[Federal Register: December 16, 2008 (Volume 73, Number 242)]
[Rules and Regulations]
[Page 76471-76497]
[DOCID:fr16de08-17]

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Part III

Department of Transportation

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Federal Motor Carrier Safety Administration

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49 CFR Parts 365, 385, 387, and 390

New Entrant Safety Assurance Process; Final Rule

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Parts 365, 385, 387, and 390

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

New Entrant Safety Assurance Process

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

ACTION: Final rule.

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SUMMARY: FMCSA amends the New Entrant Safety Assurance Program
regulations to raise the standard of compliance for passing the new
entrant safety audit. The Agency identifies 16 regulations that are
essential elements of basic safety management controls necessary to
operate in interstate commerce and makes a carrier's failure to comply
with any one of the 16 regulations an automatic failure of the safety
audit. Additionally, if certain violations are discovered during a
roadside inspection, the new entrant now will be subject to expedited
actions to correct these deficiencies. The Agency now will also check
compliance with the Americans with Disabilities Act and certain
household goods-related requirements in the new entrant safety audit,
if they apply to the new entrant's operation. Failure to comply with
either of these requirements will not affect the outcome of the safety
audit; however, the Agency will take appropriate actions to improve
compliance. FMCSA clarifies changes to some of the existing new entrant
regulations and establishes a separate new entrant application
procedure and safety oversight program for non-North America-domiciled
motor carriers.
    Finally, the Agency has enhanced the quality and availability of
its educational and technical assistance (ETA) materials to ensure
applicants are knowledgeable about applicable Federal motor carrier
safety standards. Because the Agency believes Form MCS-150A--Safety
Certification for Application for USDOT Number is not an effective
instrument for establishing knowledgeability, it is eliminating that
form.
    FMCSA believes this rule will improve the Agency's ability to
identify at-risk new entrant carriers and ensure deficiencies in basic
safety management controls are corrected before the new entrant is
granted permanent registration. These changes do not impose additional
regulatory requirements on any new entrant carrier because these
carriers are already required to comply with all applicable rules.

DATES: Effective: This rule is effective: February 17, 2009.
Compliance: Compliance with this rule is required beginning December
16, 2009.

FOR FURTHER INFORMATION CONTACT: Ms. Stephanie Haller, New Entrant
Program Manager, Enforcement and Compliance Division.<PHONE_NUMBER>,
<EMAIL_ADDRESS>Business hours are from 8 a.m. to 4:30 p.m.,
e.t., Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Privacy Act

    Anyone is able to search the electronic form for all comments
received into any of our dockets by the name of the individual
submitting the comment (or signing a comment, if submitted on behalf of
an association, business, labor union, etc.). You may review DOT's
complete Privacy Act Statement in the Federal Register published on
April 11, 2000 (Volume 65, Number 70; Page 19476).
    The preamble is organized as follows:

I. Legal Basis for the Rulemaking
II. Regulatory History
    A. Interim Final Rule
    B. Notice of Proposed Rulemaking
III. Discussion of Comments to the NPRM and Section-by-Section
Analysis of the Final Rule
IV. Rulemaking Analyses

I. Legal Basis for the Rulemaking

    Title 49 U.S.C. 31144 authorizes the Secretary of Transportation
(Secretary) to determine whether an owner or operator is fit to operate
safely. Section 210(a) of the Motor Carrier Safety Improvement Act of
1999 [Pub. L. 106-159, 113 Stat. 1764, December 9, 1999] (MCSIA) added
section 31144(g) \1\ directing the Secretary to establish regulations
to require each motor carrier owner and operator granted new operating
authority to undergo a safety review within 18 months of starting
operations. In issuing these regulations, the Secretary was required
to: (1) Establish the elements of the safety review, including basic
safety management controls; (2) consider their effects on small
businesses; and (3) consider establishing alternate locations where
such reviews may be conducted for the convenience of small businesses.
The Secretary was also required to phase in the new entrant safety
review requirements in a manner that takes into account the
availability of certified motor carrier safety auditors. Congress
mandated increased oversight of new entrants because studies indicated
these operators had a much higher rate of non-compliance with basic
safety management requirements and were subject to less oversight than
established operators. The authority to establish such regulations has
been delegated to the Federal Motor Carrier Safety Administration
(FMCSA). 49 CFR 1.73(g).
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    \1\ MCSIA originally codified sec. 31144(g) as sec. 31144(c) and
directed that it be added at the end of 49 U.S.C. 31144 following
preexisting subsections (c), (d), and (e). Section 4114(c)(1) of the
Safe, Accountable, Flexible, Efficient Transportation Equity Act: A
Legacy for Users (Pub. L. 109-59, 119 Stat. 1144, August 10, 2005)
(SAFETEA-LU) recodified this provision as sec. 31144(g).
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    Section 210(b) of MCSIA (codified as a note to 49 U.S.C. 31144)
required the Secretary to initiate a rulemaking to establish minimum
requirements for applicant motor carriers seeking Federal interstate
operating authority to ensure such applicants are knowledgeable about
applicable Federal motor carrier safety standards. The Secretary was
directed to consider establishment of a proficiency examination, as
well as other requirements, to ensure applicant knowledgeability.
    In addition to expanding the Secretary's authority under section
31144, section 210 of MCSIA was a specific statutory directive
consistent with the more general pre-existing legal authority provided
by the Motor Carrier Safety Act of 1984 (the 1984 Act) [49 U.S.C. App.
2505 (1988), recodified at 49 U.S.C. 31136(a)], which requires the
Secretary to prescribe regulations on commercial motor vehicle safety.
The regulations required by the 1984 Act must prescribe minimum safety
standards for commercial motor vehicles (CMVs). At a minimum, the
regulations shall ensure: (1) CMVs are maintained, equipped, loaded,
and operated safely; (2) the responsibilities imposed on operators of
CMVs do not impair their ability to operate the vehicles safely; (3)
the physical condition of operators of CMVs is adequate to enable them
to operate the vehicles safely; and (4) the operation of CMVs does not
have a deleterious effect on the physical condition of the operators.
    The rule changes the New Entrant Safety Assurance Program to
improve the Agency's ability to identify at-risk new entrant motor
carriers and ensures deficiencies are corrected before granting them
permanent registration. It also ensures that applicants will become
knowledgeable about Federal safety regulations before they commence
interstate operations. As such, it implements the section 31136(a)(1)

mandate that FMCSA regulations ensure CMVs are maintained and operated
safely. It does not add any new operational responsibilities on drivers
pursuant to sections 31136(a)(2)-(a)(4).

II. Regulatory History

A. Interim Final Rule

    In response to the statutory mandate in MCSIA, FMCSA published an
interim final rule (IFR) titled New Entrant Safety Assurance Process
(67 FR 31978) on May 13, 2002, which became effective January 1, 2003.
All domestic and Canada-domiciled new entrants are subject to the New
Entrant Safety Assurance Process. Mexico-domiciled new entrants are
covered under a separate application process and safety monitoring
system (see 67 FR 12652, 67 FR 12701, and 67 FR 12757 published March
19, 2002).
    Under the existing New Entrant Safety Assurance Program, a motor
carrier seeking to register as a new entrant is directed to the FMCSA
Internet Web site to either obtain an application by mail or complete
the application package online. The application package includes: (1)
Form MCS-150--The Motor Carrier Identification Report; (2) Form MCS-
150A--Safety Certification for Application for USDOT Number, and (3)
application forms to obtain operating authority under 49 CFR part 365,
if appropriate. See 49 CFR 385.305. Form MCS-150A requires the
applicant to self-certify its knowledge of relevant regulations and to
self-certify that basic safety management controls are in place. FMCSA
also provides educational and technical assistance materials, upon
request. If the application is approved, FMCSA grants new entrant
registration through issuance of a United States Department of
Transportation (USDOT) Number and an 18-month safety monitoring period
for the new entrant begins.
    A for-hire motor carrier, unless providing transportation exempt
from registration requirements in the ICC Termination Act of 1995 [Pub.
L. 104-88, 109 Stat. 888, December 29, 1995], also is required to
obtain FMCSA operating authority under 49 U.S.C. 13902, prior to
commencing covered operations. Generally, for-hire motor carriers must:
(1) Complete the appropriate OP-1 application form for operating
authority; (2) file a process agent designation with the Agency using
Form BOC-3--Designation of Agents, Motor Carriers, Brokers and Freight
Forwarders; and (3) comply with certain insurance filing requirements
prior to being granted operating authority.
    To maintain its new entrant registration, a carrier must
demonstrate sufficient compliance with applicable Federal Motor Carrier
Safety Regulations (FMCSRs) and Hazardous Materials Regulations (HMRs).
Within the first 18 months of a new entrant's operation, FMCSA conducts
a safety audit of the carrier's operations to educate the carrier on
compliance with the FMCSRs and HMRs and to determine if the carrier is
exercising basic safety management controls as defined in 49 CFR 385.3.
The Agency schedules the safety audit after the carrier has been
operating for at least 3 months to ensure sufficient data are on hand
to adequately assess the carrier's operations. The Agency conducts the
safety audit according to the scoring methodology set forth in Appendix
A to part 385.
    If the new entrant passes the safety audit, it retains the new
entrant registration and remains subject to the new entrant safety
monitoring system for the remainder of the 18-month period. FMCSA will
grant permanent registration only if the new entrant successfully
completes the monitoring period. If the new entrant fails the safety
audit, the new entrant must provide FMCSA evidence of corrective action
within a specified time period. Carriers operating vehicles designed or
used to transport 16 or more passengers and hazardous materials
carriers must submit evidence within 45 days; passenger carriers
operating vehicles designed or used to transport between 9 and 15
passengers and non-hazardous materials property carriers must do so
within 60 days. FMCSA may extend these compliance periods if it
determines the new entrant is making a good faith effort to remedy the
problems. If within 45 or 60 days, as applicable, the new entrant fails
to respond to the notice or fails to correct the deficiencies, FMCSA
issues an out-of-service order prohibiting further operations in
interstate commerce and revokes the new entrant registration.
    A new entrant may appeal the Agency's determination by requesting
an administrative review. The decision rendered by the administrative
review process is final. A new entrant that fails to make corrections
following the safety audit or whose new entrant registration is revoked
for failure to submit to a safety audit must wait at least 30 days to
reapply for new entrant registration.
    Section 210(b) of MCSIA directed that the implementing regulations
ensure applicant carriers are knowledgeable about applicable Federal
safety requirements before receiving new entrant registration. As part
of this rulemaking, the Secretary was directed to consider a
proficiency examination, as well as other requirements to ensure
applicants understand applicable safety requirements before being
granted new entrant registration.
    In developing the May 2002 IFR, the Agency considered, but decided
against requiring a proficiency examination as the means of ensuring a
new motor carrier applicant's knowledge about applicable safety
regulations. Instead, the Agency established procedures in the IFR to:
(1) Require the new entrant to certify to being knowledgeable about
applicable requirements and to certify procedures are in place for
basic safety management controls as a condition for receiving new
entrant registration; (2) provide the applicant with materials
explaining the Federal safety requirements to ensure that a
knowledgeability foundation is available to all new entrants; (3)
confirm the new entrant's knowledge of safety requirements during the
safety audit; and (4) grant permanent registration only to new entrants
that successfully complete the safety audit and 18-month safety
monitoring system.

