[Federal Register Volume 79, Number 14 (Wednesday, January 22, 2014)]
[Rules and Regulations]
[Pages 3520-3542]
[FR Doc No: 2014-01174]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Parts 385 and 386

[Docket No. FMCSA-2011-0321]
RIN 2126-AB42

Patterns of Safety Violations by Motor Carrier Management

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

ACTION: Final rule.

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

SUMMARY: FMCSA amends its regulations to enable the Agency to suspend
or revoke the operating authority registration of for-hire motor
carriers that show egregious disregard for safety compliance, permit
persons who have shown egregious disregard for safety compliance to
exercise controlling influence over their operations, or operate
multiple entities under common control to conceal noncompliance with
safety regulations. These amendments implement section 4113 of the
Safe, Accountable, Flexible, Efficient Transportation Equity Act: A
Legacy for Users (SAFETEA-LU), as amended by section 32112 of the
Moving Ahead for Progress in the 21st Century Act (MAP-21), and are
designed to enhance the safety of commercial motor vehicle (CMV)
operations on our nation's highways.

DATES: Effective February 21, 2014.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or email Juan Moya, Transportation Specialist, Enforcement
Division, Federal Motor Carrier Safety Administration, telephone: 202-
366-4844; email<EMAIL_ADDRESS>If you have questions on the
docket, call Ms. Barbara Hairston, Docket Operations, telephone 202-
366-3024.

SUPPLEMENTARY INFORMATION:

Abbreviations/Acronyms

Advocates for Highway and Auto Safety Advocates
American Trucking Associations ATA
Amalgamated Transit Union ATU
Commercial Motor Vehicle CMV
FedEx Corporation FedEx
Federal Motor Carrier Safety Administration FMCSA
Hazardous Materials Safety Permits HMSP
International Brotherhood of Teamsters IBT
Interstate Commerce Commission ICC
Institute of Makers of Explosives IME
Moving Ahead for Progress in the 21st Century Act MAP-21
Motor Carrier Safety Advisory Committee MCSAC
Motor Carrier State Assistance Program MCSAP
National Ground Water Association NGWA
Notice of Proposed Rulemaking NPRM
North American Transportation Consultants, Inc. NATC
Owner-Operator Independent Drivers Association, Inc. OOIDA
Safe, Accountable, Flexible, Efficient Transportation Equity Act: A
Legacy for Users SAFETEA-LU
Secretary of Transportation Secretary
Transportation Intermediaries Association TIA
Truck Safety Coalition TSC
Transportation Trades Department, AFL-CIO TTD
United Motorcoach Association UMA
Werner Enterprises, Inc. Werner

Executive Summary

Purpose and Summary of the Major Provisions

    This rule enables FMCSA to suspend or revoke the operating
authority registration of for-hire motor carriers that show egregious
disregard for safety compliance, permit persons who have shown
egregious disregard for safety compliance to exercise controlling
influence over their operations, or operate multiple entities under
common control to conceal noncompliance with safety regulations.
Congress directed the Agency to implement this rule because it
recognized the danger that carriers seeking to evade compliance with
FMCSA's regulation pose to the motoring public. The rule establishes a
two-part framework under which the Agency first determines whether a
motor carrier has failed to comply with FMCSA's safety regulations or
has attempted to conceal such noncompliance. If a motor carrier meets
this initial threshold, the Agency then evaluates the motor carrier's
conduct to determine whether the motor carrier has engaged in a pattern
or practice of safety violations or is using other entities under
common control to avoid compliance or mask the noncompliance. The rule
establishes factors for the

Agency to consider when making these determinations and provides for
administrative review. If the Agency ultimately determines that the
motor carrier has engaged in such conduct, the carrier may have its
operating authority registration suspended or revoked and may be
subject to civil or criminal penalties.

Benefits and Costs

    FMCSA assessed the potential costs associated with this rule. These
costs were found to be economically insignificant. Further discussion
of this topic is covered in the Rulemaking Analyses section of this
final rule.

Background

    Implementation of this rule enables the Agency to suspend or revoke
the operating authority registration of motor carriers that show
egregious disregard for safety compliance, permit persons who have
shown egregious disregard for safety compliance to exercise controlling
influence over their operations or operate multiple entities under
common control to conceal noncompliance with safety regulations. Motor
carriers that engage in such conduct may face suspension or revocation
of their operating authority registration. FMCSA acknowledges that loss
of operating authority registration is a significant penalty. This rule
is necessary and appropriate, however, to address motor carriers that
engage in a pattern or practice of willfully violating safety
regulations or forming new entities or affiliate relationships to avoid
compliance or mask or otherwise conceal noncompliance.
    FMCSA has determined that each year a small number of motor
carriers have attempted to avoid regulatory compliance or mask or
otherwise conceal noncompliance by submitting new applications for
registration, often under a different name, to continue operations
after being placed out of service or to avoid other negative
consequences of non-compliant behavior including a poor safety history.
Motor carriers and individuals do this for a variety of reasons that
include avoiding payment of civil penalties, circumventing denial of
operating authority registration based on a determination that they are
not willing or able to comply with the applicable statutes or
regulations, or avoiding a negative compliance history. Other motor
carriers attempt to avoid compliance, or mask or otherwise conceal
noncompliance, by creating or using an affiliated company under common
operational control. They shift customers, vehicles, drivers, and other
operational activities to one of the affiliated companies when FMCSA
places one of the other commonly controlled companies out of service.
    On August 8, 2008, a fatal bus crash occurred in Sherman, Texas,
highlighting the danger posed by motor carriers and other persons who
avoid regulatory compliance or mask or otherwise conceal noncompliance.
Seventeen motorcoach passengers died, and the driver and 38 other
passengers received minor-to-serious injuries. The investigations
conducted by FMCSA and the National Transportation Safety Board
revealed that the motor carrier was operating without authority, was a
reincarnation of another bus company that had been recently placed out
of service for safety violations, and that both companies were under
the control of the same person. FMCSA determined that the companies'
flagrant disregard for safety under this person's control demonstrated
a hazard to the safety of the motoring public.
    Based on these findings, FMCSA instituted a vetting process for
for-hire passenger and household goods carriers that involves a
comprehensive review of registration applications to determine whether
the applicants are reincarnations or affiliates of other motor carriers
with negative compliance histories or are otherwise not willing and
able to comply with the applicable regulations. Although the vetting
process was a significant improvement to the previous registration
review and regulatory compliance process, it is not a complete solution
to the problem of regulatory avoidance because it does not impose
sanctions, and, therefore, deter, the motor carriers or individuals who
engage in or condone egregious disregard for safety compliance.
    The Sherman crash is but one example that demonstrates how the
practice of avoiding compliance or masking or otherwise concealing
noncompliance to circumvent Agency enforcement action or to avoid a
negative safety compliance history creates an unacceptable risk of harm
to the public, resulting in the continued operation of at-risk carriers
and impeding FMCSA's ability to execute its safety mission. This rule
will help address these problems by providing a significant enforcement
tool that allows the Agency to suspend or revoke the operating
authority registration of motor carriers that show egregious disregard
for safety compliance, permit persons who have shown egregious
disregard for safety compliance to exercise controlling influence over
their operations or operate multiple entities under common control to
conceal noncompliance with safety regulations.
    Section 31135 of title 49, United States Code, originally enacted
as Sec.  4113 of SAFETEA-LU (Pub. L. 109-59, 119 Stat. 1144), and
subsequently amended by Sec.  32112 of MAP-21 (Pub. L. 112-141, 126
Stat. 405), authorizes FMCSA to withhold, suspend, amend, or revoke the
operating authority registration of a motor carrier if it or any person
has engaged in a pattern or practice of avoiding compliance, or
concealing noncompliance with regulations governing CMV safety
prescribed under 49 U.S.C., Chapter 311, subchapter III. That section,
as amended, also permits FMCSA to revoke the individual operating
authority registration of any officer of a motor carrier that engages
in or has engaged in a pattern or practice of, or assisted in avoiding
compliance, or masking or otherwise concealing noncompliance while
serving as an officer of a motor carrier. FMCSA is required to issue
standards to implement the authority granted in Sec.  31135.
    To assist the Agency in developing those standards, FMCSA tasked
the Motor Carrier Safety Advisory Committee (MCSAC) with identifying
concepts that FMCSA should consider. On June 21, 2011, the MCSAC issued
a number of recommendations, some of which formed the foundation for
this rule. These recommendations include the concepts that a pattern is
both widespread and continuing over time, involves more than isolated
violations, and does not require a specific number of violations. The
Agency also embraced the idea that FMCSA would have to exercise
discretion to identify those motor carriers whose officers have shown
egregious disregard for safety compliance.

Legal Basis for the Rulemaking

    The FMCSA has authority, delegated by the Secretary of
Transportation (Secretary) under 49 CFR 1.87, to establish the minimum
safety standards governing the operation and equipment of a motor
carrier operating in interstate commerce (49 U.S.C. 31136(a) and
31502(b)). Also, as amended by section 4114 of SAFETEA-LU, 49 U.S.C.
31144(a) requires that the Secretary determine whether an owner or
operator is fit to safely operate CMVs; periodically update the safety
determinations of motor carriers; and prescribe, by regulation,
penalties for violations of applicable commercial safety fitness
requirements.
    Section 31135 of title 49, United States Code, was originally
enacted as part the 1994 Recodification Act (Pub.

L. 103-272, 108 Stat. 745). It was subsequently amended as a part of
Sec.  4113 of SAFETEA-LU, and then again by Sec.  32112 of MAP-21.
Section 31135, as amended, requires employers and employees to comply
with FMCSA's safety regulations that apply to the employees' and the
employers' conduct. It prohibits motor carriers from using common
ownership, common management, common control or common familial
relationships to avoid compliance or mask or otherwise conceal
noncompliance, or a history of noncompliance. It also authorizes FMCSA
to withhold,\1\ suspend, amend, or revoke the operating authority
registration of a motor carrier if it or any person has engaged in a
pattern or practice of avoiding compliance, or concealing noncompliance
with regulations governing CMV safety prescribed under 49 U.S.C.,
Chapter 311, subchapter III. FMCSA may suspend, amend, or revoke the
individual registration of an officer of a motor carrier who has
engaged in a pattern or practice of, or assisted in, avoiding
compliance or masking or otherwise concealing noncompliance while
serving as an officer of such motor carrier. FMCSA was required to
establish standards implementing Sec.  31135 through rulemaking.
---------------------------------------------------------------------------

    \1\ Although MAP-21 includes authority for FMCSA to withhold
operating authority registration under Sec.  31135, FMCSA has
elected not to incorporate that authority into this rule. The Agency
has existing authority to withhold operating authority registration
and will continue to exercise this authority under its current
registration process.
---------------------------------------------------------------------------

    FMCSA relies on 49 U.S.C. 13902, 13905, 31134, and 31135 for the
authority and procedures to suspend and revoke operating authority
registration in this rule. The Motor Carrier Act of 1935 (Pub. L. 74-
255, 49 Stat. 543) authorized the Interstate Commerce Commission (ICC)
to issue operating authority registration to motor carriers, brokers,
and freight forwarders subject to its jurisdiction and to suspend or
revoke such operating authority registration for willful failure to
comply with applicable statutes and regulations. The ICC Termination
Act of 1995 (Pub. L. 104-88, 109 Stat. 803) transferred this authority
to the Secretary by enacting 49 U.S.C. 13902 (establishing standards
for issuing operating authority registration) and 13905 (establishing
standards and procedures for suspending and revoking operating
authority registration). Section 4113 of SAFETEA-LU amended 49 U.S.C.
13902 to authorize FMCSA to deny an application for operating authority
registration of a for-hire motor carrier if the motor carrier is not
willing and able to comply with the duties of employers and employees
established under 49 U.S.C. 31135. In addition, Sec.  32105 of MAP-21
created new 49 U.S.C. 31134 establishing requirements for motor
carriers seeking to obtain operating authority registration and USDOT
numbers. This new section authorizes FMCSA to withhold, suspend, or
revoke operating authority registration for failing to disclose, among
other things, common management or control with any other person or
applicant for operating authority registration or any other person or
applicant for operating authority registration that has been determined
to be unfit, unwilling or unable to comply with the requirements for
registration. The changes enacted as a part of MAP-21 were effective
October 1, 2012.

