because CDLIS already provides daily updates of licensing information
to the SDLAs. FMCSA intends that Clearinghouse information would be an
additional data element included in the daily transmission. According
to AAMVA's October 1, 2018 Product & Services Catalog-Government Rate
Schedule, AAMVA allocates the cost of Program Services and Technology
Services based on the ratio of State population to national population
using Census Bureau data.\46\ Thus, the Agency finds that SDLAs would
not incur transaction-specific CDLIS costs. FMCSA requests comment on
whether either ``pull'' or ``push'' notifications would result in
additional costs to the SDLAs.
---------------------------------------------------------------------------

    \45\ SDLAs' CDLIS-related labor costs for licensing transactions
were accounted for in the Agency's Final Regulatory Evaluation
published with the final rule ``Commercial, Driver's License Testing
and Commercial Learner's Permit Standards,'' 76 FR 26853, (May 11,
2011). The current information collection request (ICR) for that
rule estimates, SDLAs on average, perform 6.5 million licensing
transactions per year that include renewals, transfers,
endorsements, disqualifications and establishing new driver records.
The Agency estimates that the proposed rule would result in 77,600
transactions per year, many of which would be among the of the 6.5
million transactions estimated in the current ICR. For example, some
renewal transactions in the 6.5 million would be denied, resulting
in a non-issuance. The current ICR was approved by OMB on December
31, 2018. The ICR is available at https://mobile.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201810-2126-001 (accessed June 21, 2019).
    \46\ AAMVA, Product & Services Catalog-Government Rate Schedule,
October, 1 2018. The catalogue is available at https://www.aamva.org/NetworkServices_government/ (accessed June 21, 2019).
---------------------------------------------------------------------------

    By using the existing CDLIS platform, Method #1 would result in
costs to SDLAs for initial system development and to make the needed
upgrades and modifications, as well as ongoing O&M expenses. The Agency
reviewed four SDLA grant applications submitted in 2017 for IT system
upgrades needed to interface and receive information from the National
Registry of Certified Medical Examiners (NRCME) database and used the
grant application requests as a proxy for the IT development costs
SDLAs would incur under Method #1. The four States requested grant
funds ranging from $64,000 to $549,993 for the system upgrades, with an
average value of just over $200,000 in 2017 dollars ($196,000 in 2016
dollars). IT development costs vary because of individual differences
in the SDLAs' IT systems. The FMCSA accounted for this variation by
estimating the average of the four grants the upfront/initial system
development costs. Multiplying this cost by the number of SDLAs (51)
resulted in a total of $10 million ($196,000 x 51, rounded to the
nearest million) in SDLA initial/upfront development costs. This one-
time cost would occur in the first year of the 10-year analysis period.
    The Agency assumed that SDLAs' annual O&M expenses would be equal
to 20 percent of the upfront costs, or $39,200 ($196,000 x 20%).
Multiplying the O&M expense rate by the number of SDLAs resulted in
$2.0 million of annual O&M expenses ($39,200 x 51 SDLAs, rounded to the
nearest million). The Agency assumed that SDLAs would incur O&M
expenses in the second year of the 10-year analysis period. O&M
expenses over the 10-year analysis period are estimated at $18.0
million ($2.0 million x 9 years).\47\
---------------------------------------------------------------------------

    \47\ If IT development costs would vary plus or minus 10 percent
above the average, undiscounted initial IT development costs would
change plus or minus $996,600. Total O&M expenses over the 10-year
analysis period would change plus or minus $1.8 million.
---------------------------------------------------------------------------

    The sum of Method #1 undiscounted IT development costs and O&M
expenses over the 10-year analysis period is estimated at $28.0 million
($10.0 million IT development costs + $18.0 million O&M expenses). At a
7 percent discount rate, the 10-year total cost is estimated at $21.5
million. The annualized cost is estimated at $3.1 million.
    Under Method #1, the Agency would not incur system development cost
or O&M expenses. This annual cost was accounted for in the RIA
published with the Clearinghouse final rule. The Agency estimated its
annual cost to develop, operate and maintain the Clearinghouse at $2.2
million.

Electronic Transmission Method #2: Information Transfer via a Web-Based
Services Call (AKA: Application Program Interface (API))
    Method #2 involves the transmission of information from the
Clearinghouse to the SDLAs using a web-based services call, which
relies on cloud-based technology. The capacity for this alternative
would reside within the DOT's Amazon Web Service (AWS) cloud. By using
the DOT AWS cloud, FMCSA would be able to make efficient updates to the
system on an as-needed basis.
    In order to implement Method #2 FMCSA would develop an interface
between the Clearinghouse and the SDLAs. FMCSA envisions that the API
would connect seamlessly to the existing State interface so that when a
State employee initiates the CDLIS driver record check, the State
system would simultaneously query the Clearinghouse. FMCSA would
provide the API code and work with the States to integrate the API into
their existing technology platforms. In developing this interface,
FMCSA would leverage the current FMCSA web-based services calls, such
as Query Central, to reduce development costs wherever possible. In
addition to the initial development cost, FMCSA would incur costs for
annual O&M expenses.
    Under Method #2, SDLAs would incur costs for initial modification
of their systems to interface with the Clearinghouse, and annual O&M
expenses. FMCSA expects that SDLAs' costs to implement the interface
specifications would vary based on the characteristics of their
individual IT systems. The Agency's IT staff estimated a representative
initial/upfront cost taking into account that some States currently use
a mainframe application and others use an existing web interface. The
initial development costs for each method to interface with the
Clearinghouse were estimated based on the man hours it would take a
programmer to develop an application for use in a mainframe environment
and in a non-mainframe environment. Developing a web interface in a
mainframe environment is estimated to take 1,080 hours. Developing a
web interface in a non-mainframe environment is estimated to take 360
hours. These hours were monetized in 2016 dollars using the United
States Department of Labor, Bureau of Labor Statistics (BLS) $38.39 per
hour median wage for a computer programmer.\48\ The hourly wage is
adjusted for a 70 percent fringe benefit rate obtained the from the BLS
June 2016 ``Employer Cost of Employee Compensation News Release.'' \49\
The resultant labor cost is $65.42 per hour. At that hourly rate, the
cost for a programmer to develop an interface in a non-mainframe
environment is estimated at $23,551 (360 hours x $65.42 per hours,
rounded to the nearest dollar) and $70,654 (1,080 hours x $65.42 per
hour, rounded to the nearest dollar) in a mainframe environment. The
average of these two cost estimates results in an initial IT
development of $47,100 per SDLA (rounded to the nearest hundred).
Multiplying this cost by the number of SDLAs results in $2.4 million
($47,100 x 51) of initial IT development costs in the first year of the
10-year analysis period.
---------------------------------------------------------------------------

    \48\ This hourly wage is for the BLS-SOC 15-1131 computer
programmer. See https://www.bls.gov/oes/2016/may/oes151131.htm
(accessed June 21, 2019)
    \49\ BLS, ``Employer Cost of Employee Compensation 2nd Quarter
News Release,'' Table 4-State and Local Employees, available at
https://www.bls.gov/news.release/archives/ecec_09082016.pdf
(accessed June 21, 2019). The fringe benefit rate is the ratio of
hourly wage for average hourly wage for State and local government
administrative personnel and the associated hourly benefit rate (70
percent = $13.13/$18.65).
---------------------------------------------------------------------------

    The Agency estimates an SDLA's annual O&M expenses equal to 20
percent of the initial IT development cost, or $9,420 ($47,100 x 20%).
The total annual O&M expense for the 51 SDLAs is estimated at $480,420
($9,420 x 51). SDLAs would begin incurring O&M expenses in the second
year of the 10-year analysis period. Total O&M expenses over the 10-
year analysis period are estimated at $4.3 million ($480,420 x 9).
Under Method #2, the undiscounted cost SDLAs would incur over the 10-
year analysis period is estimated at $6.7 million consisting of $2.4 in
initial IT development costs, $4.3 million of O&M expenses. The
undiscounted annualized cost is estimated at $0.6 million. It consists
of $0.2 million of IT development costs and $0.4 million of O&M
expenses. At a 7 percent discount rate, the total cost SDLAs would
incur over the 10-year analysis period is estimated at $5.1 million
that consists of $2.2 million of IT development costs and $2.9 million
of O&M expenses. The annualized cost is estimated at $0.7 million,
which consists of $0.3 million in IT development costs and $0.4 million
of O&M expenses.
    The Agency estimates that under Method #2, FMCSA would incur
initial IT development costs of nearly $1.0 million in 2016 dollars in
the first year of the 10-year analysis period. Annual O&M expenses are
estimated at $192,000 ($0.96 million x 20%, rounded to the nearest
million) beginning in the second year of the 10-year analysis period.
Over remaining nine years of the analysis period, the Agency would
incur $1.7 million of O&M expenses ($192,000 x 9 years, rounded to the
nearest hundred). The sum of initial IT development costs and annual
O&M expenses results in FMCSA incurring total undiscounted costs of
$2.7 million over the 10-year analysis period ($1.0 million + $1.7
million). At a 7 percent discount rate, the Agency is estimated to
incur $2.1 million IT development and O&M expenses over the 10-year
analysis period. The annualized cost at a 7 percent discount rate is
estimated at $0.3 million.
    Table 2 compares total and annualized costs, undiscounted and at a
7 percent discount rate, that SDLAs and FMCSA would incur to transmit
Clearinghouse information using Method #1 and Method #2. The total cost
estimate for Method #1 would be the same under Alternative #1 and
Alternative #2. Likewise, the total cost estimated for Method #2 would
be the same under Alternative #1 and Alternative #2. FMCSA does not
incur any IT development or annual operating and maintenance expenses
under Method #1 because they have been accounted for in the
Clearinghouse final rule RIA. However, the SDLAs' IT development and
annual O&M expenses are greater under Method #1. Thus, the undiscounted
10-year overall cost of Method #2 is $21.3 million less than Method #1
($28.0 million-$9.4 million).
    The Agency requests comments on the feasibility and the estimated
cost of allowing the SDLAs the flexibility to receive Clearinghouse
information by choosing either method of electronic transmission.

