[Federal Register Volume 81, Number 13 (Thursday, January 21, 2016)]
[Proposed Rules]
[Pages 3561-3634]
[FR Doc No: 2015-33153]

Vol. 81

Thursday,

No. 13

January 21, 2016

Part II

Department of Transportation

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 Federal Motor Carrier Safety Administration

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49 CFR Parts 350, 365, 385, et al.

Carrier Safety Fitness Determination; Proposed Rule

Federal Register / Vol. 81 , No. 13 / Thursday, January 21, 2016 /
Proposed Rules

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Parts 350, 365, 385, 386, 387, and 395

[Docket No. FMCSA-2015-0001]
RIN 2126-AB11

Carrier Safety Fitness Determination

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

ACTION: Notice of proposed rulemaking (NPRM); request for comments.

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SUMMARY: FMCSA proposes to amend the Federal Motor Carrier Safety
Regulations (FMCSRs) to revise the current methodology for issuance of
a safety fitness determination (SFD) for motor carriers. The proposed
new methodologies would determine when a motor carrier is not fit to
operate commercial motor vehicles (CMVs) in or affecting interstate
commerce based on the carrier's on-road safety data in relation to five
of the Agency's seven Behavior Analysis and Safety Improvement
Categories (BASICs); an investigation; or a combination of on-road
safety data and investigation information. The intended effect of this
action is to more effectively use FMCSA data and resources to identify
unfit motor carriers and to remove them from the Nation's roadways.

DATES: FMCSA will be accepting both initial comments and reply comments
in response to this NPRM. Send your initial comments on or before March
21, 2016 and reply comments on or before April 20, 2016.

ADDRESSES: You may submit comments (initial and reply) identified by
the docket number FMCSA-2015-0001 using any of the following methods:
     Web site: http://www.regulations.gov. Follow the
instructions for submitting comments on the Federal electronic docket
site.
     Fax: 1-202-493-2251.
     Mail: Docket Services, U.S. Department of Transportation,
Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590-0001.
     Hand Delivery: Ground Floor, Room W12-140, DOT Building,
1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m.
Monday through Friday, except Federal holidays.
    To avoid duplication, please use only one of these four methods.
See the ``Public Participation and Request for Comments'' portion of
the SUPPLEMENTARY INFORMATION section below for instructions on
submitting comments.

FOR FURTHER INFORMATION CONTACT: Mr. David Yessen,<PHONE_NUMBER>,
<EMAIL_ADDRESS>FMCSA office hours are from 7:30 a.m. to 4 p.m.,
Monday through Friday, except Federal holidays. If you have questions
on viewing or submitting material to the docket, call Docket Services,
telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: This notice of proposed rulemaking is
organized as follows:

Table of Contents

I. Acronyms and Abbreviations
II. Executive Summary
III. Legal Basis
IV. History of Past Actions
    A. History of SFDs
    B. Analytical Basis for the Proposed Changes
V. Existing Safety Monitoring and Data Quality Programs
    A. Safety Measurement System (SMS)
    B. Interventions
    C. Current SFD Process
    D. Data Quality Program
VI. Proposed SFD Changes
    A. Numbers of Inspections and Violations Used in This Proposal
    B. Only One SFD--Unfit
    C. Three Paths to ``Proposed Unfit''
    D. MAP-21 Requirements for Motor Carriers of Passengers and
Operators of Motorcoach Services
    E. Summary Justification for SFD Proposal
VII. Revised SFD Appeals Process
    A. Administrative Review of Material Errors
    B. Claiming Unconsidered Inspection Data
    C. Requests To Operate Under a Compliance Agreement
    D. Requests To Resume Operations After a Final Unfit
Determination
    E. Carriers Expected To Receive a Final Unfit SFD
VIII. Implementation of and Transition to Final Rule
    A. Proposed MCSAP Requirements
    B. Implementation of a Final Rule and Transition Provisions
    C. General Statements of Enforcement Policy Regarding Violation
Severity Weights and Time Weights
IX. Section-by-Section Description of Proposed Rule
    A. Part 350
    B. Part 365
    C. Part 385
    D. Part 386
    E. Part 387
    F. Part 395
X. Regulatory Analyses and Notices
XI. Public Participation and Request for Comments
    A. Submitting Comments
    B. Viewing Comments and Documents
    C. Privacy Act

I. Acronyms and Abbreviations

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------------------------------------------------------------------------
ATRI.................................  American Transportation Research
                                        Institute.
BASIC................................  Behavior Analysis and Safety
                                        Improvement Categories.
CDL..................................  Commercial Driver's License.
CMV..................................  Commercial Motor Vehicle.
CVOR.................................  Commercial Vehicle Operators
                                        Registration.
CR...................................  Compliance Review.
CSA..................................  Compliance, Safety,
                                        Accountability.
DOT..................................  United States Department of
                                        Transportation.
FHWA.................................  Federal Highway Administration.
FMCSA................................  Federal Motor Carrier Safety
                                        Administration.
FMCSRs...............................  Federal Motor Carrier Safety
                                        Regulations, 49 CFR parts 350
                                        through 399.
FR...................................  Federal Register.
HM...................................  Hazardous Materials.
HMR..................................  Hazardous Materials Regulations,
                                        49 CFR parts 171 through 180.
MCMIS................................  Motor Carrier Management
                                        Information System.
MCSAC................................  Motor Carrier Safety Advisory
                                        Committee.
MCSAP................................  Motor Carrier Safety Assistance
                                        Program.
NPRM.................................  Notice of Proposed Rulemaking.
NTSB.................................  National Transportation Safety
                                        Board.
OMB..................................  Office of Management and Budget.
PHMSA................................  Pipeline and Hazardous Materials
                                        Safety Administration.
PU...................................  Power Unit.
SFD..................................  Safety Fitness Determination.
SMS..................................  Safety Measurement System.
VMT..................................  Vehicle Miles Traveled.
VOLPE................................  U.S. DOT Office of the Assistant
                                        Secretary for Research and
                                        Technology's John A. Volpe
                                        National Transportation Systems
                                        Center, Cambridge, MA.
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II. Executive Summary

    As the Federal government agency responsible for commercial motor
vehicle (CMV) safety, FMCSA must identify unfit motor carriers. Under
the existing regulations, a compliance review must be conducted to
issue a Safety Fitness Determination (SFD) and, if a motor carrier
receives a final unsatisfactory safety rating, FMCSA declares that
motor carrier to be unfit to operate on the Nation's highways. The
current SFD process does not permit the Agency to use all of the on-
road safety data in the Motor Carrier Management Information System
(MCMIS) in making each SFD. Based on experience and empirical data from
the Safety Measurement System (SMS) and interventions, the integration
of on-road safety data into the SFD process would improve the
assessment of motor carriers and the identification of unfit motor
carriers. Such integration is a longstanding recommendation of the
National Transportation Safety Board (NTSB). Under this proposal, unfit
determinations could be based on a carrier's on-road safety data alone.
In this NPRM, FMCSA proposes to eliminate the current three-tier rating
system (i.e., satisfactory-conditional-unsatisfactory) for determining
safety fitness in favor of a single determination of unfit. FMCSA's
statutory requirement is to determine which owners or operators are
unfit to operate on the Nation's roadways, and prescribe specific
consequences for motor carriers found to be unfit. By statute, such
carriers are prohibited from operating in interstate commerce or
transportation that affects interstate commerce.
    Using data from inspections or investigations or both, FMCSA
proposes to evaluate carriers monthly to determine if they failed two
or more Behavior Analysis and Safety Improvement Categories (BASICs)
and thus should be proposed unfit. A motor carrier would be proposed
unfit if it: (1) Failed two or more BASICs based exclusively on on-road
safety data from 11 or more inspections with 1 or more violations in
each, in a single BASIC, before a carrier could fail the BASICs; (2)
had violations of the proposed set of critical and acute regulations,
identified through an investigation, that cause the motor carrier to
fail two or more BASICs; or (3) failed two or more BASICs based on a
combination of data from inspections and investigation results. The
Agency's analysis and reasoning for these proposals is explained in
more detail later in this document.
    FMCSA's MCMIS automatically takes each motor carrier's safety data
from on-road safety inspections and converts the data into a BASIC
measure and a rank/percentile using the methodology in ``Carrier Safety
Measurement System (CSMS) Methodology.'' \1\ This methodology,
available to the public since December 2010, provides the details of
the SMS currently used for identifying unsafe behaviors and
prioritizing and selecting motor carriers for interventions, including
investigations and compliance reviews. Each motor carrier's measure in
each BASIC is a quantifiable determination of safety behavior in that
BASIC. Percentile ranking allows the safety behavior of a motor carrier
to be compared with the safety behavior of carriers with similar
numbers of safety events. Within each safety event group, a percentile
is computed on a 0-100 scale for each motor carrier that receives a
non-zero measure, with 100 indicating the worst performance. Currently,
when a motor carrier's SMS measures percentile ranking meets or exceeds
the intervention thresholds shown in Table 3 below, the Agency
prioritizes the carrier for interventions, including possibly a
compliance review.
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    \1\ See ``Safety Measurement System Changes, June 2012'' page 5
in docket FMCSA-2012-0074 at http://www.regulations.gov/#!documentDetail;D=FMCSA-2012-0074-0039 referencing version 3.0 of
``Carrier Safety Measurement System (CSMS) Methodology.'' The latest
version, 3.0.2 of June 2014, is available in the rulemaking docket
and at http://csa.fmcsa.dot.gov/Documents/SMSMethodology.pdf.
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    In SMS, a carrier's performance is compared to other carriers in
its safety event group every month. As a result, improved safety
performance by other carriers could result in the carrier having higher
(worse) percentiles without having committed any additional violations.
In contrast, under the proposed SFD methodology, every month a
carrier's performance would be compared to an absolute failure standard
that would be set in regulation based on each safety event group.
Because the absolute failure standard would not change from month to
month, changes in another company's performance would not impact the
motor carrier. The failure standard will only be changed after
rulemaking by the Agency, with notice and comment. The carrier's SFD
measure would reflect its own performance against the failure standard,
and would not be impacted by other carriers' performance.
    From the motor carrier's measures, percentile ranking, and
intervention thresholds, FMCSA developed proposed SFD failure standards
at higher levels of noncompliance with the FMCSRs and HMRs, which
provide stronger correlations to previous crashes.\2\ The proposed SFD
failure standards would be equivalent to the measures that would
determine a motor carrier unfit at the 96th percentile for the Unsafe
Driving and HOS Compliance BASICs, that is, a person would know the
carrier is in the worst 4 percent of carriers that have measurable
(non-zero) data in the MCMIS. The proposed SFD standards would
determine that a motor carrier is unfit at the 99th percentile for the
Driver Fitness, Vehicle Maintenance, and HM Compliance BASICs.
Likewise, a person would know the carrier is in the worst 1 percent of
carriers that have measurable data in the MCMIS. A carrier's absolute
BASIC performance measure in any given month, not the carrier's
percentile within a given month, would be used to determine if the
carrier failed the BASIC. A carrier with an absolute performance
measure that equals or is greater than the failure standard proposed in
this document for the carrier's safety-event group would fail that
BASIC using only on-road safety data.
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    \2\ The term ``crash'' is synonymous to the term ``accident'' as
defined in 49 CFR 390.5 and may be used interchangeably in this
document. See 79 FR 59457, October 2, 2014.
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    Thus, the failure standards for a proposed unfit SFD would require
significantly more evidence of non-compliance than the thresholds in
SMS that the Agency uses to prioritize a carrier for interventions. The
Agency's proposed approach would ensure that only the worst performing
motor carriers would be issued a proposed unfit determination based
solely on on-road safety performance data.
    In addition, the proposed standards for an unfit SFD would be set
at absolute values that would be higher measures (i.e., poorer safety
performance) than those used currently in SMS for interventions (see
Table 3 below). The proposed SFD process would also require more
inspections with violations--i.e., 11 versus 3 to 5--to trigger a
proposed SFD.
    Failure standards would be established in each BASIC for several
safety event groups. A carrier meeting or exceeding the failure
standard in its safety event group would fail the BASIC.
    The Crash Indicator BASIC and the Controlled Substances/Alcohol
Compliance BASIC would be evaluated only during investigations, because
the Crash Indicator BASIC currently does not include preventability
determinations and controlled