Discussion of Comments

    FMCSA published a notice of proposed rulemaking (NPRM) on November
13, 2012 (77 FR 67613) and received 24 comments in response. The
commenters included: Advocates for Highway and Auto Safety (Advocates),
American Trucking Associations (ATA), Amalgamated Transit Union (ATU),
FedEx Corporation (FedEx), GG Regulatory Consulting (GGRC),
International Brotherhood of Teamsters (IBT), Institute of Makers of
Explosives (IME), National Ground Water Association (NGWA), New York
State Department of Motor Vehicles (NY DMV), North American
Transportation Consultants, Inc. (NATC), Owner-Operator Independent
Drivers Association (OOIDA), Transportation Intermediaries Association
(TIA), Truck Safety Coalition (TSC), Transportation Trades Department
AFL-CIO (TTD), United Motorcoach Association (UMA), Werner Enterprises,
Inc. (Werner) and seven individuals.
    Several commenters fully supported the proposal, while others
stated that they agreed with the general goals of the proposal, but not
with the methods of accomplishing those goals. A majority of the
commenters requested clarifications to make the rule easier to
understand and implement. Several commenters stated that the Agency
went too far in some aspects of the rule, and that the rule would have
a broader application than they believe FMCSA intended. Still others
questioned how the new rule would fit within FMCSA's existing
enforcement programs. FMCSA responds to those comments, organized by
subject, below.

General Comments

    The New York State Department of Motor Vehicles (NY DMV) and five
individuals expressed general support for the rule while one individual
expressed general opposition. GG Regulatory Consulting (GGRC) expressed
support for North American Transportation Consultants, Inc.'s (NATC)
comments and adopted them as its own.

Comment Period

    NATC requested that the Agency either extend the comment period or
withdraw the rule so that FMCSA can address the commenters' issues and
improve the rule.
    FMCSA Response. The Agency will not extend the comment period or
withdraw the NPRM. The Agency provided a 60-day comment period during
which it received 24 comments from interested members of the public.
NATC did not identify any information suggesting that interested would-
be commenters were unable to submit comments during this time frame or
explaining why this rule in particular should have had a longer comment
period than the standard 60 days. Moreover, the purpose of notice and
comment rulemaking is to provide an opportunity for interested members
of the public to submit their views on the proposed Agency action and
for the Agency to make adjustments, if warranted, in response to those
comments. As a part of this process, FMCSA carefully considered all
comments received, including those submitted by NATC, and made
appropriate adjustments, as described below.

Applicability/Targeted Population

    Comment. NATC commented that the rule creates a new class of people
subject to regulation by including the conduct of ``any person'' as a
trigger and that this exceeds the Agency's authority. But NATC also
commented that 49 CFR 390.13 already regulates the same conduct,
rendering this rule redundant and in violation of an unspecified
executive order. In addition, NATC commented that the rule should be
changed to ``increase the specific action which should be taken against
both the carrier and individual manage/ownership personnel who violate
existing regulations.''
    FMCSA Response. Congress charged FMCSA with regulating the conduct
of motor carriers to include the conduct of ``any person, however
designated, exercising controlling influence over the operations of a
motor carrier'' (49 U.S.C. 31135(d)(2)). By using the conduct of ``any
person'' with controlling influence to trigger enforcement action
against motor carriers, FMCSA implements that

authority Congress specifically authorized--and directed--the Agency to
exercise.
    FMCSA disagrees with NATC's comment that this final rule is
redundant or that the substance is covered by existing Sec.  390.13.
Section 390.13 provides that ``No person shall aid, abet, encourage or
require a motor carrier or its employees to violate the rules of this
chapter.'' Unlike today's final rule, Sec.  390.13 places a direct
prohibition on individual conduct. Moreover, it does not address
Congress's mandate that the Agency penalize motor carriers for
individual conduct that rises to the level of a pattern or practice of
safety violations.
    Although NATC objected to creating a new class of people subject to
FMCSA's jurisdiction, it nonetheless suggested that the Agency target
that same class of people with enhanced penalties for violations of
existing regulations. But the final rule is based on a specific
congressional mandate: the Agency is directed to revoke or suspend the
registration of motor carriers, not take action against individuals,
except where those individuals are registered motor carriers. As a
result, FMCSA did not make NATC's suggested changes.
    Because NATC did not identify the Executive Order it alleged the
Agency to be in violation of and why, FMCSA cannot respond.
    Comment. NATC commented that 49 U.S.C. 31134 was established to
screen motor carriers attempting to obtain operating authority, and
that FMCSA is incorrectly attempting to apply that standard to carriers
holding existing authority.
    FMCSA Response. FMCSA disagrees that Congress intended for this
rule to apply only prospectively to motor carriers seeking new
operating authority. Although Sec.  31134 contains provisions
authorizing the Agency to withhold, revoke or suspend registrations,
neither that section nor Sec.  31135, which specifically authorizes
FMCSA to revoke or suspend registration based on patterns or practices
of safety violations, limits FMCSA's authority to take action against
existing registrants.
    Comment. Werner Enterprises, Inc. (Werner) commented that carriers
with an excellent record and culture of safety and compliance could be
targeted for hiring an officer with a history of noncompliance. Werner
further commented that a carrier could be punished without having done
anything to affect its safety rating negatively.
    FMCSA Response. This rule will target only the worst actors in the
industry. As a practical matter, FMCSA finds it highly unlikely that a
motor carrier with an excellent safety compliance record would place
someone with a history of egregious disregard for safety compliance in
a position of controlling influence over operations. But, in accordance
with Congress's direction, the Agency has determined that it is
appropriate to revoke or suspend the registration of motor carriers
that permit such individuals to exercise control over operations. In
discharging its mission to reduce crashes, injuries and fatalities, the
Agency believes that it is not appropriate to wait until a crash or
other adverse safety event occurs before taking action. To the
contrary, the intent of this rule, as mandated by Congress, is to
prevent non-compliant actors from circumventing their negative safety
compliance records, and thus preventing crashes, injuries and
fatalities from occurring in the first place.
    In the event that a motor carrier innocently places such a person
in a position of controlling influence, the rule provides safeguards
for the carrier. This rule requires that the Agency provide notice to
the carrier of the Agency's intent to suspend or revoke and gives the
carrier an opportunity to respond, which could include, among other
things, submission of mitigating information showing that the person is
not a safety risk, did not engage in the suspected conduct or has been
removed from a position of controlling influence. But this does not
mean that submission of mitigating information about a particular
officer would necessarily be dispositive. If a motor carrier's safety
management controls were so inadequate that placing the officer in a
position of controlling influence would be just a symptom of a pattern
or practice of safety violations, submitting mitigating information
about a particular officer might not be sufficient.
    Comment. The International Brotherhood of Teamsters (IBT) commented
in support of the rule and suggested expanding the Agency's vetting
process to include property-carrying and hazardous materials motor
carriers. NATC recommended extending the Agency's vetting program to
all motor carriers requesting operating authority registration and
suggested that all registrants be re-vetted every 5-10 years.
    FMCSA Response. FMCSA considers its vetting program to be an
important tool in discharging its safety mission. The Agency does not
believe that this rule is the appropriate vehicle for the expansion of
that program. FMCSA will, however, take these comments under advisement
and consider them in future vetting initiatives.
    Comment. IBT suggested that the Agency take enforcement action
against drivers in the port/drayage sector of the motor carrier
industry.
    FMCSA Response. Members of the industry in the port/drayage sector,
including drivers, could be subject to enforcement if they meet the
criteria established under this rule.
    Comment. Transportation Intermediaries Association (TIA) suggested
expanding the scope of the rule to include those entities that engage
in unlawful brokerage activities. Similarly, Owner-Operator Independent
Drivers Association, Inc. (OOIDA) suggested expanding the rule to reach
brokers and freight forwarders that reincarnate or use affiliated
entities to avoid safety compliance.
    FMCSA Response. In accordance with Congress's mandate, this rule is
limited to patterns or practices of safety violations. See 49 U.S.C.
31135(a), (b)(1) and (b)(2). The commercial regulations at 49 CFR parts
360 and 366-379, including provisions applicable to brokers and freight
forwarders, are not based on FMCSA's safety jurisdiction (49 U.S.C.,
Chapter 311, subchapter III and 49 CFR parts 380-387 and 390-398) and,
as a result, those regulations are outside the scope of this
rulemaking. Brokers and freight forwarders that also operate CMVs,
however, do fall under FMCSA's safety jurisdiction, and if such
entities reincarnate or use affiliated entities to avoid compliance
with safety regulations, then they too are covered under this rule.
    Comment. NATC asked whether a person not required to register under
FMCSA's regulations constitutes a motor carrier for the purposes of
this rule.
    FMCSA Response. Any entity registered under 49 U.S.C. 13902, 49 CFR
part 365, and 49 CFR part 368 is a motor carrier for the purposes of
this rule. To eliminate any confusion over the applicability of this
rule, FMCSA amended the regulatory text to state explicitly that any
entity registered or required to register is subject to this rule.
    Comment. United Motorcoach Association (UMA) commented that FMCSA
should establish a ``venue'' for motor carriers to disclose when they
are acquiring assets of a company placed out of service so that they
are not considered to be reincarnating.
    FMCSA Response. Carriers currently may report these transactions to
FMCSA and should file an updated MCS-150, as appropriate. It is
important to note, however, that this rule does not prohibit

legitimate business transactions involving the sale and purchase of
assets. It applies to carriers who attempt to avoid regulatory
requirements or enforcement action by creating a new identity or
affiliate relationship to mask the true nature of their identity. If a
carrier is placed out of service and elects to sell its assets rather
than take the corrective action necessary to resume operation, and
there is no common ownership or operational control between the out of
service carrier and the purchasing carrier, then this rule would not
apply. FMCSA recently initiated a separate regulatory initiative on the
related issue of the lease and interchange of passenger-carrying CMVs.
See Lease and Interchange of Vehicles; Motor Carriers of Passengers,
Notice of Proposed Rulemaking, Docket No. FMCSA-2012-0103, 78 FR 57822
(Sept. 20, 2013).

Regulatory Noncompliance

    Comment. OOIDA and Transportation Trades Department, AFL-CIO (TTD)
commented in support of the four categories of actions the Agency
identified in Sec.  385.907 that would trigger liability under this
rule. NATC commented that the Agency did not define ``avoid
compliance'' and did not identify a standard for complying with
statutory or regulatory safety requirements. Similarly, National Ground
Water Association (NGWA) and OOIDA requested that FMCSA clarify the
terms ``avoiding noncompliance,'' ``avoiding regulatory compliance,''
and ``concealing regulatory noncompliance.'' Several commenters
requested a definition or clarification of what type of conduct
constitutes ``masking or otherwise concealing noncompliance.''
    FMCSA Response. Section 385.907 identifies avoiding regulatory
compliance as failure or concealing failure to (1) comply with
statutory or regulatory requirements prescribed under 49 U.S.C. Chapter
311, subchapter III, (2) comply with State or Federal orders issued to
redress violations of those requirements, (3) pay a civil penalty for
violating those requirements, or 4) respond to an enforcement action
for a violation of those requirements. Any of these four types of
conduct constitutes noncompliance, and anyone who has engaged in such
conduct has avoided compliance. Anyone who attempts to hide, or evade
the consequences of, such noncompliance has engaged in masking or
otherwise concealing noncompliance.
    Comment. OOIDA sought clarification of ``. . . failure or
concealing failure to . . . 2) comply with State or Federal orders
issued to redress violations of those requirements,'' by asking what
types of orders trigger enforcement.
    FMCSA Response. Failing to comply with any order issued by FMCSA or
a State to enforce safety regulations issued under the authority of 49
U.S.C. Chapter 311, subchapter III could trigger enforcement of this
rule. These orders could include, but are not limited to, operations
out-of-service orders, orders directing payment of civil penalties,
orders directing compliance, orders revoking or suspending operating
authority registration and orders directing a safety audit or other
investigation.
    Comment. NATC asked what constitutes ``a history of non-
compliance.''
    FMCSA Response. A motor carrier that has engaged in one or more of
the four types of conduct identified in Sec.  385.907 has a history of
noncompliance.
    Comment. NATC commented that the Agency did not define ``failure to
respond'' as used in Sec.  385.907 and asked whether a partial response
would constitute failure to respond.
    FMCSA Response. Failure to respond means not taking action in
response to, or not participating in, enforcement actions arising out
of violations of safety requirements. Examples include, but are not
limited to, failing to: submit proof of corrective action as directed
by the Agency; produce information as directed by the Agency in
furtherance of an audit or investigation; or pay a civil penalty as
required by a final order imposing the penalty. Whether a partial
response constitutes failure to respond is a highly fact-specific
question that cannot be generalized prospectively but would be the
subject of focused consideration in an action under this rule.
    Comment. OOIDA asked to what extent FMCSA will be focused on
finding patterns or practices of safety violations that involve
concealment and whether a single act of concealment could trigger
enforcement.
    FMCSA Response. The Agency intends to pursue egregious conduct
under this rule irrespective of whether it constitutes avoiding
compliance or concealing noncompliance. One act of concealment could be
sufficient to establish a pattern or practice; however, that
determination is fact-specific and must be considered within the
context of the officer or motor carrier's conduct and the factors set
forth in Sec.  385.909.
    Comment. UMA commented that when a motor carrier that is placed out
of service makes arrangements to fulfill its contractual obligations,
that carrier should not automatically be considered to be
reincarnating, or masking or avoiding a negative compliance history.
UMA further commented that it would be better for FMCSA to monitor the
continued operations of an out-of-service carrier while that carrier
seeks reinstatement, citing financial obligations such as payroll and
lease payments.
    FMCSA Response. The fact that a motor carrier contracts with
another company after being placed out of service does not necessarily
establish reincarnation. The Agency's orders may permit carriers to
contract with other entities or to resume operations after receiving an
out-of-service order under certain circumstances. How a motor carrier
handles its contractual obligations may be one factor the Agency
considers when determining whether a motor carrier has reincarnated,
but it would not necessarily be dispositive. Each case is fact specific
and would be evaluated in accordance with the factors in Sec.
385.1007.
    Carriers must work with the appropriate enforcement personnel to
ensure that they remain in compliance with all regulatory requirements.
A carrier that operates within the parameters of existing regulations
and orders is not, by definition, avoiding compliance or masking or
concealing noncompliance. Although FMCSA regulations require a
passenger carrier to make arrangements to transport stranded passengers
to the next destination in the event a vehicle or driver is placed out-
of-service, that carrier would not normally be permitted to resume
regular operations through the use of a third party.
    Comment. Institute of Makers of Explosives (IME) requested that
FMCSA clarify that holders of hazardous materials safety permits (HMSP)
would not be subject to liability under the proposed rule if they
transferred assets to other related HMSP carriers while waiting to
``age out'' of an out-of-service disqualification, as long as this
arrangement was disclosed to the Agency and the assets transferred were
not the cause of the disqualification.
    FMCSA Response. A carrier that transfers assets to an affiliated
carrier to avoid being placed out of service or losing its HMSP engages
in conduct that is designed to avoid regulatory compliance. Whether the
conduct would then rise to the level of a pattern or practice of
avoiding, masking or concealing would depend on the facts of the
particular case.
    Comment. OOIDA commented that violations of 49 U.S.C. 31105, motor

