug and Alcohol Testing       49 CFR part   Reglamento
 Procedures--Collection of     40.                   del Servicio de
 Samples.                                            Medicina Preventiva
                                                     del Transporte.
                               Collection    DGPMPT-IT-
                               procedures outlined   02-01; DGPMPT-PE-02-
                               and detailed          F-01.
                               description of the    DGPMPT-PE-
                               custody.              02.
                                                     DGPMPT-IT-
                                                     02-01 thru 08.
                                                     Collection
                                                     procedures have
                                                     been ISO certified.
                                                     The United
                                                     States and Mexico
                                                     have a Memorandum
                                                     of Understanding
                                                     that Mexico will,
                                                     when collecting
                                                     samples to satisfy
                                                     U.S. drug testing
                                                     regulations, use
                                                     U.S. collection
                                                     procedures and
                                                     forms. These forms
                                                     have been
                                                     translated into
                                                     Spanish and
                                                     provided to Mexico.
Drug and Alcohol Testing       49 CFR part   Reglamento
 Procedures--Laboratory        40.                   del Servicio de
 Testing.                                            Medicina Preventiva
                                                     del Transporte.
                                             DGPMPT-PE-
                               Laboratories          01-IE-01.
                               approved by the       Regulations
                               U.S. Department of    and procedures are
                               Health and Human      equivalent to U.S.
                               Services.             standards.
                                                     Laboratory
                                                     is not certified
                                                     due to lack of
                                                     proper equipment
                                                     and other
                                                     procedural
                                                     requirements.
Commercial Driver's License--  49 CFR part   Ley de
 Issuance.                     383.                  Caminos, Puentes y
                                                     Autotransporte
                                                     Federal.
                               Outlines      Articlos 89
                               the knowledge,        y 90, Reglamento de
                               skills and testing    Autotransportes
                               procedures required   Federal y Servicio
                               to obtain a           Auxilares.
                               commercial driver's   Driver must
                               license.              provide proof of
                                                     medical
                                                     qualification,
                                                     proof of address,
                                                     and training (both
                                                     skills and
                                                     knowledge).
                                                     Must be
                                                     renewed every 5
                                                     years (every 3
                                                     years for hazardous
                                                     material category).
Commercial Driver's License--  49 CFR part   Articulo
  Training.                    380.                  36, 37, y 57 Ley de
                                                     Caminos, Puentes y
                                                     Autotransporte
                                                     Federal.
                               Outlines      Articlos 89
                               special training      y 90, Reglamento de
                               requirements for      Autotransportes
                               longer combination    Federal y Servicio
                               vehicle drivers on    Auxilares.
                               basic operation,      Programa
                               safe operating        Minimo de
                               practices, advanced   Capacitacion para
                               operations and non-   Conductores del
                               driving activities    Servicios de
                               training and an       Autotransporte
                               orientation.          Federal y
                                                     Transporte Privado,
                                                     Para Referendo de
                                                     Carga General
                                                     (Tractorcamion
                                                     Quinta Rueda y
                                                     Camion Utitario).

                               Outlines      Outlines 41
                               special training      hours of training
                               requirements for      requirements
                               entry level drivers   (theory) for new
                               on driver             drivers
                               qualifications,       transporting
                               hours of service,     general cargo on
                               driver wellness,      General
                               and whistleblower     Introduction to
                               protection training.  Driving, Road
                                                     Safety Education,
                                                     Defensive Driving,
                                                     Vehicle Operations,
                                                     Preventive
                                                     Maintenance and
                                                     Emergency Repair,
                                                     Latest Regulations,
                                                     plus 100 hours of
                                                     practical driving
                                                     (behind the wheel),
                                                     Practical Defensive
                                                     driving (8 hours)
                                                     and practical
                                                     emergency repair (6
                                                     hours).
                                                     Outlines 58
                                                     (theory and
                                                     practical) hours of
                                                     continued training
                                                     for returning
                                                     drivers
                                                     transporting
                                                     general cargo on
                                                     General
                                                     Introduction,
                                                     Health and Safety,
                                                     Road Safety
                                                     Education, Human
                                                     Relations, Family
                                                     and Lifestyle,
                                                     Latest Rules and
                                                     Technological
                                                     Advances.
                                                     Outlines 16
                                                     hours of continuing
                                                     education for
                                                     drivers with a
                                                     licencia federal de
                                                     conductor.
Commercial Driver's License--  49 CFR part   Ley de
 Disqualifications.            383.                  Caminos, Puentes y
                                                     Autotransporte
                                                     Federal.
                               Outlines      Reglamento
                               CDL                   del Servicio de
                               disqualifications     Medicina Preventiva
                               for major and         del Transporte.
                               serious traffic
                               violations.
                                                     Provides
                                                     for the
                                                     disqualification of
                                                     drivers for major
                                                     and serious traffic
                                                     violations.
                                                     License can
                                                     be canceled by a
                                                     judge.
                                                     License can
                                                     be canceled for
                                                     three speeding
                                                     violations in a one
                                                     year period.
                                                     License can
                                                     be canceled for
                                                     leaving the scene
                                                     of an accident
                                                     without notifying
                                                     the closest
                                                     authority or
                                                     abandoning the
                                                     vehicle.
                                                     License can
                                                     be canceled for
                                                     altering the
                                                     license.
                                                     License can
                                                     be canceled for
                                                     failing a drug
                                                     test.
                                                     License
                                                     cannot be obtained
                                                     after failing a
                                                     drug test without
                                                     proof of success
                                                    completion of a
                                                     rehabilitation
                                                     program.
                                                     License can
                                                     be suspended for
                                                     failing to provide
                                                     accurate
                                                     information on
                                                     application.