                        Table 2--Comparison of Cost to Transmit Clearinghouse Information
----------------------------------------------------------------------------------------------------------------
                                          Undiscounted (2016 $ million)         Discounted at 7% ($ million)
                                     ---------------------------------------------------------------------------
                                        10-year total                         10-year total
                                             cost            Annualized            cost            Annualized
----------------------------------------------------------------------------------------------------------------
                               Electronic Transmission Method #1 (CDLIS Platform)
----------------------------------------------------------------------------------------------------------------
SDLA Initial IT Development Costs...              $10.0               $1.0               $9.3               $1.3
SDLA System Operating and                          18.0                1.8               12.2                1.7
 Maintenance Expense................
                                     ---------------------------------------------------------------------------
    Method #1 Total.................               28.0                2.8               21.5                3.1
----------------------------------------------------------------------------------------------------------------
                              Electronic Transmission Method #2 (Web Service Call)
----------------------------------------------------------------------------------------------------------------
Initial IT Development Costs:
    Government......................                1.0                0.1                0.9                0.1
    SDLAs...........................                2.4                0.2                2.2                0.3
System Operating and Maintenance
 Expense:
    Government......................                1.7                0.2                1.2                0.2
    SDLAs...........................                4.3                0.4                2.9                0.4
        Method #2 Total Cost........                9.4                0.9                7.2                1.0
----------------------------------------------------------------------------------------------------------------
Totals are subject to rounding error.

Driver Opportunity Cost and CLP/CDL Reinstatement Cost
    Under Alternative #1 (mandatory downgrade), a driver could incur an
opportunity cost equal to the income forgone between the time he or she
is eligible to resume operating a CMV (i.e., when an employer reports a
negative RTD result to the Clearinghouse) and when the SDLA reinstates
the driver's privilege to operate a CMV. Drivers may also incur
reinstatement costs attributed to SDLA requirements for removing the
downgrade. These reinstatement procedures could include payment of a
reinstatement fee, and partial or full retesting.\50\ The Agency finds
mandatory downgrade required by Alternative #1 would cause drivers to
incur modest opportunity costs and reinstatement costs. As discussed
above in section II.C, ``Costs and Benefits'', the States have
established a broad spectrum of procedures for reinstatement of the
CLP/CDL privilege to the driver's license following a downgrade due to
invalid medical certification. Thus, the Agency expects that the States
will rely on existing procedures established for downgrading a CLP/CDL
for invalid medical certification, as required by 383.73(o)(4). Any
time drivers would spend to comply with State procedures for
reinstatement would be a cost of the proposed rule under Alternative
#1.
---------------------------------------------------------------------------

    \50\ A requirement to retake the knowledge and skills test would
cause the driver to forego income during the 14-day waiting period
required before taking the skills test.
---------------------------------------------------------------------------

    Under Alternative #2, the States would determine whether to receive
the Clearinghouse information to enforce the driving prohibition under
State law. Thus, any opportunity costs and reinstatement costs a driver
would incur to comply with State procedures under Alternative #2 would
be the result of State law or policy, not the proposed rule.
    The estimate of opportunity costs drivers might incur under
Alternative #1 would be a function of the number of drivers that SAPs
refer to outpatient education programs versus intensive outpatient
treatment (IOT) programs. In the RIA published with the Clearinghouse
final rule, the Agency assumed an education program would be completed
in 16 hours and an IOT program would be completed in 108 hours over 12
weeks. Alternative #1 would require SDLAs to record a downgrade on the
driver's CDLIS record within 30 days. If the driver completes the RTD
process before the SDLA records a downgrade in CDLIS, the SDLA would be
required to terminate the downgrade, consistent with State law. A
driver referred to a 16-hour education program by a SAP would likely
complete the RTD process before the SDLA records the downgrade in
CDLIS. In this case, a driver would be qualified to operate a CMV
without having to comply with State-established procedures to reinstate
the CMV driving privilege. Under these circumstances, drivers would not
incur opportunity costs or reinstatement costs.
    In the RIA published with the Clearinghouse final rule, the Agency
assumed that 75 percent of drivers that violated the drug or alcohol
program would be referred to a 16-hour education program. The remaining
drivers would be referred to a 108-hour IOT program. In July 2018, the
Substance Abuse and Mental Health Service Administration (SAMHSA),
published a report titled National Survey of Substance Abuse Treatment
Services (N-SSATS): 2017. Data on Substance Abuse Treatment Facilities.
SAMHSA reported that 82 percent of individuals in outpatient programs
participated in education programs. The remaining 18 percent
participated in IOT programs.\51\
---------------------------------------------------------------------------

    \51\ The report is available at https://www.samhsa.gov/data/report/national-survey-substance-abuse-treatment-services-n-ssats-2017-data-substance-abuse, Table 5-1a (accessed June 16, 2019).
---------------------------------------------------------------------------

    The Clearinghouse final rule RIA estimated that 53,500 drivers
would test positive and be required to complete the RTD process. Of
these, 24,100 drivers would complete the RTD process.\52\ Based on
SAMHSA's most recent survey, the Agency estimates that 82 percent, or
19,762 of the 24,100 drivers who would complete the RTD process before
a downgrade would be recorded by SDLAs. These drivers would not incur
opportunity or reinstatement costs. The remaining 4,338 drivers (24,100
drivers x 18 percent) presumably would be referred to an IOT program.
Based on the proposed requirement that SDLAs record a downgrade within
30 days of receiving notice of the driver's prohibited status, the
Agency assumes that a driver's license would be downgraded before he or
she completes an IOT program and related RTD requirements. Therefore,

these drivers would have to comply with any reinstatement procedures
established by the State that could cause a driver to incur opportunity
costs and reinstatement costs.
---------------------------------------------------------------------------

    \52\ Federal Motor Carrier Administration, ``Final Rulemaking
Regulatory Impact Analysis,'' November 2016, p. 32, available at
https://www.regulations.gov/document?D=FMCSA-2011-0031-0183
(accessed August 6, 2019).
---------------------------------------------------------------------------

    As noted above, FMCSA reviewed current procedures used by the
States for drivers whose CLP or CDL has been downgraded for failure to
maintain their medical certification. The Agency is aware that about
half of the States require knowledge and/or skills retesting before
removing a downgrade. However, in these States retesting would be
required only if a driver is not able to present a new medical
certificate before the expiration of a prescribed grace period. None of
these States have a retesting grace period less than six months.
    In the RIA published with the Clearinghouse final rule the Agency
conservatively assumed that it would take a driver 12 weeks to complete
a 108-hour program based on one 9-hour session per week. Thus, the
Agency finds that drivers referred to IOT programs would complete the
IOT program and the RTD process without having to retest to have the
CLP or CDL privilege restored to their license.
    To reinstate CMV driving privileges, SDLAs may require a driver to
pay a reinstatement fee that would be a transfer payment. Additionally,
a driver could be required to appear in person at the SDLA to complete
the reinstatement process that could require the driver to incur
opportunity costs for the time to travel to and from the SDLA. Some
SDLAs allow the transaction to be completed by email or over the
internet. For purposes of this analysis, the Agency conservatively
assumes that drivers would need to complete the transaction in person.
The Agency assumes that it would take one day for a driver to travel to
an SDLA and complete the reinstatement process. Thus, drivers would
incur opportunity cost for time spent traveling and out of pocket
travel costs.
    The estimated of driver opportunity costs and reinstatement costs
are based on the following assumptions:
    1. One day to travel to and from the SDLA and complete the
reinstatement process.
    2. 10 hours of lost wages.
    3. 4,338 drivers subject to mandatory downgrades.
    4. The $31.00 per hour wage to estimate income foregone.
    5. $0.557 per-mile cost for use of private vehicle.\53\
---------------------------------------------------------------------------

    \53\ The mileage rate is the General Services Administration
current reimbursement rate for use of private vehicles expressed in
2016 dollars using the Bureau of Economic Analysis 2018 GDP price
deflator. The mileage rate for private vehicle use is available at
https://www.gsa.gov/travel/plan-book/transportation-airfare-rates-pov-rates/privately-owned-vehicle-pov-mileage-reimbursement-rates
(accessed August 9, 2019).
---------------------------------------------------------------------------

    Based on these assumptions, the upper bound of annual opportunity
costs for one day spent traveling and completing the reinstatement
process is estimated at $1.3 million in 2016 dollars (10 hours x 4,338
drivers x $31.0 per hour) and $13.4 million over 10 years. Annual
travel costs are estimated at $120,800 in 2016 dollars (4,338 drivers x
50 miles x $0.557 per mile, rounded to the nearest hundred) and $1.2
million over 10 years. Thus, the total annual cost to drivers to have
their CMV privilege restored is $14.7 million over 10 years. At a 7
percent discount rate, the 10-year cost is estimated at $10.3 million
and the annualized cost is estimated at $1.5 million.
Motor Carrier Opportunity Costs
    Motor carrier opportunity costs are estimated for Alternative #1,
because drivers subject to reinstatement would not be eligible to
resume safety-sensitive functions, such as driving, until the SDLA
restores the CLP or CDL privilege to the driver's license. This
represents a change from current requirements in parts 382 and 40,
which permit resumption of safety-sensitive functions immediately
following a negative RTD test result. Thus, motor carriers may also
incur opportunity costs under Alternative #1 based on the profits
forgone from the loss of productive driving hours between the time the
driver completes the RTD process and State reinstatement. The Agency
estimates that a motor carrier will lose 10 hours of productive driving
time while a driver completes the reinstatement process. FMCSA bases
this estimate on current processes the States employ to reinstate a CLP
or CDL privilege following a downgrade of the driver's license due to
invalid medical certification. The Agency requests that States comment
on the time needed to reinstate a CLP or CDL privilege to a downgraded
license, including the extent to which a driver can be reinstated
without appearing in person at the SDLA.
    The Agency uses a typical motor carrier's marginal hourly cost to
operate a CMV as a measure of profit margin. The Agency estimates that
motor carriers would lose 43,380 hours of productive driving time
(4,338 drivers x 10 hours) while a driver completes the reinstatement
process.
    The FMCSA used an estimate of the marginal cost to operate a
vehicle reported in ``An Analysis of the Operational Costs of Trucking:
2017 Update,'' published by the American Transportation Research
Institute.\54\ The Agency used this as the base from which it estimated
an hourly profit margin. The elements of marginal operating costs
consist of vehicle-based costs (e.g., fuel costs, insurance premiums,
etc.), and driver based-costs (i.e., wages and benefits). The ATRI
survey found that marginal operating costs were $63.60 per hour in
2016, rounded to $64 per hour in this analysis.
---------------------------------------------------------------------------