substances and alcohol violations from on-road safety data would rarely
meet the data sufficiency standards. Thus, these two BASICs would not
be used to make a proposed unfit determination based on on-road
performance data alone, although data relating to the Crash Indicator
BASIC and Controlled Substances/Alcohol BASIC would certainly be used
during investigations. To be proposed unfit based solely on on-road
safety data, a motor carrier would have to meet or exceed the absolute
failure standard established for its safety event group for two BASICs.
    Further, only preventable crashes would be used in calculating an
SFD. This differs from the current SFD process which only determines
the preventability of crashes to contest a motor carrier's recordable
crash rate after the SFD. As described below, crash data could trigger
a failure in a BASIC during the investigative process only if a
certified safety investigator makes a ``preventability determination''
on the crashes and the preventable crashes exceed the failure standard.
    It is important to note that while the relative percentiles in SMS
are not used in making Safety Fitness Determinations under this NPRM,
the same data are used. Some groups have expressed concerns about that
data, and many of those concerns are proactively addressed concerns
about the SMS in the development of this SFD proposal. In addition to
the differences noted above, it is important to point out that other
concerns about the system including disparities for long-haul and
short-haul carriers; differences for urban and rural motor carriers,
and enforcement differences by the States have all been considered. The
long and short haul differences are minimized by the combination (long-
haul) and straight truck (short haul) segmentation. The impacts of
urban and rural transportation are factored into the calculation of the
Crash Indicator BASIC failure rates. Lastly, while enforcement
differences exist between the States, the nature of the high failure
standard in this rule is that the patterns of non-compliance for the
carriers that are proposed unfit are not the result of these
disparities but are the result of recurring non-compliance.
    After a proposed unfit SFD, a motor carrier would have three
different administrative proceedings available: (1) A review for
material errors in assigning a proposed unfit SFD; (2) a review
claiming unconsidered on-road performance inspection data; (3) a review
after a request to operate under a compliance agreement. Consistent
with current procedures, requests for one or more administrative
reviews would not automatically stay a proposed unfit determination.
After a final unfit determination, the motor carrier could request a
review to resume operations.
    The revised SFD methodology and rule would be used to identify and
take legal action against unfit motor carriers that have failed to
implement and maintain adequate safety management controls for
achieving compliance with the FMCSRs and HMRs.
    The Agency would maintain the current administrative review
processes provided under Sec.  385.15, would propose a compliance
agreement procedure similar to the existing Sec.  385.17 upgrade
process for carriers with a proposed unfit SFD, and would add an
opportunity to submit missing inspection data under Sec.  385.16. FMCSA
proposes to reduce the time for filing a petition for administrative
review from the current 90 days to 15 days after the issuance of the
proposed unfit SFD. Further, a new process, under Sec.  385.18,
explains the requirements for demonstrated corrective action and
compliance agreements for entities with revoked registration due to an
unfit safety rating.
    Under this proposal, the Agency estimates in its separate
Regulatory Evaluation that it would have proposed as unfit 3,056 motor
carriers in 2011, about 2.5 times the number of proposed unfit SFDs
relative to 1,232 under the current process, known as proposed
unsatisfactory safety ratings. FMCSA estimates that the 3,056 proposed
unfit SFD motor carriers would consist of:
     262 motor carriers based solely upon on use of inspection
data,
     2,674 motor carriers based upon the result of
investigations, and
     120 motor carriers based on a combination of inspection
and investigation data.

FMCSA then evaluated how many of these 3,056 motor carriers would have
been in active service 12 months following a hypothetical final unfit
determination in 2011 and found that most, 2,822 carriers, were active.
The actual crash involvement and crash rates experienced by this
population of 2,822 carriers over the course of the 12 months after the
hypothetical final unfit determination provides a baseline and means of
estimating benefits had these carriers been identified by the proposed
process. The separate Regulatory Evaluation analyzing the costs and
benefits of the proposed rule is available in the docket.
    Application of the proposed method to data from a supporting
analysis \3\ identified 1,805 additional poor-performing carriers
beyond those identified by the current SFD process, while the current
SFD process identified 106 carriers that the proposed SFD method would
not (1,017 carriers were identified by both the current and proposed
methods). On net, of the 1,699 of these 1,805 carriers--the subset of
carriers which remained in active operation during the twelve months
following the date upon which each would have received a final unfit
determination under the proposed rule--the switch from the current to
the proposed method identifies carriers that were involved in 41 more
fatal crashes, 508 more injury crashes, and 872 more tow-away crashes
in those subsequent 12 months. The crash reduction elicited from these
carriers constitutes the benefits of the rule.
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    \3\ ``Estimating the Safety Impact of Proposed Safety Fitness
Determination (SFD) Criteria,'' FMCSA, May 2015.
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    The costs of the rulemaking are those incurred by:
    (1) Drivers who were employed by additional carriers ordered out of
service (OOS) who are now forced to seek new employment. It is
estimated that 1,855 drivers would have been adversely affected in this
manner annually.
    (2) The additional carriers identified as deficient under the
proposed SFD that opt to improve performance, thereby incurring costs
to achieve compliance.
    (3) FMCSA, resulting from information technology system update and
modification expenses (estimated as a one-time cost of $3.0 million
incurred in year 2017 under both Option 1 and Option 2).
    Given (1) an assumed 2.17 percent annual increase in the carrier
population, and hence the number of drivers, and (2) no change in real
wages for drivers over time,\4\ for the ten years from 2017 through
2026 the annualized costs (discounted at seven percent) of this
proposed rule are estimated at $9.9 million. Were the real wages of
drivers to increase by one percent annually, then the annualized cost
from 2017 through 2026 rises to $10.6 million. Were drivers' real wages
to increase by two percent annually, the annualized

cost of this proposed rule is $11.3 million.
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    \4\ This is a central assumption of the regulatory evaluation,
and affects only the costs side of the net benefits projections. The
Agency opted in this evaluation to consider costs under alternate 1%
and 2% annual real wage growth assumptions to demonstrate the
minimal degree to which potential growth in drivers' future real
wages affects the net benefits of the rule.
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    Given (1) the estimated current monetized value of a statistical
life component for a fatal crash of $10,885,000, for an injury crash of
$393,000, and for a tow-away crash of $50,000, (2) annual increases in
each of these values due to projected real growth of the value a
statistical life of 1.18 \5\ percent, (3) additional fixed crash costs
not projected to increase annually of $134,000 for each fatal crash,
$60,000 for each injury crash, and $22,000 for each tow-away crash, (4)
an assumed 2.17 percent annual increase in the carrier population and
hence the number of crashes, (5) an estimated 52.8 percent improvement
in the 16.1 percent of carriers placed out of service (OOS), and (6) an
estimated 17.4 percent improvement in the 83.9 percent of carriers that
opted to correct deficiencies and remain in service, for the ten years
from 2017 through 2026, the annualized benefits of the rule (discounted
at seven percent) would be $240.9 million.\6\
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    \5\ The real growth rate of the VSL is in keeping with DOT's
Office of the Secretary of Transportation guidance, available on the
web at http://www.dot.gov/sites/dot.gov/files/docs/VSL_Guidance_2014.pdf. This growth factor represents real growth in
the median hourly wage at a macroeconomic level and is not specific
to drivers or the motor carrier industry. While real median hourly
wages are projected to grow at 1.18% per year at a macroeconomic
level, this assumption does not apply to drivers, as the real median
hourly wage of drivers has declined or remained static in recent
years. Nevertheless, the Agency considered a sensitivity analysis
regarding real wage growth of drivers to demonstrate the costs of
this proposed rule in the event that drivers' wages grow at 1 or 2
percent per year.
    \6\ Comparisons of the crash rates of carriers identified as
unfit under the current and proposed SFD are presented in Section 2
of this rulemaking's Regulatory Evaluation.
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    With $240.9 million in annualized benefits and $9.9 million in
annualized costs with no projected real wage growth among drivers, the
annualized net benefits of the proposed rule would be $231.1 million.
Table 1 summarizes the Agency's annualized benefit, cost, and net
benefit projections of this rule utilizing a 7 percent discount rate
under a range of annual real wage growth assumptions of 0 to 2 percent.

  Table 1--Annualized Net Benefits (7% Discount Rate) of the Rule From
                            2017 Through 2026
                         [in millions of 2013$]
------------------------------------------------------------------------
                                              Real wage growth
                                  --------------------------------------
                                        0%           1%           2%
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Benefits.........................       $240.9       $240.9       $240.9
Costs............................          9.9         10.6         11.3
                                  --------------------------------------
    Net Benefits.................        231.1        230.4        229.6
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Note: Compliance costs to carriers that improve performance to achieve
  compliance are not estimated.

    Cumulative benefits, costs, and net benefits of the proposed rule
are presented in Table 2 for not discounted, 3% discounted, and 7%
discounted bases. For brevity, corresponding tables associated with the
1% and 2% annual real wage growth scenarios are not included here as
the projections are nearly identical under these alternate assumptions,
and the minimal differences resulting from utilization of positive real
wage growth assumptions are demonstrated in the annualized values in
the preceding table.

  Table 2--Cumulative Benefits and Costs of the Rule From 2017 Through
                                  2026
                         [in millions of 2013$]
------------------------------------------------------------------------
         Discount rate-->               0%           3%           7%
------------------------------------------------------------------------
Benefits.........................     $2,290.9     $1,997.5     $1,692.0
Costs............................         92.2         81.0         69.2
                                  --------------------------------------
    Net Benefits.................      21,98.7      1,916.5      1,622.8
------------------------------------------------------------------------
Note: Compliance costs to carriers that improve performance to achieve
  compliance are not estimated.

III. Legal Basis

    The proposed rule would replace the current safety fitness rating
methodology with new methodologies. The new methodologies incorporate
on-road safety data and the results of safety investigations.
    This rulemaking is based primarily on the authority of section 215
of the Motor Carrier Safety Act of 1984 (1984 Act),\7\ which directs
the Secretary of Transportation (Secretary) to determine whether an
owner or operator is fit to operate safely commercial motor vehicles
and to maintain by regulation a procedure for determining the safety
fitness of an owner or operator. [49 U.S.C. 31144(a), (b)] Congress
intended that the safety fitness procedure required by this section
would supersede all previous rules regarding DOT safety fitness
assessments and ratings of motor carriers.\8\ FMCSA's authority to
determine the safety fitness of owners or operators of CMVs was
broadened with major amendments in 1998 by the Transportation Equity
Act