B. Notice of Proposed Rulemaking

    The Agency received numerous comments to the IFR from industry and
public interest groups regarding the self-certification requirement and
the effectiveness of the safety audit. These comments indicated that
the safety audit is not effective in identifying new entrant motor
carriers lacking basic safety management controls. FMCSA field staff
also recommends enhancing the New Entrant Safety Assurance Program,
based upon its experience in program implementation and administration.
In response, the Agency convened a working group to review and improve
the program. The Agency proposed enhancements to the New Entrant Safety
Assurance Program in a notice of proposed rulemaking (NPRM) titled New
Entrant Safety Assurance Process (71 FR 76730) on December 21, 2006.
    The Agency sought to enhance the new entrant program through the
following regulatory proposals and certain non-regulatory actions
described in the NPRM:
    Automatic failure of the safety audit. Discovery of any one of 11
specific regulatory violations during the safety audit would result in
automatic failure. The Agency proposed that these 11 regulatory
requirements were essential to demonstrating that basic safety
management controls are in place.
    Triggers for expedited action. Discovery of any one of seven
triggering

incidents, generally determined during a roadside inspection, would
result in FMCSA taking some form of expedited action against the new
entrant. Expedited actions could include a written demand for
corrective action, an expedited safety audit (if the new entrant had
not yet received one) or an expedited compliance review.
    Elimination of Form MCS-150A. The Agency proposed to eliminate the
self-certification of carrier knowledge about applicable Federal
requirements. Many carriers were discovered to have falsely certified
having such knowledge, and commenters urged the Agency to remove this
requirement. The Agency concluded that enhanced educational and
technical assistance materials would provide most carriers with
sufficient knowledge of applicable regulations and of how to comply
with such regulations, as required by section 210(b) of MCSIA.
    Americans with Disabilities Act (ADA) and household goods (HHG)
compliance.
    The Agency proposed to review and include questions regarding a
carrier's compliance with ADA and HHG compliance in the safety audit.
While responses to these questions would not be a factor in determining
the outcome of the safety audit, the Agency would refer violations of
the ADA to the U.S. Department of Justice for further investigation and
may take enforcement actions for violations of HHG regulations.
    Educational and Technical Assistance (ETA) materials. The Agency
indicated that it intended to improve and update ETA materials and
provide an interactive CD to enhance carrier knowledge of applicable
Federal safety requirements. As discussed in the next section, the
Agency has made enhancements to the ETA materials.
    Corrective action and administrative review processes. The Agency
proposed regulatory changes to clarify procedures relating to the
corrective action and administrative review processes.
    Non-North America-domiciled motor carriers. The Agency proposed a
new application process and safety monitoring system for motor carriers
domiciled outside of the United States, Canada and Mexico (NNA-
domiciled motor carriers). These carriers are currently not covered by
a safety monitoring system.

III. Discussion of Comments to the NPRM and Section-by-Section Analysis
of the Final Rule

    In response to the December 2006 NPRM, FMCSA received 17 comments
from 21 entities. The commenters included nine State enforcement
agencies; one individual commenter; one motor carrier--Greyhound Lines,
Inc., seven motor carrier industry associations and consultants,
including the American Trucking Associations (ATA), the Owner-Operator
Independent Drivers Association (OOIDA), and the Canadian Trucking
Alliance (CTA); one safety enforcement organization--the Commercial
Vehicle Safety Alliance (CVSA), one union, the Amalgamated Transit
Union and one safety advocacy group, Advocates for Highway and Auto
Safety (Advocates).
    Based on public comments and the Agency's review of the December
2006 proposal, FMCSA has made changes in the final rule to the proposed
revisions to part 385.

A. ``Chameleon'' Carriers--Sec.  385.306

    FMCSA described the term ``chameleon carrier'' as a carrier that
attempts to register as a new entrant and operate as a different entity
under a new USDOT Number in an effort to evade enforcement action and/
or out-of-service orders issued against it by the Agency. FMCSA
proposed under Sec.  385.305 that such carriers would be subject to
revocation of registration and may be subject to civil and/or criminal
penalties. All of the comments received on this issue supported FMCSA's
efforts in identifying chameleon carriers. However, some stated that
the Agency did not include details on how it will detect chameleon
carriers. They recommended revising the new entrant application to
request more ``related company'' information. CVSA recommended the
Agency coordinate efforts regarding various information systems and
projects--including the Creating Opportunities, Methods, Practices, and
Securing Safety System (COMPASS), the Licensing & Insurance (L&I)
System, the Comprehensive Safety Analysis 2010 (CSA 2010) Initiative,
the Commercial Vehicle Information Systems and Networks (CVISN),
Unified Carrier Registration (UCR) System, and the Commercial Driver's
License Information System (CDLIS) modernization project--to better
detect chameleon carriers. OOIDA urged the Agency to look at
``chameleon'' freight brokers.
    FMCSA Response:
    Actions regarding chameleon carriers. New Sec.  385.306 states that
a carrier that provides false or misleading information, or that
conceals material information in connection with the application
process is subject to revocation of its new entrant registration and
civil and/or criminal penalties. The Agency is committed to ensuring
that only safe carriers are permitted to continue operating on our
Nation's highway. FMCSA has the inherent authority to correct, modify,
or revoke new entrant registration issued inadvertently, or obtained by
fraud, misrepresentation or other wrongful means.
    If FMCSA determines the reapplying motor carrier is not subject to
an outstanding order to cease operations under a previous USDOT Number,
the Agency will link the history of the old and new companies by
identifying the new USDOT Number as the primary active number. The old
USDOT Number would be listed in the Agency database as one under which
the carrier has also done business, and its safety history, including
enforcement actions against the motor carrier, would be linked to
records on the new entity.
    When a carrier applies for a USDOT Number, the system checks the
application against existing motor carrier Census database records to
identify possible duplicate records in an effort to prevent assignment
of multiple USDOT Numbers to a single motor carrier. The Agency
currently is reviewing its information systems to identify ways to
enhance its ability to detect chameleon carriers during the application
process. FMCSA also plans to address the chameleon carrier issue under
a separate rulemaking in response to SAFETEA-LU section 4113 regarding
patterns of safety violations by motor carrier management and will
reassess the need for additional revisions to its information systems
in support of that effort. Finally, under the Unified Registration
System rulemaking, the Agency is streamlining its registration process
so that we can more efficiently track all FMCSA regulated motor
carriers, freight forwarders and brokers.

B. Triggers for Expedited Action--Sec.  385.308

    ATA asked the Agency to clarify what the term ``hazardous materials
incident'' means and to identify which hazardous materials incidents
could result in an expedited action. Advocates requested more
information regarding the rationale for including the violation which
involves driver or vehicle out-of-service rates (item 7 on the list
under proposed Sec.  385.308). Another commenter asked if the wording
of proposed Sec.  385.308 means the Agency will take expedited action
whenever one of these violations or incidents is discovered.
    FMCSA Response:
    Clarification of the term ``hazardous materials incident.'' The
Agency agrees that the description of a hazardous

materials incident under Sec. Sec.  385.308(a) and (b) is unclear. In
response, the Agency revises Sec.  385.308 (a)(3) to make a hazardous
materials incident criteria consistent with the criteria for a
reportable hazardous materials incident under 49 CFR 171.15 and 171.16
of the HMRs with regard to a single incident involving: (1) A highway
route-controlled quantity of certain radioactive materials (Class 7);
(2) any quantity of certain explosives (Class 1, Division 1.1, 1.2, or
1.3; or (3) any quantity of certain poison inhalation hazard materials
(Zone A or B). The Agency revises 49 CFR 385.308(a)(4) to cross
reference 49 CFR 171.15 and 171.16 for two or more hazardous materials
incidents involving hazardous materials other than those listed in
paragraph (a)(3) under Sec.  385.308.
    Driver or vehicle out-of-service rates. Under existing Sec.
385.307(a), the Agency may take expedited action against a motor
carrier if it were discovered to have an ``accident rate or driver or
vehicle violation rate that is higher than the industry average for
similar motor carrier operations.'' The Agency expands the list of
actions that could trigger expedited actions and specifically replaces
existing Sec.  385.307(a) with Sec.  385.308(a)(7), ``having a driver
or vehicle out-of-service rate of 50 percent or more based upon at
least three inspections occurring within a consecutive 90-day period.''
From an operational standpoint, the ``50 percent or more'' threshold
will provide for more effective and efficient monitoring of new entrant
performance because it is a non-subjective and easily measured rate.
    Requirement to take expedited action. The regulatory text of Sec.
385.308 provides that the Agency may, but is not required to, initiate
expedited action following discovery of a triggering action or
violation. However, the section heading used the word ``will'' instead
of ``may.'' The final rule changes the section heading so that it is
consistent with the regulatory text.

C. Corrective Action and Administrative Review Processes--Sec. Sec.
385.319, 385.323, 385.325, and 385.327

    Several commenters supported reducing the timeframes for the
corrective action and administrative review processes. Commenters also
complained that a paper-based system is an inadequate means of ensuring
corrective action for detected deficiencies. Other comments recommended
verification be conducted on-site at the carrier's place of business.
    FMCSA Response:
    Corrective action and administrative review timeframes. FMCSA
believes the existing timeframes for corrective action and
administrative review should be retained because they reflect a
balanced consideration of the due process rights of motor carriers as
well as demands on the Agency related to processing corrective action
submissions and administrative review requests. Comments on this issue
did not provide compelling reasons for shortening the timeframes for
the corrective action or administrative review processes.
    Depending on the nature and severity of identified violations, the
Agency may take expeditious enforcement action against the new entrant
without using the corrective action procedures. FMCSA has authority to
immediately shut down operations of a motor carrier deemed to be an
imminent hazard to highway safety. At all times during which a new
entrant is subject to the safety monitoring system in 49 CFR part 385,
subpart D, it is also subject to the general safety fitness procedures
established in subpart A and to compliance and enforcement procedures
applicable to all carriers regulated by FMCSA. Section 385.335, for
example, expressly recognizes the Agency's authority to conduct a
compliance review instead of a safety audit when circumstances warrant
more intensive scrutiny of a new entrant's safety compliance.
    The final rule amends Sec.  385.319, which concerns a new entrant's
responsibilities for correcting deficient safety management practices
discovered during the safety audit, by adding passenger carriers
operating vehicles designed or used to transport between 9 and 15
passengers for compensation to the group of carriers that must remedy
deficiencies within 45 days of notification by FMCSA. This change
achieves consistency with 49 CFR 385.11, which provides a 45-day
corrective action period for ``unfit'' motor carriers transporting
passengers by CMV. The Agency also amends Sec.  385.319(c), as well as
Sec. Sec.  385.323, 385.325, and 385.327, to make them consistent with
timeframes relating to notification of motor carriers of passengers
under Sec.  385.11. Section 385.319 is rewritten to cross reference the
definition of CMV relating to hazardous materials carriers in 49 CFR
390.5 for purposes of consistency.
    The administrative review provisions in Sec.  385.327 were
ambiguous with respect to the time during which a carrier was allowed
to file a request for administrative review and when it had to file a
request for administrative review, if it wanted the review to be
completed before its registration was revoked. Accordingly, FMCSA
revises Sec.  385.327 to clarify timeframes for requesting
administrative review of determinations regarding the safety audit. A
new entrant must file the request within 90 days of the date of the
notice of audit failure or within 90 days of the date of notice of
insufficient corrective action. However, if a new entrant wants a
decision before the revocation takes effect, the new entrant must file
a request for review within 15 days of the date of the notice of audit
failure. Requests filed after the 15th day will be considered, but it
is possible the revocation would take effect before the administrative
review process is completed, if the carrier waits until after the 15th
day.
    On-site verification of corrective action. Regarding on-site
verification of evidence of corrective action, in most instances
written documentation is sufficient to substantiate correction of
deficiencies, and an on-site visit is not required. The Agency believes
its proposed corrective action process is adequate and is an efficient
use of resources.

D. Automatic Failure of the Safety Audit--Sec.  385.321(b)

    Some commenters to the NPRM raised concerns regarding the list of
regulatory violations that were proposed to result in automatic failure
of the safety audit. Advocates stated that the proposed list is too
short and should include more hours-of-service-based violations. ATA
stated that regulatory violations which are based on a single driver or
a single CMV would unfairly disadvantage larger carriers. Some asked
why certain regulatory violations, if discovered during the safety
audit, would cause an automatic failure but would not result in
expedited action if discovered during a roadside inspection.
    FMCSA Response: Under Sec.  385.321(b), the Agency increases from
11 to 16 the number of regulatory violations that will result in
automatic failure of the safety audit. The Agency will develop
appropriate enforcement guidelines regarding how the Agency will
address egregious safety violations found during the safety audit if
such violations are not part of the automatic failure violation list
and do not result in failure of the safety audit under the evaluation
guidelines in Appendix A to part 385. For example, the guidance will
provide instructions to document all deficiencies regardless of whether
they cause failure of the safety audit, and to include them in the
Motor Carrier Management Information System (MCMIS).

    Automatic failure determination. Committing any one of the
following 16 violations will result in automatic failure of the safety
audit in accordance with guidelines in the table to Sec.  385.321(b).