    \54\ The ATRI report presents industry operating data for the
10-year period ending in 2016. The report is available at https://atri-online.org/wp-content/uploads/2017/10/ATRI-Operational-Costs-of-Trucking-2017-10-2017.pdf (accessed August 10, 2019).
---------------------------------------------------------------------------

    Profit is a function of revenue and operating expenses. The ATA
defines the operating ratio of a motor carrier as a measure of
profitability based on operating expenses as a percentage of gross
revenues. Armstrong & Associates, Inc. (2009) states that trucking
companies that cannot maintain a minimum operating ratio of 95%
(calculated as Operating Costs / Net Revenue) will not have sufficient
profitability to continue operations in the long run. Forbes reported
the average profit margin for general freight trucking companies at 6
percent in 2017, with annual profit margins ranging from 2.5 percent to
4 percent since 2012. Based on this range, the Agency assumed a 5
percent profit margin.\55\
---------------------------------------------------------------------------

    \55\ Mary Ellen Biery and Sagework Stats, Forbes, ``Trucking
Companies Hauling in Higher Sales,'' available at https://www.forbes.com/sites/sageworks/2018/03/04/trucking-companies-hauling-in-higher-sales/ (accessed June 25, 2019).
---------------------------------------------------------------------------

    Applying the assumed 5 percent motor carrier profit margin to the
$64 per-hour marginal operating cost noted above yields an hourly
operating profit of $3.20 per-hour. Based on the loss of 43,380 hours
of product driving hours, the Agency estimates motor carrier
undiscounted opportunity costs at $1.4 million over the 10-year
analysis period ($3.20 per hour x 43,380 hours x 10 years, rounded to
the nearest one hundred thousand). The annualized cost is estimated at
$138,816. At a 7 percent discount rate, motor carrier opportunity costs
are estimated at $1 million (rounded to the nearest million) over 10
years. The annualized cost is estimated at $1 million (rounded to the
nearest million). The Agency did not estimate motor carrier opportunity
costs for

Alternative #2, because any downgrade/reinstatement procedures States
might choose to establish would not be required by the proposed rule.
Summary of the Estimated Cost of the Proposed Rule
    Table 3 compares the total and annualized costs estimated for the
four pairings of Alternatives #1 (non-issuance/mandatory downgrade) and
Alternative #2 (optional notice of prohibited status) with electronic
transmission Method #1 (CDLIS) and Method #2 (web services/API).\56\
---------------------------------------------------------------------------

    \56\ The Agency notes that the CDL Program Implementation
(CDLPI) grant program provides financial assistance to States to
achieve compliance with 49 CFR parts 383 and 384. States would
therefore be eligible to apply for CDLPI funds to help offset the
cost of SDLA IT system upgrades necessary to comply with the CLP/CDL
downgrade requirement, as proposed.

                                                        Table 3--Estimated Cost of Proposed Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                2016 $ million                                  Costs discounted at 7%
                                                 -------------------------------------------------------------------------------------------------------
                     Option                                                    Motor
                                                     State        Driver      carrier       FMCSA        Total      Annualized     Total      Annualized
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alternative #1 with Method #1...................        $28.0        $14.7         $1.4           $0        $44.0         $4.4        $32.8         $4.7
Alternative #1 with Method #2...................          6.7         14.7          1.4          2.7         25.5          2.5         18.5          2.6
Alternative #2 with Method #1...................         28.0            0            0            0         28.0          2.8         21.5          3.1
Alternative #2 with Method #2...................          6.7            0            0          2.7          9.4          0.9          7.2          1.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The total cost estimates over the 10-year analysis period range
from $9.4 million to $44.0 million in 2016 dollars. Annualized costs
range from $0.9 million to $4.4 million. At a 7 percent discount rate,
the 10-year total cost estimates from $7.2 million to $32.8 million.
Annualized costs at a 7 percent discount rate range from $1.0 million
to $4.7 million. Alternative #1 cost estimates are larger than
Alternative #2 because neither drivers nor motor carriers would incur
opportunity costs and reinstatement costs because of the rule. SDLA IT
costs are also larger under Alternative #1. Alternative #2 does not
require the States to implement downgrade/reinstatement procedures.
States are not precluded from acting on the optional notice of a
driver's prohibited status. However, any costs incurred by drivers and
motor carriers because of a State-initiated action would not be a cost
of the proposed rule. The States will still incur IT development and
O&M expenses under Alternative #2 because they are required to query
the Clearinghouse when performing a licensing transaction.
Benefits
    The Clearinghouse final rule required States to request information
from the Clearinghouse when processing specified licensing
transactions. This NPRM builds on that requirement by proposing that
SDLAs could not issue, renew, upgrade, or transfer the CDL, or issue,
renew or upgrade the CLP, of any driver prohibited from operating a CMV
due to drug and alcohol program violations. The Agency's preferred
alternative proposes that, in addition, SDLAs downgrade the driver
licenses of individuals prohibited from operating a CMV due to drug and
alcohol program violations. SDLAs would rely on applicable State law
and procedures \57\ to accomplish the downgrade and any subsequent
reinstatement of the CLP or CDL privilege. FMCSA believes these
proposed requirements would improve highway safety by increasing the
detection of CLP or CDL holders not qualified to operate a CMV due to a
drug or alcohol testing violation. The safety benefits attributable to
the increased distribution of information about the driver's prohibited
status must be viewed in the context of the current regulatory scheme,
as explained below.
---------------------------------------------------------------------------

    \57\ Under 383.73(o)(4), States are currently required to
downgrade the license of CLP and CDL holders not in compliance with
medical certification requirements, by changing the commercial
status on the driver's license from ``licensed'' to ``eligible'',
thereby removing the CLP or CDL privilege from the license.
Accordingly, States have established procedures to implement those
downgrade requirements.
---------------------------------------------------------------------------

    The current CMV driving prohibition is largely self-enforcing in
that it relies on motor carrier employers to prevent non-compliant
drivers from operating. The Agency is aware, through motor carrier
compliance reviews, targeted investigations, and other forms of
retrospective compliance monitoring, that non-compliance with the
driving prohibition occurs. Non-compliant drivers evade detection
because, although subject to the driving prohibition, these drivers
continue to hold a valid CLP or CDL in 47 States and the District of
Columbia. Consequently, during a traffic stop or roadside checkpoint
inspection, traffic safety enforcement officers have no way of knowing
the driver is not qualified to operate a CMV. The Clearinghouse will
change that by making the information available to certain highway
safety enforcement officers in real time at roadside through FMCSA's
electronic enforcement tools, thereby increasing the detection of
drivers not qualified to operate a CMV. MCSAP personnel would be able
to immediately place these drivers out of service.
    The mandatory downgrade, as proposed in Alternative # 1, would
further strengthen roadside detection of drivers not qualified to
operate due to a drug or alcohol testing violation. The reason is that
not all traffic safety enforcement officers have reliable access to
FMCSA's electronic enforcement tools that, after the Clearinghouse is
operational, would make the driver's prohibited status available at
roadside. While the 12,000 officers who are trained, and certified
under MCSAP would have consistent roadside access to a CMV driver's
prohibited status, most of the 500,000 non-MCSAP enforcement officers
likely would not. Accordingly, if a driver subject to the prohibition
holds a valid CLP or CDL at the time of a traffic stop, non-MCSAP
personnel would not have access to the driver's prohibited operating
status. However, all traffic safety officers have access to the
driver's license status; a check of the license is conducted whenever
there is a roadside intervention. Therefore, a driver whose license is
downgraded due to a drug and alcohol program violation would be
detected, through a routine license check, as not qualified to operate
a CMV. The proposed downgrade, by increasing the detection of
individuals unlawfully driving a CMV, would therefore improve public
safety.
    Just as a driver's prohibited status is not currently available to
traffic safety personnel, most SDLAs cannot currently identify drivers
who are subject to the prohibition. Both alternatives would address
this information gap by making the driver's prohibited status known to
SDLAs at the time of a driver's requested licensing transaction. Under
this approach, if the SDLA's mandated