                                                     Cancellation is
                                                     valid for 10 years--
                                                     cannot obtain a
                                                     license for 10
                                                     years.
Medical Standards...........   49 CFR part   Reglamento
                               391.                  del Servicio de
                                                     Medicina Preventiva
                                                     del Transporte.
                               US--          Requires a
                               Requires a            comprehensive
                               comprehensive         physical and
                               physical and          psychological
                               psychological         examination.
                               examination.
                               Medical       Medical
                               examination is        examination is a
                               currently separate    pre-requisite to
                               from the CDL          obtaining an LF.
                               issuance process.
                                                     Medical
                                                     examination may be
                                                     required while the
                                                     driver is ``in
                                                     operation'' (on
                                                     duty) to determine
                                                     if the driver is
                                                     still qualified to
                                                     drive.
------------------------------------------------------------------------

Information and Reporting

    FMCSA is committed to transparency during this pilot program. As a
result, the Agency would be maintaining data on the pilot program on
its Web site at http://www.fmcsa.dot.gov. FMCSA would use this site to
post current information about the pilot program including, but not
limited to, PASAs, the carriers participating, the vehicles approved
for cross-border long-haul transportation, the results of roadside
inspections for each carrier, and the number of trips into the United
States beyond the commercial zones and the States traveled by program
participants. FMCSA would also publish in the Federal Register
comprehensive data and information on PASAs conducted on Mexico-
domiciled carriers that are granted authority to operate beyond the
border commercial zones.
    The Department and Mexico's SCT would establish a monitoring group
to supervise the implementation of the pilot program and to find
solutions to issues affecting the operational performance of the pilot.
The group would generally convene monthly in person, by video
conference or by telephone. This group, composed of DOT and SCT
employees, would discuss any issues that arise for carriers of either
country, as they participate in the pilot program, and recommend
changes as needed.
    FMCSA is also establishing an oversight and monitoring mechanism by
utilizing a Federal advisory committee. This committee would be made up
of stakeholders and will be a subcommittee of the MCSAC. The monitoring
group's objective is to review the implementation of the pilot program
and recommend solutions to

issues affecting the operational performance of the pilot program.
    The Department would be providing reports to Congress regarding
this pilot program on an annual basis. These reports will be posted on
FMCSA's Web site. Additionally, at the conclusion of the pilot program
the Department would report to Congress the findings, conclusions, and
recommendations of the program.
    Additionally, the Department's OIG will be completing reviews of
the pilot program within 6 months of its start and within 6 months of
its completion. These reports would be posted on the Web site.