                       Table to Sec.   385.321(b)
------------------------------------------------------------------------
   Violations that will result in automatic failure of the new entrant
                              safety audit
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                                                     Guidelines for
                                                 determining automatic
                  Violation                      failure of the safety
                                                         audit
------------------------------------------------------------------------
1. Sec.   382.115(a)/Sec.   382.115(b)--       Single occurrence.
 Failing to implement an alcohol and/or
 controlled substances testing program
 (domestic and foreign motor carriers,
 respectively).
2. Sec.   382.201--Using a driver known to     Single occurrence.
 have an alcohol content of 0.04 or greater
 to perform a safety-sensitive function.
3. Sec.   382.211--Using a driver who has      Single occurrence.
 refused to submit to an alcohol or
 controlled substances test required under
 part 382.
4. Sec.   382.215--Using a driver known to     Single occurrence.
 have tested positive for a controlled
 substance.
5. Sec.   382.305--Failing to implement a      Single occurrence.
 random controlled substances and/or alcohol
 testing program.
6. Sec.   383.3(a)/Sec.   383.23(a)--          Single occurrence.
 Knowingly using a driver who does not
 possess a valid CDL.
7. Sec.   383.37(a)--Knowingly allowing,       Single occurrence.
 requiring, permitting, or authorizing an
 employee with a commercial driver's license
 which is suspended, revoked, or canceled by
 a State or who is disqualified to operate a
 commercial motor vehicle.
8. Sec.   383.51(a)--Knowingly allowing,       Single occurrence.
 requiring, permitting, or authorizing a       This violation refers to
 driver to drive who is disqualified to drive   a driver operating a CMV
 a commercial motor vehicle.                    as defined under Sec.
                                                383.5.
9. Sec.   387.7(a)--Operating a motor vehicle  Single occurrence.
 without having in effect the required
 minimum levels of financial responsibility
 coverage.
10. Sec.   387.31(a)--Operating a passenger    Single occurrence.
 carrying vehicle without having in effect
 the required minimum levels of financial
 responsibility.
11. Sec.   391.15(a)--Knowingly using a        Single occurrence.
 disqualified driver.
12. Sec.   391.11(b)(4)--Knowingly using a     Single occurrence.
 physically unqualified driver.                This violation refers to
                                                a driver operating a CMV
                                                as defined under Sec.
                                                390.5.
13. Sec.   395.8(a)--Failing to require a      Requires a violation
 driver to make a record of duty status.        threshold (51% or more
                                                of examined records) to
                                                trigger automatic
                                                failure.
14. Sec.   396.9(c)(2)--Requiring or           Single occurrence.
 permitting the operation of a commercial
 motor vehicle declared ''out-of-service''
 before repairs are made.
15. Sec.   396.11(c)--Failing to correct out-  Single occurrence.
 of-service defects listed by driver in a
 driver vehicle inspection report before the
 vehicle is operated again.
16. Sec.   396.17(a)--Using a commercial       Requires a violation
 motor vehicle not periodically inspected.      threshold (51% or more
                                                of examined records) to
                                                trigger automatic
                                                failure.
------------------------------------------------------------------------

    In response to comments stating that violations based on a single
driver or a single CMV unfairly disadvantage larger carriers, the
Agency has made adjustments to its approach for the automatic failure
determination. Although 14 of the 16 regulatory violations (numbers 1-
12, 14 and 15 in the table to Sec.  385.321(b)) would trigger automatic
failure of the safety audit based on a single occurrence of the
violation, two of the violations will include thresholds. FMCSA
continues to believe the severity of 14 of these violations warrants
the single-occurrence trigger. However, in the case of Sec. Sec.
395.8(a) and 396.17(a), the Agency will require a violation threshold
of 51% to cause automatic failure of the safety audit. (Both of the
threshold violations were included in the December 2006 NPRM). FMCSA
has determined that the appropriate standard is preponderance of the
evidence, often called the ``51% rule.'' In other words, if the driver
did not prepare a record of duty status in more than half of the trips
examined, or the carrier failed to perform periodic inspections on more
than half of the fleet vehicles examined during the safety audit, there
exists a violation threshold indicative of breakdowns in the carrier's
management controls which will result in automatic failure of the new
entrant safety audit. Violation rates of 50% or less will be taken into
consideration in the overall assessment of the carrier's compliance
with applicable regulations, and the Agency may use other means to
improve the carrier's performance, including assessment of civil
penalties following a compliance review of the new entrant.
    Discussion of additional regulatory violations. Violation two
(Sec.  382.201) corrects an inadvertent omission from the December 2006
NPRM. While the Agency proposed that a violation of the prohibition
against carriers using a driver who tests positive for controlled
substances would result in automatic failure of the safety audit, it
omitted the corresponding violation regarding the prohibition against
carriers knowingly using a driver who has an alcohol concentration of
0.04 or greater.
    Violation five (Sec.  382.305) involves failure to implement random
controlled substances and/or alcohol testing, a crucial element of any
effective drug and alcohol testing program. The Agency believes
implementation of such random testing is essential to deterring use of
controlled substances or abuse of alcohol by CMV drivers.
    Violation six (Sec. Sec.  383.3/383.23) is added to close a gap in
the list of automatic failure regulatory violations relating to CDL
drivers. The NPRM only addressed a carrier that uses a driver with a
suspended, revoked or cancelled CDL or a driver who was disqualified to
operate a CMV. Using a driver who does not obtain a CDL when one is
required is an equally serious safety violation.
    Violation 10 (Sec.  387.31(a)) complements regulatory violation

number nine (Sec.  387.7) by including financial responsibility
requirements for passenger-carrying motor carriers in addition to
property carriers. The December 2006 NPRM inadvertently omitted
financial responsibility requirements for passenger carriers.
    Violation 15 (Sec.  396.11(c)), failing to correct out-of-service
defects listed by the driver, complements violation 14 (Sec.
396.9(c)(2)), requiring or permitting the operation of a commercial
motor vehicle declared out-of-service before repairs are made. Section
396.9(c)(2) relates specifically to a vehicle declared out-of-service
as the result of an inspection performed at roadside. Inclusion of
Sec.  396.11(c) will ensure that all documented out-of-service defects
are corrected before the vehicle is operated again, inasmuch as
continued operation of the vehicle could present an imminent hazard to
the public.
    Distinctions in the lists of regulatory violations (automatic
failure vs. expedited actions). Generally, the regulatory violations
that would trigger automatic failure of the safety audit are more
readily discernible at the carrier's place of business. The regulatory
violations that would trigger an expedited action are detectable at the
roadside or away from the carrier's place of business. New entrant
motor carriers discovered with these violations could be identified
during a roadside inspection or by any other means even if the Agency
had not yet conducted a safety audit.

E. Elimination of Form MCS--150A--Multiple Conforming Amendments
(Sec. Sec.  385.305, 385.405 and 385.421)

    Conforming amendments are made throughout part 385 to eliminate the
requirement to complete Form MCS-150A. The purpose of the MCS-150A was
for an authorized official of the new entrant to certify to his/her
familiarity with relevant regulations and to having a system in place
to ensure compliance with the FMCSRs and applicable HMRs. However,
based on the safety audits conducted to date, FMCSA has found that
self-certification has not been an accurate indicator of
knowledgeability. Therefore, FMCSA eliminates the self-certification
registration requirement and corresponding Form MCS-150A.

F. Enhanced ETA Materials

    The Agency has updated, significantly enhanced and expanded
accessibility of its ETA materials. The ETA materials pre-date the New
Entrant Safety Assurance Program and were originally intended to help
motor carriers prepare for a compliance review. In response to comments
regarding the quality of the ETA materials, the Agency has incorporated
new information helpful to new entrants seeking knowledge about how to
comply with applicable Federal safety standards and preparing for the
new entrant safety audit. The new document retains the title
``Educational and Technical Assistance Program--A Motor Carrier's Guide
to Improving Highway Safety'' and includes the following enhancements:
     Updated regulatory requirements. The regulatory
information has been updated to include new requirements imposed since
2001.
     Revamped Design. Regulatory information is presented in
the same order in which it appears in the Federal Motor Carrier Safety
Regulations (49 CFR parts 300-399). In addition to a table of contents,
two Quick Reference Guides are added to the front of the document to
help readers quickly identify all regulatory requirements relevant to
drivers and employers, respectively. The reference guides are written
in question-and-answer format with topical subheadings. The regulatory
information is attractively presented and easy to understand. We
believe these improvements will motivate new entrants to make more
effective use of the materials to become familiar with applicable
Federal safety standards.
    [cir] Expanded coverage of the New Entrant Safety Assurance
Program. The section on Part 385--Safety Fitness Procedures--includes a
clearer discussion of the New Entrant Safety Assurance Program and the
Hazardous Materials Safety Permitting Program.
    Because the ETA enhancement project was completed in July 2008,
prior to publication of this final rule, the section on part 385
reflects new entrant program requirements in effect as of that date and
not the new requirements set forth in this final rule; changes made by
this final rule will be included in the next revision to the ETA
materials.
     More Accessible. The ETA materials are available
electronically on, and may be downloaded from, the FMCSA Web site. The
electronic version includes links directly to desired content from the
Driver or Employer Quick-Reference Guides.
    The Agency also will publish a separate notice soliciting public
comment on other ways to improve carrier knowledgeability of applicable
Federal safety standards.

G. The Application Process for Non-North America-Domiciled Motor
Carriers--Part 385, Subpart H

    General. Subpart H to part 385 adopts without change proposals set
forth in the December 2006 NPRM governing the new application process
for non-North America-domiciled motor carriers seeking to operate
within the United States beyond U.S. municipalities and commercial
zones on the U.S.-Mexico international border.
    Acceptable licensing for CMV operators used by NNA-domiciled motor
carriers. Advocates commented that only a U.S. or Canadian CDL should
be acceptable.
    FMCSA Response: In November 1991 under the terms of an
international agreement, the Administrator of the Federal Highway
Administration (FMCSA's predecessor agency) determined that Mexican
commercial driver's licenses (Licencias Federal de Conductor) are
equivalent to U.S. CDLs. This determination was upheld on judicial
review. For this reason, Sec.  385.605(a) continues to require an NNA-
domiciled motor carrier to use only drivers who possess a valid CMV
driver's license. Included on the list of valid CMV driver's licenses
are the CDL, Canadian Commercial Driver's License and Mexican Licencia
de Federal de Conductor.

H. Form--OP-1(NNA) for Non-North America-Domiciled Motor Carriers
Requesting New Entrant Registration

    Advocates strongly opposed reliance on narrative responses to
Section V of the OP-1(NNA) and self-certification responses to proposed
Sections VIII and IX.
    FMCSA Response: FMCSA does not adopt Advocates' recommendations for
modifying the Form OP-1(NNA) because the Agency verifies applicant
responses during the pre-authorization safety audit (PASA) and prior to
granting new entrant registration to them. Instead, Form OP-1(NNA)--
Application for U.S. Department of Transportation (USDOT) Registration
by Non-North America-Domiciled Motor Carriers, is adopted as proposed
in the December 2006 NPRM. The Agency corrected the form's
instructions: (1) To reflect the Agency's new Headquarters location;
and (2) to conform to a technical correction to part 387 concerning the
CMV weight threshold.

I. Proposed Safety Monitoring System for Non-North America-Domiciled
Motor Carriers--Part 385, Subpart I

    The final rule adopts all provisions regarding the safety
monitoring system for NNA-domiciled motor carriers as set forth in the
December 2006 NPRM without change.

J. Modification of Safety Audit Guidelines Under Appendix A to Part 385

    ADA compliance. Commenters suggested that the new entrant program
should include more of a focus on ensuring passenger carriers'
compliance with the ADA by including compliance with ADA requirements
in the pass/fail determination of the safety audit. Other commenters
also claimed that the Agency's position on ADA enforcement is
contradicted by case law [Peter Pan Bus Lines, Inc. v. Federal Motor
Carrier Safety Administration (471 F. 3d 1350 (DC Cir. 2006)].
    Congress addressed the issues raised in the Peter Pan Bus Lines
case by enacting the Over-the-Road Bus Accessibility Act of 2007 [Pub.
L. 110-291, 122 Stat. 2915, July 30, 2008]. This law requires FMCSA to
consider compliance with DOT's ADA regulations as an element of an
over-the-road bus company's fitness for receiving new operating
authority. It also authorizes the Agency to suspend, amend, or revoke a
motor carrier's registration in the event of a willful failure to
comply with DOT's ADA regulations.
    Inasmuch as ADA compliance is not indicative of a passenger
carrier's ability to operate its vehicles safely, a finding of
potential ADA noncompliance will not affect the results of the new
entrant safety audit. However, to assist in ensuring ADA compliance,
FMCSA will take the following additional steps:
     Begin training enforcement officials to detect ADA
compliance violations. Such training will not be included as an auditor
certification requirement under 49 CFR Part 385, subpart C.
     Include a question regarding ADA compliance in the safety
audit.
     If ADA noncompliance is discovered in the course of a new
entrant safety audit or compliance review, FMCSA will forward the
information to the U.S. Department of Justice (DOJ), and appropriate
action by DOJ and/or DOT will be taken, pursuant to the memorandum of
understanding to be established between DOJ and DOT as directed by
Public Law 110-291.
     Refer any non-compliant motor carrier that is also a
recipient of DOT financial assistance to the Federal Transit
Administration (FTA) for administrative enforcement action, as
appropriate. FTA administers a program that provides financial
assistance to some over-the-road bus carriers and, consistent with
section 504 of the Rehabilitation Act of 1973 and DOT rules
implementing it (49 CFR Part 27), cannot provide such assistance to
carriers who are out of compliance with their ADA obligations.
     When appropriate, initiate action to amend, suspend, or
revoke a carrier's new entrant registration based on willful
noncompliance with DOT's ADA regulations (49 CFR Part 37, Subpart H).