Clearinghouse query results in notice that the driver is subject to the
CMV driving prohibition in Sec.  382.501(a), the SDLA would not
complete the transaction, resulting in non-issuance. This proposed
requirement would strengthen enforcement of the CMV prohibition by
ensuring that these drivers complete RTD requirements before obtaining,
renewing, transferring, or upgrading a CLP or CDL, as applicable.
    As described above, both alternatives would allow improved SDLA and
traffic safety enforcement officer enforcement of the CMV driving
prohibition. In that sense, the prohibition would no longer be self-
enforcing. As a result, FMCSA expects that, by ``raising the stakes''
of non-compliance, some CLP and CDL holders would be deterred from
drugs or alcohol misuse, though the Agency is unable to estimate the
extent of deterrence. FMCSA invites comment on this issue.
    Finally, this proposal would permit the Agency to use its
enforcement resources more efficiently. Currently, FMCSA generally
becomes aware that a driver is operating a CMV in violation of Sec.
382.501(a) during the course of a compliance review of a motor carrier,
or through a focused investigation of a carrier or service agent. The
process for imposing sanctions on a driver who tested positive for a
controlled substance, but continued to operate a CMV, is a lengthy one
that involves outreach to the driver to determine whether RTD
requirements have been met, issuance of a Notice of Violation, the
driver's possible request for a hearing (and potentially a subsequent
request for administrative review), and possible issuance of a Letter
of Disqualification (LOD) to the driver, based on Sec.
391.41(b)(12).\58\ FMCSA may then forward the LOD to the SDLA,
requesting that the driver's CDL be downgraded. Under current
regulations, the SDLA is not obligated to comply with that request. The
proposed downgrade requirement will obviate the need for this time-
consuming and labor-intensive process, thus enabling the Agency's
enforcement resources to be deployed more effectively elsewhere.
---------------------------------------------------------------------------

    \58\ Section 391.41(b)(12) applies only to the use of controlled
substances; alcohol use, test refusals, and actual knowledge
violations are not a basis for disqualification under this
provision.
---------------------------------------------------------------------------

    Table 4 summarizes information on the cost to the Agency to conduct
different types of investigations. It provides a measure of the costs
the Agency would avoid due to the availability of driver-specific
information, in real time, in the Clearinghouse. The average cost of an
investigation is $2,012. This cost savings was not included in the
Clearinghouse final rule RIA.

   Table 4--Cost Comparison of Investigations With and Without Future Enforcement Slated for Comprehensive and
                                          Onsite Focused Investigations
----------------------------------------------------------------------------------------------------------------
             Investigation type                           Enforcement                  Cases       Average cost
----------------------------------------------------------------------------------------------------------------
Offsite.....................................  No................................              31          $1,088
Offsite.....................................  Yes...............................               5           1,495
Onsite Comprehensive........................  No................................             302           2,424
Onsite Comprehensive........................  Yes...............................             108           2,866
Onsite Focused..............................  No................................             652           1,965
Onsite Focused..............................  Yes...............................            2172           2,236
                                             -------------------------------------------------------------------
    Average.................................  ..................................  ..............           2,012
----------------------------------------------------------------------------------------------------------------

B. E.O. 13771 Reducing Regulation and Controlling Regulatory Costs

    This rule is not subject to the requirements of E.O. 13771 because
it has been designated a non-significant regulatory action.

C. Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801, et seq.),
the Office of Information and Regulatory Affairs designated this rule
as not a ``major rule,'' as defined by 5 U.S.C. 804(2).

D. Regulatory Flexibility Act (Small Entities)

    The Regulatory Flexibility Act of 1980 (RFA) (5 U.S.C. 601 et
seq.), as amended by the Small Business Regulatory Enforcement Fairness
Act of 1996 (SBREFA) (Pub. L. 104-121, 110 Stat. 857, (March 29, 1996),
requires Federal agencies to consider the impact of their regulatory
proposals on small entities, analyze effective alternatives that
minimize small entity impacts, and make their analyses available for
public comment. The term ``small entities'' means small businesses and
not-for-profit organizations that are independently owned and operated
and are not dominant in their fields, and governmental jurisdictions
with populations under 50,000 (5 U.S.C. 601). Accordingly, DOT policy
requires an analysis of the impact of all regulations on small
entities, and mandates that agencies strive to lessen any adverse
effects on these entities. Therefore, FMCSA is publishing this initial
regulatory flexibility analysis (IRFA) to aid the public in commenting
on the potential small business impacts of the proposals in this NPRM.
FMCSA invites all interested parties to submit data and information
regarding the potential economic impact that would result from adoption
of the proposals in this NPRM. FMCSA will consider all comments
received in the public comment process when deciding on the final
regulatory flexibility assessment.
    An IRFA must include six components (5 U.S.C. 603(b) and (c)). The
Agency discusses each of the components below.
    1. A description of the reasons why the action by the agency is
being considered.
    The Agency is taking this action to respond to operational and
legal issues identified by individual SDLAs and AAMVA following
publication of the Clearinghouse final rule.
    2. A succinct statement of the objectives of, and legal basis for,
the proposed rule.
    Title 49 of the Code of Federal Regulations (CFR), sections 1.87(e)
and (f), delegates authority to the FMCSA Administrator to carry out
the functions vested in the Secretary by 49 U.S.C. chapter 313 and 49
U.S.C., chapter 311, subchapters I and III, relating to CMV programs
and safety regulations.
    The ``Commercial Driver's License Drug and Alcohol Clearinghouse''
final rule (81 FR 87686 (Dec. 5, 2016)) implements section 32402 of the
Moving Ahead for Progress in the 21st Century Act (MAP-21) (Pub. L.
112-41, 126 Stat. 405, codified at 49 U.S.C.

31306a), which requires that the Secretary establish a national
clearinghouse for records relating to alcohol and controlled substances
testing by CMV operators who hold CDLs. As part of that mandate, MAP-21
requires that the Secretary establish a process by which the States can
request and receive an individual's Clearinghouse record, for the
purpose of ``assessing and evaluating the qualifications of the
individual to operate a commercial motor vehicle'' (49 U.S.C.
31306a(h)(2)). Section 32305(b)(1) of MAP-21, codified at 49 U.S.C.
31311(a)(24), requires that States request information from the
Clearinghouse before renewing or issuing a CDL to an individual. This
NPRM proposes the processes by which the Agency and the States would
implement these statutory requirements. A full explanation of the legal
basis for this rulemaking is set forth in Section III.
    3. A description, and, where feasible, an estimate of the number of
small entities to which the proposed rule will apply.
    ``Small entity'' is defined in 5 U.S.C. 601(6) as having the same
meaning as the terms ``small business'' in paragraph (3), ``small
organization'' in paragraph (4), and ``small governmental
jurisdiction'' in paragraph (5). Section 601(3) defines a small
business as a ``small business concern'' under section 3 of the Small
Business Act (15 U.S.C. 632(a)), which mean a business that is
independently owned and operated and is not dominant in its field of
operation. Section 601(4) defines small organizations as not-for-profit
enterprises that are independently owned and operated, and are not
dominant in their fields of operation. Additionally, section 601(5)
defines small governmental jurisdictions as governments of cities,
counties, towns, townships, villages, school districts, or special
districts with populations of less than 50,000.
    This proposed rule would affect SDLAs, CDL, or CLP applicants,
interstate motor carriers, interstate passenger carriers, and
intrastate hazardous materials motor carriers. However, drivers do not
meet the definition of a small entity in section 601 of the RFA.
Specifically, CMV drivers are considered neither a small business under
section 601(3) of the RFA, nor are they considered a small organization
under section 601(4) of the RFA. SLDAs do not meet the definition of a
small entity because they are governmental entities with statewide
jurisdiction over licensing CMV operators.
    FMCSA used data from the 2012 Economic Census to determine the
percentage of motor carriers with annual revenue at or below the Small
Business Administration's (SBA) thresholds.\59\ The SBA thresholds are
used to classify a business as a small business for purposes of
determining eligibility to participate in SBA and Federal contracting
programs.\60\ The Economic Census sums the number of firms classified
according to their North American Industry Classification System
(NAICS) code by ranges of annual revenue. The range with the high end
closest to the SBA thresholds was used to determine the percentage of
motor carriers that meet the definition of an SBA small business. FMCSA
used the Economic Census as the basis for estimating the number of
small entities affected by the proposed rule. As discussed below, the
Agency estimates that 98.7 percent of trucking firms and 95.2 percent
of passenger carriers are classified as small businesses.
---------------------------------------------------------------------------

    \59\ U.S. Census Bureau, 2012 Economic Survey, Table
EC1248SSSZ4-Summary Statistics by Revenue and Size of Firm.
Available at https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk# (accessed April 24, 2019).
    \60\ The SBA regulation defining small business size standards
by North American Industry Classification System codes is set forth
in 13 CFR 121.201.
---------------------------------------------------------------------------

    The Economic Census aggregates the Truck Transportation industry
under the NAICS Code 484-Trucking Firms. Survey respondents are
categorized in one of 10 revenue ranges. The range with the high end
closely aligned with the SBA $27.5 million threshold that includes
trucking firms with annual revenue up to $24.9 million. Of the trucking
firms surveyed that operated for the entire year, 98.7 percent had
revenues less than or equal to $24.9 million. The Agency finds that
this 98.7 percent is a reasonable proxy for the number of trucking
firms with annual revenue, equal to or less than the $27.5 million SBA
threshold.
    The Agency used the same methodology to determine the percentage of
passenger carriers that qualify as an SBA small business. The SBA
threshold for Transit and Ground Transportation firms (NAICS Code 485)
is $15 million. For purposes of determining the percentage of passenger
carriers with annual revenue less than or equal to $15 million, the
Agency considered the number of passenger carriers in three NAICS Code
subsectors: Charter Bus; Interurban Transportation and Rural
Transportation; and School and Employee Transportation subsectors.\61\
The Economic Census revenue range closest to the SBA $15 million
threshold includes passenger carriers with revenue ranging from $5
million to $9.9 million. Passenger carriers with revenue less than or
equal to $9.9 million accounted for 95.2 percent of survey respondents
within the three subsectors. Thus, the Agency finds that 95.2 percent
of passenger carriers with revenue less than or equal to $9.9 million
is approximately the same percentage of those with annual revenue less
than the $15 million SBA threshold.
---------------------------------------------------------------------------