for the 21st Century (TEA-21) \9\ and in 2005 by the Safe, Accountable,
Flexible, Efficient Transportation Equity Act: A Legacy for Users
(SAFETEA-LU).\10\ Another amendment was made by the Commercial Motor
Vehicle Safety Enhancement Act of 2012, part of the Moving Ahead for
Progress in the 21st Century Act (MAP-21).\11\
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    \7\ Motor Carrier Safety Act of 1984, sec. 215, Pub. L. 98-554,
Title II, 98 Stat. 2829, 2844-2845, Oct. 30, 1984, now codified at
49 U.S.C. 31144. See http://www.gpo.gov/fdsys/pkg/STATUTE-98/pdf/STATUTE-98-Pg2829.pdf (PDF page 16 of 25).
    \8\ Sen. Report No. 98-424 at 16, May 2, 1984. Federal Highway
Administration (FHWA) had been required to determine the safety
fitness of for-hire motor carriers seeking operating authority from
the Interstate Commerce Commission since 1967 when the Department of
Transportation was created (see section 1653(e) of the Department of
Transportation Act of 1966, Pub. L. 89-670, Oct. 15, 1966 (DOT
Act)), see sec. 4(e) at http://www.gpo.gov/fdsys/pkg/STATUTE-80/pdf/STATUTE-80-Pg931.pdf (PDF page 4 of 20). FHWA codified in 49 CFR
part 385 the for-hire motor carrier safety fitness regulations to
address the DOT Act on June 17, 1982 (47 FR 26137) and revised them
on May 19, 1983 (48 FR 22566). The 1984 Act expanded the Agency's
safety fitness determinations to all motor carriers and owners and
operators of CMVs operating in interstate commerce.
    \9\ Sec. 4009(a) of the Transportation Equity Act for the 21st
Century (TEA-21), Pub. L. 105-178, 112 Stat. 107, 405 (June 12,
1998). See http://www.gpo.gov/fdsys/pkg/STATUTE-112/pdf/STATUTE-112-Pg107.pdf (PDF page 299 of 403).
    \10\ Sec. 4114(a) of the Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users (SAFETEA-LU), Pub. L.
109-59, 119 Stat. 1144, 1725 (Aug. 10, 2005). See http://www.gpo.gov/fdsys/pkg/STATUTE-119/pdf/STATUTE-119-Pg1144.pdf (PDF
page 582 of 835).
    \11\ Sec. 32707(a), Div. C., Title II of the Moving Ahead for
Progress in the 21st Century Act (MAP-21), Pub. L. 112-141, 126
Stat. 813 (July 6, 2012). See http://www.gpo.gov/fdsys/pkg/PLAW-112publ141/pdf/PLAW-112publ141.pdf (PDF page 409 of 584).
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    As amended, the statute now requires the Secretary to: (1)
Determine whether an owner or operator is fit to operate safely
commercial motor vehicles, utilizing among other things the accident
record of an owner or operator operating in interstate commerce and the
accident record and safety inspection record of such owner or
operator--(A) in operations that affect interstate commerce within the
United States; and (B) in operations in Canada and Mexico if the owner
or operator also conducts operations within the United States; (2)
periodically update such safety fitness determinations; (3) make such
final safety fitness determinations readily available to the public;
and (4) prescribe by regulation penalties for violations of 49 U.S.C.
31144 consistent with 49 U.S.C. 521.\12\
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    \12\ 49 U.S.C. 31144(a). See http://www.gpo.gov/fdsys/pkg/USCODE-2013-title49/pdf/USCODE-2013-title49-subtitleVI-partB-chap311-subchapIII-sec31144.pdf.
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    It also provides that the Secretary shall maintain by regulation a
procedure for determining the safety fitness of an owner or operator.
The procedure shall include, at a minimum, the following elements: (1)
Specific initial and continuing requirements with which an owner or
operator must comply to demonstrate safety fitness; (2) a methodology
the Secretary will use to determine whether an owner or operator is
fit; (3) specific time frames within which the Secretary will determine
whether an owner or operator is fit.\13\
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    \13\ 49 U.S.C. 31144(b).
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    This proposed rule also relies on 49 U.S.C. 31133, which gives the
Secretary broad administrative powers to assist in the implementation
of the provisions of the 1984 Act.\14\ These powers include, among
others, authority to conduct inspections and investigations, compile
statistics, require production of records and property, prescribe
recordkeeping and reporting requirements, and perform other acts
considered appropriate. The Agency also has broad authority to inspect
the equipment of a motor carrier or lessor, and to inspect and copy any
record of a motor carrier or person controlling, controlled by, or
under common control with, a motor carrier.\15\ These powers are
exercised to obtain the data used in the proposed new methodology for
SFDs.\16\
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    \14\ See Sen. Report No. 98-424 at 9 (May 2, 1984). The amended
provisions of the Motor Carrier Safety Act of 1984 are now found in
subchapter III of chapter 311 of 49 U.S.C. See http://www.gpo.gov/fdsys/pkg/USCODE-2013-title49/pdf/USCODE-2013-title49-subtitleVI-partB-chap311-subchapIII.pdf.
    \15\ 49 U.S.C. 504(c). See http://www.gpo.gov/fdsys/pkg/USCODE-2013-title49/pdf/USCODE-2013-title49-subtitleI-chap5-subchapI-sec504.pdf.
    \16\ The statute provides FMCSA authority to determine the
safety fitness of both motor carriers and employers owning and
operating CMVs and drivers or other employees operating CMVs. Cf. 49
U.S.C. 31132(2) and (3). See http://www.gpo.gov/fdsys/pkg/USCODE-2013-title49/pdf/USCODE-2013-title49-subtitleVI-partB-chap311-subchapIII-sec31132.pdf. This proposed rule involves the procedures
and standards for determination of the safety fitness of only motor
carriers and other employers that own or lease CMVs.
---------------------------------------------------------------------------

    FMCSA has authority to revoke the operating authority registration
of any motor carrier that has been prohibited from operating as the
result of a final unfit SFD.\17\ MAP-21 grants FMCSA the authority to
take similar action to revoke or suspend a motor carrier's safety
registration on the same grounds.\18\ FMCSA also has statutory
authority to adopt a requirement that States receiving MCSAP grants
enforce orders issued by FMCSA related to CMV safety and hazardous
materials (HM) transportation safety.\19\
---------------------------------------------------------------------------

    \17\ 49 U.S.C. 13905(f)(1)(B). See http://www.gpo.gov/fdsys/pkg/USCODE-2013-title49/pdf/USCODE-2013-title49-subtitleIV-partB-chap139-sec13905.pdf.
    \18\ 49 U.S.C. 31134(c). See http://www.gpo.gov/fdsys/pkg/USCODE-2013-title49/pdf/USCODE-2013-title49-subtitleVI-partB-chap311-subchapIII-sec31134.pdf.
    \19\ 49 U.S.C. 31102(a) and (b). See http://www.gpo.gov/fdsys/pkg/USCODE-2013-title49/pdf/USCODE-2013-title49-subtitleVI-partB-chap311-subchapI-sec31102.pdf.
---------------------------------------------------------------------------

    The Secretary has delegated the authority to carry out all of these
functions to the FMCSA Administrator.\20\
---------------------------------------------------------------------------

    \20\ 49 CFR 1.87(f).
---------------------------------------------------------------------------

IV. History of Past Actions

A. History of SFDs

    The Federal Highway Administration (FHWA), the predecessor of
FMCSA, promulgated Safety Fitness Procedures \21\ in 1988 to determine
the safety fitness of motor carriers through an onsite visit at the
motor carrier's premises and to establish procedures to resolve safety
fitness disputes with motor carriers, as required by the 1984 Act.\22\
In 1991, FHWA issued an interim final rule \23\ based on provisions of
the Motor Carrier Safety Act of 1990 (1990 Act).\24\ This interim final
rule prohibited certain motor carriers rated unsatisfactory from
operating CMVs in interstate commerce to transport more than 15
passengers or placardable quantities of HM starting on the 46th day
after being found unfit. The regulation has been in effect since August
1991. FHWA stated that it would use a safety-rating formula to
determine safety ratings, but the formula, while publicly available,
was not included in the safety fitness regulation.\25\
---------------------------------------------------------------------------

    \21\ 53 FR 50961 (Dec. 19, 1988), codified at 49 CFR part 385.
    \22\ FHWA codified safety fitness regulations for motor carriers
seeking operating authority from the Interstate Commerce Commission
(for-hire motor carriers) in 49 CFR part 385 on June 17, 1982 (47 FR
26137) and revised them on May 19, 1983 (48 FR 22566). The 1984 Act
expanded the Agency's safety fitness determinations from for-hire
motor carriers to all motor carriers operating in interstate
commerce.
    \23\ 56 FR 40802 (Aug. 16, 1991), Regulatory Identification
Number (RIN) 2125-AC71.
    \24\ Motor Carrier Safety Act of 1990, Pub. L. 101-500, sec.
15(b)(1), 104 Stat. 1218 (Nov. 3, 1990). See http://www.gpo.gov/fdsys/pkg/STATUTE-104/pdf/STATUTE-104-Pg1213.pdf. These provisions
formerly found at 49 U.S.C. 5113 are now found at 49 U.S.C.
31144(c)(2) and (3) and (f) (as amended later). See http://www.gpo.gov/fdsys/pkg/USCODE-2013-title49/pdf/USCODE-2013-title49-subtitleVI-partB-chap311-subchapIII-sec31144.pdf.
    \25\ 56 FR at 40803.
---------------------------------------------------------------------------

    In March 1997, in MST Express v. Department of Transportation,\26\
the U.S. Court of Appeals for the District of Columbia Circuit ruled in
favor of a motor carrier that had appealed its conditional safety
fitness rating. The court found that FHWA did not carry out its
statutory obligation to establish, by regulation, a means of
determining whether a carrier has complied with the safety fitness
requirements of the 1984 Act.\27\ Because the carrier's conditional
safety rating was based, in part, upon the formula that was publicly
available, but was not included in the promulgated 1988 final rule or
1991 interim final rule, the court vacated the petitioner's conditional
safety rating and remanded the matter to FHWA for further action.
---------------------------------------------------------------------------

    \26\ 108 F.3d 401 (D.C. Cir. 1997).
    \27\ 49 U.S.C. 31144.
---------------------------------------------------------------------------

    In response, FHWA issued a second interim final rule in May 1997
incorporating the safety fitness rating

methodology into the safety fitness regulations \28\ and a companion
NPRM published the same day \29\ proposed to adopt the formula or
methodology for use in assigning safety fitness ratings to all classes
of motor carriers. This companion NPRM discussed the public comments
received in response to the 1991 interim final rule.
---------------------------------------------------------------------------

    \28\ 62 FR 28807 (May 28, 1997) adding appendix B to 49 CFR part
385. RIN 2125-AC71.
    \29\ 62 FR 28826 (May 28, 1997), discussion of 1991 interim
final rule comments at page 28827, RIN 2125-AC71.
---------------------------------------------------------------------------

    In November 1997, FHWA published a final rule incorporating the
Agency's revised safety fitness rating methodology in appendix B to 49
CFR part 385, Safety Fitness Procedures.\30\ In November 1998, FHWA
published amendments to the rule that corrected several minor
errors.\31\ These changes withstood judicial review in 1999 in American
Trucking Associations, Inc. v. U.S. DOT.\32\ The court in the ATA case
gave deference to the FHWA's interpretation of its statutory directive
as it related to the level of specificity required in regulation and
related interpretive guidance. On the reason for the Agency's use of
interpretive guidance rather than notice and comment rulemaking to
implement aspects of the methodology, the court noted: ``It is easy to
imagine an affirmative reason for the agency's decision not to subject
the sampling procedure to notice and comment rulemaking--the desire to
be able to vary these technical elements of the process without
excessive delay as experience accrues.'' \33\
---------------------------------------------------------------------------

    \30\ 62 FR 60035 (Nov. 6, 1997). RIN 2125-AC71.
    \31\ 63 FR 62957 (Nov. 10, 1998). RIN 2125-AC71.
    \32\ 166 F.3d 374 (D.C. Cir. 1999).
    \33\ 166 F.3d at 378-380. See also Animal Legal Defense Fund,
Inc. v. Glickman, 204 F.3d 229, 235 (D.C. Cir. 2000) and cases
therein cited.
---------------------------------------------------------------------------

    In 1998, TEA-21 added a prohibition applicable to all owners and
operators of CMVs not previously subject to the 1990 Act's
prohibition--that is, those CMV owners and operators not transporting
more than 15 passengers or HM in quantities requiring placarding.
Following that change, all owners and operators, including those not
transporting more than 15 passengers or HM in quantities requiring
placarding, were prohibited from operating CMVs in interstate commerce,
starting on the 61st day after being found unfit.\34\ It also
prohibited Federal agencies from using those owners and operators that
were prohibited from operating to provide interstate transportation of
non-HM freight. FHWA proposed the regulations implementing the TEA-21
amendments in 1999, and FMCSA, which was established in 2000, published
the final rule on August 22, 2000.\35\
---------------------------------------------------------------------------

    \34\ Section 4009 of the Transportation Equity Act for the 21st
Century, Pub. L. 105-178, 112 Stat. 107, at 405, June 9, 1998.
Section 4009 added the additional prohibition and recodified the
statutory prohibitions of using unsatisfactory-rated motor carriers
in 49 U.S.C. 5113 to 49 U.S.C. 31144.
    \35\ 65 FR 50919 (Aug. 22, 2000).
---------------------------------------------------------------------------

    FMCSA published several additional amendments in 2000.\36\ These
changes updated the list of acute and critical regulations \37\ to
conform it to changes in FMCSA and the Pipeline and Hazardous Materials
Safety Administration (PHMSA) regulations. In 2007, the Agency further
revised the safety fitness procedures regulations and appendix B to
implement SAFETEA-LU statutory amendments.\38\
---------------------------------------------------------------------------