K. Conforming Amendments to Part 387

    The Agency adopts the December 2006 NPRM proposal to amend part 387
by requiring all non-North America-domiciled motor carriers to file
evidence of financial responsibility with the Agency as a condition for
registration. Sections 387.3(c)(1) and 387.9 are also revised to make a
technical correction to the threshold weights pertaining to CMVs to
read ``over 10,001 pounds'' and ``less than 10,001 pounds,'' as
appropriate.

L. Discussion of Remaining Comments That Will Not Warrant a Regulatory
Change

    1. Proficiency Examination. Three commenters urged the Agency to
include a proficiency examination as part of the new entrant program to
ensure applicants are knowledgeable about the applicable regulatory
safety requirements.
    FMCSA Response: The Agency is sensitive to concerns expressed by
commenters that there may be additional mechanisms of ensuring
applicant knowledgeability. FMCSA will respond to these concerns by
publishing a notice inviting the public to provide information to
assist the Agency in evaluating the feasibility of alternative
requirements or additional enhancements to the current process for
ensuring applicant knowledgeability, including proficiency
examinations. However, FMCSA believes this final rule fully complies
with section 210(b) of MCSIA, which requires the Agency to consider a
proficiency examination. The Agency has considered the option of
requiring a proficiency examination and has decided not to impose such
a requirement at this time. Commenters to the Agency's notice regarding
the applicant knowledgeability issue will have the opportunity to
address the feasibility of potential alternatives for improving
applicant knowledgeability, including proficiency examinations.
    2. PASA and compliance review requirement for all new entrants.
Advocates believe domestic and Canada-domiciled motor carriers, like
NNA-domiciled motor carriers, should be subject to a PASA to obtain new
entrant registration and a compliance review to receive permanent
registration.
    Some comments recommended the Agency require a new entrant whose
registration was revoked to successfully undergo a PASA before being
re-issued new entrant registration.
    FMCSA Response: The Agency's limited resources are insufficient to
provide for conducting a PASA and compliance review for the 40,000-
50,000 new entrants annually that obtain USDOT Numbers. Section 210 of
MCSIA does not require PASAs or compliance reviews for new entrant
carriers. FMCSA disagrees with the Advocates' and other commenters'
statements about the necessity of conducting PASAs on all new motor
carriers. The Agency continues to believe that its safety monitoring
program and the safety audit, accompanied by expedited actions, will
help to ensure safety given current resources.
    Today's final rule does not require reapplying new entrants to
successfully complete a PASA as a condition of obtaining new entrant
registration. If the carrier's new entrant registration was revoked
because the carrier refused to submit to a safety audit, it would be
re-prioritized for an expedited safety audit as soon as practicable
upon reentering the new entrant program. A reapplying carrier is
prohibited from operating in interstate commerce until its new
application is approved. A new 18-month monitoring period would start
upon approval of the new application.
    A carrier whose new entrant registration was revoked for failing
the safety audit would have to submit an updated Form MCS-150
application and provide evidence that it has corrected the deficiencies
that resulted in revocation of its registration. The Agency will not
grant new entrant registration, and a carrier may not conduct
interstate operations, unless FMCSA approves the new application and
corrective action plan. Additionally, the carrier will be subject to a
new 18-month safety monitoring period.
    To retain historical information on a revoked new entrant's past
performance, FMCSA will require the new entrant to retain the same
USDOT Number when reapplying for registration. This is consistent with
what FMCSA has done in the past and is currently doing whenever a
carrier is placed out-of-service and subsequently remedies whatever
deficiencies resulted in the out-of-service order.
    3. Impact of rule on Federal/State resources. Several State
enforcement agencies requested that FMCSA disclose who would be
responsible for handling the increased number of corrective

actions anticipated due to the higher failure rate likely to occur as a
result of modifications to the new entrant program.
    FMCSA Response: States are not responsible for managing corrective
action procedures and administrative review requests. FMCSA handles
these actions, and the Agency will continue to manage these due process
provisions in the new entrant program at this time.
    4. Implementation issues/questions. The Public Utilities Commission
of Ohio (PUCO) requested that the Agency address its concerns regarding
implementation of the new entrant program:
     Reclassified motor carriers and the new entrant safety
monitoring system. According to PUCO, some motor carriers enter the new
entrant program and later reclassify to an operational status not
subject to new entrant program requirements (such as a PRISM registrant
[an entity that is required by the State but not FMCSA to obtain a
USDOT Number under the Performance and Registration Information System
Management (PRISM) program] or intrastate motor carrier). If the
carrier later reclassifies as a new entrant, PUCO believes the Agency
should disregard time operating outside of the new entrant program when
computing the new entrant's 18-month safety monitoring period.
     Treatment of relocated new entrant motor carriers. PUCO
asks the Agency to ensure, in instances where a new entrant transfers
its operations to a new State, there is sufficient time provided to the
new jurisdiction to be able to schedule and conduct the safety audit
prior to the end of the 18-month period.
     Treatment of new entrant motor carriers that change
operational status to evade the safety audit. PUCO recommends the
Agency track motor carriers that continually change their status in an
effort to avoid a safety audit to ensure that they undergo a safety
audit or compliance review within a specified time period.
     Implementation date for the new entrant rule. PUCO
requests the Agency provide sufficient time for it to make staffing
changes and conduct training when establishing the final rule
compliance date.
    FMCSA Response:
    Reclassified motor carriers and the new entrant safety monitoring
system. The Agency agrees that time spent operating as a motor carrier
outside of FMCSA jurisdiction should not count toward completion of the
18-month new entrant safety monitoring process. For example, if a motor
carrier completes 6 months of the safety monitoring period before
converting to a status that is not subject to the new entrant program
then upon re-entering the new entrant program the clock would resume
from 6 months onward. Time operating as a non-new entrant would not be
credited toward the new entrant safety monitoring period.
    Treatment of relocated new entrant motor carriers. Existing
regulations under Sec.  385.333(d) permit a carrier to continue
operations as a new entrant if a safety audit or compliance review has
not been performed by the end of the 18-month monitoring period through
no fault of the motor carrier. The carrier may continue operating until
FMCSA conducts a safety audit or compliance review and makes a final
determination regarding the adequacy of its safety management controls.
This provision gives FMCSA the flexibility to extend the safety
monitoring period for any new entrant that relocates from one State to
another before completion of the safety audit. A new entrant motor
carrier that relocates would continue to be subject to the new entrant
program. FMCSA information systems would continue to monitor the new
entrant's status through completion of the safety audit and the 18-
month safety-monitoring period.
    Treatment of new entrant motor carriers that change operational
status to evade the safety audit. A motor carrier may voluntarily
revoke its new entrant registration at any time. Nonetheless, the
Agency is aware that there may be instances in which a motor carrier
may use this option to evade the new entrant safety audit. Because
MCMIS reveals that an extremely small number of motor carriers may be
manipulating operational status in this way, the Agency does not
believe a regulatory change is warranted. The Agency analyzed data from
MCMIS regarding changes in status for the period from January 2003
through October 2007. MCMIS records the initial issuance of new entrant
registration as the first change and subsequent changes are tracked as
change 2, 3, etc. For example, a carrier that receives new entrant
registration in May 2007, changes its operations solely to intrastate
nonhazardous materials transportation in May 2008, and then resumes
interstate operations and re-enters the new entrant program in August
2008, is considered as having three changes. For purposes of the
report, the Agency considered four or more changes as frequent and
found that of 200,000 new entrants, only 130 indicated frequent
changes. Instead of a regulatory change, the Agency will address this
issue operationally by altering the audit prioritization formula.
    Besides the prioritization algorithm under the Safety Status
Measurement System (SAFESTAT), several means exist to trigger a
compliance review of a motor carrier. The Agency will consider the
frequency of changes in operating status as a reason for conducting a
compliance review on a motor carrier. There may be instances where a
motor carrier may legitimately request frequent changes in operational
status. However, the Agency believes it is appropriate to prioritize
carriers for a compliance review if there are frequent changes in
status. Existing Sec. Sec.  385.333 and 385.335 indicate that a new
entrant may be subject to a compliance review during the 18-month
safety-monitoring period and that the Agency may take such action at
its discretion.
    Implementation date for the new entrant rule. In establishing a 1-
year compliance date for this final rule, the Agency has taken into
consideration and provided time for staffing changes, information
system modifications, and training.
    5. New entrant related notifications to other jurisdictions.
Missouri DOT claimed that a more aggressive new entrant program will
cause a dramatic increase in the failure rate of motor carriers. It
recommended development of a real-time database for notification of
State enforcement personnel. CVSA also recommended that the
notification take place in several different media types and formats,
both electronic and print. This issue was not directly addressed in the
2002 IFR or the 2006 NPRM.
    FMCSA Response: The Agency already provides the States with Web-
based access to information about motor carriers, including new
entrants. If an enforcement officer has Web access, the officer can
check new entrant status in ``real-time'' through FMCSA's enforcement
query system designed to dramatically increase access to motor carrier
safety information for State and Federal law enforcement personnel.
    6. Reciprocity agreement with Canada concerning provincial audits.
CTA requested FMCSA exempt Canada-domiciled new entrants that had
undergone a provincial facility audit during the 18-month monitoring
period from the requirement to pass a safety audit under the New
Entrant Safety Assurance Process. CTA reiterated that provincial audits
suffice for purposes of FMCSA's New Entrant Safety Assurance Process.
CVSA recommended developing reciprocity agreements for safety audits
with Canada and Mexico.
    FMCSA Response: The Agency acknowledges CTA's concerns but the

Agency cannot exempt Canada-based carriers from the new entrant program
required by 49 U.S.C. 31144(g)(1). Section 31144(g)(1) does not provide
FMCSA authority to exempt new entrants from the safety audit
requirement. FMCSA is currently working with Canadian officials to
examine the feasibility of establishing a reciprocity agreement
concerning compliance reviews conducted on motor carriers in their
respective country of domicile. The Agency will consider working with
Canadian officials on reciprocity of new entrant safety audits.
    7. Group audits and audits conducted at alternate locations. In
comments to the NPRM, CVSA questioned whether group audits provide a
proper environment for the safety audits.
    FMCSA Response: The Agency will continue conducting group audits
and conducting audits at alternate locations, as appropriate. Congress
directed the Agency under section 210(a) of MCSIA to consider alternate
locations where safety audits may be conducted for the convenience of
small businesses. We believe conducting audits at alternate locations
can be beneficial for both motor carriers and the Agency. Group audits
can be an efficient means of simultaneously educating and auditing
larger groups of motor carriers than are covered during single-carrier
audits. Typically, Federal or State enforcement personnel determine a
date to convene the group audit and contact several new entrants by
telephone to schedule them to attend. After all carriers are scheduled
by phone, the enforcement official sends a confirmation letter with the
appointment date, time and location and instructions on specific
records and information to bring to the audit.
    Group audits take place away from the respective carriers'
principal places of business, generally in a large conference room
either at the State agency or at a local hotel. The audit commences
with an educational presentation for the entire group, including a
question-and-answer period and educational materials. After the
presentation, several individual safety audits are conducted
simultaneously throughout the room. The room is configured with tables
spaced sufficiently to provide adequate privacy for the carrier
official and safety auditor. A safety auditor conducts a one-on-one
interview with the carrier official and examines the carrier's safety
records. In some instances, enforcement personnel have been able to
conduct multiple sessions, auditing as many as 48 carriers in a single
day. At the conclusion of the audit, the carrier is provided with a
written notice of determination and information on corrective actions
for any detected deficiencies. A carrier that fails the safety audit is
subject to revocation of registration if corrective action is not
completed.
    Nonetheless, we recognize that group audits only are beneficial in
select situations, depending on many factors including, but not limited
to, the number of new entrants within the given geographical area. For
this reason, the Agency conducts group audits only in those areas where
practicable. Safety auditors are also careful to judiciously separate
the educational and auditing functions in such a way as to maintain
carrier privacy.
    8. Program assessment. CVSA recommends that FMCSA conduct a
thorough program assessment to examine the impact of the safety audit.
    FMCSA Response: We agree, but will defer until the enhancements
made by this final rule have been fully implemented and sufficient time
has elapsed to enable evaluation of program changes.
    9. Comments beyond the scope of the rule. Advocates criticized the
Agency for what it calls use of SafeStat and the roster of acute and
critical regulations as the guideposts for determining which carriers
pose increased safety risks. OOIDA stated it believes the report titled
``Analysis of New Entrant Motor Carrier Safety Performance and
Compliance Using SafeStat'' is ``scientifically challenged'' and should
not be the basis for FMCSA to impute an increase in the safety risks
associated with new entrant motor carriers. The report is in the docket
for this rule.
    FMCSA Response: Discussions of SafeStat for identifying at-risk
carriers and prioritizing them for compliance reviews are beyond the
scope of the New Entrant Safety Assurance Process final rule. Moreover,
SafeStat itself has no bearing on the implementation of the new entrant
program since Congress has mandated that all new entrants submit to the
safety audit before receiving permanent registration, nor does it have
any bearing on the analysis of its effectiveness.