    \61\ Commuter rail, public transit systems, taxi, limousine, and
special needs transportation that are included in Subsector 485 are
excluded from the analysis.
---------------------------------------------------------------------------

    4. A description of the projected reporting, recordkeeping, and
other compliance requirements of the proposed rule, including an
estimate of the classes of small entities that will be subject to the
requirement and the types of professional skills necessary for
preparation of the report or record.
    The purpose of the proposed rule is to develop the information
technology platform through which the States would query the
Clearinghouse when initiating a licensing transaction. If the
Clearinghouse transmits information that a driver is prohibited from
operating a CMV because of a violation the drug and alcohol program,
the SDLA would be required to deny the transaction, resulting in a non-
issuance. Once a transaction is denied, a driver would need to reapply
after completing the RTD process. The proposed information technology
platform would provide for transmission of Clearinghouse information on
a real-time. In light of the capability to electronically transmit
Clearinghouse information to the SDLAs, the Agency is proposing
alternative uses of the Clearinghouse data by the SDLAs to improve the
States' enforcement of the prohibition of the use of drugs and alcohol
by CMV drivers. The SDLAs are the only entities with reporting and
recordkeeping requirements under the proposed rule.
    The SDLAs would incur IT development costs and annual O&M expenses
for an interface with the Clearinghouse. FMCSA would also incur costs
IT development and annual O&M expenses for one of the proposed methods
for transmitting Clearinghouse information to the SDLAs. The SDLAs are
not small entities. As discussed in Item 3, motor carriers are small
entities that would be affected by the proposed rule. However, the
propose rule does

not impose reporting or recordkeeping on motor carriers.
    5. An identification, to the extent practicable of all relevant
Federal rules that may overlap, duplicate or conflict with the proposed
rule.
    The Agency is proposing this rule in furtherance of the MAP-21
requirement that the Agency establish the Clearinghouse. The Agency
finds that no other Federal rules exist that would be duplicative,
overlap or conflict with the proposed rule.
    6. A description of any significant alternative to the proposed
rule which accomplish the stated objections of the applicable statutes
and which minimize significant economic impact on small entities.
    The Agency did not identify any significant alternatives to the
proposed rule that would minimize the impact on small entities.

E. Assistance for Small Entities

    In accordance with section 213(a) of the SBREFA, FMCSA wants to
assist small entities in understanding this proposed rule so that they
can better evaluate its effects on themselves and participate in the
rulemaking initiative. If the proposed rule will affect your small
business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance; please
consult FMCSA point of contact, Mr. Juan Moya, listed in the For
Further Information Contact section of this proposed rule.
    Small businesses may send comments on the actions of Federal
employees who enforce or otherwise determine compliance with Federal
regulations to the Small Business Administration's Small Business and
Agriculture Regulatory Enforcement Ombudsman and the Regional Small
Business Regulatory Fairness Boards. The Ombudsman evaluates these
actions annually and rates each agency's responsiveness to small
business. If you wish to comment on actions by employees of FMCSA, call
1-888-REG-FAIR (1-888-734-3247). DOT has a policy regarding the rights
of small entities to regulatory enforcement fairness and an explicit
policy against retaliation for exercising these rights.

F. Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $165 million (which is the
value equivalent of $100,000,000 in 1995, adjusted for inflation to
2018 levels) or more in any 1 year. Though this proposed rule will not
result in such an expenditure, the Agency does discuss the effects of
this rule elsewhere in this preamble.

G. Paperwork Reduction Act

    This proposed rule would call for no new collection of information
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The
current ICR will expire on January 1, 2020, and is being renewed
through the established process.

H. E.O. 13132 (Federalism)

    A rule has implications for federalism under section 1(a) of
Executive Order (E.O.) 13132 if it has ``substantial direct effects on
the States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government.'' FMCSA analyzed this proposed rule under
that Order and determined that it has implications for federalism. In
accordance with section 6(c)(2) of E.O. 13132, the Agency's federalism
summary impact statement follows.
    MAP-21 (49 U.S.C. 31306a(l)(1) and (2)) specifically preempts State
laws and regulations inconsistent with the establishment of the
Clearinghouse and Federal regulations implementing the Clearinghouse
mandate, including State-based requirements pertaining to the reporting
of violations of FMCSA's drug and alcohol use and testing program. In
addition, this NPRM imposes minimum requirements for the issuance of
CLPs and CDLs by the States, consistent with the Agency's authority
under the Commercial Motor Vehicle Safety Act of 1986 (1986 Act)
(codified at 49 U.S.C. chapter 313). In accordance with sections 4(e)
and 6(c)(1) of E.O. 13132, FMCSA consulted with the National Governors
Association, the National Conference of State Legislatures, and the
American Association of Motor Vehicle Administrators (AAMVA) early in
the process of developing the proposal to gain insight into the
federalism implications of the NPRM.
    The States' representatives requested that the NPRM delineate the
States' role and responsibilities regarding the Clearinghouse, as well
as the potential cost implications for the States, as clearly as
possible and in a manner consistent with Congressional intent. They
also requested that the preemptive effect of MAP-21 on existing State
drug and alcohol program violation reporting requirements be
specifically discussed, and that FMCSA allow States the time they need
to enact laws or regulations implementing Federal regulatory
requirements related to the Drug and Alcohol Clearinghouse. AAMVA
suggested that the Agency disqualify drivers who commit drug or alcohol
violations before requiring the SDLAs to take action on the commercial
license. The Agency addresses these issues above, in section II
(Executive Summary), subsection C (Costs and Benefits); section III
(Legal Basis); section V (Discussion of Proposed Rulemaking),
subsections B (Impact on SDLAs), C (Compliance Date) and D (Impact of
MAP-21 and the NPRM on State Laws); and below in section VIII,
subsection A (E.O. 12866 (Regulatory Planning and Review), E.O. 13563
(Improving Regulation and Regulatory Review), and DOT Regulatory
Policies and Procedures (Benefits)). Additionally, as discussed in
section IV (Background), subsection B (AAMVA's Petition), the NPRM
responds, in part, to a petition for rulemaking submitted to FMCSA by
AAMVA in June 2017. The petition, available in the docket of this
rulemaking, raised questions and concerns about the extent and nature
of the States' role in the Clearinghouse; the NPRM addresses those
issues directly. Finally, the Agency notes that, while the 1986 Act
grants broad authority to the Secretary to prescribe regulations on
minimum uniform standards for the issuance of commercial drivers'
licenses and learners' permits by the States, the CDL program itself
does not have preemptive effect. It is voluntary; States may withdraw
their participation at any time, although doing so could would result
in the loss of certain Federal highway funds, pursuant to 49 U.S.C.
31314.

I. Privacy

    Section 522 of title I of division H of the Consolidated
Appropriations Act, 2005, enacted December 8, 2004 (Pub. L. 108-447,
118 Stat. 2809, 3268, note following 5 U.S.C. 552a), requires the
Agency to conduct a Privacy Impact Assessment of a regulation that will
affect the privacy of individuals. The assessment considers impacts of
the rule on the privacy of information in an identifiable form and
related matters. The FMCSA Privacy Officer has evaluated the risks and
effects the rulemaking might have on collecting, storing, and sharing
personally identifiable information and has evaluated protections and
alternative information handling processes in developing the rule to
mitigate potential privacy risks. FMCSA preliminarily

determined that this proposed rule would not require the collection of
individual personally identifiable information beyond that which is
already required by the Clearinghouse final rule.
    Additionally, the Agency submitted a Privacy Threshold Assessment
analyzing the rulemaking and the specific process for collection of
personal information to the DOT, Office of the Secretary's Privacy
Office. The DOT Privacy Office has determined that this rulemaking does
not create privacy risk.
    The E-Government Act of 2002, Public Law 107-347, sec. 208, 116
Stat. 2899, 2921 (Dec. 17, 2002), requires Federal agencies to conduct
a Privacy Impact Assessment for new or substantially changed technology
that collects, maintains, or disseminates information in an
identifiable form. No new or substantially changed technology would
collect, maintain, or disseminate information because of this proposed
rule.

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

    E.O. 13783 directs executive departments and agencies to review
existing regulations that potentially burden the development or use of
domestically produced energy resources, and to appropriately suspend,
revise, or rescind those that unduly burden the development of domestic
energy resources. In accordance with E.O. 13783, DOT prepared and
submitted a report to OMB that provides specific recommendations that,
to the extent permitted by law, could alleviate or eliminate aspects of
agency action that burden domestic energy production. This rule has not
been identified by DOT under E.O. 13783 as potentially alleviating
unnecessary burdens on domestic energy production.

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

    This rule does not have Tribal implications under E.O. 13175,
Consultation and Coordination with Indian Tribal Governments, because
it does not have a substantial direct effect on one or more Indian
Tribes, on the relationship between the Federal Government and Indian
Tribes, or on the distribution of power and responsibilities between
the Federal Government and Indian Tribes.

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

    The National Technology Transfer and Advancement Act (15 U.S.C. 272
note) directs agencies to use voluntary consensus standards in their
regulatory activities unless the agency provides Congress, through OMB,
with an explanation of why using these standards would be inconsistent
with applicable law or otherwise impractical. Voluntary consensus
standards (e.g., specifications of materials, performance, design, or
operation; test methods; sampling procedures; and related management
systems practices) are standards that are developed or adopted by
voluntary consensus standards bodies. This rule does not use technical
standards. Therefore, FMCSA did not consider the use of voluntary
consensus standards.