carrier employee whistleblower protection provisions, should also be
included in Sec.  385.907.
    FMCSA Response. The Agency did not incorporate OOIDA's suggestion
that whistleblower protection provisions be included in Sec.  385.907.
Congress limited the Agency's authority to suspend or revoke a motor
carrier's registration for a pattern or practice of regulatory
noncompliance involving violations of safety statutes at 49 U.S.C.,
Chapter 311, subchapter III (49 U.S.C. sections 31131-31151) and
accompanying regulations (49 CFR parts 380-387 and 390-398). The motor
carrier employee whistleblower protection provisions at 49 U.S.C. 31105
are outside the scope of FMCSA's statutory authority for the purposes
of this rule. Individuals seeking protection under Sec.  31105 can seek
redress through the U.S. Department of Labor or by pursuing their
rights in Federal court. Regardless, if the conduct that gave rise to
the whistleblower claims involved violations of FMCSA's safety
statutes, they could form the basis for enforcement under this rule.

Officer

    Comment. UMA, American Trucking Associations (ATA) and FedEx
Corporation (FedEx) all commented that the Agency's interpretation of
the statutory definition of ``officer'' is overly expansive and should
not include contractors and consultants. OOIDA took the opposite
position, commenting that the definition should include contractors and
consultants.
    FMCSA Response. Including contractors and consultants in the
definition of ``officer'' is consistent with Congress's intent. The
statutory definition specifically includes ``any person, however
designated, exercising controlling influence over the operations of a
motor carrier.'' Nothing indicates that Congress intended to limit the
concept of ``any person'' to something less than the plain meaning of
the words ``any person.'' To the contrary, all evidence suggests that
Congress sought to target bad actors based on their conduct and the
influence they wield over motor carrier operations, regardless of their
position, title or employment status.
    Comment. ATA commented that motor carriers rarely grant controlling
influence to contractors and that defining ``officer'' to include
contractors would have a chilling effect on motor carriers seeking
outside help to improve safety practices. NATC also commented that
contractors rarely have direct control over motor carrier compliance
and could suffer unfairly from association with disreputable motor
carriers.
    FMCSA Response. Contractors, agents or consultants who exercise
controlling influence over motor carrier operations in an effort to
reverse a culture of noncompliance or otherwise improve compliance
would not be the subject of enforcement under this rule. That said,
FMCSA has observed instances in which consultants have exercised
controlling influence over operations to help motor carriers avoid
compliance or evade the consequences of previous instances of
noncompliance. Although these consultants are not technically
employees, their influence is both palpable and detrimental to safety.
The Agency intends for this final rule to have a deterrent effect on
persons such as contractors, agents or consultants who exercise a
controlling influence and advise motor carriers on how to circumvent
FMCSA's safety regulations.
    Comment. FedEx commented that the rule should define ``contractor''
to exclude independent businesses operating pursuant to the Part 376
leasing regulations.
    FMCSA Response. The Agency does not believe it is appropriate to
define contractor because the term is not used in the regulatory text.
Regardless, FMCSA does not believe that any classification of
contractor should be categorically excluded from this rule, for the
reasons stated above.

Controlling Influence

    Comment. Werner, ATA and FedEx commented that the Agency should
define ``controlling influence.''
    FMCSA Response. In response to comments, the Agency added a
definition of ``controlling influence.'' FMCSA describes this change in
the Section-by-Section Analysis portion of this final rule.
    Comment. OOIDA asked whether owner-operators are intended to be one
of the subjects of the rulemaking when they do not meet the definition
of ``officer.''
    FMCSA Response. This rule covers any person who exercises
controlling influence over a motor carrier's operations. An owner-
operator can be subject to this rulemaking either as a motor carrier or
as an officer, depending on the capacity in which he or she is acting.
For example, an owner-operator who engages in a pattern or practice of
safety violations in his or her capacity as a motor carrier, operating
under his or her own registration, could be subject to enforcement
under this rule. An owner-operator who acts as an officer, exercising
controlling influence over another motor carrier's operations and
engaging in a pattern or practice of safety violations, could also be
the subject of enforcement action. In accordance with congressional
intent, an owner-operator who engages in a pattern or practice of
safety violations while working under another motor carrier's
registration risks having his or her own individual registration
suspended or revoked. However, an owner-operator who neither acts as a
motor carrier nor an officer would not be subject to this rule.

Pattern or Practice

    Comment. TTD commented in support of the factors the Agency set
forth in Sec.  385.909 to determine whether a pattern or practice
exists. ATA, NATC, FedEx and OOIDA requested that the Agency define
``pattern of noncompliance'' or otherwise establish objective factors
for ``pattern or practice.''
    FMCSA Response. Congress charged the Agency with rooting out those
bad actors that have engaged in a pattern or practice of avoiding
regulatory compliance. That charge does not lend itself to the
establishment of rigid factors or a single definition. Each case must
be assessed based on the facts specific to that situation; no two acts
of noncompliance or avoidance are exactly the same. As such, the Agency
must have the flexibility to tailor its enforcement actions to the
facts of the specific cases. The factors in Sec.  385.909 are designed
to provide a framework for identifying objective information the Agency
can evaluate when determining whether a violation occurred. Moreover,
the factors provide the Agency the necessary flexibility to balance a
suspected violation against potentially mitigating circumstances.
    Comment. OOIDA commented that without a more exact formula for
determining what is a pattern or practice, enforcement officials would
not be able to ensure uniform application of the rule and motor
carriers could be subject to inconsistent enforcement actions.
Similarly, FedEx commented that the Agency could develop significant
regional differences in the application without more specific
guidelines.
    FMCSA Response. The Agency is not persuaded that enforcement rules
require a formulaic approach in order to avoid inconsistent application
or result. To the contrary, the Agency believes enforcement is best
served when there is room for discretion, explanation, and
consideration of the unique circumstances of each individual and
carrier. Regardless, the administrative review procedure in the rule
mitigates

the potential for inconsistency because one person--the Assistant
Administrator--is responsible for administrative review in all cases.
    Comment. FedEx recommended establishing predicate acts that must
occur prior to the Agency determining that a pattern or practice
exists.
    FMCSA Response. In order for FMCSA to determine that a motor
carrier or officer has engaged in a pattern or practice of avoiding
compliance or concealing noncompliance, the Agency must first determine
that the motor carrier or officer has engaged in one or more acts of
regulatory noncompliance as described in Sec.  385.907. Those acts that
fall within one of the four prongs in Sec.  385.907 are themselves the
predicate acts that must occur prior to the Agency making a
determination that a motor carrier or officer engaged in a pattern or
practice of avoiding regulatory compliance or concealing noncompliance.
    Comment. OOIDA asked the Agency to clarify what types of data it
would rely on in enforcing this rule. OOIDA specifically asked whether
the Agency would use violations identified in inspection reports from
Motor Carrier State Assistance Program (MCSAP) partners and during
safety audits. OOIDA commented that it believes the inspection data
FMCSA collects is inaccurate and unreliable and would undermine the
lawfulness and utility of enforcement actions. NATC asked whether the
Agency has established standards to ensure uniform investigations and
whether there is a process for reviewing the investigation results
before they are used as a basis for action under this rule.
    FMCSA Response. To enforce this rule, FMCSA will use the same data
gathered in accordance with the same investigative procedures that it
currently uses in enforcement actions. In fact, data gathered in
previous investigations in accordance with those procedures may be used
to inform the Agency Official's action under the rule. For example, the
Agency intends to use information obtained from compliance reviews,
safety audits, roadside inspections and other investigations concerning
safety performance. FMCSA's investigative standards and policies,
including those of its MCSAP partners, will generally apply to
proceedings arising under this rule, just as they would to any other
Agency enforcement proceeding.
    Comment. FedEx commented that information gathered in accordance
with pending enforcement actions should not be one of the factors in
Sec.  385.909, suggesting that only those enforcement actions that
constitute final agency actions should be taken into consideration.
    FMCSA Response. This rule is designed to deter motor carriers and
individuals from attempting to avoid enforcement action by masking or
concealing noncompliance or creating new identities or affiliate
relationships. This rule is necessary because, in many cases, motor
carriers attempt to avoid detection by concealing evidence of
noncompliance or creating new identities when they believe enforcement
action has or will be initiated due to a poor safety performance
history. The Agency has observed that some motor carriers engage in
evasive conduct to avoid even the threat of scrutiny. These carriers
constantly shift their assets, hoping that the Agency cannot keep up
with them. In some cases, motor carriers may disappear and pop up
elsewhere before the Agency can issue an order or a notice of claim.
    The Agency will look at all aspects of a motor carrier's safety
performance history, as it does in any other type of investigation. The
motor carrier's safety performance history provides critical
information about the carrier, irrespective of whether that information
culminated in a formal investigation or closed enforcement case. The
fact that pending or unresolved enforcement actions exist, however, are
often an indicator that, especially in the context of reincarnated
carriers, a motor carrier may be taking evasive action to avoid a
negative safety compliance history. But the fact that there is a
pending or unresolved enforcement action associated with a motor
carrier is not in and of itself dispositive; the Agency will consider
and evaluate the facts associated with the underlying conduct that gave
rise to the enforcement action. As in any other type of enforcement
action, the motor carrier is given the opportunity, in accordance with
principles of due process, to rebut the Agency's claims and submit its
own evidence.
    Regardless, the Agency understands FedEx's concerns with the
language as proposed. To address this concern, FMCSA changed proposed
Sec.  385.909(e) to clarify that the purpose of considering pending and
closed enforcement actions is to evaluate a carrier's safety
performance history. As such, that factor now reads: ``(e) Safety
performance history, including pending or closed enforcement actions,
if any. . . .''
    Comment. NATC commented that the rule does not incorporate the
MCSAC recommendation that ``a pattern is both widespread and continuing
over time, and does not require a specific number of violations.''
Similarly, Werner commented that the rule did not distinguish between
conduct that occurred recently or in the distant past.
    FMCSA Response. The Agency disagrees that the rule does not
incorporate the MCSAC recommendation or does not distinguish between
current and past conduct. To the contrary, the factors in Sec.  385.909
were designed to do just that. For example, the first factor, ``the
frequency, remoteness in time, or continuing nature of the conduct,''
allows the Agency Official to consider how often or enduring the
conduct is, including whether it was confined to the past or continues
currently. Moreover, the rule does not require the Agency to identify a
specific number of violations. As explained in the NPRM, as few as one
violation identified in Sec.  385.907 is sufficient to trigger
enforcement of the rule.