IV. Rulemaking Analyses

Executive Order 12866 (Regulatory Planning and Review) and DOT
Regulatory Policies and Procedures

    FMCSA has determined that this final rule is a significant
regulatory action within the meaning of Executive Order 12866 and the
U.S. Department of Transportation's regulatory policies and procedures
(DOT Order 2100.5 dated May 22, 1980; 44 FR 11034, February 26, 1979).
FMCSA has analyzed the costs and benefits, as discussed below, and has
determined this rule will be economically significant. The benefits of
this rule will exceed the $100 million annual threshold as defined in
Executive Order 12866. A full Regulatory Evaluation is included in the
docket for this rule. This rule has been reviewed by the Office of
Management and Budget (OMB).

Overview of Analysis

    This rule imposes costs on all new entrants. Although the costs
associated with existing regulations were counted when these measures
were first promulgated, OMB guidance on regulatory analysis suggests
that unless full compliance with these rules and regulations was
already being achieved, the compliance costs associated with this rule
should be counted.\2\ All new entrants will face costs associated with
the time their staff spends reviewing ETA materials and participating
in the safety audit. These would be the only costs borne by new
entrants that are found to comply with the applicable FMCSRs and HMRs.
New entrants not in compliance with safety regulations will have
additional costs associated with actions taken by them to achieve
higher levels of compliance to pass the safety audit or to properly
correct deficiencies after failing it. FMCSA will place out-of-service
any new entrant that opts not to incur the higher compliance costs
implicit with this more rigid enforcement scheme. The discussion of
costs is followed by a discussion of safety benefits.
---------------------------------------------------------------------------

    \2\ Circular A-4 (September 2003).
---------------------------------------------------------------------------

    OMB guidance also states that an Agency's analyses should ``focus
on benefits and costs that accrue to citizens and residents of the
United States.'' \3\ The Agency estimates that only about 3.5 percent
of new entrants are based outside of the U.S.\4\ This analysis reports
the total costs to all new entrants and separately the small fraction
of costs borne by non-U.S. entities. However, the estimates of benefits
include all carriers because all safety benefits from this rule occur
within the United States.
---------------------------------------------------------------------------

    \3\ Ibid.
    \4\ Derived using data from 1995 through 2002 contained in the
Motor Carrier Management Information System (MCMIS). Approximately
96.5 percent of new entrants are based in the U.S., 3.3 percent are
based in Canada, 0.2 percent are based in Mexico, and a minor
fraction are based in other countries.
---------------------------------------------------------------------------

Number of New Entrants

    FMCSA estimates that this final rule will affect about 40,000 motor
carriers

annually. Although about 68,700 MCS-150A forms are filed each year,
data on the number of safety audits that have been performed each year
indicate that about 40 percent of these carriers do not remain in the
new entrant program through the safety audit phase. Because this final
rule imposes new criteria for passing the safety audit, the number of
new entrant carriers actually audited is most relevant for the economic
analysis of this rule.

Costs

    New entrants will bear costs for time spent reviewing ETA
materials, time spent with a safety auditor during the safety audit,
and compliance costs to rectify any deficiencies found during the
safety audit. FMCSA also assumes that some new entrants, when
confronted with a safety audit failure, will choose to end interstate
operations. The Agency assumes that these exiting firms will leave a
gap to be filled by replacement new entrants, and that these
replacement firms will bear some costs to setting up operations and
acquiring the equipment of exiting firms. All of these costs are
discussed in detail below.

Paperwork Costs

    All new entrants will bear a cost of reviewing the ETA materials.
FMCSA assumed that it would take 3 hours for the chief safety officer
of each new carrier to study the new materials. In the NPRM, the Agency
assumed that reading this material would take just 1 hour, but after
having reconsidered the content of the ETA package, FMCSA reasoned that
carriers would be better served by spending considerably more time
studying it.
    Labor costs should account for both average hourly wages and
average benefits of motor carrier employees. The Bureau of Labor
Statistics' (BLS) National Compensation Survey (NCS) provides estimates
of wages, salaries, and benefits for several industries. According to
the December 2006 NCS, employer hourly costs for benefits are equal to
52.9 percent of hourly wages in the transportation and warehousing
industries.\5\ May 2006 wage data from the BLS Occupational Employment
Statistics (OES) survey indicate that the median hourly wage for
managers in the trucking industry was $34.35.\6\ Adding benefits equal
to 52.9 percent of that wage yields compensation of $52.52 per hour.
The total cost to all new entrants is approximately $6.3 million
annually ($52.52 per hour x 3 hours x 40,000 new entrants).
---------------------------------------------------------------------------

    \5\ http://stats.bls.gov/ncs/ebs/home.htm.
    \6\ http://www.bls.gov/oes/oes_dl.htm. Standard Occupational
Classification (SOC) 11-0000, North American Industry Classification
System (NAICS) 48400, Truck Transportation. Because, passenger
carriers (NAICS 485200, Interurban Bus Transportation) account for
just 1.5 percent of new entrants, and managers for these entities
earn similar wages, including them had essentially no effect on our
wage assumption.
---------------------------------------------------------------------------

    This rule eliminates the Form MCS-150A, Safety Certification for
Applications for USDOT Number, which was implemented in the IFR. This
form takes 9 minutes to complete. According to May 2006 OES data, the
base hourly general clerical wage for the trucking industry \7\ is
$11.12, and adding benefits equal to 52.9 percent of that wage yields
$17 per hour. Although about 40,000 new entrants continue interstate
operations through the safety audit, about 68,700 file this form
annually. Eliminating this form avoids a $0.2 million annual cost to
all new entrants.
---------------------------------------------------------------------------

    \7\ SOC 43-9061, NAICS 484000.
---------------------------------------------------------------------------

Costs of Safety Audit

    In 2007, FMCSA commissioned a study on the cost to the Agency and
carriers of conducting safety audits.\8\ This study estimated that the
cost to motor carriers consists entirely of the cost of employee time
spent with the auditor during the safety audit. A motor carrier manager
\9\ is assumed to be involved in the safety audit for 4 hours, 1 hour
during the pre-visit telephone interview and 3 hours during the onsite
portion of the safety audit. Based on May 2005 wages estimates, the
total cost is estimated to be $216.68; using May 2006 wages, the Agency
estimates the cost to be $220.60. FMCSA and its State partners conduct
on average about 40,000 safety audits per year, at a total annual cost
to new entrants of $8.8 million dollars.
---------------------------------------------------------------------------

    \8\ ``Safety Audit Cost Estimation''. http://www.fmcsa.dot.gov/
facts-research/research-technology/report/Safety-Audit-Cost-
Estimation-Oct2007.pdf.
    \9\ NAICS 484000, 11-1021 General and Operations Managers in the
Truck Transportation Industry.
---------------------------------------------------------------------------

Compliance and Out-of-Service (OOS) Costs

    This final rule imposes additional costs on those new entrants who
will fail the stricter safety audits established by this rule. FMCSA
divides these carriers into two categories, those that take required
action and come into compliance, and those that do not and are placed
out of service. Although the normal costs of remedial action for an
individual carrier are likely to be small and would seemingly not
discourage compliance, the Agency assumes that there will be a
substantial number of carriers in both categories.
    FMCSA calculated the safety audit failure rate under the provisions
of this final rule over a period running from January 2003 through
September 2007 and estimated that 69,551 of the 145,246 safety audits
performed over this period would have been failures. This translates
into a failure rate of 47.9 percent, and applying this failure rate to
the 40,000 safety audits conducted each year, the Agency estimates that
19,154 new entrants will fail safety audits annually. These carriers
will be required to take the appropriate actions to come into
compliance with the applicable regulations and to demonstrate to the
Agency that they have remedied deficiencies by submitting corrective
action plans.
    One would not necessarily expect such a high failure rate to
persist after the rule is implemented. Upon implementation of this
rule, many carriers will take the appropriate action to pass the
stricter new entrant safety audit, and the actual failure rate will be
significantly lower than 47.9 percent.\10\ Nevertheless, this high
failure rate will be used in this analysis because it represents that
fraction of carriers who will have to bear additional costs to come
into compliance with the rule, whether they do so before or after their
safety audit occurs.
---------------------------------------------------------------------------

    \10\ In ``Crime and Punishment: An Economic Approach'' (1968),
economist Gary Becker showed that raising the expected value of
punishments serves as a deterrent to potential offenders. The
expected value includes both the likelihood of being caught and the
severity of the punishment.
---------------------------------------------------------------------------

    New entrants may also be subject to expedited actions in addition
to safety audits that would require them to take steps to demonstrate
that they have taken appropriate actions to come into compliance with
applicable FMCSRs. Based on FMCSA's experience with Mexico-domiciled
border zone carriers subject to similar expedited action procedures,
the Agency estimates that 15 percent of new entrants will incur costs
in responding to expedited action requests that are similar to those
they would incur to remedy deficiencies found during a safety audit.
    The cost of coming into compliance would vary according to many
factors. These include the size of the new entrant, the specific
violations, and the severity of the violation. For example, provided
that all vehicle repairs are undertaken eventually, the remedial action
for a one-time violation of Sec.  396.9(c), ``operating a CMV after it
has been declared out of service, and before repairs have been made,''
aside from any business exigency that might

motivate non-compliance, has very little cost; a carrier would simply
be required to undertake repairs in a timely manner rather than put
them off. A small new entrant without a drug and alcohol testing
program could join a testing consortium for no more than $1,000
annually. However, a large carrier could spend several thousand dollars
to establish a system to periodically inspect its CMVs. After
considering the small size of most new entrants and the low cost of
complying with most of these violations, the Agency assumes that, if
all corrective action scenarios were ranked by cost, the example of the
small new entrant joining a drug testing program would be
representative of the median cost incurred to correct a deficiency that
resulted in a safety audit failure. FMCSA estimated in the NPRM a
$1,000 cost for compliance costs and, after having received no comment
on it, continues to believe that it is a reasonable estimate on which
to base its cost calculations.
    In addition to compliance costs, a motor carrier will bear some
small costs for preparing and submitting to FMCSA a corrective action
plan that shows that the motor carrier has remedied deficiencies that
were found during the safety audit. Although some carriers will come
into compliance before the safety audit occurs, for simplicity the
Agency calculated these notification costs for all carriers that will
face additional compliance costs. Notifying FMCSA that the appropriate
actions have been taken will use about $2.00 in materials (e.g., an
envelope, postage, and copies of documents that show what actions the
carrier has taken). Assembling this information should take little
time, but the motor carrier may have additional contact with FMCSA, so
the Agency has assumed that on average a manager at the motor carrier
will spend no more than an hour preparing and submitting the corrective
action plan. The manager's wage calculated above shows a cost of about
$53 per hour of this employee's time. The total cost of submitting a
corrective action plan will be $55 per carrier. Total compliance costs
are $1,055 per carrier.
    Although compliance costs are low, many new entrants may
nevertheless not take the steps to avoid being placed out of service.
These carriers would be able to recover the costs of their equipment
and facilities by selling them to new owners, but some other smaller
costs, listed in Table 4 of the regulatory evaluation, are
unrecoverable, or ``sunk,'' regardless of whether or not the carrier
continues operations. Although exit from the industry is economically
costless to an individual carrier, these sunk costs would be borne by
the new entrants that replace exiting motor carriers. In this way,
carriers placed out of service will increase costs borne by the motor
carrier industry as a whole.
    Carriers entering the interstate trucking business to replace
exiting new entrants will bear several costs. These include
application, licensing, and registration fees; and advertising,
training, and asset transfer costs. Several third-party firms offer to
complete all the administrative requirements for a fee of $500, and the
market price for these services is used in this analysis. Advertising
costs vary widely among motor carriers, depending upon their location,
market, personal taste, and other factors. According to the Census
Bureau's Business Expense Survey, an average of $3,900 was spent on
advertising in 2002 per trucking establishment.\11\ Many new entrants
may rely on freight brokers, and therefore spend little or nothing on
advertising. Rather than attempt to calculate a precise average based
on the composition of the new entrant group, the Agency chose an
estimate for advertising in the middle of the range, $2,000. Average
transactions cost for transferring assets are assumed to be about $200
each. Costs for training are highly variable and depend on many
factors, such as the size and type of the motor carrier and the
experience of its staff. FMCSA assumes that this will on average take
40 labor-hours to accomplish. The median wage in the trucking industry
for all employees was $16.95 per hour, and adding 52.9 percent for
benefits yields about $26 per hour. This labor rate multiplied by 40
hours yields an estimate of learning costs that is slightly over $1,000
dollars. Included is another $300 to account for any other small start-
up costs. Total costs are $4,000 per replacement carrier, and are
presented in Table 4 of the regulatory evaluation, which is reproduced
here. The assumption of $4,000 was presented in the NPRM and, after
having received no comment on it, the Agency continues to believe that
it is a reasonable estimate on which to base cost calculations.
---------------------------------------------------------------------------