M. Environment (National Environmental Policy Act)

    FMCSA analyzed this NPRM for the purpose of the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and
determined this action is categorically excluded from further analysis
and documentation in an environmental assessment or environmental
impact statement under FMCSA Order 5610.1 (69 FR 9680, March 1, 2004),
Appendix 2, paragraphs (6)(t)(2). The Categorical Exclusion (CE) in
paragraph (6)(t)(2) covers regulations ensuring States comply with the
provisions of the Commercial Motor Vehicle Act of 1986, by having the
appropriate information technology systems concerning the qualification
and licensing of persons who apply for and persons who are issued a
CDL. The proposed requirements in this rule are covered by this CE, and
the proposed action does not have the potential to significantly affect
the quality of the environment. The CE determination is available for
inspection or copying in the regulations.gov website listed under
ADDRESSES.

List of Subjects

49 CFR Part 382

    Administrative practice and procedure, Alcohol abuse, Drug abuse,
Drug testing, Highway safety, Motor carriers, Penalties, Safety,
Transportation.

49 CFR Part 383

    Administrative practice and procedure, Alcohol abuse, Drug abuse,
Highway safety, Motor carriers.

49 CFR Part 384

    Administrative practice and procedure, Alcohol abuse, Drug abuse,
Highway safety, Motor carriers.

49 CFR Part 390

    Highway safety, Intermodal transportation, Motor carriers, Motor
vehicle safety, Reporting and recordkeeping requirements.

49 CFR Part 392

    Alcohol abuse, Drug abuse, Highway safety, Motor carriers.

    In consideration of the foregoing, FMCSA proposes the following
amendments to 49 CFR chapter III, parts 382, 383, 384, 390, and 392 for
each alternative to read as follows:

Regulatory Text for the Preferred Alternative--Mandatory Downgrade

PART 382--CONTROLLED SUBSTANCES AND ALCOHOL USE AND TESTING

0
 1. The authority citation for part 382 is revised to read as follows:

    Authority:  49 U.S.C. 31133, 31136, 31301 et seq., 31502; sec.
32934 of Pub. L. 112-141, 126 Stat. 405, 830; and 49 CFR 1.87.

0
2. Revise Sec.  382.503 to read as follows:

Sec.  382.503  Required evaluation and testing, reinstatement of
commercial driving privilege.

    (a) No driver who has engaged in conduct prohibited by subpart B of
this part shall perform safety-sensitive functions, including driving a
commercial motor vehicle, unless the driver has met the requirements of
part 40, subpart O, of this title. No employer shall permit a driver
who has engaged in conduct prohibited by subpart B of this part to
perform safety-sensitive functions, including driving a commercial
motor vehicle, unless the driver has met the requirements of part 40,
subpart O, of this title.
    (b) No driver whose commercial driving privilege has been removed
from the driver's license, pursuant to 382.501(a), shall drive a
commercial motor vehicle until the State Driver Licensing Agency
reinstates the CLP or CDL privilege to the driver's license.
0
3. Amend Sec.  382.717 by revising the section heading and paragraph
(a)(2)(i) to read as follows:

Sec.  382.717  Access by State licensing authorities.

    (a) * * *
    (2) Exceptions. (i) Petitioners may request that FMCSA add
documentary evidence of a non-conviction to an employer's report of
actual knowledge that the driver received a traffic citation for
driving a commercial motor vehicle while under the influence of alcohol
or controlled substances if the citation did not result in a
conviction. For the

purposes of this section, conviction has the same meaning as used in 49
CFR part 383.
* * * * *
0
4. Amend Sec.  382.725 by revising paragraphs (a) and (b) to read as
follows:

Sec.  382.725  Access by State licensing authorities.

    (a) If a driver has applied for a commercial driver's license or a
commercial learner's permit from a State, to determine whether the
driver is qualified to operate a commercial motor vehicle, the chief
commercial driver's licensing official of a State must have access to
information from the Clearinghouse in accordance with Sec.  383.73 of
this chapter.
    (b) By applying for a commercial driver's license or a commercial
learner's permit, a driver is deemed to have consented to the release
of information from the Clearinghouse in accordance with this section.
* * * * *

PART 383--COMMERCIAL DRIVER'S LICENSE STANDARDS; REQUIREMENTS AND
PENALTIES

0
5. The authority citation for part 383 is revised to read as follows:

    Authority: 49 U.S.C. 521, 31136, 31301 et seq., and 31502; secs.
214 and 215 of Pub. L. 106-159, 113 Stat. 1748, 1766, 1767; sec.
1012(b) of Pub. L. 107-56, 115 Stat. 272, 297, sec. 4140 of Pub. L.
109-59, 119 Stat. 1144, 1746; sec. 32934 of Pub. L. 112-141, 126
Stat. 405, 830; and 49 CFR 1.87.

0
6. Amend Sec.  383.5 by:
0
a. Revising paragraph (4) of the definition of ``CDL downgrade; and
0
b. Adding a definition for ``CLP downgrade'' in alphabetical order.
    The revision and addition read as follows:

Sec.  383.5  Definitions.

* * * * *
    CDL downgrade means either:
* * * * *
    (4) A State removes the CLP or CDL privilege from the driver's
license by changing the commercial status from ``licensed'' to
``eligible'' on the CDLIS driver record.
* * * * *
    CLP Downgrade means a State removes the CLP privilege from the
driver record by changing the permit status from ``licensed'' to
``eligible'' on the CDLIS driver record.
* * * * *
0
7. Amend Sec.  383.73 by:
0
a. Adding paragraph (a)(3);
0
b. Revising paragraphs (b)(10), (c)(10), (d)(9), (e)(8) and (f)(4); and
0
c. Adding paragraph (q).
    The additions and revisions read as follows:

Sec.  383.73  State procedures.

    (a) * * *
    (3) Beginning [compliance date], the State must request information
from the Drug and Alcohol Clearinghouse in accordance with Sec.
382.725 of this chapter, and if, in response to the request, the State
receives notification that pursuant to Sec.  382.501(a) of this chapter
the applicant is prohibited from operating a commercial motor vehicle,
the State must not issue, renew, or upgrade the CLP. If the applicant
currently holds a CLP issued by the State, the State must also comply
with the procedures set forth in paragraph (q) of this section.
    (b) * * *
    (10) Beginning [compliance date], the State must request
information from the Drug and Alcohol Clearinghouse in accordance with
Sec.  382.725 of this chapter. If, in response to that request, the
State receives notification that pursuant to Sec.  382.501(a) of this
chapter the applicant is prohibited from operating a commercial motor
vehicle, the State must not issue the CDL.
* * * * *
    (c) * * *
    (10) Beginning [compliance date], the State must request
information from the Drug and Alcohol Clearinghouse in accordance with
Sec.  382.725 of this chapter. If, in response to that request, the
State receives notification that pursuant to Sec.  382.501(a) of this
chapter the applicant is prohibited from operating a commercial motor
vehicle, the State must not transfer the CDL.
    (d) * * *
    (9) Beginning [compliance date], the State must request information
from the Drug and Alcohol Clearinghouse in accordance with Sec.
382.725 of this chapter. If, in response to that request, the State
receives notification that pursuant to Sec.  382.501(a) of this chapter
the applicant is prohibited from operating a commercial motor vehicle,
the State must not renew the CDL and must comply with the procedures
set forth in paragraph (q) of this section.
    (e) * * *
    (8) Beginning [compliance date], the State must request information
from the Drug and Alcohol Clearinghouse in accordance with Sec.
382.725 of this chapter. If, in response to that request, the State
receives notification that pursuant to Sec.  382.501(a) of this chapter
the applicant is prohibited from operating a commercial motor vehicle,
the State must not issue an upgrade of the CDL and must comply with the
procedures set forth in paragraph (q) of this section.
* * * * *
    (f) * * *
    (4) Beginning [compliance date], the State must request information
from the Drug and Alcohol Clearinghouse in accordance with Sec.
382.725 of this chapter. If, in response to that request, the State
receives notification that pursuant to Sec.  382.501(a) of this chapter
the applicant is prohibited from operating a commercial motor vehicle,
the State must not issue, renew, transfer or upgrade a non-domiciled
CLP or CDL.
* * * * *
    (q) Drug and Alcohol Clearinghouse. Beginning [compliance date],
the State must, upon receiving notification from the Drug and Alcohol
Clearinghouse that pursuant to Sec.  382.501(a) of this chapter the CLP
or CDL holder is prohibited from operating a commercial motor vehicle,
initiate established State procedures for downgrading the CLP or CDL.
The downgrade must be completed and recorded on the CDLIS driver record
within 30 days of the State's receipt of such notification.
    (1) If, before the State completes and records the downgrade on the
CDLIS driver record, the State receives notification from the Drug and
Alcohol Clearinghouse that pursuant to Sec.  382.503(a) of this chapter
the CLP or CDL holder is no longer prohibited from operating a
commercial motor vehicle, the State must, if permitted by State law,
terminate the downgrade process without removing the CLP or CDL
privilege from the driver's license.
    (2) If, after the State completes and records the downgrade on the
CDLIS driver record, the Drug and Alcohol Clearinghouse notifies the
State that pursuant to Sec.  382.503(a) of this chapter a driver is no
longer prohibited from operating a commercial motor vehicle, the driver
must, if permitted by State law, be eligible for reinstatement of the
CLP or CDL privilege to the driver's license.

PART 384--STATE COMPLIANCE WITH COMMERCIAL DRIVER'S LICENSE PROGRAM

0
8. The authority citation for part 384 is revised to read as follows:

    Authority:  49 U.S.C. 31136, 31301, et seq., and 31502; secs.
103 and 215 of Pub. L. 106-159, 113 Stat. 1748, 1753, 1767; sec.
32934 of Pub. L. 112-141, 126 Stat. 405, 830; sec. 5524 of Pub. L.
114-94, 129 Stat. 1312, 1560; and 49 CFR 1.87.

0
9. Amend Sec.  384.225 by adding paragraph (a)(3) to read as follows:

Sec.  384.225  CDLIS driver recordkeeping.