Common Ownership, Management, Control or Familial Relationship

    Comment. TTD commented in support of the factors in proposed Sec.
385.911 to determine whether there is common ownership, management,
control or familial relationship. NATC requested that the Agency change
the language in that section from ``the Agency Official may consider,
among other things, the following factors,'' (emphasis added) to ``the
Agency Official must consider, among other things, the following
factors.'' NATC also asked the Agency to identify the other factors
that the Agency Official could consider under proposed Sec.  385.911.
FedEx and NATC commented that the Agency did not define or set
standards to determine ``common familial relationship.'' ATA suggested
that the rule specify that a single factor may not be sufficient to
establish common ownership, management, control or familial
relationship, so as not to capture carriers with operations that
resemble another carrier's operations because of a legitimate purchase
of that other carrier's business. NATC recommended establishing a
minimum number of factors that must be present to establish common
ownership, management, control or familial relationship.
    FMCSA Response. The substance of proposed Sec.  385.911 now appears
as Sec.  385.1007 in new Subpart L as a part of the non-substantive
restructuring described below. As with identifying a pattern or
practice of noncompliance, identifying common ownership,

management, control or familial relationships does not lend itself to a
rigid formula. Chameleon carriers exploit the facts of their particular
circumstances and the limitations of existing Agency regulations and
resources to evade detection. There are myriad ways a motor carrier can
structure and restructure operations in an attempt to avoid the
consequences of noncompliance. As such, the Agency must have the
flexibility to evaluate motor carrier operations from a common sense
approach, looking at the facts of each situation as they arise. The
factors are designed to root out chameleon carriers by evaluating the
individual characteristics of their actions.
    To preserve its flexibility, the Agency declines to establish a
finite set of factors or establish a minimum number of factors that
must be present. It may be that common ownership is evident by
considering only a few of the factors on the list. The Agency does not
believe that it is the best use of its resources to require the Agency
Official to engage in analyses that would not affect the outcome of his
or her decision. Similarly, if evidence related to one of the factors
clearly indicates common ownership, there is no reason that the Agency
must find evidence supporting other factors. Finally, the Agency does
not believe that it is prudent to prohibit the Agency Official from
evaluating any relevant and admissible evidence that might prove--or
disprove--such relationships simply because the evidence does not
directly relate to one of the factors. Therefore, FMCSA did not make
NATC's suggested language change.
    Comment. ATA recommended that FMCSA change the language proposed in
Sec.  385.905(a)(3) to read: ``If two or more motor carriers use common
ownership, common management, common control or common familial
relationship with the intent to permit any or all such motor carriers
to avoid compliance. . . .''
    FMCSA Response. As a part of the restructuring of new Subpart L,
FMCSA moved the text of Sec.  385.905(a)(3) to Sec.  385.1005 and
modified the text slightly to make it conform to the statutory
language. That text now reads: ``Two or more motor carriers shall not
use common ownership, common management, common control, or common
familial relationship to enable any or all such motor carriers to avoid
compliance, or mask or otherwise conceal non-compliance, or a history
of non-compliance, with statutory or regulatory requirements prescribed
under 49 U.S.C. Chapter 311, subchapter III, or with or an order issued
under such requirements.'' ATA's suggested language deviates from the
statute and, as such, Agency did not make that change.

Egregious Disregard

    Comment. OOIDA commented that the Agency did not define
``egregious.'' Similarly, NGWA requested that the Agency clarify
``egregious disregard.''
    FMCSA Response. The Agency does not believe it is necessary to
define ``egregious'' because this term does not appear in the
regulatory text. For purposes of the final rule preamble, the word
takes its ordinary meaning: extraordinarily bad. The final rule thus
targets the small number of carriers whose acts of noncompliance
involve more than isolated instances of noncompliance resulting from
simple negligence. The rule targets carriers whose conduct demonstrates
a willful, and possibly repeated, attempt to avoid compliance or shield
noncompliance. This conduct, when viewed in light of the factors
contained in the rule, shows a disregard for the Agency's safety
requirements and therefore presents an unacceptable increased risk to
safety warranting application of the rule.

Relationship to Other Agency Programs or Enforcement Activities

    Comment. OOIDA asked FMCSA to explain the relationship between
today's final rule and existing rules and to explain whether today's
final rule was intended to create an entirely new enforcement process.
OOIDA also asked that the Agency explain how the procedures in 49 CFR
parts 385 and 386 are different from today's final rule.
    FMCSA Response. In response to OOIDA's comment, FMCSA carefully
considered the differences and similarities between the proposed rule
and the Agency's existing enforcement procedures under 49 CFR parts 385
and 386 as well as the suspension and revocation practices conducted
under the authority of 49 U.S.C. 13905. Although today's final rule
promulgates new causes of action, the Agency believes that it is more
efficient and effective for these rules to fit seamlessly within the
structure of existing enforcement procedures. As a result, the Agency
decided to make a number of changes to the structure of today's final
rule to eliminate confusion and more closely align it with existing
Agency enforcement practices.
    First, instead of combining the pattern or practice and common
ownership elements of this rule, FMCSA separated them by creating a new
49 CFR part 385, subpart L titled ``Reincarnated carriers.'' FMCSA did
this because there are inherent differences between an enforcement
proceeding evaluating a pattern or practice and one evaluating
reincarnation or affiliation. For example, there might be an
intervening person in a pattern or practice proceeding, but there will
never be one in a reincarnation proceeding. In addition, the factors
for evaluating the two different types of cases are very different. The
revised structure simplifies the rule and makes it easier to understand
which procedures apply to the two different types of enforcement
actions.
    Second, FMCSA aligned the factors for evaluating reincarnated
carriers under today's final rule with the existing procedures at 49
CFR 386.73 for evaluating reincarnated and affiliated carriers. Both
rules have the same objective: determining whether the commonalities
between entities rise to the level of reincarnation or affiliation. The
only substantive difference is that Sec.  386.73 authorizes the Agency
to issue an out-of-service order or record consolidation order, while
today's final rule authorizes the Agency to suspend or revoke
registration. In light of those similarities, the Agency decided
against having two separate sets of factors--which could evolve into
two separate standards for evaluating the same conduct. As a result,
the factors previously set forth at Sec.  386.73 also apply to FMCSA's
evaluation of common ownership, management, control or familial
relationship under today's final rule.
    Third, to align this rule with existing suspension and revocation
proceedings initiated under the authority of 49 U.S.C. 13905, FMCSA
eliminated the requirement that the Agency must first suspend a
carrier's registration prior to initiating a revocation proceeding.
This change conforms today's final rule to current Agency suspension
and revocation practices, as described in FMCSA Policy on Granting,
Withholding, Suspending, Amending or Revoking Operating Authority
Registration, 77 FR 46147, Aug. 2, 2012.
    Comment. Advocates for Highway and Auto Safety (Advocates)
commented that under Sec.  385.915, a revocation proceeding can only
take place after a suspension proceeding and that the Agency should
streamline the process so that a carrier's registration could be
revoked after only one proceeding. Advocates reasoned that the
compliance orders the motor carrier failed to comply with that
triggered enforcement under this rule can serve as the predicate for
initiating revocation proceedings.

    FMCSA Response. Taking into account this comment, as well as
current enforcement procedures, FMCSA agrees that it is not necessary
to require a suspension proceeding prior to a revocation proceeding and
has therefore decided to eliminate this requirement, as discussed
above. Regardless, revocation proceedings must comply with the
requirements of 49 U.S.C 13905. Under section 13905, FMCSA may revoke
registration only after FMCSA has issued an order to the carrier
directing compliance and the carrier has willfully failed to comply for
30 days. An order that triggers enforcement could be one that was
issued before the revocation proceeding was initiated or one that was
issued during the revocation proceeding. In either scenario, Sec. Sec.
385.913 and 385.1011 provide 30 days for the motor carrier to show
cause why its registration should not be revoked.
    Comment. OOIDA commented that the enforcement procedures in 49 CFR
part 385 make distinctions between acute and critical violations and
requests this level of specificity for this rule.
    FMCSA Response. The existing safety fitness determination
procedures at part 385 subpart A serve a different purpose, making the
need for distinguishing between acute and critical violations
unnecessary for this rule. Congress has determined that those carriers
engaging in a pattern or practice of safety violations present a risk
to the public that goes beyond what the Agency can address through a
safety fitness determination. A safety fitness determination is
critical to ensuring that only qualified carriers operate on the
nation's highways. But this rule identifies conduct--a pattern or
practice of safety violations--that goes beyond what can be routinely
detected in an investigation or isolated inspection. A pattern relates
to conduct that is widespread and continuing over time, involves more
than isolated violations, and does not require a specific number of
violations. A practice is an organization's policy, whether written or
not, that informs its conduct and operational management; the practice
could be evidenced by one or more instances of conduct. Thus, under
this rule, the Agency considers a carrier's safety compliance, not just
in terms of individual instances of noncompliance, but in the greater
context of how the carrier deals with that noncompliance. Accumulating
a series of safety violations could affect a carrier's safety rating,
but would not necessarily trigger enforcement under this rule if that
carrier took corrective action and otherwise managed those violations
responsibly. Conversely, carriers that seek to avoid the consequences
of accumulating those violations, or that perpetuate a culture of
avoiding compliance with safety regulations, would be candidates for
enforcement under this rule even in cases where the particular
violations discovered in the most recent review or inspection did not
in themselves warrant an unsatisfactory safety fitness determination.
    Comment. OOIDA commented that the public could assist FMCSA with
its enforcement efforts if it would make the FMCSA Register more
accessible and informative. With more information, members of the
public could help FMCSA identify new applicants with histories of
noncompliance.
    FMCSA Response. FMCSA appreciates OOIDA's comments on how to
improve the FMCSA Register. Although it is not appropriate to codify
changes to the FMCSA Register as a part of this rulemaking, FMCSA will
take OOIDA's comments under advisement.
    Comment. OOIDA requested that FMCSA explain the Agency's standard
for denying applications for operating authority based on failure to
disclose affiliations with other motor carriers.
    FMCSA Response. The focus of this rule is on the suspension or
revocation of existing operating authority registration. Although FMCSA
has the authority to deny registration applications for failure to
disclose relationships with other registrants, that authority is beyond
the scope of today's rule. For additional information on FMCSA's
policies governing the grant or denial of operating authority
registration applications, see FMCSA's Policy on Granting, Withholding,
Suspending, Amending or Revoking Operating Authority Registration (77
FR 46147, August 2, 2012).
    Comment. TIA commented that another way to achieve the objectives
of today's rule is to require motor carriers to re-register every year
and to link the Agency's Unified Carrier Registration requirements with
operating authority. TIA also suggested that the Agency consolidate its
out-of-service processes as well as develop links between a number of
FMCSA's enforcement programs.
    FMCSA Response. FMCSA appreciates TIA's comments on how to improve
its enforcement program, but does not believe that TIA's suggestion
would fulfill Congress's directive to take action against patterns or
practices of safety violations.
    Comment. TIA recommended that FMCSA should prohibit the sale of
operating authority numbers.
    FMCSA Response. TIA's recommendation is beyond the scope of this
proceeding; however, it is the subject of a separate Agency rule. See
Unified Registration System, 78 FR 52608, August 23, 2013.
    Comment. Some commenters recommended that FMCSA train and work with
State and local partners and provide information to industry
stakeholders in an effort to eliminate the noncompliance today's rule
targets.
    FMCSA Response. FMCSA works with the State and local enforcement
partners through the MCSAP, as well as the Agency's outreach and
education programs. As part of this collaborative effort, FMCSA
provides grants, training, and guidance to State and local agencies
regarding policies, procedures, implementation, and administration of
CMV programs. These cooperative efforts, although not specifically the
focus of today's final rule, will continue to ensure that information
shared with industry stakeholders is responsive to correcting
noncompliance in areas relevant to this rule.
    Information about some of FMCSA's outreach programs can be accessed
at www.nafmp.org (North American Fatigue Management Program) and
www.tsi.dot.gov (Transportation Safety Institute). Additional
information for drivers, motor carriers and law enforcement partners
can be found on FMCSA's Web site: www.fmcsa.dot.gov.
    Comment. Some commenters recommended implementation of more
stringent processes to oversee, monitor, and verify ownership of
operating authorities and to deactivate USDOT numbers that have been
inactive for long periods of time.
    FMCSA Response. FMCSA will take this suggestion under advisement.
FMCSA is continually implementing new methods to detect motor carriers
attempting to circumvent the regulations by creating new entities. This
rule provides another tool to prevent this from happening. For more
information on the deactivation of DOT numbers, see Unified
Registration System, 78 FR 52608, August 23, 2013.
    Comment. NATC commented that the NPRM did not address how FMCSA
would handle those who operate without authority after being identified
as unfit to safely manage carrier operations.
    FMCSA Response. NATC is correct that the NPRM did not expressly
address these issues. Any motor carrier that operates without authority
is currently subject to enforcement based on that lack of authority.
See 49 CFR 392.9a. Nothing in this rulemaking changes that. Regardless,
the Agency

would consider a motor carrier's history of operating without authority
when determining whether to pursue enforcement under this rule.
    Comment. Amalgamated Transit Union (ATU) and TTD commented that
they support the rule, but caution the Agency not to overlook other
important safety issues such as driver fatigue. An anonymous commenter
stated that FMCSA should prohibit the use of loose-leaf record of duty
status log books because it leads to violations of hours-of-service
rules.
    FMCSA Response. While issues such as driver fatigue and limitations
on driving time are beyond the scope of this rulemaking, the Agency
recognizes their importance. They are the subjects of other on-going
Agency regulatory and enforcement initiatives. Information about the
North American Fatigue Management Program is available at
www.nafmp.org.