    \11\ http://www.census.gov/csd/bes/07/part3.htm. Advertising
costs were $437 million for the 112,642 trucking establishments
(NAICS code 484000) included in the 2002 Economic Census. See http:/
/www.census.gov/econ/census02/ for Economic Census data.

         Table 4--Estimated Industry Entry Costs per New Entrant
------------------------------------------------------------------------

------------------------------------------------------------------------
Application Fee, License Fee, Registration Fee................      $500
License Fee

Advertising...................................................     2,000
Transactions Cost to Transfer Assets..........................       200
Training and Other Costs......................................     1,300
                                                               ---------
    Total.....................................................     4,000
------------------------------------------------------------------------

    For the sake of simplicity, the Agency has assumed that every new
entrant that ceases interstate operations will be replaced by another
(albeit safer) new entrant. Obviously, the dynamics of entry into and
exit from the interstate motor carrier industry are more complex. Many
new entrants are not wholly new entities, but carriers who were engaged
in intrastate operations; these carriers, upon surrendering interstate
authority, may return to intrastate-only operations. Some existing
firms will absorb firms placed out of service, and will bear only a
portion of these costs. Consequently, the total cost estimated to
replace an exiting new entrant likely represents an upper bound.
    The estimates of total costs require assumptions on the number of
carriers that will remedy deficiencies after having failed a safety
audit or received an expedited action letter, and the number that will
exit the industry to avoid compliance costs. Fifteen percent of
carriers (6,000) will be required to take the appropriate actions to
achieve compliance after receiving an expedited action letter. FMCSA
assumes that 50 percent (9,577) of the carriers that would fail the
stricter safety audits will take the appropriate actions to achieve
compliance, and that the other 50 percent of carriers (9,577) will exit
the industry. According to Agency research, the normal motor carrier
attrition rate is around 5 percent per year, so this analysis accounts
for this fraction of motor carriers that would have exited the industry
regardless of whether or not they were placed out of service after
failing a safety audit.\12\ Reducing the estimated number of OOS
carriers by 5 percent left 9,098 new entrants that would be replaced as
a result of the final rule. Annual costs to complying carriers are
estimated to be $16.4 million ((6,000 + 9,577) x $1,055), and annual
costs associated with new entrants exiting the

industry are estimated to be $36.4 million (9,098 x $4,000).
---------------------------------------------------------------------------

    \12\ FMCSA calculated the average annual attrition rate using
MCMIS and SafeStat data on the numbers of new entrants and active
motor carriers over sample periods from five to ten years. The
results fell into a range of 3 to 6 percent.
---------------------------------------------------------------------------

Summary of Costs

    Costs are summarized in Table 5 of the regulatory evaluation, which
is reproduced here. Total annual costs are estimated to be $67.9
million, and are identical in all years. Costs discounted over 10 years
at a 7 percent rate will be $477.2 million. The 3.5 percent of carriers
not based in the U.S. would bear just $16.7 million of these costs;
because this small amount does not materially impact the results, it
will not be discussed further.

                   Table 5--Summary of Estimated Costs
                               [Millions]
------------------------------------------------------------------------

------------------------------------------------------------------------
Annual Costs..................................................     $67.9
  Paperwork...................................................       6.3
  Safety Audits...............................................       8.8
  Compliance Costs............................................      16.4
  OOS Costs...................................................      36.4
Costs over 10 Years, Discounted at 7%.........................     477.2
  Paperwork...................................................      44.3
  Safety Audits...............................................      62.0
  Compliance Costs............................................     115.3
  OOS Costs...................................................     255.6
------------------------------------------------------------------------

Safety Benefits

    FMCSA expects substantial safety benefits from stricter enforcement
of FMCSRs during new entrant safety audits. Research from the Volpe
National Transportation Systems Center (Volpe Center) demonstrates that
new entrant driver and carrier violations of regulations are positively
correlated with crash rates.\13\ As noted earlier, the Agency believes
that safety audits could be more effective in identifying motor
carriers that are noncompliant with the FMCSRs. The implementation of
this rule will allow safety auditors to better flag noncompliant new
entrants, and, because the ultimate goal of this rule is to improve
motor carrier safety, the Agency believes that reducing violations of
the FMCSRs will consequently lead to reductions in crash rates.
---------------------------------------------------------------------------

    \13\ Volpe Center (April 1998). ``New Entrant Safety Research,
Final Report.''
---------------------------------------------------------------------------

    The motor carrier crash rate from MCMIS is 0.75 crashes per million
vehicle miles traveled (MVMT), and the new entrant crash rate is 25
percent higher, 0.94 per MVMT.\14\ FMCSA assumes that the new entrants
placed out of service are less-safe than typical new entrants and crash
1.13 times per MVMT, a 50 percent higher rate than that of established
motor carriers. This distribution of crash rates is consistent with
recent MCMIS data: For all motor carriers, the crash rate of the worst
25th percentile is 50 to 70 percent higher than the overall rate.
According to MCMIS, new entrants average 0.4
---------------------------------------------------------------------------

    \14\ All crash rates are average crash rates weighted by MVMT.
---------------------------------------------------------------------------

Safety Benefits of the Safety Audit

    The effectiveness of stricter safety audits in reducing crash rates
cannot be determined until several years after this rule goes into
effect. However, one can make inferences from studies that demonstrate
the effectiveness of compliance reviews (CRs) at reducing crash rates.
The ``Compliance Review Effectiveness Model'' (June 2006),\15\ created
by the Volpe Center, compared the crash rates of motor carriers before
and after CRs conducted in years 2000 through 2003. The model shows
that motor carriers subject to compliance reviews in 2003 experienced a
17.5 percent reduction in their crash rates relative to the rate from
an un-reviewed control group one year after the review, and projects
extended benefits averaging about 17.5 percent below the control
group's crash rate for the subsequent three years.
---------------------------------------------------------------------------

    \15\ http://ai.volpe.dot.gov/CarrierResearchResults/PDFs/
ProgramEffectiveness/CREM_O6.pdf.
---------------------------------------------------------------------------

    Safety audits are less comprehensive than CRs, and safety issues
that may be found during a CR might not be observed in a safety audit.
Safety audits may be less successful than CRs at discovering, and
mandating corrections to, behavior that leads to crashes. The
effectiveness of the safety audit at improving carrier safety will also
be enhanced by improved compliance in response to expedited action
letters. The Agency cannot predict whether all carriers subject to
expedited actions would have failed the safety audit, but it assumes
this to be the case. Consequently, the Agency did not separately
estimate safety improvements from expedited actions, but assumed that
these effects will be contained within the impact of the overall safety
audit. Bounded by no effect and the effectiveness of a CR, the Agency
assumes that the safety audits implemented under this rule fall in the
middle, and will be half as effective as CRs, that is, they hold crash
rates 8.75 percent below the baseline rate for 4 years after they have
been conducted. An 8.75 percent reduction of the crash rate from the
0.94 rate, multiplied by the number of new entrants that take remedial
actions to comply with the FMCSRs, multiplied by the annual new entrant
MVMT (0.082 x 9,577 x 0.4) results in the rule having avoided 316
crashes each year in year one. In years two through four, the baseline
crash rate will fall slightly as accumulated experience ``teaches'' new
entrants to be safer carriers, so the crash reduction attributed to the
safety audit is reduced somewhat. New entrants entering in the second
year will experience the same reductions, which will overlap the crash
reductions from the first year carriers. About 619 crashes will be
avoided in the second year, 928 crashes in the third, and 1,238 crashes
the fourth through tenth years. Cumulative over 10 years, 10,529
crashes will have been avoided.

Safety Benefits From Exiting Carriers

    FMCSA assumes new entrants that replace exiting carriers will have
an overall crash rate that is the same as the average rate for all new
entrants, 0.94 crashes per MVMT. There would be no characteristics of
these replacement carriers that would cause them to have an overall
crash rate on average any better or worse than that of the new entrant
population as a whole. As research presented in the Volpe Center's
``Background to New Entrant Safety Fitness Assurance Process'' (March
2000) shows, carriers improve their safety performance as they gain
more years of experience. The worst carriers would be improving their
safety performance at approximately the same rate as average new
entrants. Nevertheless, the difference in the crash rates of these two
groups will decline over time: Poor-performing carriers will experience
larger declines in their crash rates by virtue of their crash rates
having started at a higher level. Over 10 years, the average difference
in crash rates would be about 0.17 crashes per MVMT.
    As the worst-performing new entrants continually terminate
interstate operations, the number of crashes avoided by their exiting
the industry will accumulate. As stated, the carriers that replace them
will have on average 0.17 fewer crashes per MVMT, and multiplying that
difference times the number of replaced carriers and overall new
entrant MVMT (0.17 x 9,098 x 0.4) yields 619 crashes in the first year.
This group of new entrants will be pared down by 5 percent due to
normal attrition in each subsequent year, as would the number of
crashes avoided that can be attributed to their exit. New entrants
arriving in subsequent years will repeat this pattern for crashes
avoided, and these patterns will overlap those of all preceding years.
Over 10 years, about 29,400 crashes will be avoided.

Summary of Safety Benefits

    Table 6 of the regulatory evaluation, which is reproduced here,
highlights estimates of the number of crashes avoided in several
example years.

                                                      Table 6--Crashes Avoided in Individual Years
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Year 1             Year 2             Year 5            Year 10         10-Year total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Continuing Carriers......................................                316                619              1,238              1,238             10,529
Closed Carriers..........................................                619              1,206              2,799              4,965             29,400
                                                          ----------------------------------------------------------------------------------------------
    Total................................................                935              1,826              4,037              6,203             39,929
--------------------------------------------------------------------------------------------------------------------------------------------------------

    FMCSA estimates that about 39,929 crashes will be avoided over 10
years. The average cost of a motor-carrier-involved crash is
$146,410.\16\ This includes both direct costs such as medical,
emergency services, and property damage, and indirect costs such as
lost productivity and diminished quality of life. By deterring 39,929
crashes, this rule will yield a 10-year benefit, discounted at a 7
percent rate, of $3,778.0 million.
---------------------------------------------------------------------------

    \16\ Zaloshnja, Eduard and Ted Miller (December 2006). ``Unit
Costs of Medium and Heavy Truck Crashes.'' Figures in this report
are for 2005: We adjusted the $91,112 cost for a large truck crash
and the $3,604,518 cost for a fatal crash to 2006 dollars using the
annual percent change in the gross domestic product deflator (http:/
/www.bea.gov/national/index.htm#gdp). Zaloshnja and Miller use a
$3.0 million value of a statistical life (VSL) for their estimates;
the Agency has recomputed these figures using a $5.8 million VSL, in
accordance with DOT guidance on the treatment of the economic value
of a statistical life in Departmental analyses issued February 5,
2008 (http://ostpxweb.dot.gov/policy/reports/080205.htm).
---------------------------------------------------------------------------

Summary of Costs and Benefits

    This rule ensures better compliance with FMCSRs. The costs and
benefits over 10 years, discounted at a 7 percent rate, will be $477.2
million and $3,778.0 million, respectively. Net benefits will be
$3,300.8 million, and the benefit/cost ratio will be 7.9. FMCSA
estimates that 39,929 crashes will be avoided over 10 years.
Eliminating these crashes will avoid 487 fatalities.\17\ The 10-year
discounted cost per life saved will be $1.0 million.
---------------------------------------------------------------------------

    \17\ FMCSA's Large Truck Crash Facts, 2005 indicates that 1
percent of crashes involve fatalities, claiming 1.15 lives per fatal
crash.
---------------------------------------------------------------------------

Alternative Assumptions on Improvements in Carrier Safety

    Benefits estimates are sensitive to assumptions about the reduction
in the crash rates that the implementation of this final rule will
achieve. The above estimates indicate that 464 crashes would have to be
avoided each year for this rule to yield positive net benefits. Even if
safety audits do nothing to improve safety and decrease crash rates,
some risky carriers will still end interstate operations as a result of
the rule. Positive net benefits would still occur if this rule did
nothing but prompt the worst 5.7 percent (about 2,300 carriers per
year) of new entrants to exit the industry. Conversely, if all new
entrants remained in the industry and took the appropriate corrective
actions, safety audits would need to be just 7.1 percent as effective
as compliance reviews in reducing crash rates for the rule to yield
positive net benefits. The reduction in crash rates needed to produce
positive net benefits would be just 1.3 percent of the average new
entrant crash rate of 0.94 per MVMT; the safety audit would have to
prevent about 0.01 crashes per MVMT.

Alternate Discount Rate and Crash Costs

    The Agency also computed costs and benefits using a 3 percent
discount rate over a 10-year horizon. Because costs are constant and
benefits increase over the time, the ratio of benefits to costs
improves as a result of using this lower discount rate. Using a 7
percent discount rate, FMCSA computed benefits using alternate values
of a large truck crash cost which incorporate different economic values
of statistical life (VSL). The baseline VSL was $5.8 million; here
values of $3.2 million and $8.4 million are also used. Even the lowest
VSL still results in strong positive net benefits. Table 7 of the
regulatory evaluation, which is reproduced here, shows the results of
these analyses.

                                Table 7--Alternate Discount Rate and Crash Costs
----------------------------------------------------------------------------------------------------------------
                                                    Value of
                                                  statistical    Average       Costs       Safety
                  Discount rate                       life      crash cost  (millions)    benefits    B/C ratio
                                                   (millions)                            (millions)
----------------------------------------------------------------------------------------------------------------
3%..............................................         $5.8     $146,410      $579.6     $4,813.0          8.3
                                                 --------------------------            -------------------------
                                                          5.8       46,410  ..........      3,778.0          7.9
                                                 --------------------------            -------------------------
7%..............................................          3.2       91,582       477.2      2,363.2          5.0
                                                 --------------------------            -------------------------
                                                          8.4      201,237  ..........      5,192.8         10.9
----------------------------------------------------------------------------------------------------------------

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501, et
seq.), Federal agencies must obtain approval from OMB for each
collection of information they conduct, sponsor, or require through
regulations. FMCSA has determined there are three currently approved
information collections that will be affected by this final rule: (1)
OMB Control No. 2126-0013 titled ``Motor Carrier Identification
Report'' (FMCSA Forms MCS-150, MCS-150A, and MCS-150B), approved at
119,270 burden hours through March 31, 2011; (2) OMB Control No. 2126-
0015 titled ``Designation of Agents, Motor Carriers, Brokers and
Freight Forwarders (FMCSA Form BOC-3) approved at 14,833 burden hours
through June 30, 2011; and (3) OMB Control No. 2126-0016 titled
``Licensing Applications for Motor Carrier Operating Authority'' (FMCSA
Forms OP-1, OP-1 (FF), OP-

1 (MX), and OP-1 (P), approved at 55,738 burden hours through August
31, 2008, (pending revision at OMB). The table below depicts the
current and future burden hours associated with the information
collections.

                            Table--Current and Future Information Collection Burdens
----------------------------------------------------------------------------------------------------------------
                                                                Annual burden
                       OMB approval No.                        hours currently   Future annual        Change
                                                                   approved       burden hours
----------------------------------------------------------------------------------------------------------------
2126-0013....................................................          119,270          108,969          -10,301
13 MCS--150..................................................          108,825          108,829                4
13 MCS--150A.................................................           10,305                0          -10,305
13 MCS--150B.................................................              140              140                0
2126-0015....................................................           14,833           14,835                2
2126-0016....................................................           55,738           55,786               48
    Net Change...............................................  ...............  ...............          -10,251
----------------------------------------------------------------------------------------------------------------

    The following is an explanation of how each of the information
collections shown above will be affected by this final rule.
    OMB Control No. 2126-0013. This final rule will eliminate the
requirement for new entrants to complete the Form MCS-150A (Safety
Certification for Applications for USDOT Number) because it does not
provide the results intended. Amendments to 49 CFR part 385, subpart E-
Hazardous Materials Safety Permits will remove references to the MCS-
150A and will not impact the MCS-150B in any way. The estimated annual
paperwork burden for this information collection will be 108,969 hours
[119,270 currently approved annual burden hours - 10,305 (68,700
respondents x 9 minutes/60 minutes to complete the MCS-150A form) + 4
(12 non-North America-domiciled motor carriers x 20 minutes/60 minutes
to complete the Form MCS-150) = 108,969].
    OMB Control No. 2126-0015. Non-North America-domiciled motor
carriers will also be required to notify the Agency regarding
designation of process agents by either: (1) Submission in the
application package of Form BOC-3 (Designation of Agents, Motor
Carriers, Brokers and Freight Forwarders), or (2) a letter stating that
the applicant will use a process agent that will submit the Form BOC-3
electronically. The estimated annual paperwork burden for this
information collection will be 14,835 hours [14,833 currently approved
annual burden hours + 2 hours (12 new entrant non-North America-
domiciled motor carriers x 10 minutes/60 minutes to complete Form BOC-
3) = 14,835 hours].
    OMB Control No. 2126-0016. The final rule will create a new Form
OP-1 (NNA) titled ``Application for U.S. Department of Transportation
(USDOT) Registration by Non-North America-Domiciled Motor Carriers.'' A
non-North America-domiciled motor carrier is one whose principal place
of business is located in a country other than the United States,
Canada or Mexico. These entities would use the OP-1 (NNA) when
requesting either a USDOT new entrant registration as a private or
exempt for-hire carrier or operating authority as a non-exempt for-hire
carrier. The estimated annual paperwork burden for this information
collection would be 55,786 hours [55,738 currently approved annual
burden hours + 48 hours (12 new entrant non-North America-domiciled
motor carriers x 4 hours to complete Form OP-1 (NNA)) = 55,786 hours].
    The changes in this final rule, affecting three currently-approved
information collections, would result in a net decrease of 10,251
burden hours in the Agency's information collection budget.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-612) (the Act)
requires Federal agencies to consider the effects of their regulatory
actions on small businesses and other small entities and to minimize
any undue disproportionate burden. To achieve this, the Act requires
that agencies describe how they have addressed these concerns by
including a Final Regulatory Flexibility Analysis (FRFA) with each
final rule. The Agency has prepared the FRFA set forth below. The full
version of this FRFA is included in the Regulatory Evaluation that has
been placed in the docket for this rule.
    (1) Objectives of, and need for, the final rule. The objective of
this final rule is to improve the compliance of new interstate carriers
(known in this rule as new entrants) with the existing FMCSRs and HMRs
and thereby reduce the number and severity of crashes in which these
carriers are involved. In response to concerns about the safety of new
entrant motor carriers, Congress enacted section 210 of MCSIA. Section
210(a) directed the Secretary to require that each motor carrier
granted operating authority undergo a safety audit within the first 18
months of operation. Section 210(b) required the Secretary to establish
regulations specifying minimum knowledgeability requirements for motor
carriers applying to obtain interstate operating authority. Congress
mandated increased oversight of new entrants because studies indicated
these operators had a much higher rate of non-compliance with basic
safety management requirements and were subject to less oversight than
established operators.
    To implement this mandate, FMCSA published an IFR on May 13, 2002
(67 FR 31978), which became effective January 1, 2003 titled ``New
Entrant Safety Assurance Process.'' New entrants are granted
provisional operating authority and subjected to an 18-month safety
monitoring period. When a new entrant registers for a USDOT Number, it
must complete Form MCS-150A--Safety Certification for Applications for
USDOT Number to certify understanding of applicable safety regulations
and receives ETA materials, upon request. Additionally, during the
initial 18-month period of operations, FMCSA evaluates the new
entrant's safety management practices by monitoring the carrier's on-
road performance prior to granting the carrier permanent registration
and by conducting an on-site review of its operations called a safety
audit.
    In response to comments on the IFR indicating new entrants lacking
basic safety management controls were passing the safety audit, and
after having collected additional data, FMCSA published an NPRM titled
``New Entrant Safety Assurance Process'' on December 21, 2006 (71 FR
76730). The NPRM proposed enhancements to strengthen and clarify the
new entrant program. Notably, the Agency proposed eliminating Form MCS-
150A because this form was deemed ineffective at assessing carrier
familiarity with safety regulations. To

meet the requirements of section 210(b), the Agency will continue to
rely on ETA materials to provide an effective foundation for knowledge
of safety regulations, and has enhanced the currency and availability
of these materials to further their support of the knowledgeability
provision. In addition, the Agency will confirm knowledge of applicable
regulations during the safety audit. The NPRM also proposed to revise
the grading criteria for the safety audit so carriers would
automatically fail if a violation was found in any one of 11
regulations.
    This final rule adopts the following NPRM proposals with
consideration to additional public comments. The final rule:
     Eliminates Form MCS-150A. To promote carrier
knowledgeability of safety regulations, the Agency has enhanced the
currency of ETA materials, provides online access to these materials,
and distributes paper copies to motor carriers.
     Adds new Sec.  385.308 to identify violations that will
result in expedited action.
     Revises Sec.  385.327 to clarify the process for
administrative review.
     Revises Sec.  385.329(b) to clarify how a new entrant
whose authority has been revoked can reapply.
     Revises Sec.  385.337(a) to clarify that refusal to submit
to a safety audit may subject a new entrant to civil penalties.
     Revises Sec.  385.306 to clarify actions that may be taken
against a carrier who provides incomplete or untruthful information on
the Form MCS-150.
     Establishes a new safety monitoring system and application
process for NNA-domiciled motor carriers, who were not covered by the
IFR.
     Establishes a list of 16 regulatory violations that would
result in automatic failure of the safety audit, five more than were
proposed by the NPRM. Many of the originally-proposed provisions were
clarified, and two of them were adjusted to require a pattern of
violations rather than a single occurrence of non-compliance to result
in automatic failure of the safety audit.
    (2) Summary of the public comments on the initial RFA (IRFA), and
Agency response. The comment period for the NPRM ended on February 20,
2007. FMCSA received a total of 17 comments in response to the NPRM,
representing 21 entities. No comments addressed the IRFA directly.
However, one commenter, OOIDA, submitted a comment relevant to the
FRFA. Specifically, OOIDA stated that the FMCSA proposal will increase
the small business failure rate and is ``reactive'' and ``punitive'' to
small businesses.
    FMCSA is mandated under section 210 of MCSIA to establish
regulations specifying minimum knowledgeability requirements for motor
carriers applying to obtain interstate operating authority, and
furthermore to require new entrants to undergo a safety audit within
the first 18 months of operation. Failure of the safety audit will
occur when a carrier fails to comply with safety regulations that the
Agency has determined to be essential in demonstrating effective safety
management controls.
    It is worth noting that no matter how the new entrant program could
have been structured, for it to be effective as envisioned by Congress
some new entrants would have to change their behavior to come into
compliance with existing FMCSRs. The Agency's analysis of past safety
audits indicates that the majority of new entrants already demonstrate
adequate safety management controls, even under the more stringent
safety audit standards imposed by this rule. New entrants have many
opportunities to educate themselves on and come into compliance with
the existing FMCSRs. Nevertheless, FMCSA expects that some new entrants
will still surrender interstate operating authority rather than comply
with the safety regulations (although they would not necessarily be
precluded from engaging in intrastate-only operations). The only way
for the Agency to eliminate all adverse business impacts on small
carriers would be to allow non-compliance by a small subset of
carriers. This is not in the public's interest and the interest of
other motor carriers, small and large.
    (3) Description and an estimate of the number of small entities to
which the rule will apply. New entrants tend to be the smallest firms
in the industry. FMCSA estimates that on average 68,700 motor carriers
apply for interstate authority each year, as evidenced by a count of
filings of Form MCS-150A. About 40,000 of these carriers remain in the
new entrant program through the safety audit phase. The Small Business
Administration (SBA) regulations (13 CFR Part 121) specify the small
business size standard for the motor carrier industry as not more than
$23.5 million in average annual receipts per firm. Revenue data for
most carriers are not available, but motor carriers are required to
report to the Agency on Form MCS-150 the number of power units they
own. A survey by OOIDA indicates that revenue per tractor is about
$120,539,\18\ and using this amount, FMCSA assumes that firms
possessing fewer than 195 power units would fall below the $23.5
million revenue threshold for small business designation. Data from
MCMIS indicate that about 99.8 percent of new entrants--effectively all
of them--are small businesses.
---------------------------------------------------------------------------