    \36\ 65 FR 11904 (Mar. 7, 2000).
    \37\ FHWA proposed acute and critical regulations for
determining safety fitness in 59 FR 47203 (Sept. 14, 1994) and made
them final in 62 FR 28807 (May 28, 1997).
    \38\ 72 FR 36760 (July 5, 2007).
---------------------------------------------------------------------------

    In 2007, in response to a motorcoach crash with numerous
fatalities, NTSB recommended that FMCSA use all motor carrier
violations when assessing a carrier's safety fitness. (See NTSB
recommendation H-07-003 in ``Highway Accident Report: Motorcoach Fire
on Interstate 45 During Hurricane Rita Evacuation Near Wilmer, Texas,
September 23, 2005.'' \39\). A copy of the NTSB report and a related
Motor Carrier Safety Advisory Committee (MCSAC) report have been placed
in the docket. The MCSAC recommended unanimously to FMCSA that it
implement the NTSB proposal to use all motor carrier violations when
assessing a carrier's safety fitness. NTSB closed the recommendation on
September 15, 2015, after NTSB accepted FMCSA's alternative actions. A
copy of NTSB's letter closing the recommendation is also in the docket.
---------------------------------------------------------------------------

    \39\ Report No. NTSB/HAR-07/01, PB2007-916202, Notation 7774C,
Adopted Feb. 21, 2007. You may download the report by visiting
http://www.ntsb.gov/investigations/AccidentReports/Reports/HAR0701.pdf on the Internet. H-07-003: ``To protect the traveling
public until completion of the Comprehensive Safety Analysis 2010
Initiative, immediately issue an Interim Rule to include all FMCSRs
in the current CR process so that all violations of regulations are
reflected in the calculation of a carrier's final rating.'' See also
NTSB recommendations H-99-006 ``Change the safety fitness rating
methodology so that adverse vehicle and driver performance-based
data alone are sufficient to result in an overall unsatisfactory
rating for the carrier'' and H-12-017 ``Include safety measurement
system rating scores in the methodology used to determine a
carrier's fitness to operate in the safety fitness rating rulemaking
for the new Compliance, Safety, Accountability initiative.''
---------------------------------------------------------------------------

B. Analytical Basis for the Proposed Changes

    FMCSA proposes to base SFDs on data from driver/vehicle inspections
and investigations. Three reports regarding the Agency's existing SMS
form the technical basis for the proposed methodology for this
rulemaking. Two of the reports were prepared by FMCSA. The third report
was developed and published by the American Transportation Research
Institute (ATRI). Copies of all three reports are in the docket for
this document.
    The most recent report is titled ``Carrier Safety Measurement
System (CSMS) Methodology-Version 3.0.2'' (June 2014).\40\ It provides
the details of the measurement system currently used for identifying
unsafe carriers and prioritizing and selecting them for interventions
under the Compliance, Safety, Accountability (CSA) initiative.
---------------------------------------------------------------------------

    \40\ John A. Volpe National Transportation Systems Center,
``Carrier Safety Measurement System (CSMS) Methodology-Version
3.0.2'' FMCSA, June 2014.
---------------------------------------------------------------------------

    The second report, ``Carrier Safety Measurement System (CSMS)
Violation Severity Weights'' (December 2010),\41\ involved quantifying
the relative crash risk of violations of the FMCSRs and HMRs. The
results from this study were used to assign risk-based weights to
driver/vehicle inspection violations in the SMS which would also be
used in the proposed methodology for determining safety fitness. (See
proposed appendix B to part 385.)
---------------------------------------------------------------------------

    \41\ John A. Volpe National Transportation Systems Center,
``Carrier Safety Measurement System (CSMS) Violation Severity
Weights,'' December 2010.
---------------------------------------------------------------------------

    The third report, a study titled, ``Compliance, Safety,
Accountability: Evaluating a New Safety Measurement System and Its
Impacts'' (December 2012), ATRI, involved an analysis of carriers
assessed by BASICs. The results from this study confirmed that SMS is
better at targeting carriers and identifying safety problems. In
addition, the ATRI study indicated that the number of ``alerts'' a
carrier has is the best indicator of future crashes.
    Additionally, the Agency's CSA Operational Model Test \42\ and
additional analysis by the University of Michigan Transportation
Research Institute \43\ and FMCSA indicate that

SMS is more effective than SafeStat, the Agency's previous intervention
prioritization system, because it improves identification of high-risk
carriers and provides information for determining the specifics of
their safety performance problems.
---------------------------------------------------------------------------

    \42\ The CSA operational model test was a two-phase, 30-month
(February 2008 to December 2010) field test to assess the validity,
efficiency, and effectiveness of the CSA operational model.
    \43\ Green and Blower, ``Evaluation of the CSA 2010 Operational
Model Test,'' FMCSA, August 2011, Report No. MC-RRA-11-019, http://csa.fmcsa.dot.gov/Documents/Evaluation-of-the-CSA-Op-Model-Test.pdf.
---------------------------------------------------------------------------

V. Existing Safety Monitoring and Data Quality Programs

    The CSA program, implemented in December 2010, is FMCSA's current
initiative to improve large truck and bus safety. It is a set of
enforcement and compliance tools that allow FMCSA and its State
partners to address the safety and compliance problems of motor
carriers before crashes occur. There are two elements of the Agency's
existing CSA Program that are part of the Agency's safety monitoring
programs: (1) The Safety Measurement System (SMS); and (2) the use of a
varied set of interventions on motor carriers identified by SMS. FMCSA
has provided significant information about the CSA program and its
initiatives through public listening sessions, Federal Register
notices, a comments docket, and a dedicated Web site. As a result, this
rulemaking provides only summary level information about CSA to explain
its relationship to the proposed changes in the SFD process.\44\
---------------------------------------------------------------------------

    \44\ For more detailed information, please go to the CSA Web
site at http://csa.fmcsa.dot.gov/ and review documents in the
program's docket at www.regulations.gov, docket number FMCSA-2004-
18898. In a one year period from 2012 to 2013, there were 46 million
visits to the SMS Web site. Therefore, FMCSA believes that the
industry and the public are already very familiar with this system
and the information it provides.
---------------------------------------------------------------------------

    The remaining element of the Agency's existing safety monitoring
programs is the compliance review or investigation that results in a
safety rating.

A. Safety Measurement System (SMS)

    The SMS is an automated system that runs monthly and measures on-
road safety performance of motor carriers to: (1) Identify candidates
for intervention, (2) identify specific safety problems, and (3)
monitor whether a carrier's performance is improving or getting worse.
SMS groups the safety performance data of motor carriers and drivers
into seven BASICs. The BASICs are:
1. Unsafe Driving BASIC
    The Unsafe Driving BASIC addresses the requirement to avoid driving
a CMV in a dangerous or careless manner, and it includes driving and
parking rules for drivers transporting HM. Some safety violations that
may cause a motor carrier to rank poorly in this BASIC include
speeding, reckless driving, improper lane change, distracted driving,
failure to wear safety belt while operating a CMV, and texting or using
a mobile telephone while operating a CMV.
2. Hours of Service (HOS) Compliance BASIC
    The HOS Compliance BASIC addresses the requirements to obey the HOS
rules and not to drive when fatigued. This BASIC includes violations of
the regulations pertaining to maximum driving time during the work day,
maximum on-duty time that may be accumulated before driving is
prohibited during the work day and during the work week, and
preparation in proper form and manner and retention of records of duty
status (RODS) as they relate to HOS requirements. Safety violations
that may cause a motor carrier to rank poorly in this BASIC include a
driver operating more hours than allowed under HOS regulations, failure
to prepare and maintain RODS and falsification of RODS.
3. Driver Fitness BASIC
    The Driver Fitness BASIC addresses the requirements concerning
commercial driver's licenses (CDLs) and disqualifying offenses for
persons operating CMVs, as defined in 49 CFR 383.5. This BASIC also
captures violations of the regulations for driver qualifications,
including medical qualifications for interstate drivers of CMVs, as
defined in 49 CFR 390.5. High scores in this BASIC are an indication
that a carrier has allowed the operation of CMVs by drivers who are not
qualified due to a lack of knowledge, skills, medical qualifications,
or a valid license.
4. Controlled Substances/Alcohol BASIC
    The Controlled Substances/Alcohol BASIC addresses the requirements
for controlled substances and alcohol testing for CDL holders. Safety
violations that may cause a motor carrier to rank poorly in this BASIC
include a driver found to be in possession of alcoholic beverages or
operating under the influence of a controlled substance.
5. Vehicle Maintenance BASIC
    The Vehicle Maintenance BASIC addresses the requirements for
equipment inspection, proper maintenance, and repair of a CMV, and the
prevention of shifting loads and spilled or dropped cargo. Proper
maintenance includes ensuring that lamps or reflectors are working,
brakes are in proper working condition, and tires are not dangerously
worn. Some safety violations that may cause a motor carrier to rank
poorly in this BASIC are operating a vehicle with inoperative brakes,
lights, or other mechanical defects; failure to make required repairs;
improper load securement to prevent shifting upon or within the CMV to
such an extent that the CMV's stability or maneuverability is adversely
affected; or operating a vehicle placed OOS for safety deficiencies.
6. HM Compliance BASIC
    The HM Compliance BASIC addresses the Federal safety regulations
related to the packaging, transportation, and identification of HM. In
the event of a crash or spill, the HM Compliance BASIC also covers the
proper communication of the hazard of the cargo on board. The general
public is subject to a greater safety risk if HM is involved in a motor
carrier crash; and unmarked or poorly marked HM cargo can result in
less effective emergency response, as well as injuries and fatalities
for emergency responders and others. At present, the HM Compliance
BASIC scores can be seen only by enforcement personnel and by a motor
carrier that accesses its own safety profile; it is not publicly
available. The public can, however, see information on the number and
types of HM violations involving the motor carrier.
7. Crash Indicator BASIC
    The Crash Indicator BASIC identifies histories or patterns of crash
involvement, such as frequency and severity. It is based on information
from State-reported crashes that meet recordable crash standards.
Multiple State-reported crashes raise the percentile rank of the Crash
Indicator BASIC, which signals potential safety problems. The SMS
cannot currently factor in the role of the carrier in causing the
crash--or crash preventability. (See discussion of crashes below.) At
present, the Crash Indicator BASIC can be seen only by enforcement
personnel and by a motor carrier that accesses its own safety profile;
it is not publicly available. The public can, however, see information
on the number and severity of crashes involving the motor carrier.

B. Interventions

    Interventions are a suite of enforcement tools ranging from warning
letters to comprehensive investigations that provide carriers with the
information necessary to understand

their safety problems and to change unsafe behavior.
    Currently, when a motor carrier's SMS scores meet or exceed
established intervention thresholds the Agency prioritizes it for
investigations or enforcement. The SMS intervention thresholds are as
follows:

                                    Table 3--Intervention Thresholds for SMS
----------------------------------------------------------------------------------------------------------------
                     Basic                                         SMS Intervention thresholds
----------------------------------------------------------------------------------------------------------------
                                                    Passenger                   HM          All others
----------------------------------------------------------------------------------------------------------------
Unsafe Driving, HOS, Crash Indicator..........  Greater than or equal to (>=)              >=60%           >=65%
                                                 50%.
Driver Fitness, Controlled Substances/Alcohol,  >=65%...........................           >=75%           >=80%
 Vehicle Maintenance.
HM............................................  >=80............................           >=80%           >=80%
----------------------------------------------------------------------------------------------------------------

    It is important to note that the thresholds FMCSA currently uses to
select carriers for an intervention, using SMS, are not the same
measures that are being proposed in this NPRM for the SFD failure
standards. (See Section 2.4 of proposed appendix B to part 385 below.)

C. Current SFD Process

    SFDs are currently determined based on data collected during a CR
or other investigation. The existing SFD process uses six factors to
rate carriers' safety performance. Portions of the regulations (the
FMCSRs and the HMRs) with similar characteristics are grouped together
into six factors:

Factor 1 General--Parts 387 and 390
Factor 2 Driver--Parts 382, 383, and 391
Factor 3 Operational--Parts 392 and 395
Factor 4 Vehicle--Parts 393 and 396
Factor 5 HM--Parts 171, 177, 180, and 397
Factor 6 Accident \45\ factor--Recordable accident rate per million
miles
---------------------------------------------------------------------------

    \45\ The term ``crash'' is synonymous to the term ``accident''
as defined in 49 CFR 390.5 and may be used interchangeably in this
document. See 79 FR 59457, October 2, 2014.