* * * * *
    (a) * * *
    (3) The removal of the CLP or CDL privilege from the driver's
license in accordance with Sec.  383.73(q) of this chapter.
* * * * *
0
10. Revise Sec.  384.235 to read as follows:

Sec.  384.235  Commercial driver's license Drug and Alcohol
Clearinghouse.

    (a) Beginning [compliance date], the State must:
    (1) Request information from the Drug and Alcohol Clearinghouse in
accordance with Sec.  383.73 of this chapter and comply with the
applicable provisions therein; and
    (2)(i) Comply with the provisions of Sec.  383.73(q) of this
chapter upon receiving notification from the Drug and Alcohol
Clearinghouse that pursuant to Sec.  382.501(a) of this chapter the CLP
or CDL holder is prohibited from operating a commercial motor vehicle;
and
    (ii) Comply with the provisions of Sec.  383.73(q) of this chapter
upon receiving notification from the Drug and Alcohol Clearinghouse
that pursuant to Sec.  382.503(a) of this chapter the CLP or CDL holder
is no longer prohibited from operating a commercial motor vehicle.
0
11. Amend Sec.  384.301 by revising paragraph (m) to read as follows:

Sec.  384.301  Substantial compliance--general requirements.

* * * * *
    (m) A State must come into substantial compliance with the
requirements of subpart B of this part and part 383 of this chapter in
effect as of [EFFECTIVE DATE OF FINAL RULE] as soon as practical, but,
unless otherwise specifically provided in this part, not later than
[compliance date].

PART 390--FEDERAL MOTOR CARRIER SAFETY REGULATIONS; GENERAL

0
12. The authority citation for part 390 continues to read as follows:

    Authority: 49 U.S.C. 504, 508, 31132, 31133, 31134, 31136,
31137, 31144, 31149, 31151, 31502; sec. 114, Pub. L. 103-311, 108
Stat. 1673, 1677; secs. 212 and 217, Pub. L. 106-159, 113 Stat.
1748, 1766, 1767; sec. 229, Pub. L. 106-159 (as added and
transferred by sec. 4115 and amended by secs. 4130-4132, Pub. L.
109-59, 119 Stat. 1144, 1726, 1743; sec. 4136, Pub. L. 109-59, 119
Stat. 1144, 1745; secs. 32101(d) and 32934, Pub. L. 112-141, 126
Stat. 405, 778, 830; sec. 2, Pub. L. 113-125, 128 Stat. 1388; secs.
5403, 5518, and 5524, Pub. L. 114-94, 129 Stat. 1312, 1548, 1558,
1560; sec. 2, Pub. L. 115-105, 131 Stat. 2263; and 49 CFR 1.81,
1.81a, 1.87.

0
 13. Amend Sec.  390.3 as follows:
0
 a. Lift the stay of the section;
0
 b. Revise paragraph (f)(1); and
0
 c. Stay Sec.  390.3 indefinitely.

Sec.  390.3  General applicability.

* * * * *
    (f) * * *
    (1) All school bus operations as defined in Sec.  390.5, except for
the provisions of Sec. Sec.  391.15(e) and (f), 392.13, 392.80, and
392.82 of this chapter;
* * * * *
0
14. Amend Sec.  390.3T(f)(1) to read as follows:

Sec.  390.3T  General applicability.

* * * * *
    (f) * * *
    (1) All school bus operations as defined in Sec.  390.5T, except
for the provisions of Sec. Sec.  391.15(e) and (f), 392.13, 392.80, and
392.82 of this chapter;
* * * * *

PART 392--DRIVING OF COMMERCIAL MOTOR VEHICLES

0
15. The authority citation for part 392 is revised to read as follows:

    Authority:  49 U.S.C. 504, 13902, 31136, 31151, 31502; Section
112 of Pub. L. 103-311, 108 Stat. 1673, 1676 (1994), as amended by
sec. 32509 of Pub. L. 112-141, 126 Stat. 405-805 (2012); and 49 CFR
1.87.

0
16. Add Sec.  392.13 to read as follows:

Sec.  392.13  Prohibited driving status.

    No driver, who holds a commercial learner's permit or a commercial
driver's license, shall operate a commercial motor vehicle if
prohibited by Sec.  382.501 of this subchapter.

Regulatory Text for Alternative #2--Optional Notice of Prohibited
Status

PART 382--CONTROLLED SUBSTANCES AND ALCOHOL USE AND TESTING

0
17. The authority citation for part 382 is revised to read as follows:

    Authority:  49 U.S.C. 31133, 31136, 31301 et seq., 31502; sec.
32934 of Pub. L. 112-141, 126 Stat. 405, 830; and 49 CFR 1.87.
0
18. Revise Sec.  382.503 to read as follows:

Sec.  382.503  Required evaluation and testing, reinstatement of
commercial driving privilege.

    (a) No driver who has engaged in conduct prohibited by subpart B of
this part shall perform safety-sensitive functions, including driving a
commercial motor vehicle, unless the driver has met the requirements of
part 40, subpart O, of this title. No employer shall permit a driver
who has engaged in conduct prohibited by subpart B of this part to
perform safety-sensitive functions, including driving a commercial
motor vehicle, unless the driver has met the requirements of part 40,
subpart O, of this title.
    (b) No driver whose commercial driving privilege has been removed
from the driver's license, pursuant to 382.501(a), shall drive a
commercial motor vehicle until the State Driver Licensing Agency
reinstates the CLP or CDL privilege to the driver's license.
0
19. Amend Sec.  382.717 by revising the section heading and paragraph
(a)(2)(i) to read as follows:

Sec.  382.717  Access by State licensing authorities.

    (a) * * *
    (2) Exceptions. (i) Petitioners may request that FMCSA add
documentary evidence of a non-conviction to an employer's report of
actual knowledge that the driver received a traffic citation for
driving a commercial motor vehicle while under the influence of alcohol
or controlled substances if the citation did not result in a
conviction. For the purposes of this section, conviction has the same
meaning as used in 49 CFR part 383.
* * * * *
0
20. Amend Sec.  382.725 by revising paragraphs (a) and (b) to read as
follows:

Sec.  382.725  Access by State licensing authorities.

    (a) If a driver has applied for a commercial driver's license or a
commercial learner's permit from a State, to determine whether the
driver is qualified to operate a commercial motor vehicle, the chief
commercial driver's licensing official of a State must have access to
information from the Clearinghouse in accordance with Sec.  383.73 of
this chapter.
    (b) By applying for a commercial driver's license or a commercial
learner's permit, a driver is deemed to have consented to the release
of information from the Clearinghouse in accordance with this section.
* * * * *

PART 383--COMMERCIAL DRIVER'S LICENSE STANDARDS; REQUIREMENTS AND
PENALTIES

0
21. The authority citation for part 383 is revised to read as follows:

    Authority:  49 U.S.C. 521, 31136, 31301 et seq., and 31502;
secs. 214 and 215 of Pub. L. 106-159, 113 Stat. 1748, 1766, 1767;
sec. 1012(b) of Pub. L. 107-56, 115 Stat. 272, 297, sec. 4140 of
Pub. L. 109-59, 119 Stat. 1144, 1746; sec. 32934 of Pub. L. 112-141,
126 Stat. 405, 830; and 49 CFR 1.87.

0
22. Amend Sec.  383.73 by:

0
a. Adding paragraph (a)(3);
0
b. Revising paragraphs (b)(10), (c)(10), (d)(9), (e)(8) and (f)(4); and
0
c. Adding paragraph (q).
    The additions and revisions to read as follows:

Sec.  383.73  State procedures.

    (a) * * *
    (3) Beginning [compliance date], the State must request information
from the Drug and Alcohol Clearinghouse in accordance with Sec.
382.725 of this chapter, and if, in response to the request, the State
receives notification that pursuant to Sec.  382.501(a) of this chapter
the applicant is prohibited from operating a commercial motor vehicle,
the State must not issue, renew, or upgrade the CLP.
    (b) * * *
    (10) Beginning [compliance date], the State must request
information from the Drug and Alcohol Clearinghouse in accordance with
Sec.  382.725 of this chapter. If, in response to that request, the
State receives notification that pursuant to Sec.  382.501(a) of this
chapter the applicant is prohibited from operating a commercial motor
vehicle, the State must not issue the CDL.
* * * * *
    (c) * * *
    (10) Beginning [compliance date], the State must request
information from the Drug and Alcohol Clearinghouse in accordance with
Sec.  382.725 of this chapter. If, in response to that request, the
State receives notification that pursuant to Sec.  382.501(a) of this
chapter the applicant is prohibited from operating a commercial motor
vehicle, the State must not transfer the CDL.
    (d) * * *
    (9) Beginning [compliance date], the State must request information
from the Drug and Alcohol Clearinghouse in accordance with Sec.
382.725 of this chapter. If, in response to that request, the State
receives notification that pursuant to Sec.  382.501(a) of this chapter
the applicant is prohibited from operating a commercial motor vehicle,
the State must not renew the CDL.
    (e) * * *
    (8) Beginning [compliance date], the State must request information
from the Drug and Alcohol Clearinghouse in accordance with Sec.
382.725 of this chapter. If, in response to that request, the State
receives notification that pursuant to Sec.  382.501(a) of this chapter
the applicant is prohibited from operating a commercial motor vehicle,
the State must not issue an upgrade of the CDL.
* * * * *
    (f) * * *
    (4) Beginning [compliance date], the State must request information
from the Drug and Alcohol Clearinghouse in accordance with Sec.
382.725 of this chapter. If, in response to that request, the State
receives notification that pursuant to Sec.  382.501(a) of this section
the applicant is prohibited from operating a commercial motor vehicle,
the State must not issue, renew, transfer or upgrade a non-domiciled
CLP or CDL.
* * * * *
    (q) Drug and Alcohol Clearinghouse. Beginning [compliance date],
States may elect to receive automatic notification from the Drug and
Alcohol Clearinghouse that, pursuant to Sec.  382.501(a), of this
chapter a CLP or CDL holder is prohibited from operating a commercial
motor vehicle. The State's use of such information must be in
accordance with Sec.  382.725(c) of this chapter.