Program Evaluation

    The objective of the pilot program is to collect and evaluate data
on the safety performance of Mexico-domiciled carriers interested in
and qualified to take advantage of the cross-border long-haul
provisions of NAFTA. This study is to be completed to satisfy the
requirement in the Agency's pilot program authority that requires ``[a]
specific data collection and safety analysis plan that identifies a
method of comparison.'' (49 U.S.C. 31315(c)(2)(B)). Safety performance
would be measured primarily in terms of violations assessed at the
roadside, as a result of inspections conducted at traditional weigh
stations, ports of entry, or during traffic enforcement activities.
From these data, violation rates would be calculated for participating
carriers, measuring the percentage of inspections having a particular
type of violation. These violations rates include overall vehicle and
driver out-of-service rates, as well as other violation rates
pertaining to specific requirements of the FMCSRs. Many of these
violation rates would capture information currently captured in the
Agency's Compliance, Safety, Accountability program metrics.
    Using the performance metrics described above, and up to 3 years of
data collected during the pilot program, statistical tests would be
performed to compare the safety performance of the Mexico-domiciled
carriers participating in the pilot program with the overall
performance of carriers domiciled in the United States. Specifically,
using commonly accepted statistical practices for each metric, the
Agency would test the ``null hypothesis'' that Mexico-domiciled
carriers that may take future advantage of NAFTA's cross-border long-
haul provisions will perform as well or better than the average carrier
domiciled in the United States. Based on the data during the pilot
program, FMCSA will either reject this null hypothesis (i.e., conclude
that the Mexico-domiciled carriers interested in and qualified to
receive long-haul operating authority in the United States will perform
worse than the average U.S.-domiciled carrier), or will conclude that
the data collected do not allow one to reject this null hypothesis.
    The degree to which differences in safety performance can be
detected between the two populations depends, in part, on the total
number of inspections performed on the carriers participating in the
pilot program. The Agency seeks to detect statistically significant
differences in the violation rates between the two populations when
such differences are two percentage points in magnitude or greater, at
a level of 90 percent confidence (see discussion below under the
section heading ``Target Number of Inspections''). Differences less
than two percentage points in magnitude between the two populations
would not be considered meaningful by the Agency.

Target Number of Inspections

    A sample size of 4,100 roadside inspections performed on pilot
program participants will allow the Agency to detect differences in
violation rates of two percentage points or greater at the 90% level of
confidence. This confidence level can be interpreted as follows: for
each metric being compared, there is a less than or equal to 10% chance
of concluding from the study that there is at least a two percentage
point difference in the violation rates between the two populations
when, in fact, there is not; or not concluding from the study that
there is at least a two percentage point difference when, in fact,
there is. We also note that a 90% confidence level is a commonly used
level of confidence for statistical studies.
    This sample size of 4,100 inspections will allow the Agency to
detect two percentage point differences in any violation rate. For many
metrics, however, fewer inspections will be required to achieve the
same level of statistical power. This stems from the fact that for a
violation rate, which is a proportion, the precision of the sample
estimate depends on the value of the violation rate itself. Violation
rates calculated from the study that are at or close to 50% will have
the lowest level of precision, and rates that are larger or smaller
than 50% will have higher levels of precision. For example, the average
vehicle out-of-service rate for U.S. carriers is approximately 20%. As
a result, a two percentage point difference in the vehicle out-of-
service rates between the two populations can be detected with a sample
size of approximately 2,800 inspections. This same sample size of 2,800
inspections will also allow the Agency to detect a two percentage point
difference in the driver out-of-service rates (which is currently
approximately 5% for U.S. carriers).

Target Number of Carriers

    FMCSA anticipates that carriers participating in the pilot program
will perform, on average, one long-haul border crossing per week per
truck, and will have, on average, two trucks participating in the pilot
program. Based on these characteristics, and an assumed attrition rate
of 25% after 18 months of participation in the pilot program, the
Agency calculates that a total of 46 carriers participating in the
program will be sufficient to achieve a target of 4,100 inspections
within 3 years. A total of 31 participating carriers will be sufficient
for achieving a target of 2,800 inspections. However, if participating
carriers have fewer average crossings per week or fewer vehicles
enrolled in the pilot program, more carriers would be needed to achieve
the desired target level of inspections. Conversely, if participating
carriers have more crossings per week, or more vehicles enrolled, fewer
carriers would be needed. Table 2 below provides estimates for the
number of carriers needed to participate in the pilot, in order to
achieve an inspection target of 4,100 inspections within 3 years:

 Table 2--Number of Pilot Program Carriers Required To Achieve a Target
of 4,100 Inspections, by Vehicles Enrolled per Carrier and Crossings per
                            Week per Carrier
------------------------------------------------------------------------
                                       Average number of carrier
                                          crossings per week
 Average Number Enrolled Vehicles  -------------------------------
                                      0.5      1       2       3
------------------------------------------------------------------
1.................................     182      91      46      30
2.................................      91      46  ......  ......
3.................................      61      30  ......  ......
4.................................      46  ......  ......  ......
5.................................      36  ......  ......  ......
------------------------------------------------------------------------