    \18\ OOIDA 2003 Cost of Operations Survey. http://www.ooida.com/
Documents/2003_Cost_Ops.pdf. Survey is $110,527 per tractor; FMCSA
adjusted this to 2006 prices using the GDP deflator.
---------------------------------------------------------------------------

    (4) Projected reporting, recordkeeping, and other compliance
requirements of the final rule. This rule improves the efficacy of the
new entrant safety audits in identifying instances of poor compliance
and directing new entrants to correct their business practices.
Although FMCSA estimates that non-compliant carriers could spend on
average $1,000 to come into compliance with safety regulations, these
costs are associated with requirements of existing regulations, and are
borne by the majority of motor carriers who already comply with the
FMCSRs. This rule imposes no new substantive requirements on any motor
carrier. It is also important to note that the safety audit is not a
compliance intervention, i.e., no civil penalties for non-compliance
are imposed.
    The rule does impose some small administrative and paperwork
requirements. FMCSA will continue to provide online access to and
distribute hard copies of ETA materials, which all new entrants should
spend time reviewing. The Agency estimates that a manager or company
official at each carrier will spend about 3 hours with the enhanced
materials, at a labor cost of about $157. The cost of a carrier's time
spent during the safety audit is estimated to be $220.60. In total, the
new entrant program imposes total one-time expense of $377.60 on each
new entrant. A new entrant that fails its safety audit or receives an
expedited action demand letter will also be required to submit a
corrective action plan, proof that it has remedied deficiencies in key
areas of regulatory compliance. This will also be handled by a manager
or company official, and FMCSA estimates that the total cost of
submitting a corrective action plan is $55, including materials and
labor. With average revenue per tractor estimated to be $120,539, the
maximum cost the smallest new entrant, a carrier with just one power
unit, would incur costs equal to about 0.3 percent of a single year's
revenue. In most cases, these new costs would be borne only once.
Consequently, FMCSA does not judge the cost of this rule to be
significant.
    (5) Steps the Agency has taken to minimize the significant adverse

economic impact on small entities. Because an interim final rule has
been in effect for several years before this final rule, FMCSA has been
able to implement the best policies based on several years of
experience.
    The safety audit received perhaps the greatest amount of
consideration. The purpose of the safety audit is to educate the
carrier about the applicable safety regulations and to assess the
adequacy of its basic safety management controls. If a carrier's safety
management controls are deemed inadequate, the Agency also requires
corrective actions by the carrier before granting permanent operating
authority. When the new entrant program was implemented in 2003, FMCSA
established a safety audit that, while educational, had such lenient
assessment criteria--the pass rate was greater than 99 percent--that it
did very little to compel carriers who lacked basic safety management
controls to improve. The Agency did not believe that education alone
was enough to encourage voluntary compliance. Analysis of recent crash
data indicates that the crash rate of new entrants is still
significantly higher than that of the overall carrier population.
Because improved safety is the ultimate goal of the new entrant
program, a stricter safety audit seemed absolutely necessary. However,
in adopting 16 automatic failure criteria, FMCSA has been careful to
implement standards that are designed to flag substantial deficiencies
in the new entrant's basic safety management controls. Even then, FMCSA
will provide guidance to carriers as they make the required corrective
actions.
    FMCSA has also made other changes to better educate carriers on
safety regulations before their safety audits. To enhance the content
and availability of the ETA materials, FMCSA has improved the
information content. In addition, the Agency has published the ETA
materials online and will also mail ETA materials to new entrants.
FMCSA will keep the ETA materials up to date. FMCSA is eliminating the
requirement to self-certify knowledge of Federal safety requirements
during the application process (Form MCS-150A--Safety Certification for
Applications for USDOT Number) because the Agency believes it fails to
demonstrate that carriers have the requisite familiarity with motor
carrier safety regulations. The Agency anticipates that the educational
focus at the beginning of the new entrant program resulting from the
improved, updated, and more accessible ETA materials will increase the
likelihood that carriers will begin their operations with adequate
safety management controls, which, in addition to reducing safety audit
failures, could also help avert costly mistakes later, such as crashes
and violations caught at roadside inspections.
    Pursuant to section 210(a) of MCSIA, FMCSA considered alternate
locations where safety audits may be conducted (other than on-site at
the carrier's principle place of business) for the convenience of small
businesses. FMCSA will conduct group audits in areas where practicable,
while being careful to maintain carrier privacy. FCMSA believes
conducting audits at alternate locations is beneficial, practical, and
cost effective for both the Federal Government and the carriers, given
the right circumstances.

Privacy Impact Analysis

    FMCSA conducted a privacy impact assessment of this rule as
required by section 522(a)(5) of division H of the FY 2005 Omnibus
Appropriations Act, Public Law 108-447, 118 Stat. 3268 (Dec. 8, 2004)
[set out as a note to 5 U.S.C. 552a]. The assessment considers any
impacts of the final rule on the privacy of information in an
identifiable form and related matters. This rule would neither enlarge
the scope of personally identifiable information collected nor change
the sharing of that information. The entire privacy impact assessment
is available in the docket for this rule.

Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 requires that agencies
prepare analyses of rules that would result in the expenditure by
State, local, and tribal governments, or by the private sector, of $100
million or more in any one year. Department of Transportation guidance
requires the use of a revised threshold figure of $136.1 million, which
is the value of $100 million in 2008 after adjusting for inflation.
FMCSA has determined that the impact of this rulemaking will not be
that large in any projected year.

National Environmental Policy Act

    FMCSA has analyzed this final rule for the purpose of the National
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321, et seq.) and
has determined under the Agency's National Environmental Policy Act
Implementing Procedures, FMCSA Order 5610.1C (published at 69 FR 9680,
March 1, 2004, with an effective date of March 30, 2004) this action is
categorically excluded under Appendix 2, paragraph 6.f of the Order
from further environmental documentation. That categorical exclusion
relates to establishing regulations implementing the following
activities, whether performed by FMCSA or by States pursuant to the
Motor Carrier Safety Assistance Program (MCSAP), which provides
financial assistance to States to reduce the number and severity of
crashes and hazardous materials incidents involving commercial motor
vehicles: (1) Driver/vehicle inspections; (2) traffic enforcement; (3)
safety audits; (4) compliance reviews; (5) public education and
awareness; and (6) data collection; and provides reimbursement for the
expenses listed under paragraphs 6.f.(6)(C)(i) through 6.f.(6)(C)(v).
This action amends the New Entrant Safety Assurance Process for
carriers newly registering to operate in interstate commerce. The
Agency believes this action will include no extraordinary circumstances
having any effect on the quality of the environment.
    FMCSA has also analyzed this action under section 176(c) of the
Clean Air Act (CAA), as amended (42 U.S.C. 7401 et seq.), and
implementing regulations promulgated by the Environmental Protection
Agency. We performed a conformity analysis of the CAA according to the
procedures outlined in Appendix 14 of FMCSA Order 5610.C. This rule
will not result in any emissions increase, nor would it have any
potential to result in emissions above the general conformity rule's de
minimis emission threshold levels. Moreover, it is reasonably
foreseeable the proposed rule change would not increase total CMV
mileage, change the routing of CMVs, change how CMVs operate, or change
the CMV fleet-mix of motor carriers. This action will revise the
program for assuring the safety of new entrant motor carriers.

Executive Order 12898 (Environmental Justice)

    FMCSA will evaluate the environmental effects of any action
implemented in subsequent phases of this proceeding in according with
Executive Order 12898 and DOT Order 5610.2 on addressing Environmental
Justice in Minority Populations and Low-Income Populations (published
at 62 FR 18377, April 15, 1997) to determine if there are environmental
justice issues associated with its provisions or any collective
environmental impact 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.

Executive Order 12988 (Civil Justice Reform)

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

Executive Order 13045 (Protection of Children)

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

Executive Order 12630 (Taking of Private Property)

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

Executive Order 13132 (Federalism)

    This action has been analyzed in accordance with the principles and
criteria contained in Executive Order 13132, dated August 4, 1999, and
it has been determined this action will not have a substantial direct
effect or sufficient federalism implications on States by limiting the
policymaking discretion of the States. Nothing in this document will
directly preempt any State law or regulation. It will not impose
additional costs or burdens on the States. This action will not have a
significant effect on the States' ability to execute traditional State
governmental functions. To the extent that States incur costs for
conducting these safety audits, they will be reimbursed 100 percent
with Federal funds under MCSAP.

Executive Order 12372 (Intergovernmental Review)

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

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

    This action is not a significant energy action within the meaning
of section 4(b) of the Executive Order because it is not economically
significant and is not likely to have a significant adverse effect on
the supply, distribution, or use of energy.

List of Subjects

49 CFR Part 365

    Administrative practice and procedure, Brokers, Buses, Freight
forwarders, Motor carriers, Moving of household goods, Reporting and
recordkeeping requirements.

49 CFR Part 385

    Administrative practices and procedure, Highway safety, Motor
carriers, Motor vehicle safety, Reporting and recordkeeping
requirements.

49 CFR Part 387

    Buses, Freight, Freight forwarders, Hazardous materials
transportation, Highway safety, Insurance, Intergovernmental relations,
Motor carriers, Motor vehicle safety, Moving of household goods,
Penalties, Reporting and recordkeeping requirements, Surety bonds.

49 CFR Part 390

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

0
In consideration of the foregoing, FMCSA amends parts 365, 385, 387,
and 390 of title 49, Code of Federal Regulations as follows:

PART 365--RULE GOVERNING APPLICATIONS FOR OPERATING AUTHORITY

0
1. The authority citation for part 365 continues to read as follows:

    Authority: 5 U.S.C. 553 and 559; 16 U.S.C. 1456; 49 U.S.C.
13101, 13301, 13901-13906, 14708, 31138, and 31144; 49 CFR 1.73.

0
2. Amend Sec.  365.101 by adding a new paragraph (i) to read as
follows:

Sec.  365.101  Applications governed by these rules.

* * * * *
    (i) Applications for non-North America-domiciled motor carriers to
operate in foreign commerce as for-hire motor carriers of property and
passengers within the United States.
0
3. Amend Sec.  365.105 by revising paragraph (a) to read as follows:

Sec.  365.105  Starting the application process: Form OP-1.

    (a) Each applicant must file the appropriate form in the OP-1
series. Form OP-1 must be filed when requesting authority to operate as
a motor property carrier, a broker of general freight, or a broker of
household goods; Form OP-1(P) must be filed when requesting authority
to operate as a motor passenger carrier; Form OP-1(FF) must be filed
when requesting authority to operate as a freight forwarder; Form OP-
1(MX) must be filed by a Mexico-domiciled motor property, including
household goods, carrier, or a motor passenger carrier requesting
authority to operate within the United States; and effective December
16, 2009.

Form OP-1(NNA) must be filed by a non-North America-domiciled motor
property, including household goods, carrier or a motor passenger
carrier requesting authority to operate within the United States. A
separate filing fee in the amount set forth at 49 CFR 360.3(f)(1) is
required for each type of authority sought.
* * * * *

PART 385--SAFETY FITNESS PROCEDURES

0
4. The authority citation for part 385 continues to read as follows:

    Authority:  49 U.S.C. 113, 504, 521(b), 5105(e), 5109, 5113,
13901-13905, 31136, 31144, 31148, and 31502; sec. 350 of Public Law
107-87; and 49 CFR 1.73.

Sec.  385.305  [Amended]

0