Regulating the Conduct of Individuals

    Comment. NATC expressed concern that penalties under the rule are
applied to the carrier and not the individual determined to have
engaged in conduct constituting egregious disregard for safety
compliance. NATC recommends that FMCSA change the rule to include or
increase the potential penalties against an individual person, rather
than focus on the motor carrier that employs the individual. Werner
recommended targeting the person who engaged in the conduct (committed
the ``pattern'') and not the hiring motor carrier.
    FMCSA Response. Section 31135 authorized FMCSA to take enforcement
action only against registered individuals and motor carriers. That
means that under this rule, individuals holding their own operating
authority registration are subject to enforcement if they engage in a
pattern or practice of safety violations while working as an officer
for another motor carrier. MAP-21 authorizes FMCSA to suspend or revoke
the registration of any person who engages in a pattern or practice of
avoiding compliance, or masking or otherwise concealing noncompliance.
As such, if an individual who exercises a controlling influence over a
motor carrier's operations also possesses his or her own operating
authority registration, FMCSA may suspend or revoke that registration
in addition to the carrier's registration. Section 385.919 (which was
Sec.  385.921 before being re-numbered in the final rule) provides that
individuals holding operating authority registration are also subject
to civil or criminal penalties.

Civil and Criminal Remedies

    Comment. NATC commented that if FMCSA pursued criminal prosecution
and the presently available enforcement remedies more vigorously, the
deterrent effect would render the rule unnecessary.
    FMCSA Response. FMCSA agrees that the possibility of criminal
prosecution can act as a deterrent to the kind of conduct contemplated
by the rule. It is not, however, the only or most effective deterrent,
because FMCSA does not have direct authority to prosecute criminal
violations. Once FMCSA identifies the potential need for criminal
prosecution, it must refer the case to the Department of Justice with
recommendations on disposition. Congress, in recognition of this
limitation on FMCSA's authority, empowered the Agency through MAP-21 to
take appropriate enforcement action in areas for which the Agency has
direct and exclusive authority: all matters concerning operating
authority registration and imposition of civil penalties for violation
of safety regulations. Consistent with past practice, FMCSA will
continue to recommend criminal prosecution in appropriate cases. Any
action by FMCSA to suspend or revoke a motor carrier's operating
authority registration or impose a civil penalty would not preclude
pursuit of criminal penalties.
    Comment. UMA commented that a motor carrier should be placed out of
service only to protect the public and not as punishment; fines and
criminal prosecution should be the only penalties for violations.
    FMCSA Response. Underlying UMA's comment is the premise that out-
of-service orders and civil or criminal penalties address different
conduct; FMCSA rejects this distinction. This final rule targets those
motor carriers that engage in willful noncompliance with safety
regulations. Willful noncompliance with safety regulations is the
clearest indication that a registered entity presents a risk to the
motoring public. While civil and criminal penalties may have a
deterrent effect, they do not in and of themselves ensure public
safety. Shutting down a motor carrier that refuses to comply with
safety requirements or follow FMCSA orders does.
    Comment. IBT recommended that civil and criminal penalties be used
against motor carriers that repeatedly violate FMCSA's safety
regulations, regardless of whether the Agency suspends or revokes
registration.
    FMCSA Response. FMCSA will continue to pursue civil and criminal
penalties against motor carriers that violate the Agency's regulations.
The procedures in today's final rule provide the Agency with additional
enforcement tools. To make clear that today's final rule is not the
exclusive remedy for unlawful conduct, the Agency amended proposed
Sec.  385.921, now Sec.  385.919, to state that nothing in this rule
precludes FMCSA from taking action against a motor carrier for other
unlawful conduct.

Due Process

    Comment. NATC, UMA, and Werner expressed concern that the rule does
not afford due process.
    FMCSA Response. FMCSA is aware of the potential impact any
determination under the rule could have on a motor carrier and the
person whose conduct gives rise to an enforcement action. Accordingly,
FMCSA deliberately included a procedural due process mechanism that
grants motor carriers and individuals the right to notice of the
proceeding and an opportunity to be heard. As with any action FMCSA
takes, the Agency is keenly aware that it must act judiciously and
fairly.
    Sections 385.911 and 385.913 (which were proposed as Sec. Sec.
385.913 and 385.915 before being re-numbered in the final rule) require
FMCSA to provide written notice to the motor carrier and person who are
alleged to have engaged in the conduct that resulted in the suspension
or revocation proceeding. This notice must inform the motor carrier and
person of the factual and legal basis for the determination and notify
the person of his or her right to intervene in the proceeding. By
intervening, the person is able to present argument and evidence,
independently of the motor carrier, in defense or extenuation of the
allegations. The procedures provide the motor carrier and intervening
person the right to request administrative review of the Agency
Official's decision. Additionally, under Sec.  385.915 (which was
proposed as Sec.  385.917 before being re-numbered in the final rule),
motor carriers and intervening persons have the right, at a later date,
to request FMCSA to rescind an order the Agency issued under the rule.
Collectively, these procedures ensure that the rights of motor carriers
and individuals who may be affected by the rule are protected.
    Regardless, FMCSA acknowledges the concerns that commenters
expressed about protecting the rights of motor carriers and
individuals. To eliminate any confusion over the rights and
responsibilities of the parties to a suspension or revocation
proceeding,

Sec.  385.911(e) makes clear that when administrative review is
requested, the Agency Official must respond with evidence supporting
each issue in dispute. The Agency Official's determination may be
supported by either direct or circumstantial evidence. If the evidence
is circumstantial, the Agency Official's determination may also be
supported by the reasonable inferences drawn from the evidence.
Finally, the Assistant Administrator may request additional evidence,
but his review is limited to those issues identified in the petition
for review.
    Comment. NATC was concerned that implementation of the rule would
result in a taking without due process.
    FMCSA Response. Application of the rule will not result in a taking
without due process of law. The procedures contained in Sec. Sec.
385.911, 385.913, and 385.915 ensure both motor carriers and officers
receive notice and an opportunity to be heard concerning any allegation
that either engaged in a pattern or practice of safety violations or
created a new entity or affiliate relationship to avoid regulatory
requirements. The Agency's determination is made in context of these
procedures, which provide due process and protect the carrier's and
individual's interests.
    Comment. NATC commented that the revocation procedures do not
require the Agency to show a willful failure to comply.
    FMCSA Response. Sections 385.913 and 385.1011 state that the Agency
Official may revoke a motor carrier's registration only if the motor
carrier willfully violated an order for at least 30 days.

Due Diligence/Hiring Concerns

    Comment. NATC commented that existing databases and Web sites do
not have adequate information about individuals for an employer to make
a determination on a prospective officer's history of noncompliance.
NATC commented that contractors would suffer guilt by association even
if they had not themselves been noncompliant or exercised controlling
influence over motor carrier operations. UMA commented that there is no
formal mechanism for carriers to disclose hiring decisions. UMA went on
to suggest that FMCSA is creating an informal blacklist, the contents
of which carriers would have to guess. UMA commented that this would
bar certain people from the industry without due process and would be
shifting responsibility for regulating to motor carriers.
    Werner commented that an innocent carrier could be held responsible
for the conduct of an employee, even though the carrier was not aware
of the employee's conduct. Werner is particularly troubled that a
carrier could face enforcement action when the employee's conduct
occurred before the carrier hired the employee. Werner and ATA
commented that carriers do not have reliable access to background
information on prospective hires and that checking references does not
always yield the necessary information because many employers are
unwilling to provide information other than the dates of hire and
termination. ATA commented that publicly available safety data for
motor carriers is generally available only for three years, and that
prospective employers might reject qualified applicants because of
their inability to confirm the compliance history of previous
employers.
    Werner and ATA stated that carriers will be put in the position of
having to make a decision as to whether the perspective employee was in
a position to exercise ``controlling influence'' without having
adequate information. Werner commented that this would create a
presumption against hiring people where information is not readily
available, and could result in a person's lifetime ban from the
industry if they were associated in any way with a questionable
carrier. ATA commented that the rule would penalize innocent employees
who happened to work for companies with poor safety cultures. ATA
recommended that the Agency limit a motor carrier's liability for an
officer's conduct with a previous employer.
    FedEx commented that there are no fixed standards for determining
whether a carrier has exercised due diligence in hiring. FedEx stated
that checking the history of previous motor carrier employers without
additional scrutiny into the applicant's role with previous employers
could result in a blanket refusal to hire an individual even if that
individual had no involvement in noncompliance. FedEx further commented
that the evaluations the rule requires are overly burdensome and will
create a significant amount of administrative work for employers.
    FMCSA Response. Motor carriers are responsible for the people they
hire to act on their behalf. This concept is not unique; motor
carriers, like all other employers, conduct due diligence to avoid
negligent hiring claims under existing law. The concept of negligent
hiring is a long-standing legal principle and myriad employers have
navigated the due diligence requirements to protect themselves from
liability. As a result, FMCSA believes that most companies already have
procedures or policies for investigating prospective employees. The
Agency finds it difficult to believe that any responsible motor carrier
would engage someone to exert controlling influence over its operations
without engaging in a level of due diligence sufficient to understand
the person's qualifications and prior work experience in the industry.
The requirements of this rule are thus consistent with standard
business practices, and, as a result, the Agency believes that motor
carrier employers should not face additional burdens with respect to
conducting the requisite due diligence in hiring. Placing limits on
liability would discourage motor carriers from engaging in due
diligence, and, accordingly, the Agency declines to adopt this
suggestion.
    That said, the Agency acknowledges that there are limitations to
what an employer can discover and that applicants can misrepresent
their work experiences. But as the Agency stated in the NPRM, this rule
targets only the worst motor carriers. The Agency must present evidence
demonstrating willful conduct before it may issue an order to suspend
or revoke operating authority registration. The Agency would not be
able to sustain an order suspending or revoking registration merely on
evidence that a person previously worked for a motor carrier that had a
history of noncompliance or even that the person exercised controlling
influence over a noncompliant motor carrier's operations. FMCSA could
only suspend or revoke the registration on competent evidence that the
person exercised controlling influence and was personally involved,
either by act or omission, in a pattern or practice of avoiding
compliance, or masking or otherwise concealing noncompliance. The
Agency must therefore establish that the officer engaged in willful
conduct to avoid compliance or hide noncompliance.
    Comment. NATC suggested that FMCSA create a database of individuals
unqualified to work in the motor carrier industry. If FMCSA does not do
that, NATC commented, it will place an unreasonable burden on motor
carriers and will force the industry to develop its own standards and
blacklists without due process. Werner and ATA suggested that the best
solution is for FMCSA to maintain a list or clearinghouse of
individuals who have engaged in a pattern or practice of avoiding
compliance.