PART 384--STATE COMPLIANCE WITH COMMERCIAL DRIVER'S LICENSE PROGRAM

0
23. The authority citation for part 384 is revised to read as follows:

    Authority:  49 U.S.C. 31136, 31301, et seq., and 31502; secs.
103 and 215 of Pub. L. 106-159, 113 Stat. 1748, 1753, 1767; sec.
32934 of Pub. L. 112-141, 126 Stat. 405, 830; sec. 5524 of Pub. L.
114-94, 129 Stat. 1312, 1560; and 49 CFR 1.87.

0
24. Revise Sec.  384.235 to read as follows:

Sec.  384.235  Commercial driver's license Drug and Alcohol
Clearinghouse.

    Beginning [compliance date], the State:
    (1) Must request information from the Drug and Alcohol
Clearinghouse in accordance with Sec.  383.73 of this chapter and
comply with the applicable provisions therein; and
    (2) Comply with the provisions of Sec.  383.73(q) of this chapter
if the State elects to receive automatic notification from the Drug and
Alcohol Clearinghouse that, pursuant to Sec.  382.501(a) of this
chapter, a CLP or CDL holder is prohibited from operating a commercial
motor vehicle.
0
25. Amend Sec.  384.301 by revising paragraph (m) to read as follows:

Sec.  384.301  Substantial compliance--general requirements.

* * * * *
    (m) A State must come into substantial compliance with the
requirements of subpart B of this part and part 383 of this chapter in
effect as of [EFFECTIVE DATE OF FINAL RULE] as soon as practical, but,
unless otherwise specifically provided in this part, not later than
[compliance date].

PART 390--FEDERAL MOTOR CARRIER SAFETY REGULATIONS; GENERAL

0
26. The authority citation for part 390 continues to read as follows:

    Authority:  49 U.S.C. 504, 508, 31132, 31133, 31134, 31136,
31137, 31144, 31149, 31151, 31502; sec. 114, Pub. L. 103-311, 108
Stat. 1673, 1677; secs. 212 and 217, Pub. L. 106-159, 113 Stat.
1748, 1766, 1767; sec. 229, Pub. L. 106-159 (as added and
transferred by sec. 4115 and amended by secs. 4130-4132, Pub. L.
109-59, 119 Stat. 1144, 1726, 1743; sec. 4136, Pub. L. 109-59, 119
Stat. 1144, 1745; secs. 32101(d) and 32934, Pub. L. 112-141, 126
Stat. 405, 778, 830; sec. 2, Pub. L. 113-125, 128 Stat. 1388; secs.
5403, 5518, and 5524, Pub. L. 114-94, 129 Stat. 1312, 1548, 1558,
1560; sec. 2, Pub. L. 115-105, 131 Stat. 2263; and 49 CFR 1.81,
1.81a, 1.87.

0
27. Amend Sec.  390.3 as follows:
0
 a. Lift the stay of the section;
0
 b. Revise paragraph (f)(1); and
0
 c. Stay Sec.  390.3 indefinitely.

Sec.  390.3  General applicability.

* * * * *
    (f) * * *
    (1) All school bus operations as defined in Sec.  390.5, except for
the provisions of Sec. Sec.  391.15(e) and (f), 392.13, 392.80, and
392.82 of this chapter.
* * * * *
0
28. Amend Sec.  390.3T(f)(1) to read as follows:

Sec.  390.3T   General applicability.

* * * * *
    (f) * * *
    (1) All school bus operations as defined in Sec.  390.5T, except
for the provisions of Sec. Sec.  391.15(e) and (f), 392.13, 392.80, and
392.82 of this chapter.
* * * * *

PART 392--DRIVING OF COMMERCIAL MOTOR VEHICLES

0
29. The authority citation for part 392 is revised to read as follows:

    Authority:  49 U.S.C. 504, 13902, 31136, 31151, 31502; Section
112 of Pub. L. 103-311, 108 Stat. 1673, 1676 (1994), as amended by
sec. 32509 of Pub. L. 112-141, 126 Stat. 405-805 (2012); and 49 CFR
1.87.

0
30. Add Sec.  392.13 to read as follows:

Sec.  392.13  Prohibited driving status.

    No driver, who holds a commercial learner's permit or a commercial
driver's license, shall operate a commercial motor vehicle if
prohibited by Sec.  382.501 of this subchapter.

    Issued under authority delegated in 49 CFR 1.87.
James A. Mullen,
Acting Administrator.
[FR Doc. 2020-08230 Filed 4-27-20; 8:45 am]
BILLING CODE 4910-EX-P


[Federal Register Volume 77, Number 199 (Monday, October 15, 2012)]
[Notices]
[Pages 62562-62563]
[FR Doc No: 2012-25282]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68016; File No. SR-ICC-2012-14]

Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Schedule 502 of the ICC Rules

October 9, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on September 24, 2012, ICE
Clear Credit LLC (``ICC'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change described in Items
I, II and III, below, which Items have been prepared primarily by ICC.
ICC filed the proposal pursuant to Section 19(b)(3)(A) \2\ of the Act
and Rule 19b-4(f)(4)(i) \3\ thereunder, so that the rule change was
effective upon filing with the Commission. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78s(b)(3)(A).
    \3\ 17 CFR 240.19b-4(f)(4)(i).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The purpose of the proposed rule change is to update the Contract
Reference Obligation International Securities Identification Numbers
(``Contract Reference Obligation ISINs'') and entity names in Schedule
502 of the ICC Rules in order to reflect the changes to the industry
standard Contract Reference Obligation ISINs and entity names for one
single name credit default swap contract that ICC currently clears (the
Sara Lee Corporation), which will undergo a succession event on
September 17, 2012. As a result of the Sara Lee Corporation's
succession event, ICC will clear two single names (The Hillshire Brands
Company and DE US, Inc.).

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, ICC included statements
concerning the purpose of and basis for the proposed rule change, and
discussed any comments it received on the proposed rule change. The
text of these statements and comments may be examined at the places
specified in Item IV below. ICC has prepared summaries, set forth in
sections A, B, and C, below, of the most significant aspects of these
statements.\4\
---------------------------------------------------------------------------

    \4\ The Commission has modified the text of the summaries
provided by ICC.
---------------------------------------------------------------------------

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    The proposed rule change would amend Schedule 502 of the ICC Rules,
which lists all the Contract Reference Obligation ISINs and entity
names of all single name credit default swaps contracts that ICC
clears. This amendment will update Schedule 502 to account for the Sara
Lee Corporation's September 17, 2012 succession event. Specifically,
the amendment will remove Schedule 502's listing of the credit default
swap contract that ICC currently clears for the Sara Lee Corporation,
and replace it with listings for the credit default swap contracts of
the Sara Lee Corporation's successor companies, The Hillshire Brands
Company and DE US, Inc. This update does not require any changes to the
body of the ICC Rules. Also, the update does not require any changes to
the ICC risk management framework.
    Section 17A(b)(3)(F) \5\ of the Act requires, among other things,
that the rules of a clearing agency be designed to promote the prompt
and accurate clearance and settlement of securities transactions and,
to the extent applicable, derivative agreements, contracts and
transactions. ICC believes that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to ICC, in particular Section 17A(b)(3)(F),
because the change will facilitate the prompt and accurate clearance
and settlement of securities transactions, and will assure the
safeguarding of securities and funds associated with securities
transactions

that are in the custody or control of ICC, or for which it is
responsible.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    ICC does not believe that the proposed rule change would have any
impact, or impose any burden, on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    ICC has not solicited written comments regarding the proposed
change. ICC will notify the Commission of any written comments received
by ICC.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The foregoing rule change has become effective upon filing pursuant
to Section 19(b)(3)(A) \6\ of the Act and Rule 19b-4(f)(4)(i) \7\
thereunder because it effects a change in one of ICC's existing
services without significantly affecting the safeguarding of securities
or funds in the custody or control of ICC, or for which it is
responsible, and without significantly affecting the respective rights
or obligations of ICC or persons using its services. At any time within
60 days of the filing of the proposed rule change, the Commission
summarily may temporarily suspend such rule change if it appears to the
Commission that such action is necessary or appropriate in the public
interest, for the protection of investors, or otherwise in furtherance
of the purposes of the Act.\8\
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(4)(i).
    \8\ 15 U.S.C. 78s(b)(3)(C).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
changes are consistent with the Act. Comments may be submitted by any
of the following methods:
     Electronic comments may be submitted by using the
Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml), or by sending an email to<EMAIL_ADDRESS>Please
include File No. SR-ICC-2012-14 on the subject line.
     Paper comments should be sent in triplicate to Elizabeth
M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street
NE., Washington, DC 20549-0609.

All submissions should refer to File Number SR-ICC-2012-14. To help the
Commission process and review your comments more efficiently, please
use only one method of submission. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule changes that
are filed with the Commission, and all written communications relating
to the proposed rule changes between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for Web site
viewing and printing in the Commission's Public Reference Room, 100 F
Street NE., Washington, DC 20549, on official business days between the
hours of 10:00 a.m. and 3:00 p.m. Copies of such filings also will be
available for inspection and copying at the principal office of ICC,
and on ICC's Web site at: https://www.theice.com/publicdocs/regulatory_filings/ICEClearCredit_091212a.pdf.
    All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly.
    All submissions should refer to File Number SR-ICC-2012-14 and
should be submitted on or before November 5, 2012.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-25282 Filed 10-12-12; 8:45 am]
BILLING CODE 8011-01-P