    The Agency recognizes that the stipulated number of carriers needed
for this analysis is lower than the target sample size originally cited
for the previous demonstration project. A lower number of carriers will
be needed in this program for two reasons. First, the target sample
size stipulated for the earlier demonstration project was based on an
effort to estimate differences in crash rates between U.S. carriers and
program participants. Sample size requirements for estimating
differences in crash rates are difficult to determine because the
exposure (i.e., vehicle miles traveled) for the program participants,
as well as the variability in this exposure, is unknown. Moreover,
crashes are, in fact, rare events, and it is not likely that many, if
any, will be recorded during this current effort. For these reasons,
the current study focuses on measuring safety performance primarily in
terms of violation rates. When estimating violation rates, the sampling
unit is an inspection, rather than a carrier. The number of required
carriers stipulated herein is merely an estimate of the number of
carriers needed to achieve the target level of inspections.
    It is also noted that this pilot program would run for up to 3
years, rather than the one and a half year duration of the
demonstration project. As a result, it is anticipated that there may be
more data collected from the participating carriers.
    The Agency does not know how many Mexico-domiciled carriers are
interested in taking advantage of the cross-border long-haul provisions
of NAFTA and capable of satisfactorily completing a PASA and security
screening. Currently, there are approximately 6,900 Mexican carriers
operating strictly within the border commercial zones as well as
approximately 1,000 U.S.-wned ``certificate'' carriers domiciled in
Mexico and having limited operating authority in the United States.
Although it is conceivable that a large number of these carriers would
be interested in taking advantage of the NAFTA cross border provisions,
and qualified to do so, based on experience to date, such a level of
participation is not anticipated. In the 2007 demonstration project,
for example, there were 775 initial applicants, of which only 29, or
4%, completed all of the required paperwork and passed the required
vetting process. Based on this data, one might set an upper limit on
the total number of Mexico-domiciled carriers both capable of and
interested in taking advantage of the NAFTA cross-border long-haul
provision at 316 carriers (.04 x 7,900).

Representativeness of Data from the Pilot Study

    If this pilot program demonstrates that Mexico-domiciled carriers
are as safe as the average U.S. domiciled carrier, FMCSA would expect
to use the same application and screening process for post-pilot
program Mexico-domiciled carriers seeking long haul authority. Thus,
carriers participating in the pilot program would be representative of
carriers seeking and receiving such authority in the future.
    It has also been argued that using roadside inspection data to
compare carriers domiciled in the United States with Mexico-domiciled
carriers participating in the pilot program is not valid because
inspections performed on U.S. carriers are targeted. That is,
inspectors often use recommendations generated from computer software,
or perform a cursory visual inspection of the vehicle, to determine
which vehicles to inspect. Hence these roadside inspections are not
truly random, and violation rates (such as out-of-service rates)
generated from such data are biased. Studies completed more than 15
years ago suggested that this bias in U.S. carrier out-of-service rates
is minimal. To assess if such a bias currently exists, and to determine
its extent, the Agency would concurrently conduct a study of U.S.
carrier violation rates, using inspection data collected on a random
basis from U.S. carriers for a 2-week period during the course of the
pilot program.

Independent Data

    FMCSA plans to conduct an independent analysis of data collected
from the 4 currently active Mexican carriers with ``grandfathered,''
pre-1982 operating authority in the United States, the 501 Mexican-
owned carriers with current operating authority as a result of being
domiciled in the United States, and the 1336 Mexico-domiciled private
and exempt motor carriers that received a certificate of registration
to operate beyond the commercial zones between 1988 and 2002. A
separate analysis of these carriers' safety performance would be
conducted to supplement the analysis of the carriers operating under
the pilot program.

Request for Comments

    FMCSA requests public comment from all interested persons on the
pilot program outlined in this notice. The Agency intends the pilot
program to be the means of validating its safety oversight regime for a
cross-border long-haul trucking program.
    All comments received before the close of business on the comment
closing date indicated at the beginning of this notice will be
considered and will be available for examination in the docket at the
location listed under the address section of this notice. Comments
received after the comment closing date will be filed in the public
docket and will be considered to the extent practicable. In addition to
late comments, FMCSA will also continue to file, in the public docket,
relevant information that becomes available after the comment closing
date. Interested persons should continue to examine the public docket
for new material.
    Section 6901(b)(2)(B) of the U.S. Troop Readiness, Veterans' Care,
Katrina recovery, and Iraq Accountability Appropriations Act, 2007,
provides that FMCSA must request public comment on five specific
aspects of the pilot program. For the convenience of the reader, these
items are listed below. A complete copy of