    FMCSA Response. The Agency acknowledges the commenters' interests
in creating a clearinghouse for the purposes of identifying officers
who have engaged in a pattern or practice of safety violations, but it
declines to make this information available in the form of a list or
clearinghouse. A clearinghouse or list would not take into account all
of the factors the Agency might take under consideration such as
remoteness in time and whether the individual continues to present a
risk to safety or has rehabilitated him or herself. The Agency intends
for this rule to address non-compliance in the context of the point in
time and circumstances raised in the Agency Official's order. A list of
the type the commenters suggested could have the effect of unfairly
excluding individuals from the motor carrier industry. That said,
FMCSA's enforcement decisions under this rule will be available to the
public. Although those decisions will identify the individual officers
who have engaged in a pattern or practice of safety violations, they
will also provide the context and circumstances giving rise to the
Agency Official's decision.
    Comment. UMA suggested that FMCSA should register individuals
responsible for safety compliance and revoke that registration if the
Agency can show noncompliance with safety regulations.
    FMCSA Response. Section 31135 authorized the Agency to suspend or
revoke motor carrier registration for permitting an officer who engages
in or has engaged in a pattern or practice of safety violations to act
on the motor carrier's behalf. It did not authorize FMCSA to create a
new registration scheme for those individuals who are employed by motor
carriers to manage for safety compliance. To the contrary, in section
31135, Congress authorized FMCSA to use its existing tools--suspension
or revocation of a motor carrier's operating authority registration--to
address patterns and practices of safety violations. FMCSA has never
registered individuals who are not operating as motor carriers, brokers
or freight forwarders; it need not do so now to effectuate Congress's
intent.

Timing of Suspension or Revocation

    Comment. Truck Safety Coalition (TSC), IBT, and TIA each generally
supported the rule. Each commenter expressed concern, however, that
revocation and suspension orders issued under the rule do not take
effect immediately and requested that FMCSA either make the orders
immediately effective or dramatically reduce the time in which carriers
have to respond to the action under Sec. Sec.  385.913 and 385.915.
    FMCSA Response: FMCSA appreciates these and other comments
expressing concern that the suspension and revocation process would
take too long or be unnecessarily cumbersome. In response to these
comments, FMCSA decided to make changes to the suspension and
revocation procedures in this rule, as described below. That said, MAP-
21, and in particular 49 U.S.C. 13905, requires that registered
entities be given notice and an opportunity for a proceeding before
FMCSA suspends or revokes operating authority registration. FMCSA does
not have statutory authority, therefore, to issue a suspension or
revocation order under 49 U.S.C. 31135 that becomes immediately
effective and for which procedural due process is provided after the
fact.
    Moreover, FMCSA carefully considered the timeframes and has
determined that they are not only consistent with other Agency
enforcement procedures, but also provide both a fair opportunity for
the registered entity to be heard and an efficient process to stop
carriers who flagrantly disregard requirements from operating. But we
emphasize that this rule was not meant to address situations with
carriers that the Agency considers an immediate threat to public
safety; FMCSA has authority under 49 U.S.C. 521(b)(5) to issue an
imminent hazard operations out-of-service order, which is immediately
effective. FMCSA issues these orders when it determines that a
carrier's operation substantially increases the likelihood of serious
injury or death if not discontinued immediately. If the facts warrant,
FMCSA could issue an order under today's rule, as well as an imminent
hazard operations out-of-service order.
    Comment. FedEx suggested that the Agency amend proposed Sec.
385.913(e) (Sec.  385.911(e) in the final rule) so that any suspension
order is automatically stayed until after the Assistant Administrator
conducts his review. Conversely, TSC commented that a motor carrier
should not be able to continue operating for an additional 60 days
after the Agency concludes that its registration should be suspended or
revoked.
    FMCSA Response. FMCSA acknowledges the desire of TSC and others for
swift resolution in an enforcement action while at the same time
acknowledging FedEx's concern that carriers not be prematurely shut
down. Loss of registration is a significant sanction; as such, FMCSA
carefully balanced the public safety interest in suspending or revoking
an unsafe motor carrier's registration with the need to protect the due
process rights of motor carriers and individuals that are the subject
of enforcement proceedings. One of those safeguards includes providing
adequate opportunity for the carrier or individual to be heard before
registration is suspended or revoked. In addition, this rule was not
meant to replace other FMCSA enforcement tools to prevent carriers from
operating when their operations present an immediate risk of harm, such
as imminent hazard procedures at 49 U.S.C. 521 and 49 CFR 386.72.
    Comment. NATC commented that there are no time requirements by
which the Agency must respond to a petition for administrative review.
Similarly, TSC commented that the Agency does not have a fixed time
within which to respond to a carrier's submission. Advocates
recommended that proposed Sec. Sec.  385.913 and 385.915 establish a
time within which the Assistant Administrator must render a decision on
whether to suspend or revoke a motor carrier's registration.
    FMCSA Response. The rule provides for specific timeframes within
which the Agency must act in response to a petition for administrative
review of suspension or revocation proceedings. With respect to
suspension proceedings, Sec.  385.911(e)(3) (proposed as Sec.
385.913(e)(3)) requires FMCSA, through the Agency Official, to serve a
response to the petition no later than 15 days following the service of
the petition. Recognizing the Assistant Administrator's limited
resources, FMCSA changed Sec.  385.911(e)(5) (proposed as Sec.
385.913(e)(5)) to require the Assistant Administrator to issue a
written decision within 60 days instead of 30 days. Section 385.913(e)
applies the same time frame to administrative review procedures for
revocation proceedings.
    Section 385.915 (proposed as Sec.  385.917) requires the Agency
Official to act on a petition for rescission within 60 days. NATC is
correct, however that the proposed rule did not establish a time frame
for the Agency Official to respond to a request for administrative
review of a denial of a petition for rescission under Sec.  385.915. To
correct this omission, the Agency added a new paragraph (g) granting
the Agency Official 15 days to respond to a petition for review of the
order denying the petition for rescission. New paragraph (h) grants the
Assistant Administrator 60 days from service of either the petition for
review or the Agency

Official's timely-served response to serve a decision to act on the
petition.

Privacy Analysis

    Comment. NATC commented that it disagreed with the Agency's privacy
impact analysis because the rule fails to address the rights of the
individuals who will be refused work, and that a determination without
an impartial Federal judge directly impacts the privacy of the
individuals involved.
    FMCSA Response. The Agency's privacy impact analysis explains how
FMCSA will safeguard the personally identifying information the Agency
collects or uses in connection with the rule. NATC's comment about the
rights of individuals relates to the process the Agency has developed
to protect individual rights. The Agency addresses those comments in
the section entitled ``Due Process,'' above.

Economic Analysis

    Comment. NATC commented that the proposed rule would have a major
impact on the motor carrier industry and stated that FMCSA had not
documented the number of carriers that would be impacted by this rule,
the economic impact of their loss of operating authority, or the fact
that the impact will be smaller than $100 million. Furthermore, NATC
commented that the rule would impose costs on carriers by requiring
them to conduct background checks on new employees. Finally, NATC said
that small entities will be adversely affected by the loss of
individuals deemed unfit by the FMCSA.
    FMCSA Response. In the NPRM, the Agency estimated the cost of
suspension or revocation of a company's operating authority. The use of
the proposed rule against a typical carrier would require the State-
level re-licensing and re-registering of an average of 10 CMVs, which
would cost at most $32,000. We estimate that the rule would have been
applied six times in the year preceding this final rule, which would
have created total societal costs of $192,000. The costs of this rule
would remain well below the $100 million threshold for economic
significance even if the Agency were to apply it to a much larger
number of carriers each year; therefore, no detailed analysis is
necessary. FMCSA has indicated that this rule would be used only in
egregious circumstances. It is therefore unlikely to have a
``significant economic impact on a substantial number of small
entities'' (SEISNOSE). The small number of companies affected by this
rulemaking allows FMCSA to certify that it will not have a SEISNOSE.
With regard to background checks, employers vet new employees already
as part of good business practices. Vetting for the purposes of
ensuring compliance with this rule is consistent with established
business practices and therefore does not impose additional costs on
carriers.

Changes From the NPRM

    This final rule makes the following changes to the NPRM in response
to comments. FMCSA separated the rule into two subparts: Subpart K
governing patterns or practices of safety violations and Subpart L
governing reincarnated carriers. As a result of this change, FMCSA
eliminated proposed Sec.  385.911 and renumbered proposed Sec. Sec.
385.913-385.923 as Sec. Sec.  385.911-385.921. FMCSA changed the
regulatory text in Sec.  385.901 to make clear that this rule applies
to all entities required to be registered under 49 U.S.C. Sec.  13902.
In Sec.  385.903, FMCSA added a definition of ``controlling influence''
to clarify what types of conduct would trigger enforcement under this
rule. In Sec.  385.909, FMCSA changed the title to ``Pattern or
practice,'' to eliminate confusion and made a change to the factors
that the Agency Official considers in determining whether a motor
carrier or a person acting on its behalf has engaged in a pattern or
practice of safety violations. The factor that previously considered
the existence of pending or closed enforcement cases was changed to
clarify that the Agency would be considering safety compliance history,
including pending or closed enforcement cases. FMCSA changed the
regulatory text in proposed Sec.  385.913(b) (now Sec.  385.911(b)) to
make clear that the motor carrier's or intervening person's response to
the show cause order must state the factual or legal basis for the
response. FMCSA also changed the regulatory text in proposed Sec.
385.913(e) (now Sec.  385.911(e)) to make clear the parties rights and
responsibilities on administrative review. In proposed Sec.  385.915,
now Sec.  385.913, FMCSA made changes that mirror the changes to Sec.
385.911(e) and also eliminated the requirement that the Agency must
first obtain a suspension order prior to initiating a revocation
proceeding. In proposed Sec.  385.917 (now Sec.  385.915), FMCSA
changed the rule to give the Agency Official 15 days to respond to a
petition for review of a denial of a petition for rescission. FMCSA
amended proposed Sec.  385.921, now Sec.  385.919, to make clear that
nothing in this rule precludes the Agency from taking action against a
carrier for other violations.
    New Subpart L consists of Sec. Sec.  385.1001-385.1019. Sections
385.1001-385.1003 establish the applicability and defined terms
relevant to reincarnated carriers under Subpart L. Sections 385.1005
and 385.1007 establish the prohibition against reincarnation and the
factors for evaluating a violation. They are substantively the same as
what was proposed, with minor changes to conform to the statutory
language and Sec.  386.73. Sections 385.1009-385.1019 contain the
procedures for suspension and revocation, administrative review,
rescission and penalties that are substantially the same as Sec. Sec.
385.911-385.921. Subpart L is described in more detail in section-by-
section explanation below.
    Several other conforming changes were made throughout the document
to update the regulatory text as a result of the renumbering of
sections in Subpart K and the movement of other sections to Subpart L.

Section-by-Section Analysis

    FMCSA amends 49 CFR Parts 385 and 386 in the following ways.

Subpart K--Pattern or Practice of Safety Violations by Motor Carrier
Management Section 385.901

    Section 385.901 remains primarily as proposed with one minor
modification. FMCSA changed the regulatory text in Sec.  385.901 to
make clear that this rule applies to all entities registered or
required to be registered under 49 U.S.C. 13902. The explanatory text
in the NPRM made clear that all entities required to register are
subject to this rule; these changes are designed to eliminate any
ambiguity.
Section 385.903
    The definitions of the terms Agency Official and officer remain as
proposed. The term ``Agency Official'' is the Director of FMCSA's
Office of Enforcement and Compliance or his or her designee. The term
``officer'' is identical to the statutory definition codified at 49
U.S.C. 31135. In response to comments requesting that the Agency define
``controlling influence,'' the Agency added the following definition to
Sec.  385.903: ``Controlling influence'' means having or exercising
authority, whether by act or omission, to direct some or all of a motor
carrier's operational policy and/or safety management controls.''
    Whether an officer exercises controlling influence is fact-
specific. For example, controlling influence could be authority or
responsibility over day-to-day vehicle maintenance, or it could be
about implementing or failing to implement operational safety policies.
Someone exercising controlling