    FMCSA calculates a vehicle out-of-service rate, reviews crash
involvement, and conducts an in-depth examination of the motor
carrier's compliance with the acute and critical regulations of the
FMCSRs and HMRs, currently listed in 49 CFR part 385, appendix B, part
VI.
     ``Acute regulations'' are those where noncompliance is so
severe as to require immediate corrective action, regardless of the
overall safety management controls of the motor carrier.
     ``Critical regulations'' are related to management or
operational systems controls.
    Overall noncompliance is calculated and rated on a point system
according to the six factors. During the investigation, for each
instance of noncompliance with an acute regulation or each pattern of
noncompliance with a critical regulation one point is assessed.
Patterns of noncompliance with HOS are assessed two points. For a
critical regulation, the number of violations required to meet the
threshold for a pattern is equal to at least 10 percent of those
sampled, and more than one violation must be found to establish a
pattern. In addition, on-road safety data is used in calculating the
vehicle and crash factors.
    If any of the six factors is assessed one point, then that factor
is rated as ``conditional.'' If any of the six factors is assessed two
points, then that factor is rated as ``unsatisfactory.'' Two or more
individual factors rated as ``unsatisfactory'' will result in an
overall rating of ``unsatisfactory.'' One individual factor rated as
``unsatisfactory'' and more than two individual factors rated as
``conditional'' will also result in an ``unsatisfactory'' rating
overall. See Table 4 below:

                    Table 4--Current SFD Rating Table
------------------------------------------------------------------------
                   Factor ratings
-----------------------------------------------------   Overall safety
         Unsatisfactory               Conditional           rating
------------------------------------------------------------------------
0...............................  2 or fewer........  Satisfactory
0...............................  More than 2.......  Conditional
1...............................  2 or fewer........  Conditional
1...............................  More than 2.......  Unsatisfactory
2 or more.......................  0 or more.........  Unsatisfactory
------------------------------------------------------------------------

    The Agency's current SFD process is resource-intensive and reaches
only a small percentage of motor carriers. In FY 2012, FMCSA and its
State partners conducted approximately 17,000 ratable reviews out of a
population of more than approximately 525,000 active motor carriers. A
ratable review is one that could potentially result in a conditional or
unsatisfactory safety rating. Table 5 presents the distribution of
ratable reviews conducted.
---------------------------------------------------------------------------

    \46\ Motor Carrier Safety Progress Report, FMCSA, as of March
31, 2013. Under the ``Carrier Reviews'' section, figures are summed
to obtain counts in Table 5. Accessed April 29, 2015 at https://cms.fmcsa.dot.gov/safety/data-and-statistics/motor-carrier-safety-progress-report-33113.

  Table 5--Distribution of Ratable Investigations Types in FY 2012 \46\
------------------------------------------------------------------------
                   Investigation type                         Number
------------------------------------------------------------------------
Ratable Full CRs/Comprehensive On-Site Investigations...           6,641
Ratable Focused CRs/Focused On-Site Investigations......          10,361
                                                         ---------------
    Total...............................................          17,002
------------------------------------------------------------------------

    Of the 17,002 ratable reviews conducted in FY 2012, 1,013 resulted
in a proposed unsatisfactory safety rating, while an additional 3,618
resulted in a proposed or final safety rating of conditional.
    The Agency concludes that changes to the SFD process are needed for
many reasons. First, the current SFD methodology evaluates a motor
carrier's compliance using only a limited range of inspection data.
Additionally, the current process does not integrate all of the data
that is available in MCMIS. Over 3.5 million inspections are conducted
each year, and this information is not effectively used to remove
unsafe operators from our Nation's roadways.
    Second, the safety rating is a snapshot of a company's safety
performance on a specific date. The Agency's MCMIS database reflects
safety ratings dating back to 1986, and many of the ratings are not
likely to reflect the carriers' current safety compliance.
    Third, the current SFD process is not designed to continually
monitor motor carrier on-road safety data. In addition, the assignment
of a ``satisfactory'' safety rating implies to the public, correctly or
not, that the Agency has approved the current operations of a motor
carrier, when actually FMCSA has merely rated the operations for the
specific period covered by the CR. The assigned safety rating thus may
not reflect the company's current compliance and could be misleading to
those who might interpret it as a reflection of a motor carrier's
current safety status.

    Fourth, under the current SFD process, a motor carrier may continue
to operate indefinitely with a conditional rating even if a ratable
review reveals breakdowns in safety management controls in multiple
areas. For example, a motor carrier with noncompliance documented by an
investigation in areas such as vehicle maintenance (factor 4) and
controlled substances and alcohol testing (factor 2) would receive only
a proposed conditional rating, which, if it became final, still allows
the motor carrier to continue operating.
    Fifth, as noted above, the current regulations only allow the
Agency and its State partners to assess or rate the safety fitness of a
small population of motor carriers on an annual basis. This proposal
expands the number of assessed and rated carriers.
    Lastly, FMCSA has two open NTSB recommendations related to changing
the safety fitness methodology on which the Agency has agreed to take
action: \47\
---------------------------------------------------------------------------

    \47\ These recommendations are available through the NTSB Safety
Recommendations-Search and View Web pages. Retrieved April 6, 2015,
from: http://www.ntsb.gov.
---------------------------------------------------------------------------

     H-99-006: Change the safety fitness rating methodology so
that adverse vehicle and driver performance-based data alone are
sufficient to result in an overall unsatisfactory rating for the
carrier.
     H-12-017: Include safety measurement system rating scores
in the methodology used to determine a carrier's fitness to operate in
the safety fitness rating rulemaking for the new Compliance, Safety,
Accountability initiative.
    For these reasons, the Agency proposes to make the changes to the
SFD process reflected in this NPRM.

D. Data Quality Program

    Over the past several years, the Agency has significantly improved
the quality of safety data on motor carriers and considers the State-
reported driver and vehicle inspection and crash data to be reliable.
All of the States receive MCSAP grant funds from FMCSA and are required
to establish programs to ``ensure that . . . accurate, complete, and
timely motor carrier safety data is collected and reported'' and to
participate in a national motor carrier safety data correction
system.\48\ FMCSA sets a goal for States to provide standard, basic
information about large truck and bus crashes within 90 days of the
crash event and results of driver/vehicle inspections within 21 days.
In addition, FMCSA implemented a comprehensive set of data quality
initiatives to assist the States in improving the accuracy, timeliness,
completeness, and consistency of crash and inspection data. The process
provides the States and FMCSA with a monthly report that summarizes the
latest performance results and tracks progress toward meeting FMCSA's
goals. Also, evaluation teams made up of technical experts from the
DOT's John A. Volpe National Transportation Systems Center and FMCSA
conduct reviews of the data collection processes for State-reported
crash and inspection data. These reviews identify areas for potential
process improvement. These initiatives have resulted in a significant
improvement in the quality of State-reported data over the past several
years.
---------------------------------------------------------------------------

    \48\ 49 U.S.C. 31102(b)(1)(Q). See also (1) section 4128 of
SAFETEA-LU, Pub. L. 109-59, 119 Stat. 1144, 1742 (Aug. 10, 2005)
(providing for State Safety Data Improvement Program Grants ``to
improve the accuracy, timeliness, and completeness of . . . safety
data''), (2) section 32603(c) of Moving Ahead for Progress in the
21st Century Act (MAP-21), Pub. L. 112-141, 126 Stat. 405 (July 6,
2012) (additional State Safety Data Improvement grant funding was
provided for fiscal years 2013 and 2014), and (3) 49 CFR 350.201(s),
350.211, 350.327(b)(3) and (5).
---------------------------------------------------------------------------

    In addition, FMCSA developed the DataQs online system to facilitate
data corrections and to track corrective actions.\49\ DataQs provides a
single, Web-based location that allows the industry to file and monitor
Requests for Data Review (RDRs) concerning Federal and State data
released to the public. Through the DataQs system, data concerns are
forwarded automatically to the appropriate office for resolution,
including State partners. The system also allows filers to monitor the
status of each request. Requests for changes to data based on
adjudicated citations are also processed through the DataQs system.
---------------------------------------------------------------------------

    \49\ FMCSA established the DataQs system in accordance with the
Office of Management and Budget (OMB) Guidelines for Implementing
Section 515 of the Treasury and General Government Appropriations
Act for Fiscal Year 2001 (Pub. L. 106-554). OMB directed Federal
agencies subject to the Paperwork Reduction Act (44 U.S.C. Chapter
35) to establish and implement written guidelines to ensure and
maximize the quality, utility, objectivity, and integrity of the
information they disseminate.
---------------------------------------------------------------------------

    FMCSA also evaluates State-reported crash and inspection data and
releases evaluation data to the public on a quarterly basis on the
FMCSA Web site. The evaluation uses the State Safety Data Quality map
to rate the States on the completeness, timeliness, accuracy, and
consistency of State-reported crash and inspection data reported to
MCMIS (http://ai.fmcsa.dot.gov/DataQuality/dataquality.asp \50\). As of
October 2015, only the District of Columbia and Massachusetts had a
``poor'' rating and two States (Connecticut and Maryland) have ``fair''
ratings. All other States have ``good'' ratings.
---------------------------------------------------------------------------

    \50\ Accessed on April 6, 2015.
---------------------------------------------------------------------------

VI. Proposed SFD Changes

A. Numbers of Inspections and Violations Used in This Proposal

    FMCSA uses 11 inspections as the minimum number for several
different analyses and considerations in Tables 6 through 16. Table 6
below is provided to clarify the various applications of the 11-
inspection requirement. To receive a safety fitness determination based
on inspections a motor carrier must have had at least 11 inspections in
the previous 24 months.

                             Table 6--Number of Inspections With Violations Required
----------------------------------------------------------------------------------------------------------------
                                                                  Minimum number
                                               Minimum number     of inspections
                   Action                      of inspections    with violations            Explanation
                                                  required           required
----------------------------------------------------------------------------------------------------------------
Assess.....................................                 11                  0  If a motor carrier has 11
                                                                                inspections in MCMIS, the
                                                                                Agency has sufficient
                                                                                information to assess it.
Data Sufficiency for Potential to Fail a                    11                 11  This is the data threshold
 BASIC.                                                                             that must be met before a
                                                                                carrier could fail a BASIC.
----------------------------------------------------------------------------------------------------------------

B. Only One SFD--Unfit

    In this NPRM, FMCSA proposes to eliminate the current three-tier
rating system (i.e., satisfactory-conditional-unsatisfactory). FMCSA
proposes to change its SFD system to a single determination--unfit. The
Agency has statutory discretion to establish the nomenclature for
safety fitness determinations.\51\ In addition, the safety fitness
statute requires FMCSA to determine only ``whether an owner or operator
is fit'' to continue to operate on the Nation's roadways, and it
prescribes specific consequences for motor carriers found to be not
fit. It prohibits such carriers from engaging in interstate
transportation \52\ or transportation that affects interstate
commerce.\53\ It also prohibits any U.S. Government agency from using
such carriers for transportation.\54\
---------------------------------------------------------------------------

    \51\ 49 U.S.C. 31133(a)(10), 31144(b).
    \52\ 49 U.S.C. 31144(c)(1)-(3).
    \53\ 49 U.S.C. 31144(c)(5).
    \54\ 49 U.S.C. 31144(f).
---------------------------------------------------------------------------

    This change to the SFD process would address some of the
shortcomings of the current safety rating system. Most importantly, it
would help focus the Agency's resources on removing unsafe carriers
from the Nation's highways. In addition, it would eliminate the
misperception that a satisfactory rating means that FMCSA approves of
the current operations of a motor carrier. FMCSA believes that the term
``unfit'' conveys a clearer and more accurate message to the public
than the term ``unsatisfactory.'' These changes better align the safety
fitness regulations with the Agency's mission to remove unsafe
operators from the Nation's roadways. At the same time, the change
makes clear that the Agency will not devote its limited enforcement
resources toward reviews initiated for the sole purpose of assigning a
more positive safety rating label to carriers that are not prohibited
from operating in interstate or intrastate commerce.

C. Three Paths to ``Proposed Unfit''

    Based on the Agency's experience with SMS and interventions, FMCSA
believes that integration of on-road safety data into the SFD process
would improve the safety evaluation of motor carriers and the
identification of unsafe motor carriers as unfit. Under this proposal,
unfit determinations could be based on one of three methodologies.
     Unfit Method 1: Carrier with Two or More Failed BASICs
from On-Road Safety Performance
     Unfit Method 2: Carrier with Violations of the Revised
Critical and Acute Regulations Identified Through an Investigation
     Unfit Method 3: Combination of Inspection Data and
Investigation Results
    Figures 1, 2, and 3 illustrate how, under this proposal, carriers
could receive proposed unfit safety fitness determinations. This
information is also provided in appendix B. Extensive detail for each
method is provided below. These paths to a proposed unfit determination
are not mutually exclusive. For example, even though an owner or
operator regularly undergoes the monthly assessment under Unfit Method
1, at any time, if circumstances warrant, FMCSA can conduct an
investigation under Unfit Method 2 to determine whether the owner or
operator is fit.

[GRAPHIC] [TIFF OMITTED] TP21JA16.000

[GRAPHIC] [TIFF OMITTED] TP21JA16.001

1. Unfit Method 1: Carrier With Two or More Failed BASICs From On-Road
Safety Performance Is Proposed Unfit
    Under Unfit Method 1, violations recorded on inspections would be
sorted into the five BASICs for which on-road safety data is considered
under the proposed SFD process: Unsafe Driving, HOS Compliance, Driver
Fitness, Vehicle Maintenance, and HM Compliance. (Under the proposed
SFD process, a motor carrier can fail the Crash Indicator BASIC or the
Controlled Substances and Alcohol BASIC only based upon investigation
findings under Unfit Method 2.)
    The proposed rule would require 11 or more inspections with 1 or
more violations in each, in a single BASIC, before a carrier could fail
the BASIC for SFD purposes. The Agency proposes 11 or more inspections
with violations, rather than the minimum of 3 to 5 inspections with
violations required for SMS intervention, because this higher number
provides a higher confidence level in assessing safety fitness, which
is appropriate due to the seriousness of the regulatory consequences.
    While more inspections with violations might be an even stronger
indicator of non-compliance, as was recommended by the Government
Accountability Office (GAO) for the Agency's SMS,\55\ a significantly
greater data requirement--e.g., 20 inspections with violations--would
mean that an unreasonably large percentage of carriers would never
reach this threshold in a 24-month period. FMCSA believes that a more
than twofold difference from the higher SMS inspection requirement is
sufficient and appropriate for SFD. The Agency's analysis indicates
that requiring 11 or more inspections with 1 or more violations in each
increases the proportion of medium to large carriers falling within the
``SFD eligible'' population, compared to a 5 or more inspection
requirement, but still does not result in small motor carriers escaping
scrutiny. The Agency notes that carriers with 10 or fewer inspections
with violations are still subject to safety fitness determinations
under Unfit Method 2. The Agency also notes that raising the inspection
requirement above 20 violations as GAO recommends for SMS as shown in
tables 8 to 13, the groups of 11 to 20 inspections showed the highest
crash risk compared to carriers with more inspections.
---------------------------------------------------------------------------

    \55\ ``Modifying the Compliance, Safety, Accountability Program
Would Improve the Ability to Identify High Risk Carriers,'' U.S.
Government Accountability Office, Report No. GAO-14-114, February 3,
2014. See http://www.gao.gov/products/GAO-14-114, accessed April 6,
2015.
---------------------------------------------------------------------------

    Table 7 illustrates the number of carriers that have 11 or more
inspections with 1 or more violations in each in a 24-month period and,
therefore, would have sufficient data to be evaluated for an SFD,
compared to carriers with 5 or more inspections.

         Table 7--Number of Carriers That Have 11 or More or 5 or More Inspections in a 24-Month Period
----------------------------------------------------------------------------------------------------------------
                                                       11+ inspections (SFD)       5+ inspections (intervention)
                                                 ---------------------------------------------------------------
                   Power units                                      Percent of                      Percent of
                                                     Number of      total shown      Number of      total shown
                                                     carriers        (percent)       carriers        (percent)
----------------------------------------------------------------------------------------------------------------
5 or fewer......................................          31,957            42.1          86,486            59.5
6 to 15.........................................          21,885            28.9          32,974            22.7
16 to 50........................................          14,843            19.6          18,122            12.5
51 to 500.......................................           6,558             8.6           7,058             4.9

501+............................................             585             0.8             597             0.4
                                                 ---------------------------------------------------------------
    Total.......................................          75,828             100         145,237             100
----------------------------------------------------------------------------------------------------------------

    The weight of a safety event would decrease over time, with more
recent events having a greater impact on a motor carrier's BASIC scores
than events from the more distant past. Under this proposal the Agency
would not use events older than 24 months in determining a motor
carrier's safety performance measure.
    FMCSA emphasizes that a carrier that receives a proposed unfit
determination under Method 1 may have the opportunity to enter into a
compliance agreement which could provide it an opportunity to improve
its safety performance and avoid a final determination of unfit.
Therefore, the increased scrutiny that comes with poor results from 11
inspections with violations within 24 months does not mean the carrier
would automatically face an operations out-of-service order. It would
be required, however, to correct deficiencies in its safety management
controls sooner than it would if the Agency waited for a larger number
of inspections. The Agency requests comments on the minimum number of
inspections and minimum number of violations that should be considered
in making a proposed unfit determination.
Proposed Failure Standards for Unfit Method 1
    The proposed failure standard for an SFD would be set at an
absolute value that would equate to higher levels (i.e., poorer safety
performance) than those used in SMS for interventions. That absolute
value--a figure based on time- and severity-weighted violations divided
by the number of relevant inspections or vehicles for different safety
event groups--would be set at the time when the SFD rule becomes final.
    The Agency's goal is to establish failure standards that would
identify motor carriers with a high crash risk. However, the Agency
must take into consideration existing enforcement resources and strike
a balance between the population identified and the ability to handle
the associated workload.
    In considering what absolute failure standards to propose, the
Agency considered four options, based on different SMS percentiles. The
standards considered equate roughly to the 95th, 96th, 98th, and 99th
percentiles for all motor carriers with 11 or more inspections with
violations for the 24-month period that ended on March 22, 2013. The
proposed failure standards for each BASIC, as calculated through
inspections, are presented in Tables 8 through 13. But the standards in
the final rule will be based on a more current data and calculation
completed closer to the final rule's publication date.
    For purpose of analysis in this rulemaking, the Agency proposes to
use the absolute failure standards that equate to the 99th percentile
for the Driver Fitness, Vehicle Maintenance, and HM Compliance BASICs.
This failure standard is equivalent to the absolute value that defines
the worst 1 percent of motor carriers with 11 or more inspections, each
with 1 or more violations, in a BASIC as of the date of the
calculation--March 22, 2013. (See also Table 16 below.)
    The failure standard for Unsafe Driving and HOS Compliance would be
more stringent than the other BASICs and require a higher level of
compliance. A measure equivalent to the 96th percentile would be used
for the Unsafe Driving and HOS Compliance BASICs. FMCSA based this
standard on the stronger correlation of these BASICs to previous
crashes.\56\ During CSA development, the Agency discussed having these
two BASICs be ``stand-alone'' BASICs in the SFD rulemaking; \57\
meaning that failing even one of these two BASICs would result in a
proposed unfit SFD. However, based on both the Agency's analysis for
this proposal and the ATRI research, mentioned above, using more BASICs
to determine a carrier's safety fitness has been shown to be a better
measure of the overall safety performance of the carrier.
---------------------------------------------------------------------------

    \56\ John A. Volpe National Transportation Systems Center,
``Carrier Safety Measurement System (CSMS) Violation Severity
Weights,'' December 2010.
    \57\ See 72 FR 62293, at 62299, (Nov. 2, 2007), Comprehensive
Safety Analysis 2010 Initiative, Notice of public listening session.
---------------------------------------------------------------------------

    The Crash Indicator BASIC and the Controlled Substances/Alcohol
Compliance BASIC would be examined only during investigations, because
the Crash Indicator BASIC currently does not include preventability
determinations, and controlled substances and alcohol violations from
on-road safety data would rarely meet the data sufficiency standards.
    Failure standards for each of the five BASICs relevant to Unfit
Method Number 1 would be established for up to four different safety
event groups. (A full explanation of safety event groups is provided
below.) A carrier meeting or exceeding the failure standard in its
safety event group in the specific BASIC would fail that BASIC for SFD
purposes. Tables 8 through 16 below show the options FMCSA considered
for each BASIC.
    In SMS, a carrier's performance is compared every month to other
carriers in its safety event group. As a result, improved performance
by other carriers could result in the carrier having higher (worse)
percentiles, without the carrier having committed any additional
violations. By contrast, in the proposed SFD process, each month a
carrier's performance would be compared to an absolute failure standard
that would be set in regulation based on each safety event group.
Because the absolute failure standard would not change by the month but
instead would only change after rulemaking by the Agency, with notice
and an opportunity to comment, changes in another company's performance
would not impact the motor carrier. The carrier's measure would reflect
its own performance against the failure standard.
    Tables 8 through 13 below show proposed failure standards that
would apply for each of the five BASICs used in this methodology. For
all of the BASICs except Unsafe Driving, the threshold would be
determined by

dividing the number of time- and severity-weighted violations by the
number of relevant inspections. The specific numerators and
denominators that would be used to determine the proposed failure
standard for each BASIC are identified in appendix B. For purposes of
clarifying and analyzing this proposal only, failure standards are
presented below based on the data available as of March 22, 2013. But
the standards in the final rule will be based on a more current
calculation completed closer to the final rule's publication date.
---------------------------------------------------------------------------

    \58\ Combination vehicle segments include those motor carriers
that operate either truck tractors or motor coaches.
    \59\ Straight truck segments include all carriers that operate
straight trucks, HM cargo tank trucks, or school buses/mini-buses/
limousines/vans with capacity of 9 or more passengers. These
different types of power units are defined on the FMCSA
Registration/Update(s) (Application for USDOT Number/Operating
Authority Registration), Form MCSA-1. See http://www.regulations.gov/#!documentDetail;D=FMCSA-1997-2349-0195.

 Table 8--Unsafe Driving Failure Standards (Generally, Weighted Violations Divided by Power Units--See Appendix
                   B, Section 2.4)--Combination \58\ Vehicle Segment--Alternatives Considered
----------------------------------------------------------------------------------------------------------------
                                                   BASIC Failure   BASIC Failure   BASIC Failure   BASIC Failure
 Safety Event Group  (number of inspections with     standard        standard        standard        standard
           unsafe driving violations)              equivalent to   equivalent to   equivalent to   equivalent to
                                                        95%             96%             98%             99%
----------------------------------------------------------------------------------------------------------------
11 to 21........................................           12.74           14.21           18.54           27.25
22-57...........................................            8.77            9.58            13.5           18.98
58-149..........................................            5.47            6.26            8.10            9.71
150+............................................            2.77            2.80            2.90            3.00
----------------------------------------------------------------------------------------------------------------

   Table 9--Unsafe Driving Failure Standards: (Weighted Violations Divided by Power Units) Straight Truck \59\
                                        Segment--Alternatives Considered
----------------------------------------------------------------------------------------------------------------
                                                   BASIC Failure   BASIC Failure   BASIC Failure   BASIC Failure
 Safety event group  (number of inspections with     standard        standard        standard        standard
           unsafe driving violations)              equivalent to   equivalent to   equivalent to   equivalent to
                                                        95%             96%             98%             99%
----------------------------------------------------------------------------------------------------------------
11 to 18........................................            8.19            9.64           11.47           15.99
19-49...........................................            4.59            5.12            7.31           12.05
50+.............................................            1.36            1.47            1.89            2.05
----------------------------------------------------------------------------------------------------------------

  Table 10--Hours of Service Compliance Failure Standards (Weighted Violations Divided by Driver Inspections)--
                                             Alternatives Considered
----------------------------------------------------------------------------------------------------------------
                                                   BASIC Failure   BASIC Failure   BASIC Failure   BASIC Failure
      Safety event group  (number of driver          standard        standard        standard        standard
                  inspections)                     equivalent to   equivalent to   equivalent to   equivalent to
                                                        95%             96%             98%             99%
----------------------------------------------------------------------------------------------------------------
11 to 20........................................            3.88            4.15            4.94            5.65
21-100..........................................            2.94            3.13            3.66            5.21
101-500.........................................            2.09            2.20            2.44            2.69
501+............................................            1.46            1.54            1.73            1.91
----------------------------------------------------------------------------------------------------------------

  Table 11--Driver Fitness Failure Standards (Weighted Violations Divided by Driver Inspections)--Alternatives
                                                   Considered
----------------------------------------------------------------------------------------------------------------
                                                   BASIC Failure   BASIC Failure   BASIC Failure   BASIC Failure
      Safety event group  (number of driver          standard        standard        standard        standard
                  inspections)                     equivalent to   equivalent to   equivalent to   equivalent to
                                                        95%             96%             98%             99%
----------------------------------------------------------------------------------------------------------------
11 to 20........................................            1.54            1.68            2.19            2.74
21-100..........................................            0.78            0.86            1.11            1.39
101-500.........................................            0.29            0.31            0.39            0.50
501+............................................            0.14            0.15            0.19            0.24
----------------------------------------------------------------------------------------------------------------

     Table 12--Vehicle Maintenance Failure Standards (Weighted Violations Divided by Vehicle Inspections)--
                                             Alternatives Considered
----------------------------------------------------------------------------------------------------------------
                                                   BASIC Failure   BASIC Failure   BASIC Failure   BASIC Failure
     Safety event group  (number of vehicle          standard        standard        standard        standard
                  inspections)                     equivalent to   equivalent to   equivalent to   equivalent to
                                                        95%             96%             98%             99%
----------------------------------------------------------------------------------------------------------------
11 to 20........................................           14.19           14.93           16.94           18.79

21-100..........................................           11.96           12.62           14.38           16.12
101-500.........................................            8.84            9.18           10.36           11.82
501+............................................            6.54            6.77             7.9            8.91
----------------------------------------------------------------------------------------------------------------

      Table 13--HM Compliance Failure Standards (Weighted Violations Divided by Placarded HM Inspections)--
                                             Alternatives Considered
----------------------------------------------------------------------------------------------------------------
                                                   BASIC Failure   BASIC Failure   BASIC Failure   BASIC Failure
   Safety event group  (number of placarded HM       standard        standard        standard        standard
                  inspections)                     equivalent to   equivalent to   equivalent to   equivalent to
                                                        95%             96%             98%             99%
----------------------------------------------------------------------------------------------------------------
11 to 20........................................            4.18            4.34            5.55            6.87
21-100..........................................            2.81            2.99            3.65            4.82
101-500.........................................            1.86            1.96            2.34            2.56
501+............................................            1.33            1.46            1.83            1.95
----------------------------------------------------------------------------------------------------------------

    The percentage of carriers and crash rates of carriers under
FMCSA's jurisdiction are presented in Tables 14 and 15 below for the
purpose of comparison. Table 14 displays the frequency with which motor
carriers are identified as ``unfit,'' based on the number of power
units (PU) the carrier operates. Table 15 show the crash rates for the
same motor carriers.

     Table 14--Distribution of Proposed Unfit Determinations by Power Units (PU) Groups for Each Alternative
                                                   Considered
----------------------------------------------------------------------------------------------------------------
                                   5 or fewer PU    6 to 15 PU      16 to 50 PU    51 to 500 PU
     Alternatives considered            (%)             (%)             (%)             (%)        501+ PU  (%)
----------------------------------------------------------------------------------------------------------------
General Population of Carriers              82.8            11.2             4.4             1.5             0.1
 with Recent Activity * as of
 March 2013 (Baseline for
 comparison)....................
Option 1: Equivalent to 95th                63.1            22.2            10.8             3.5             0.3
 percentile for Unsafe Driving
 and HOS and 98th percentile for
 Driver Fitness, Vehicle
 Maintenance, and HM (Based on
 11+ inspections with
 violations)....................
Proposed Option: Equivalent to              63.9            22.3            10.2             3.3             0.3
 96th percentile for Unsafe
 Driving and HOS and 99th
 percentile for Driver Fitness,
 Vehicle Maintenance, and HM
 (based on 11+ inspections with
 violations)....................
----------------------------------------------------------------------------------------------------------------
* Recent Activity means a motor carrier has had any recorded activity in the past 36 months related to an
  inspection, crash, investigation (including new entrant audit), MCS-150 update, registration activity,
  insurance or Unified Carrier Registration payment, process agent update or name/ownership change. Also, any
  carrier with active for-hire operating authority is considered as having ``recent activity.'' Using this
  definition, FMCSA intends to remove from its motor carrier census motor carriers with ``active status'' that
  have left the industry years ago but still remain in the census because they never notified FMCSA that they
  stopped operating CMVs.

    Both considered options noted above result in inclusion of a
smaller proportion of small (5 or fewer power units) carriers than
small carriers represent nationally. Therefore, neither of these
options is numerically biased against small carriers, as demonstrated
in Tables 15 and 16.

              Table 15--Crash Rates of Carriers Determined To Be Unfit--by Alternatives Considered
                                      [in crashes per 100 power units (PU)]
----------------------------------------------------------------------------------------------------------------
     Alternatives considered       5 or fewer PU    6 to 15 PU      16 to 50 PU    51 to 500 PU       501+ PU
----------------------------------------------------------------------------------------------------------------
General Population of Carriers               2.2             2.3             2.4             2.2             1.8
 with Recent Activity as of
 March 2013 (Baseline for
 comparison)....................
Option 1: Equivalent to 95th                 6.7             5.3             4.8             3.6             2.6
 percentile for Unsafe Driving
 and HOS and 98th percentile for
 Driver Fitness, Vehicle
 Maintenance, and HM (Based on
 11+ inspections with
 violations)....................

Proposed Option: Equivalent to               6.5             5.2             4.7             3.8             3.5
 96th percentile for Unsafe
 Driving and HOS and 99th
 percentile for Driver Fitness,
 Vehicle Maintenance, and HM
 (Based on 11+ inspections with
 violations)....................
----------------------------------------------------------------------------------------------------------------

    The highest crash rates identified (between 6.5 and 6.7) are all in
the small (5 or fewer power units) carrier population. This suggests
that small carriers are not unfairly selected under either of the two
proposed models.
    Table 16 presents the overall crash rates of carriers identified by
two or more failed BASICs from inspections. The nation-wide crash rate
of the general carrier population is 2.13 per 100 power units. The
general carrier population crash rate was calculated on a consistent
time frame as that of the carriers identified under the proposed
process.

                   Table 16--Number of Total Failed Carriers and the Corresponding Crash Rate
----------------------------------------------------------------------------------------------------------------
                                     Number of
                                  carriers unfit
                                   based on 2 or    Crash rate
                                    more failed    (crashes per       Active        Crashes for     Power units
     Alternatives considered          BASICs         100 power       carriers         active        for active
                                    (inspection       units)                         carriers        carriers
                                    violations
                                       only)
----------------------------------------------------------------------------------------------------------------
Option 1: Equivalent to 95th                 479            3.75             387             569          15,161
 percentile for Unsafe Driving
 and HOS/98th percentile for
 Driver Fitness, Vehicle
 Maintenance, and HM (Based on
 11+ inspections with
 violations)....................
Proposed Option: Equivalent to               262            8.28             211             300           3,625
 96th percentile for Unsafe
 Driving and HOS/99th for Driver
 Fitness, Vehicle Maintenance,
 and HM (Based on 11+
 inspections with violations)...
----------------------------------------------------------------------------------------------------------------

    Of the two options presented, the proposed option identifies the
carriers (262) that have the highest overall crash rate (8.28 crashes
per 100 power units).
    Although Option 1 has a higher net benefit than Option 2, the
Agency notes that selecting Option 1 may require additional resources
while Option 2 is largely resource neutral. The Agency can accommodate
under Option 2 the number of investigations resulting in proposed unfit
determinations based on its current resources. The number of
enforcement cases, compliance agreements, and oversight required from
this population approaches the capacity of the Agency's existing staff.
Option 2 represents the best balance for the Agency with its limited
resources. It should be noted that the cost of reallocating Agency
resources is not included in this analysis. FMCSA seeks comment on this
policy choice.
    FMCSA proactively addressed concerns about the SMS in the
development of this SFD proposal. In addition to the differences noted
above, it is important to point out that other concerns about the
system including disparities for long-haul and short-haul carriers;
differences for urban and rural motor carriers, and enforcement
differences by the States have all been considered. The long and short
haul differences are minimized by the combination (long-haul) and
straight truck (short haul) segmentation. The impacts of urban and
rural transportation are factored into the calculation of the Crash
Indicator BASIC failure rates. Lastly, while enforcement differences
exist between the States, since the failure standards proposed in this
rule are significantly higher than the SMS intervention thresholds, the
patterns of non-compliance for the carriers that are proposed unfit are
not the result of these disparities but are the result of recurring
non-compliance.
Safety Event Groups
    As noted above, the Agency is proposing different SFD failure
standards within each BASIC. The applicable failure standard for each
motor carrier would be based on its assigned safety event group. If
FMCSA did not establish different SFD failure standards for each safety
event group, a disproportionately high number of small carriers (i.e.,
carriers with few safety events) would be found to be unfit. Larger
carriers (with many safety events) would rarely fail. The Agency
believes the reason for this disparity is attributable to the
statistical phenomenon of higher fail rates among carriers with few
safety events--``the law of small numbers.'' \60\
---------------------------------------------------------------------------

    \60\ Tversky, A.; Kahneman, D. (1971). ``Belief in the law of
small numbers''. Psychological Bulletin 76 (2): 105-110. http://psycnet.apa.org/journals/bul/76/2/105/.
---------------------------------------------------------------------------

    Diagram 1 below shows an example of the absolute failure standard
that corresponds to the worst performing 4 percent of carriers for the
HOS Compliance BASIC. This data comes from Table 10 above.

[GRAPHIC] [TIFF OMITTED] TP21JA16.002

    The above diagram shows that establishing a single failure
standard, without reference to the number of safety events to which a
motor carrier is exposed, would disproportionately affect those
carriers with fewer safety events--typically smaller carriers. For
example, if the HOS Compliance BASIC SFD failure standard were set at
4.15 for all carriers, 4 percent of carriers with 11-20 inspections
would fail. However, very few carriers in the remaining safety event
groups have measures as high as 4.15. A carrier with many inspections
(21 or more relevant inspections with violations) would be essentially
immune to BASIC failure from on-road safety performance. Therefore, the
SFD failure standard needs to be proportionate to the number of safety
events.
    FMCSA uses the same percentile equivalent (e.g. 96 percentile for
HOS Compliance BASIC) to make sure all carriers are held to similar
safety standards regardless of the number of inspections and the
variance associated with number of inspections. This allows the Agency
to treat carriers of all sizes as equitably as possible. To adjust the
failure standard based on the number of inspections would imply that
carriers of a certain size are inherently more unsafe. This would open
the Agency to criticism that the rule is biased against small carriers
or large carriers (depending on how the percentiles are adjusted).
Given that this proposal is designed to get the most non-compliant
carriers off the road (regardless of size), the straightforward
approach is applying the same percentile equivalent to all safety event
groups.
    A baseball analogy may provide some insight into this impact. A
major league baseball player's number of at-bats is important to
evaluating whether his batting average warrants demotion to the minor
leagues. Likewise, a motor carrier's number of inspections is important
in evaluating whether its performance warrants adverse SFD
consequences. For example, 2 hits in 20 at-bats at the beginning of the
baseball season (i.e., a 0.100 batting average) would generally not get
a baseball player demoted to the minor leagues. However, 80 hits in 400
at-bats (i.e., a 0.200 batting average) across an entire season likely
would get a baseball player demoted, even though his batting average is
twice as high (0.200 vs. 0.100).\61\
---------------------------------------------------------------------------

    \61\ The average batting average for all of Major League
Baseball in 2014 was 0.251. See http://espn.go.com/mlb/stats/team/_/stat/batting/year/2014/seasontype/2, accessed on April 6, 2015.
---------------------------------------------------------------------------

    Similarly, motor carriers with few inspections exhibit a wider
range of performance measures than carriers with many more inspections.
A batter might bat 5 for 10 (0.500 average) in the first week of the
season (corresponding to a high absolute measure), but no batter
sustains that level through 400 at bats. Similarly, a carrier could
have an HOS Compliance BASIC violation in each of 5 inspections, but it
would be almost impossible that a carrier would have 500 HOS Compliance
BASIC violations in 500 inspections. The greater the number of events,
be they at-bats or inspections, the narrower the range of realistic
outcomes. Failure standards that incorporate the number of safety
events thus ensure that the worst performing motor carriers across all
sizes and numbers of safety events are subject to an absolute standard.
    When appropriate, the motor carrier's BASICs measures are
normalized to reflect differences in inspection and

other safety oversight exposure among motor carriers. The HOS
Compliance and Driver Fitness measures are normalized by adding the
number of time-weighted driver inspections, while Vehicle Maintenance
BASIC measures are normalized by adding the number of time-weighted
vehicle inspections. The HM Compliance BASIC is normalized by adding
the number of time-weighted vehicle inspections where placardable
quantities of HM were present. The inspections used to normalize a
BASIC measure are considered relevant inspections.
    Motor carrier exposure for the Unsafe Driving BASIC is normalized
by carrier size using power units and vehicle miles traveled (VMT).
Carriers with above-average CMV utilization, in terms of VMT per power
unit as reported from MCMIS, receive a positive adjustment to account
for the increased exposure to violations that result from miles
operated by incorporating an Unsafe Driving Utilization Factor. The
Unsafe Driving BASIC accounts for further carrier differences by
dividing the carrier population into two segments based on the current
mix of vehicles operated. This differentiates the levels of exposure
associated with carriers that have fundamentally different types of
operations.
    The Unsafe Driving Utilization Factor is a multiplier that adjusts
the average power unit values based on utilization in terms of VMT per
average power unit where VMT data from the past 24 months are
available. In cases where the VMT data have been obtained multiple
times over the past 24 months for the same carrier, FMCSA proposes to
use the most current VMT figure reported by the motor carrier during an
investigation, reported online biennially, or reported on Forms MCSA-1
or MCS-150. The Utilization Factor would be calculated as follows:
    (1) Determine carrier segment based on the types of vehicles the
carrier operates (The types of vehicles are ``combination'' \62\ or
``straight truck.'' These different types of power units are defined on
the Application for USDOT Registration/Operating Authority (Form MCSA-
1) \63\ instructions);
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    \62\ The combination segment includes those carriers that
operate either truck tractors or motor coaches. The instructions for
``Application for USDOT Registration/Operating Authority'' (Form
MCSA-1) define a ``motor coach'' as ``a vehicle designed for long
distance transportation of passengers, usually equipped with storage
racks above the seats and a baggage hold beneath the passenger
compartment.'' See http://www.regulations.gov/#!documentDetail;D=FMCSA-1997-2349-0195. Carriers are placed in the
combination category if 70 percent or more of the carrier's total
power units meet that definition. The straight truck segment
includes all other carriers, including those that operate straight
trucks, HM cargo tank trucks, or school buses/mini-buses/limousines/
vans with a capacity of 9 or more passengers.
    \63\ The Motor Carrier Identification Report (Form MCS-150) will
be replaced by the Application for USDOT Registration/Operating
Authority (Form MCSA-1) for most motor carriers on September 30,
2016, as required by the Unified Registration System final rule
published on August 23, 2013 (78 FR 52608) and the extension of
effective dates final rule published on October 21, 2015 (80 FR
63695). The form MCS-150 will continue to be used by Mexico-
domiciled motor carriers requesting authority 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. The Agency is considering eliminating the MCS-
150 altogether and would do so by separate rulemaking.
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    (2) Calculate the VMT per average power unit by taking the most
recent positive VMT data \64\ and dividing it by the average power
units;
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    \64\ Reported by the motor carrier during an investigation,
reported online biennially, or reported on Forms MCSA-1 or MCS-150.
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    (3) Use the information in (1) and (2) to find the utilization
factor in Tables 2-3 and 2-4 to appendix B to part 385: VMT per Power
Unit.
    Use of failure standards that consider the number of safety events
has precedent. The province of Ontario, Canada uses a similar approach
in its Commercial Vehicle Operators Registration (CVOR) motor carrier
safety rating system. A technical document that illustrates Ontario's
safety rating failure standards based on a motor carrier's number of
inspections is included in the docket for this document.\65\ The
Ontario Ministry of Transportation ``analysed the on-road safety
performance of a large sample of carriers operating in Ontario during
the two-year period from July 1, 2003 until June 30, 2005. Collision
rates and safety related conviction rates for each carrier were plotted
and compared for carriers with varying rates of travel, resulting in a
standard that identifies acceptable levels of performance. A similar
standard was developed for vehicle inspection performance based on
frequency of inspection. Performance standards were determined based on
monthly kilometric travel. . . . An overall performance level or
threshold was established for each carrier by weighting the collision,
conviction and inspection performances in the ratios of 2:2:1. In other
words, collisions and convictions are given double the weight of
inspections in determining an operator's overall violation rate
(performance level)'' page 25.
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    \65\ Ontario's CVOR and Carrier Safety Rating Public Guideline,
Ministry of Transportation, St. Catharines, Ontario, November 2011.
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    FMCSA proposes that the failure standard for each safety event
group be the absolute performance measure corresponding to a given
BASIC percentile at the time the standard is set. For example, the
absolute failure standards that correspond to the 96th percentile in
the HOS Compliance BASIC are presented above in Table 10. FMCSA
specifically seeks comments on the use of absolute failure standards
based on a motor carrier's number of inspections. In addition, the
Agency requests information on the impact to commenters if the Agency
were to move to a different safety event grouping approach--similar to
Ontario's CVOR process. Under such a different approach, there would be
more safety event groups in each BASIC and more corresponding BASIC
failure standards. The carrier groupings would be narrower and more
closely aligned to the motor carrier's exact number of inspections. For
example, rather than grouping all motor carriers with 11-20 inspections
for the Vehicle BASIC, as is proposed in this NPRM, a different
approach might establish safety event groups and corresponding BASIC
failure standards for all motor carriers with, for example, 11-13
inspections, 14-16 inspections, and 17-20 inspections.
    FMCSA seeks comment on setting the standard at the same percentile
for each safety event group. Would it be appropriate to allow the
threshold to vary across safety event groups? If so, please provide
data to support your position.
2. Unfit Method 2: Carrier With Violations of the Revised Critical and
Acute Regulations Identified Through an Investigation
    Unfit Method 2 would use data only from investigations. For
example, investigations may begin after receipt of a complaint alleging
a substantial violation of a regulation is occurring or has occurred, a
crash report suggesting a substantial violation of a regulation
occurred, or when a motor carrier's SMS BASIC percentiles meet or
exceed intervention thresholds. The Agency proposes to use any of the
investigation types used by the Agency during interventions--either an
offsite focused, onsite focused, or an onsite comprehensive
investigation to issue proposed SFDs. This approach would modify the
Agency's current requirement for an onsite investigation in order to
issue an SFD. Documentation supporting an unfit determination would be
collected using existing enforcement guidelines and standards--
including sampling methodologies.

    If a motor carrier is cited for a violation of an acute regulation
associated with a BASIC, it would fail that BASIC. If a motor carrier
is cited for a violation of a critical regulation with violations
discovered in a minimum of 10 percent violation of the records
examined, it would fail that BASIC. If a motor carrier failed two or
more BASICs due to violations of the proposed critical and/or acute
regulations, this would result in a proposed unfit determination. This
proposed SFD methodology raises the safety standard above that used in
the current process. Only one violation of a critical regulation, at a
10 percent or higher violation rate, would be required to fail a BASIC,
whereas, in the current process, two violations of critical regulations
are generally required to fail a Factor.
    The costs and benefits associated with this proposal only use
investigation results from a one month period prior to a proposed SFD.
FMCSA specifically seeks comments on the length of time that failed
BASICs from investigations should be reviewed together with failed
BASICS from on-road safety data to potentially result in a proposed
SFD.
    As a result of its analysis and alternatives development, FMCSA
proposes to alter the list of critical and acute regulations. Analysis
by FMCSA \66\ compared the crash rates of motor carriers with
violations of the existing list of critical and acute regulations to
the crash rates of motor carriers with violations of the proposed list
of critical and acute regulations. The revised, refined list of
critical and acute regulations correlated to a higher crash rate. For
the purpose of proposing unfit SFDs, the refined list of critical and
acute regulations is an equally strong, if not a better, indicator of
crash risk. A copy of the analysis is included in the docket for this
rulemaking.
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    \66\ ``Estimating the Safety Impact of Proposed Safety Fitness
Determination (SFD) Criteria,'' FMCSA, May 2015.
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    Table 17 shows the revised acute and critical violations and the
BASIC with which they would align. The current critical and acute
regulations may be found at 49 CFR part 385, appendix B, section VII.
In contrast to on-road inspection violations, violations cited during
an investigation are not time or severity weighted, see section 2.3.7,
2.3.8, and 2.3.9 in proposed appendix B to part 385 below.

                                Table 17--Revised Critical and Acute Regulations
----------------------------------------------------------------------------------------------------------------
                                                                                Behavior analysis
                                                                                and safety
         Acute or critical                49 CFR section         Description of violation   improvement category
                                                                                (BASIC)
----------------------------------------------------------------------------------------------------------------
Critical..........................  173.24(b)(1)                Accepting for               HM Compliance.
                                                                 transportation or
                                                                 transporting a package
                                                                 that has an identifiable
                                                                 release of a HM to the
                                                                 environment.
Critical..........................  173.24b(d)(2)               Loading bulk packaging      HM Compliance.
                                                                 (cargo tank) with an HM
                                                                 which exceeds the maximum
                                                                 weight of lading marked
                                                                 on the specification
                                                                 plate.
Critical..........................  173.33(a)(1)                Offering or accepting a HM  HM Compliance.
                                                                 for transportation in an
                                                                 unauthorized cargo tank.
Critical..........................  173.33(a)(2)                Loading or accepting for    HM Compliance.
                                                                 transportation two or
                                                                 more materials in a cargo
                                                                 tank motor vehicle which
                                                                 if mixed results in an
                                                                 unsafe condition.
Critical..........................  173.33(b)(1)                Loading HM in a cargo tank  HM Compliance.
                                                                 motor would have a
                                                                 dangerous reaction when
                                                                 in contact with the tank.
Critical..........................  177.800(c)                  Failing to instruct a       Driver Fitness.
                                                                 category of employees in
                                                                 HM regulations.
Acute.............................  177.801                     Accepting for               HM Compliance.
                                                                 transportation or
                                                                 transporting a forbidden
                                                                 material.
Critical..........................  177.817(a)                  Transporting a shipment of  HM Compliance.
                                                                 HM not accompanied by a
                                                                 properly prepared
                                                                 shipping paper.
Critical..........................  177.834(i)                  Loading or unloading a      HM Compliance.
                                                                 cargo tank without a
                                                                 qualified person in
                                                                 attendance.
Critical..........................  177.848(d)                  Failing to store, load, or  HM Compliance.
                                                                 transport HM in
                                                                 accordance with the
                                                                 segregation table.
Critical..........................  180.407(a)                  Transporting a shipment of  HM Compliance.
                                                                 HM in cargo tank that has
                                                                 not been inspected or
                                                                 retested in accordance
                                                                 with Sec.   180.407.
Acute.............................  382.115(a)                  Failing to implement an     Controlled
                                                                 alcohol and/or controlled   Substances.
                                                                 substances testing
                                                                 program (domestic motor
                                                                 carrier).
Acute.............................  382.115(b)                  Failing to implement an     Controlled
                                                                 alcohol and/or controlled   Substances.
                                                                 substances testing
                                                                 program (foreign motor
                                                                 carrier).
Acute.............................  382.201                     Using a driver known to     Controlled
                                                                 have an alcohol             Substances.
                                                                 concentration of 0.04 or
                                                                 greater.
Acute.............................  382.211                     Using a driver who has      Controlled