section 6901 is included in the docket for this notice.
    1. Comprehensive data and information on the pre-authorization
safety audits conducted before and after the date of enactment of this
Act of motor carriers domiciled in Mexico that are granted authority to
operate beyond the United States municipalities and commercial zones on
the United States-Mexico border;
    2. Specific measures to be required to protect the health and
safety of the public, including enforcement measures and penalties for
noncompliance;
    3. Specific measures to be required to ensure compliance with
section 391.11(b)(2) of title 49, CFR, concerning FMCSA's English
language proficiency requirement, and section 365.501(b) of title 49,
CFR, concerning FMCSA's prohibition against Mexico-domiciled drivers
engaging in the transportation of domestic freight within the U.S.;
    4. Specific standards to be used to evaluate the pilot program and
compare any change in the level of motor carrier safety as a result of
the pilot program; and
    5. A list of Federal motor carrier safety laws and regulations,
including the commercial driver's license requirements, for which the
Secretary of Transportation will accept compliance with a corresponding
Mexican law or regulation as the equivalent to compliance with the
United States law or regulation, including for each law or regulation
an analysis as to how the corresponding United States and Mexican laws
and regulations differ.

    Issued on: April 8, 2011.
Anne S. Ferro,
Administrator.
[FR Doc. 2011-8846 Filed 4-8-11; 2:00 pm]
BILLING CODE 4910-EX-P


[Federal Register: June 1, 2006 (Volume 71, Number 105)]
[Notices]
[Page 31227]
[DOCID:fr01jn06-107]

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SECURITIES AND EXCHANGE COMMISSION

Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of Filings and Information Services, Washington, DC
20549.

Extension: Rules 17Ad-6 and 17Ad-7; SEC File No. 270-151; OMB
Control No. 3235-0291.

    Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') has submitted to the Office of Management
and Budget a request for extension of the previously approved
collection of information discussed below.

Rules 17Ad-6 and 17Ad-7: Recordkeeping Requirements for Transfer Agents

    Rule 17Ad-6 (17 CFR 240.17Ad-6) under the Securities Exchange Act
of 1934 (15 U.S.C. 78b et seq.) requires every registered transfer
agent to make and keep current records about a variety of information,
such as: (1) Specific operational data regarding the time taken to
perform transfer agent activities (to ensure compliance with the
minimum performance standards in Rule 17Ad-2 (17 CFR 240.17Ad-2); (2)
written inquiries and requests by shareholders and broker-dealers and
response time thereto; (3) resolutions, contracts or other supporting
documents concerning the appointment or termination of the transfer
agent; (4) stop orders or notices of adverse claims to the securities;
and (5) all canceled registered securities certificates.
    Rule 17Ad-7 (17 CFR 240.17Ad-7) under the Securities Exchange Act
of 1934 (15 U.S.C. 78b et seq.) requires each registered transfer agent
to retain the records specified in Rule 17Ad-6 in an easily accessible
place for a period of six months to six years, depending on the type of
record or document. Rule 17Ad-7 also specifies the manner in which
records may be maintained using electronic, microfilm, and microfiche
storage methods.
    These recordkeeping requirements ensure that all registered
transfer agents are maintaining the records necessary to monitor and
keep control over their own performance and for the Commission to
adequately examine registered transfer agents on an historical basis
for compliance with applicable rules. We estimate that approximately
785 registered transfer agents will spend a total of 392,500 hours per
year complying with Rules 17Ad-6 and 17Ad-7. Based on average cost per
hour of $50, the total cost of compliance with Rule 17Ad-6 is
$19,625,000.
    The retention period for the recordkeeping requirements under Rule
17Ad-6 is six months to one year. In addition, such records must be
retained for a total of two to six years or for one year after
termination of the transfer agency, depending on the particular record
or document. The recordkeeping requirements under Rules 17Ad-6 and
17Ad-7 are mandatory to assist the Commission and other regulatory
agencies with monitoring transfer agents and ensuring compliance with
the rule. This rule does not involve the collection of confidential
information. Please note that an agency may not conduct or sponsor, and
a person is not required to respond to, a collection of information
unless it displays a currently valid control number.
    General comments regarding the above information should be directed
to the following persons: (i) Desk Officer for the Securities and
Exchange Commission, Office of Information and Regulatory Affairs,
Office of Management and Budget, Room 10102, New Executive Office
Building, Washington, DC 20503; or send an e-mail to:
<EMAIL_ADDRESS>and (ii) R. Corey Booth, Director/Chief

Information Officer, Securities and Exchange Commission, C/O Shirley
Martinson, 6432 General Green Way, Alexandria, Virginia 22312, or send
an e-mail to<EMAIL_ADDRESS>Comments must be submitted to OMB
within 30 days of this notice.

    Dated: May 22, 2006.
Nancy M. Morris,
Secretary.
[FR Doc. E6-8474 Filed 5-31-06; 8:45 am]

BILLING CODE 8010-01-P