influence could be directing others working on the company's behalf
regarding compliance with safety management controls. That person could
be an employee or an outside consultant engaged to oversee safety
management controls or the workers that manage such controls. The
degree to which a person exercises controlling influence is the degree
to which his or her conduct affects the carrier's operation and safety
performance. To determine whether, and to what degree, a person
exercises controlling influence, the Agency will consider the
individual's role in the company, irrespective of title, in the context
of all available information about the company's operations.
    To eliminate any potential confusion between the operating
authority registration required under 49 U.S.C. 13902, which is subject
to revocation under this rule, and USDOT registration required under 49
U.S.C. 31134, which is not subject to revocation under this rule, the
Agency added the following definition of ``registration'' applicable to
Subpart K: ``Registration means the registration required under 49
U.S.C. 13902, 49 CFR Part 365, and 49 CFR Part 368.''
Section 385.905
    Section 385.905(a)(1) and (2) remain substantively as proposed.
These paragraphs describe the conduct that could trigger suspension or
revocation of a motor carrier's operating authority registration. The
only non-substantive change substitutes the words ``49 U.S.C. Chapter
311, subchapter III'' for ``subchapter'' to make more clear that the
safety regulations that could trigger the application of this rule are
those promulgated under the authority of 49 U.S.C. Chapter 311,
subchapter III. Section 385.905(b)(1) remains substantively as
proposed, with one minor language change to make clear that the Agency
Official may issue an order requiring compliance with FMSCA's safety
requirements as a part of a suspension or revocation proceeding.
Section 385.905(b)(2) remains as proposed. These paragraphs describe
how the Agency would determine whether that conduct occurred.
    Paragraph (a)(1) sets forth the Agency's authority to suspend or
revoke the motor carrier's operating authority registration if it
engages or has engaged in a pattern or practice of avoiding regulatory
compliance or masking noncompliance. Paragraph (a)(2) sets forth the
Agency's authority to suspend or revoke a motor carrier's operating
authority registration if it permits any person to exercise controlling
influence over the motor carrier's operations if that person engages or
has engaged in a pattern or practice of avoiding regulatory compliance
or masking noncompliance while acting on behalf of any motor carrier.
For purposes of this rule, a person acts on behalf of a motor carrier
when the person exercises controlling influence over part or all of the
motor carrier's operations. Paragraph (b) authorizes FMCSA's Director
of the Office of Enforcement and Compliance or his or her designee (the
Agency Official) to exercise the authorities established in paragraph
(a).
    For purposes of clarity, the Agency deleted the substance of the
reincarnated and affiliate carrier provisions that were proposed at
Sec.  385.905(a)(3) and (b)(3), and moved them to Sec. Sec.  385.1005
and 385.1007.
Section 385.907
    Section 385.907 remains as proposed. Under this section, the Agency
Official determines whether a motor carrier or person acting on its
behalf has avoided regulatory compliance or masked or otherwise
concealed regulatory noncompliance based on the results of an
investigation by FMCSA, State, or local enforcement personnel. This
conduct includes failure to or concealing failure to: (1) comply with
statutory or regulatory safety requirements; (2) comply with FMCSA,
State, or local orders intended to redress violations of Federal
regulatory safety requirements; (3) pay civil penalties for violations
of regulatory safety requirements; or (4) respond to enforcement
actions arising out of violations of regulatory safety requirements.
Regulatory safety requirements include statutory or regulatory
requirements prescribed under 49 U.S.C. Chapter 311, subchapter III,
which include 49 U.S.C. sections 31131-31151 and 49 CFR Parts 380-387
and 390-398.
Section 385.909
    The majority of this section remains as proposed. If the Agency
Official concludes that the motor carrier or person acting on its
behalf has failed, or concealed failure, to do one or more of the
actions described in Sec.  385.907, the Agency Official determines
whether such conduct constitutes a pattern or practice of noncompliance
or masking noncompliance by considering the factors set forth in this
section. In response to comments, FMCSA clarifies the meaning of the
factor in paragraph (e) by changing the regulatory text to state
``Safety compliance history, including pending or closed enforcement
actions, if any.'' This change clarifies that the purpose of this
factor is to evaluate a carrier's safety performance history. In
addition, the Agency amended the title of this section to read
``Pattern or practice,'' to streamline the organization of Subpart K.
Section 385.911
    For purposes of clarity, the Agency deleted the substance of
proposed Sec.  385.911, which set forth the factors for evaluating
reincarnated and affiliate motor carriers, and moved it to Sec.
385.1007. As a result of this change, FMCSA re-numbered proposed Sec.
385.913 to Sec.  385.911. This section authorizes the Agency Official
to issue an order suspending the motor carrier's registration and
establishes the procedures FMCSA will follow to suspend a motor
carrier's registration, including administrative review. With the
following exceptions, the substance of that section remains as
proposed.
    FMCSA changed the regulatory text in paragraph (a)(2) to make clear
that any order triggering a revocation proceeding would have to be one
directing compliance with safety requirements. FMCSA changed the
regulatory text in paragraph (b)(4) to make clear that motor carriers
(and by extension intervening persons) must state the factual or legal
basis for their responses to an order to show cause issued under this
section. Accordingly, and like safety rating proceedings under 49 CFR
Part 385, a motor carrier or intervening person who alleges that the
show cause order was issued in error has the burden of proof to
demonstrate error. This paragraph is also consistent with the Agency's
current practice under 49 U.S.C. 13905, which governs suspension and
revocation proceedings.
    FMCSA also changed the regulatory text in paragraph (d)(2)(i) to
require that the Agency Official's suspension order include information
on how to submit a petition for administrative review, which is
described in paragraph (e) of this section. In addition, FMCSA amended
the language of paragraph (e) (introductory paragraph) to include
specific instructions on how to petition the Assistant Administrator
for review of the Agency Official's order.
    FMCSA changed the regulatory text in paragraph (e)(3) to make clear
that the Agency Official must respond with legal argument or evidence
to support issues a petitioner raises on review. The changes also make
clear that the Agency Official may base his or her decision on direct
or circumstantial evidence, including the reasonable inferences drawn
from that evidence, in addition to

other types of documents and testimony. Paragraph (e)(4) makes clear
that the Assistant Administrator's review is limited to those issues
identified in the petition for review. The Assistant Administrator may,
however, require the parties to produce additional evidence. If the
petitioner does not provide the additional evidence requested, this
paragraph authorizes the Assistant Administrator to dismiss the
petition for review. This provision is consistent with the procedures
for safety rating cases in 49 CFR part 385.
    Changes to paragraph (e)(5) extend the Assistant Administrator's
decision making period from 30 to 60 days. The Agency made this change
acknowledging the heavy case load the Assistant Administrator carries
as well as his or her limited resources.
Section 385.913
    This section was proposed as Sec.  385.915, but was renumbered to
Sec.  385.913. It establishes the procedures for revoking a motor
carrier's operating authority registration for failure to comply with
an order issued under Subpart K. To conform to existing Agency
practices, this section was amended to eliminate the requirement that
the Agency first obtain a suspension order prior to seeking revocation
of a motor carrier's operating authority registration. This section now
requires that the Agency determine that a motor carrier has willfully
violated an order directing compliance for a period of at least 30 days
before revoking operating authority registration, but that order is no
longer required to be a suspension order issued under Sec.  385.911, or
even an order issued under part 385, subpart K. Changes to this section
make clear that any order directing compliance with FMCSA's safety
regulations and in effect for more than 30 days could form the basis
for revocation under this section. Finally, FMCSA made changes to
paragraph (b)(4) that are identical to the changes made at Sec.
385.911(b)(4) and changes to paragraph (d)(2)(i) that are identical to
the changes made at Sec.  385.911(d)(2)(i).
    The rest of the substance of this section remains as proposed.
Section 385.915
    This section was proposed as Sec.  385.917, but was renumbered to
Sec.  385.915. This section establishes the procedures for motor
carriers and intervening persons to file petitions for rescission of an
order issued under this rule. The Agency added a provision stating that
a motor carrier is permitted to resume operations, so long as it is
otherwise in compliance with FMCSA's requirements, as soon as a
suspension order is rescinded. Although this was implied in the text as
proposed, the Agency decided to change the regulatory text to make this
clear. The Agency also made minor changes to make clear that a motor
carrier that applies for and is granted registration after rescission
of a revocation order would be subject to the new entrant requirements
at 49 CFR part 385. The Agency made changes to paragraph (f),
describing how to file a petition for review, that are identical to the
changes made at Sec.  385.911(e). Finally, the Agency added a new
paragraph (g) (renumbering old paragraph (g) as paragraph (h)) that
sets a time limit of 15 days for the Agency Official to respond to a
petition for review. Previously, no time limit was set. New paragraph
(h) allows the Assistant Administrator 60 days from service of the
petition or a timely-filed response, whichever is later, to act on the
petition.
Section 385.917
    This section was proposed as Sec.  385.919, but was renumbered to
Sec.  385.917. This section states that orders issued under the rule
would not amend or supersede existing FMCSA orders, prohibitions, or
requirements. The Agency amended this section to state, in addition,
that suspension or revocation under this rule is not the exclusive
remedy for FMCSA to pursue against motor carriers that violate the
FMCSRs. It also states that nothing precludes FMCSA from taking
enforcement action against a motor carrier's operating authority
registration or USDOT registration for other conduct violating
applicable statutes, regulations or FMCSA orders. FMCSA could take that
action as a part of a separate proceeding, or in combination with a
proceeding instituted under this rule.
Section 385.919
    This section was proposed as Sec.  385.921, but was renumbered to
Sec.  385.919. This section states that existing statutory civil and
criminal penalties and sanctions could apply to motor carriers subject
to enforcement under this rule. For example, among other things, FMCSA
could also seek revocation of a motor carrier's USDOT number
registration pursuant to its authority under 49 U.S.C. 31134(c).
Section 385.921
    This section was proposed as Sec.  385.923, but was renumbered to
Sec.  385.921. This section states that the regulations governing the
service of documents and the computation of time at 49 CFR 386.6 and
386.8 would apply to proceedings under this rule, except as otherwise
provided. The Agency made one minor change to this section. It now
states that all documents served under subpart K must include a
certificate of service.

Subpart L--Reincarnated and Affiliated Motor Carriers

Section 385.1001
    This section establishes that Subpart L--Reincarnated and
Affiliated Motor Carriers--applies to for-hire motor carriers holding
or required to hold operating authority registration.
Section 385.1003
    This section defines Agency Official, using the same definition
that was proposed in Sec.  385.903. It also defines a reincarnated or
affiliated carrier as one with common ownership, common management,
common control or common familial relationship. To eliminate any
potential confusion between the operating authority registration
required under 49 U.S.C. 13902, which is subject to revocation under
this rule, and USDOT registration required under 49 U.S.C. 31134, which
is not subject to revocation under this rule, the Agency added the
following definition of ``registration'' applicable to Subpart L:
``Registration means the registration required under 49 U.S.C. 13902,
49 CFR part 365, and 49 CFR part 368.''
Section 385.1005
    This section prohibits carriers from reincarnating or using
affiliates to avoid compliance with safety requirements.
Section 385.1007
    Section 385.1007 sets forth the factors the Agency Official
evaluates to determine whether a carrier or carriers have violated the
prohibition on reincarnating or using affiliates to avoid compliance
with safety requirements. Paragraph (a) establishes that the Agency
Official may issue an order to suspend or revoke one or more motor
carriers' operating authority registration for violations of Sec.
385.1005. Paragraph (b) establishes that the Agency Official must use
the factors set forth at Sec.  386.73 to determine whether a motor
carrier has reincarnated or whether two or more motor carriers are
affiliates. These factors are substantively the same as those that were
in proposed Sec.  385.911.
    FMCSA recognizes that motor carriers may have legitimate business
purposes for affiliating or changing their business identity and that
this conduct is not per se unlawful. This rule is triggered only when
one or more carriers reincarnate or affiliate for the purpose of
avoiding

compliance or masking or concealing regulatory noncompliance or a
history of noncompliance. Paragraph (c) identifies conduct that
constitutes avoiding or concealing regulatory noncompliance or a
history of noncompliance. The conduct in paragraph (c) is substantively
similar to that which was proposed in Sec.  385.907. The Agency made
minor changes to the wording of the four proposed types of conduct and
added a fifth type of conduct: avoiding being linked with a negative
compliance history. These changes conform this rule to statutory
language at 49 U.S.C. 31135(b)(1), which, in addition to prohibiting
motor carriers from reincarnating or affiliating to avoid compliance,
or mask or otherwise conceal non-compliance, also prohibits motor
carriers from concealing a history of non-compliance. This change also
aligns today's final rule with the pre-existing regulatory scheme at
Sec.  386.73, which uses identical language.
Section 385.1009
    This section sets forth procedures for suspending a motor carrier's
operating authority registration. These procedures are substantively
the same as those in Sec.  385.911, which apply to suspensions based on
patterns or practices of safety violations. The only difference is
that, because of the differences between engaging in pattern or
practice of safety violations and reincarnating or affiliating to avoid
regulatory compliance, there are no provisions for intervening persons.
Section 385.1011
    This section sets forth procedures for revoking a motor carrier's
operating authority registration. These procedures are substantively
the same as those in Sec.  385.913, which apply to suspensions based on
patterns or practices of safety violations. The only difference is that
this section does not contain a provision for intervening persons
because there would not be an intervening person in a reincarnated or
affiliated carrier case.
Section 385.1013
    This section establishes motor carriers seeking to file petitions
for rescission of an order issued under this rule should follow the
procedures in Sec.  385.915.
Section 385.1015
    This section, which is identical to Sec.  385.917, states that
orders issued under the rule would not amend or supersede existing
FMCSA orders, prohibitions, or requirements. In addition, suspension or
revocation of operating authority under this rule is not the exclusive
remedy for FMCSA to pursue against motor carriers that violate the
FMCSRs. For example, among other things, FMCSA could also seek
revocation of a motor carrier's USDOT number registration pursuant to
its authority under 49 U.S.C. 31134(c).
Section 385.1017
    This section establishes that motor carriers that violate 49 CFR
part 385, subpart L are subject to civil or criminal penalties.
Section 385.1019
    This section states that the regulations governing the service of
documents and the computation of time at 49 CFR 386.6 and 386.8 would
apply to proceedings under this rule. The Agency made one minor change
to this section. It now states that all documents served under subpart
L must include a certificate of service.

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

    The substance of this section remains as proposed, with minor
changes caused by the renumbering of sections in Subpart K and movement
of others to Subpart L. This section establishes the penalty for
operating in violation of an order suspending or revoking operating
authority registration under this rule.

Rulemaking Analyses

Executive Order 12866 (Regulatory Planning and Review) as Supplemented
by E.O. 13563 and DOT Regulatory Policies and Procedures

    This action does not meet the criteria for a significant regulatory
action, either as specified in Executive Order 12866, as supplemented
by Executive Order 13563 (76 FR 3821, January 18, 2011) or within the
meaning of the DOT regulatory policies and procedures (44 FR1103,
February 26, 1979). The estimated economic costs of the rule do not
exceed the $100 million annual threshold nor does the Agency expect the
rule to have substantial Congressional or public interest. Therefore,
this rule has not been formally reviewed by the Office of Management
and Budget.
    FMCSA assessed the potential costs associated with this rule. While
there should be no cost associated with this rule, there could
potentially be cost associated with the transfer to other firms of
assets from motor carriers that have had their operating authority
registration suspended or revoked. These State-level license and
registration fees can total $3,200 per CMV, depending on weight. For an
average carrier with 10 vehicles, the cost of re-registering the
vehicles and returning them to operation for a different carrier would
be an estimated $32,000. We estimate that the rule would have been
applied six times in the year preceding this final rule, which would
have created total societal costs of $192,000. Therefore, the costs of
this rule will remain below the $100 million threshold for economic
significance even if the Agency were to apply it to a much larger
number of carriers each year. These costs will not reach the level of
economic significance unless an unexpectedly large number of carriers
is suspended which, as previously noted, is highly unlikely due to the
egregious nature of the circumstances that would provoke action under
this rule. As a result, these costs were found to be economically
insignificant. Moreover, any transfer costs incurred could have been
avoided by complying with the FMCSRs or declining to mask or otherwise
conceal evidence of noncompliance with the FMCSRs. Motor carriers that
have their operating authority registration suspended or revoked would
lose revenue, but this revenue would be reallocated to other firms.
    Additionally, FMCSA evaluated the effects of this final rule in
accordance with Executive Order 12898 and determined that there are no
environmental justice issues associated with its provisions nor any
collective environmental impacts resulting from its promulgation.
Environmental justice issues would be raised if there were
``disproportionate'' and ``high and adverse impact'' on minority or
low-income populations. This NPRM is exempt from analysis under the
National Environmental Policy Act due to a categorical exclusion (see
below).

Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.)
requires Federal agencies to consider the effects of the regulatory
action on small business and other small entities and to minimize any
significant economic impact. The term ``small entities'' comprises
small businesses and not-for-profit organizations that are
independently owned and operated and are not dominant in their fields,
and governmental jurisdictions with a population of less than
50,000.\2\
---------------------------------------------------------------------------

    \2\ Regulatory Flexibility Act (5 U.S.C. 601 et seq.) see
National Archives at http://www.archives.gov/federal-register/laws/regulatory-flexibility/601.html.
---------------------------------------------------------------------------

    Accordingly, DOT policy requires an analysis of the impact of all
regulations on small entities, and mandates that

agencies strive to lessen any adverse effects on these businesses.
Under the Regulatory Flexibility Act, as amended by the Small Business
Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat.
857), the rule is not expected to have a significant economic impact on
a substantial number of small entities. Consequently, I certify the
action would not have a significant economic impact on a substantial
number of small entities.

Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), FMCSA wants to assist small
entities in understanding this rule so that they can better evaluate
its effects on them. If the rule would affect your small business,
organization, or governmental jurisdiction and you have questions
concerning its provisions or options for compliance, please consult the
FMCSA point of contact, Juan Moya, listed in the FOR FURTHER
INFORMATION CONTACT section of this 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 and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of FMCSA, call 1-888-REG-FAIR (1-888-
734-3247).

Unfunded Mandates Reform Act of 1995

    This rule would not impose an unfunded Federal mandate, as defined
by the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532 et seq.),
that would result in the expenditure by State, local, and tribal
governments, in the aggregate, or by the private sector, of $150.7
million (which is the value of $100 million in 2012 after adjusting for
inflation) or more in any 1 year.

National Environmental Policy Act and Clean Air Act

    FMCSA analyzed this Final Rule for the purpose of the National
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.) and
determined under its environmental procedures Order 5610.1, published
February 24, 2004 (69 FR 9680), that this action does not have any
effect on the quality of the environment. Therefore, this Final Rule is
categorically excluded from further analysis and documentation in an
environmental assessment or environmental impact statement under FMCSA
Order 5610.1, paragraph 6(u) of Appendix 2. The Categorical Exclusion
under paragraph 6(u) relates to regulations implementing rules of
practice for proceedings before the Assistant Administrator and to
determine whether a motor carrier has failed to comply with applicable
statutes and regulation and to issue an appropriate order to compel
compliance, which is the focus of this rulemaking. A Categorical
Exclusion determination is available for inspection or copying in the
regulations.gov Web site listed under ADDRESSES.
    In addition to the NEPA requirements to examine impacts on air
quality, the Clean Air Act (CAA) as amended (42 U.S.C. 7401 et seq.)
also requires FMCSA to analyze the potential impact of its actions on
air quality and to ensure that FMCSA actions conform to State and local
air quality implementation plans. No additional contributions to air
emissions are expected from this rule and FMCSA expects the rule to not
be subject to the Environmental Protection Agency's General Conformity
Rule (40 CFR parts 51 and 93).

Paperwork Reduction Act

    This rule would call for no new collection of information under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

Executive Order 12630 (Taking of Private Property)

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

Executive Order 12988 (Civil Justice Reform)

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

Executive Order 13045 (Protection of Children)

    Executive Order 13045, ``Protection of Children from Environmental
Health Risks and Safety Risks'' (April 23, 1997, 62 FR 19885), requires
that agencies issuing economically significant rules, which also
concern an environmental health or safety risk that an Agency has
reason to believe may disproportionately affect children, must include
an evaluation of the environmental health and safety effects of the
regulation on children. Section 5 of Executive Order 13045 directs an
Agency to submit for a covered regulatory action an evaluation of its
environmental health or safety effects on children. The FMCSA has
determined that this rule is not a covered regulatory action as defined
under Executive Order 13045. This determination is based on the fact
that this rule is not economically significant under Executive Order
12866, because the changes in this rule would not have an impact of
$100 million or more in any given year. In addition, this rule does not
constitute an environmental health risk or safety risk that would
disproportionately affect children.

Executive Order 13132 (Federalism)

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on State or local
governments and would either preempt State law or impose a substantial
direct cost of compliance on States or localities. FMCSA has analyzed
this rule under that Order and has determined that it does not have
implications for federalism.

Executive Order 12372 (Intergovernmental Review)

    The regulations implementing Executive Order 12372 regarding
intergovernmental consultation on Federal programs and activities do
not apply to this program.

Executive Order 13211 (Energy Supply, Distribution, or Use)

    The FMCSA has analyzed this rule under Executive Order 13211,
``Actions Concerning Regulations That Significantly Affect Energy
Supply, Distribution, or Use.'' This rule is not a significant energy
action within the meaning of section 4(b) of the Executive Order. This
rule is a procedural action, is not economically significant, and would
not have a significant adverse effect on the supply, distribution, or
use of energy.

Privacy Impact Analysis

    FMCSA conducted a Privacy Threshold Analysis for the Final Rule and
determined that the rulemaking has privacy implications that will be
addressed by modifying the following two documentations: FMCSA
Enforcement Management Information System, Privacy Impact Assessment
and DOT/FMCSA 002 System of Records Notice for Motor Carrier Safety
Proposed Civil and Criminal Enforcement Cases. These documents have
been placed in the docket.

List of Subjects

49 CFR Part 385

    Administrative practice and procedure, Highway safety, Mexico,
Motor carriers, Motor vehicle safety, Reporting and recordkeeping
requirements

49 CFR Part 386

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

    For the reasons stated in the preamble, FMCSA amends title 49 CFR,
Code of Federal Regulations, chapter III, as follows:

PART 385--SAFETY FITNESS PROCEDURES

0
1. The authority citation for part 385 is revised to read as follows:

    Authority: 49 U.S.C. 113, 504, 521(b), 5105(e), 5109, 13901-
13905, 14701, 31133, 31135, 31136, 31137(a), 31144, 31148, and
31502; Sec. 113(a), Pub. L. 103-311; Sec. 408, Pub. L. 104-88; Sec.
350, Pub. L. 107-87; and 49 CFR 1.87.

0
2. Add a new subpart K, consisting of Sec. Sec.  385.901 through
385.921, to read as follows:
Subpart K--Pattern or Practice of Safety Violations by Motor Carrier
Management
385.901 Applicability.
385.903 Definitions.
385.905 Suspension or revocation of registration.
385.907 Regulatory noncompliance.
385.909 Pattern or practice.
385.911 Suspension proceedings.
385.913 Revocation proceedings.
385.915 Petitions for rescission.
385.917 Other orders unaffected; not exclusive remedy.
385.919 Penalties.
385.921 Service and computation of time.

Subpart K--Pattern or Practice of Safety Violations by Motor
Carrier Management

Sec.  385.901  Applicability.

    The requirements in this subpart apply to for-hire motor carriers,
employers, officers and persons registered or required to be registered
under 49 U.S.C. 13902, 49 CFR part 365, and 49 CFR part 368. When used
in this subpart, the term ``motor carrier'' includes all for-hire motor
carriers, employers, officers and other persons, however designated,
that are registered or required to be registered under 49 U.S.C. 13902,
49 CFR part 365, and 49 CFR part 368.

Sec.  385.903  Definitions.

    As used in this subpart:
    Agency Official means the Director of FMCSA's Office of Enforcement
and Compliance or his or her designee.
    Controlling Influence means having or exercising authority, whether
by act or omission, to direct some or all of a motor carrier's
operational policy and/or safety management controls.
    Officer means an owner, director, chief executive officer, chief
operating officer, chief financial officer, safety director, vehicle
maintenance supervisor, and driver supervisor of a motor carrier,
regardless of the title attached to those functions, and any person,
however designated, exercising controlling influence over the
operations of a motor carrier.
    Registration means the registration required under 49 U.S.C. 13902,
49 CFR part 365, and 49 CFR part 368.

Sec.  385.905  Suspension or revocation of registration.

    (a) General. (1) If a motor carrier engages or has engaged in a
pattern or practice of avoiding compliance, or masking or otherwise
concealing noncompliance, with regulations on commercial motor vehicle
safety under 49 U.S.C. Chapter 311, subchapter III, FMCSA may suspend
or revoke the motor carrier's registration.
    (2) If a motor carrier permits any person to exercise controlling
influence over the motor carrier's operations and that person engages
in or has engaged in a pattern or practice of avoiding compliance, or
masking or otherwise concealing noncompliance, with regulations on
commercial motor vehicle safety 49 U.S.C. Chapter 311, subchapter III
while acting on behalf of any motor carrier, FMCSA may suspend or
revoke the motor carrier's registration.
    (b) Determination. (1) The Agency Official may issue an order to
revoke or suspend a motor carrier's registration, or require compliance
with an order issued to redress violations of a statutory or regulatory
requirement prescribed under 49 U.S.C. Chapter 311, subchapter III,
upon a determination that the motor carrier engages or has engaged in a
pattern or practice of avoiding regulatory compliance or masking or
otherwise concealing regulatory noncompliance.
    (2) The Agency Official may issue an order to revoke or suspend a
motor carrier's registration, or require compliance with an order
issued to redress violations of a statutory or regulatory requirement
prescribed under 49 U.S.C. Chapter 311, subchapter III, upon a
determination that the motor carrier permitted a person to exercise
controlling influence over the motor carrier's operations if that
person engages in or has engaged in a pattern or practice of avoiding
regulatory compliance or masking or otherwise concealing regulatory
noncompliance.

Sec.  385.907  Regulatory noncompliance.

    A motor carrier or person acting on behalf of a motor carrier
avoids regulatory compliance or masks or otherwise conceals regulatory
noncompliance by, independently or on behalf of another motor carrier,
failing to or concealing failure to: