[Federal Register: October 3, 2007 (Volume 72, Number 191)]
[Notices]
[Page 56412-56415]
[DOCID:fr03oc07-111]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56564; File No. SR-ISE-2007-74]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Order Granting Accelerated Approval to a Proposed Rule Change, as
Modified by Amendment No. 1, Relating to an Extension and Expansion of
the Penny Pilot Program

September 27, 2007.

I. Introduction

    On August 21, 2007, the International Securities Exchange, LLC
(``ISE'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to extend and expand a pilot
program to quote certain options in smaller increments (``Pilot
Program'' or ``Pilot''). On August 22, 2007, the Exchange filed
Amendment No. 1 to the proposed rule change. The proposed rule change,
as amended, was published for comment in the Federal Register on August
29, 2007.\3\ The Commission received one comment letter on the proposed
rule change.\4\ This order approves the proposed rule change, as
modified by Amendment No. 1, on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 56306 (August 22,
2007), 72 FR 49753.
    \4\ See letter to Nancy Morris, Secretary, Commission, from John
C. Nagel, Director & Associate General Counsel, Citadel, dated
September 12, 2007 (``Citadel Letter).
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II. Description of the Proposal

    Currently, the six options exchanges, including ISE, participate in
the thirteen class Pilot Program,\5\ which is scheduled to expire on
September 27, 2007.\6\ The Exchange proposes to extend and expand the
Pilot Program to include fifty additional classes, in two phases.
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    \5\ The thirteen option classes currently in the Pilot are:
Ishares Russell 2000 (IWM); NASDAQ-100 Index Tracking Stock (QQQQ);
SemiConductor Holders Trust (SMH); General Electric Company (GE);
Advanced Micro Devices, Inc. (AMD), Microsoft Corporation (MSFT);
Intel Corporation (INTC); Caterpillar, Inc. (CAT); Whole Foods
Market, Inc. (WFMI); Texas Instruments, Inc. (TXN); Flextronics
International Ltd. (FLEX); Sun Microsystems, Inc. (JAVA); and
Agilent Technologies, Inc. (A).
    \6\ The Pilot Program began on January 26, 2007 and is currently
set to expire on September 27, 2007. See Securities Exchange Act
Release No. 56151 (July 26, 2007), 72 FR 42452 (August 2, 2007) (SR-
ISE-2007-68). See also Securities Exchange Act Release No. 55161
(January 24, 2007), 72 FR 4754 (February 1, 2007) (SR-ISE-2006-62)
(``Original Pilot Program Approval Order'').
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    Phase One will begin on September 28, 2007 and will continue for
six months, until March 27, 2008. Phase One will add the following
twenty-two options classes to the Pilot: SPDRs (SPY); Apple, Inc.
(AAPL); Altria Group Inc. (MO); Dendreon Corp. (DNDN); Amgen Inc.
(AMGN); Yahoo! Inc. (YHOO); QUALCOMM Inc. (QCOM); General Motors
Corporation (GM); Energy Select Sector (XLE); DIAMONDS Trust, Series 1
(DIA); Oil Services HOLDRs (OIH); NYSE Euronext, Inc. (NYX); Cisco
Systems, Inc. (CSCO); Financial Select Sector SPDR (XLF); AT&T Inc.
(T); Citigroup Inc. (C); Amazon.com Inc. (AMZN); Motorola Inc. (MOT);
Research in Motion Ltd. (RIMM); Freeport-McMoRan Copper & Gold Inc.
(FCX); ConocoPhillips (COP); and Bristol-Myers Squibb Co. (BMY). These
twenty-two options classes are among the most actively-traded,
multiply-listed options classes, and account, together with the current
thirteen Pilot classes, for approximately 35% of total industry trading
volume.\7\
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    \7\ This volume is based on the Options Clearing Corporation
(``OCC'') year-to-date trading volume data through July 16, 2007.
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    Phase Two will begin on March 28, 2008, and will continue for one
year, until March 27, 2009. During the second phase, the number of
options classes trading in pennies will again increase.\8\ The Exchange
proposes to add twenty-eight more classes from among the most actively-
traded, multiply-listed options classes.\9\
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    \8\ The Exchange has committed to file a proposed rule change
under section 19(b)(3)(A) of the Act to identify the options classes
to be included in the second expansion.
    \9\ As proposed in its filing, ISE represents that options
trading in penny increments will not be eligible for split pricing,
as permitted under ISE Rule 716.
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    The minimum price variation for all classes to be included in the
Pilot Program, except for the QQQQs, will continue to be $0.01 for all
quotations in option series that are quoted at less than $3 per
contract and $0.05 for all quotations in option series that are quoted
at $3 per contract or greater. The QQQQs will continue to be quoted in
$0.01 increments for all options series.
    During the extended and expanded Pilot Program, the ISE commits to
deliver four reports to the Commission. Each report will analyze the
impact of penny pricing on market quality and options system capacity.
The first report will analyze the penny pilot results from May 1, 2007
through September 27, 2007; the second will analyze the results from
September 28, 2007 through January 31, 2008; the third will analyze the
results from February 1, 2008 through July 31, 2008; and the fourth and
final report will examine the results from August 1, 2008 through
January 31, 2009. These reports will be provided to the Commission
within thirty days of the conclusion of the reporting period.

III. Discussion

    After careful review of the proposal and the comment letter, the
Commission finds that the proposed rule change is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange.\10\ In particular, the
Commission finds that the proposal is consistent with section 6(b)(5)
of the Act,\11\ which requires, among other things, that the rules of
an exchange be designed to promote just and equitable principles of
trade, to remove impediments to and perfect the mechanism of a free and
open market and a national market system, and, in general, to protect
investors and the public interest.
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    \10\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \11\ 15 U.S.C. 78f(b)(5).
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    On June 28, 2005, the Pacific Exchange (now known as NYSE Arca)
announced its intention to begin quoting and trading all listed options
in penny increments.\12\ In June 2006, to facilitate the orderly
transition to quoting a limited number of options in penny increments,
Chairman Cox sent a letter to the six options exchanges urging the
exchanges that chose to begin quoting in smaller increments to plan for
the implementation of a limited penny pilot program to commence in
January 2007.\13\ All six of the options exchanges submitted proposals
to permit quoting a limited number of classes in smaller increments,
and, in January 2007, the Commission approved those proposals to
implement the current Pilot Program.\14\ The exchanges

have now submitted proposals to extend and further expand the Pilot.
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    \12\ PCX News Release, ``Pacific Exchange to Trade Options in
Pennies,'' June 28, 2005.
    \13\ Commission Press Release 2006-91, ``SEC Chairman Cox Urges
Options Exchanges to Start Limited Penny Quoting,'' June 7, 2006.
    \14\ See Securities Exchange Act Release Nos. 55161 (January 24,
2007), 72 FR 4754 (February 1, 2007) (SR-ISE-2006-62); 55162
(January 24, 2007), 72 FR 4738 (February 1, 2007) (Amex-2006-106);
55155 (January 23, 2007), 72 FR 4741 (February 1, 2007) (SR-BSE-
2006-49); 55154 (January 23, 2007), 72 FR 4743 (February 1, 2007)
(SR-CBOE-2006-92); 55156 (January 23, 2007), 72 FR 4759 (February 1,
2007) (SR-NYSEArca-2006-73); and 55153 (January 23, 2007), 72 FR
4553 (January 31, 2007) (SR-Phlx-2006-74). As noted above, supra
note 6 and accompanying text, the current Pilot is scheduled to
expire on September 27, 2007.
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    The continued operation and phased expansion of the Pilot Program
will provide further valuable information to the exchanges, the
Commission, and others about the impact of penny quoting in the options
market. In particular, extending and expanding the Pilot Program as
proposed by ISE will allow further analysis of the impact of penny
quoting in the Pilot classes over a longer period of time on, among
other things: (1) Spreads; (2) peak quote rates; (3) quote message
traffic; (4) displayed size; (5) ``depth of book'' liquidity; and (6)
market structure. ISE has committed to provide the Commission with
periodic reports, which will analyze the impact of the expanded Pilot
Program. The Commission expects the Exchange to include statistical
information relating to these factors in its periodic reports.
    An analysis of the current Pilot shows that the reduction in the
minimum quoting increment has resulted in narrowing the average quoted
spreads in all classes in the Pilot.\15\ A reduction in quoted spreads
means that customers and other market participants may be able to trade
options at better prices. The reduction in spreads also has led the
exchanges to reduce or eliminate their exchange-sponsored payment-for-
order-flow programs.\16\ The Commission believes that the proposed rule
change is designed to continue the narrowing of spreads.
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    \15\ See ISE, Penny Pilot Analysis, May 23, 2007 (``ISE
Report''). See also Amex, Penny Quoting Pilot Program Report, June
8, 2007 (``Amex Report''); Box, Penny Pilot Data Review, June 18,
2007 (``Box Report''); CBOE, Penny Pilot Report, June 1, 2007
(``CBOE Report''); NYSE Arca Options, Understanding Economic and
Capacity Impacts of the Penny Pilot, May 31, 2007 (``NYSE Arca
Report''); and Phlx, Options Penny Pricing Pilot Report, May 31,
2007 (``Phlx Report'').
    \16\ See Securities Exchange Act Release Nos. 55328 (February
21, 2007), 72 FR 9050 (February 28, 2007) (SR-Amex-2007-16); 55197
(January 30, 2007), 72 FR 5772 (February 7, 2007) (SR-BSE-2007-02);
55265 (February 9, 2007), 72 FR 7697 (February 16, 2007) (SR-CBOE-
2007-11); 55271 (February 12, 2007), 72 FR 7699 (February 16, 2007)
(SR-ISE-2007-08); 55223 (February 1, 2007) 72 FR 6306 (February 9,
2007) (SR-NYSEArca-2007-07); and 55290 (February 13, 2007), 72 FR
8051 (February 22, 2007) (SR-Phlx-2007-05).
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    The Commission notes that, as anticipated, the Pilot has
contributed to the increase in quotation message traffic from the
options markets. However, while the increase in quotation message
traffic is appreciable, it has been manageable by the exchanges and the
Options Price Reporting Authority, and the Commission did not receive
any reports of disruptions in the dissemination of pricing information
as a result of quote capacity restraints. Although the Commission
anticipates that the proposed expansion of the Pilot Program may
contribute to further increases in quote message traffic, the
Commission believes that ISE's proposal is sufficiently limited such
that it is unlikely to increase quote message traffic beyond the
capacity of market participants' systems and disrupt the timely receipt
of quote information. The Commission also notes that ISE has adopted
and will continue to utilize quote mitigation strategies that should
mitigate the expected increase in quote traffic.\17\
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    \17\ See Securities Exchange Act Release No. 55161 (January 24,
2007), 72 FR 4754 (February 1, 2007) (SR-ISE-2007-62). Further, the
Commission notes that the other options exchanges participating in
the Pilot also have adopted and will continue to utilize quote
mitigation strategies.
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    Overall trading activity in the options markets is very
concentrated, with a relatively few options classes accounting for a
significant share of total options volume. ISE's proposal, which will
expand the Pilot to include a limited number of options from among the
most actively-traded classes (based on average trading volume), will
provide an opportunity for reduced spreads where the greatest amount of
trading occurs, thus maximizing the economic benefit of the Pilot while
minimizing the impact of increased quote traffic.
    The commenter suggests that relative trading volume is the measure
that should be used to assess the success of quoting in smaller
increments.\18\ The commenter reported the percentage change in the
relative trading volume before and after the Pilot for each of the
thirteen classes.\19\ The commenter's data shows an increase in
relative trading volume for QQQQ, IWM, SHM, AMD, and SUNW, and a
decrease in relative trading volume for MSFT, INTC, GE, TXN, A, CAT,
WFMI and FLEX. The commenter believes the data shows that the Pilot
works well for index and sector products, but smaller increments caused
a decline in the relative trading volume for single stock options. The
commenter argues that much of the decrease in relative trading volume
in Pilot classes is a symptom of the decrease in displayed size
available for those classes. On the basis of a decline in the relative
trading volume, the commenter argues that single stock option classes
should be removed from the Pilot and replaced with liquid index or
sector option classes.
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    \18\ See Citadel Letter, supra note 4.
    \19\ The commenter measures the relative trading volume of a
class as that class' trading volume as a percentage of total OCC
volume. The change in relative trading volume is the relative
trading volume from date of entrance into the Pilot to August 27,
2007 divided by the relative trading volume from November 1, 2006
through entrance in the Pilot.
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    Much of the recent growth in options volume has been in the large
index and ETF products, such as the SPX, SPY, and the QQQQ. As their
relative trading volume increases, the aggregate relative trading
volume of other products necessarily declines (although actual volume
levels may increase). For example, the SPX, SPY, QQQQ, and IWM
accounted for 16.1% of total options volume in the four months before
the pilot and rose to 21.7% of volume in the five months after the
pilot.\20\ By definition, the relative trading volume of all other
classes (Pilot and non-Pilot) falls from 83.9% in the pre-Pilot period
to 78.3% in the post-Pilot period. Using the commenter's numerical
approach, the relative market share of SPX, SPY, QQQ, and IWM increased
by 34.8% ((21.7%/16.1%)-1). In contrast, the relative trading volume of
all other classes fell by 6.7% (78.3/83.9%)-1) in the post-Pilot period
compared to the pre-Pilot period. Thus, in addition to the random
variation in relative trading volume that occurs over time, there was
an overall decline in the relative trading volume of issues outside the
four largest index and ETF options, although their actual aggregate
volume levels increased.
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    \20\ The pre-Pilot period consists of the four months before the
Pilot commenced (October 1-January 25, 2007) and the post-Pilot
period consists of the five months after the Pilot commenced
(February 9, 2007-June 30, 2007). The two week period when the Pilot
classes were introduced are excluded from the analysis.
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    More specifically, for the 100 and 500 most active classes,\21\
relative trading volume fell for 63% and 56%, respectively, of non-
Pilot classes. In the Pilot classes, seven, or 54%, of the thirteen
Pilot classes had a decline in market share and seven, or 70%, of the
ten single stock option classes had a decline in relative trading
volume.\22\
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    \21\ All of the thirteen Pilot classes fall into the 500 most
actively-traded, and nine are within the 100 most actively-traded
group.
    \22\ The change in relative trading volume for the median stock
for the top 500 (100) classes is -8% (-13%), compared to a change of
-3% for the thirteen Pilot stocks and a change of -24% for the ten
single stock options. The Commission notes that, with a Pilot sample
size of thirteen or ten, these statistics will be highly sensitive
to the performance of one or two classes.

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    The Commission does not believe that the data at this time supports
the conclusion that a decrease in relative trading volume in the Pilot
classes is due to a reduction of the minimum quoting variation. In
fact, the data demonstrates that declines in relative trading volume
were not limited to stocks included in the Pilot, and substantial
declines in relative trading volume, as defined by the commenter,
describe a large portion of classes that were not in the Pilot.
Therefore, based on the data reviewed to date, the Commission cannot
conclude that the Pilot has had an adverse impact on volume in the
Pilot securities. Therefore, the Commission believes that ISE's
proposal to select additional classes from among the most actively-
traded options has a reasonable basis and is consistent with the
Act.\23\
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    \23\ The Commission notes that the classes the commenter
specifically recommends for inclusion in the expanded Pilot--SPY,
DIA, OIH, XLF, and XLE--are among classes proposed by ISE to be
included in the Pilot Program beginning September 28, 2007.
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    The Commission believes that the impact of smaller increments on
trading volume is one of the more difficult aspects of the Pilot to
assess, and notes that the exchange reports did not show a clear change
in trading volume.\24\ While some industry participants expressed
disappointment that volume had not increased, the bid-ask spread is
only one factor that influences volume. Other factors that impact
option volume are trading activity in the underlying security and in
related products, volatility in the market and in the underlying
security, as well as firm and market specific information and events.
The Commission believes that the addition of more securities in the
next phase will increase the sample size and should help in further
analysis of such issues.
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    \24\ See Amex Report, supra note 15, at 6-7; CBOE Report, supra
note 15, Attachment at pages 5-6; ISE Report, supra note 15, at 17-
20; and NYSE Arca Report, supra note 15, at 15.
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    The commenter also expressed concern that the quoted size in the
Pilot classes is dropping to levels that are ``sub-optimal'' or
``inadequate'' for institutional size orders, and recommended that the
Commission carefully evaluate the impact of penny quoting on liquidity
before allowing the exchanges to expand the Pilot. The Commission fully
agrees that the impact of the Pilot on displayed size, as well as non-
displayed ``depth of book,'' and the impact of any decreased size on
market and execution quality, is an area that should be carefully
analyzed as the Pilot continues. The Commission also recognizes that
the exchange reports show there has, in fact, been a reduction in the
displayed size available in the Pilot classes.\25\ The Commission is
not at this time, however, able to conclude that this decrease has
caused a decrease in trading volume or relative trading volume, or
other harm to the market, as a result of the Pilot Program. The
Commission does, however, expect the Exchange to include in its reports
an analysis of the market impact of reducing the minimum price
increment, particularly on the ability of market participants to
effectively execute large-sized orders. The Commission will analyze the
information provided in the Exchange's reports, in conjunction with the
information provided by other exchanges and market participants, to
inform its evaluation and consideration of any exchange's proposed
further expansion of the Pilot.
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    \25\ See Amex Report, supra note 15, at 6; BOX Report, supra
note 15, at 2; CBOE Report, supra note 15, at Attachment page 2; ISE
Report, supra note 15, at 7-8; NYSE Arca Report, supra note 15, at
9-10; and Phlx Report, supra note 15, at 3-4 and 6-7.
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    The commenter further noted, to the extent that additional size may
be available below the best bid or offer,\26\ options market
participants discount the value of such liquidity because it is
generally not transparent to the market and is not easily accessible
even if displayed.\27\ The commenter noted that, unlike in the equities
markets, market participants cannot quickly sweep multiple markets
through multiple price levels to reach such additional liquidity. The
Commission encourages the exchanges to consider measures that would
facilitate access to depth of book quotes.
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    \26\ Only two exchanges provided information on ``depth of
book'' on their markets in the Pilot classes. See NYSE Arca Report
at 8-10, supra note 15, and ISE Report, supra note 15, at 9. ISE
reported that the average total size of all quotes on its book at
all price levels, weighted for volume, for all thirteen Pilot
classes was reduced by 61%. See ISE Report, supra note 15, at 9.
NYSE Arca compared liquidity resident in its book within the legacy
minimum price variation to pre-Pilot top of book liquidity and
reported that volume weighted liquidity across all thirteen Pilot
classes decreased 1%. See NYSE Arca Report, supra note 15, at 8.
    \27\ The Commission notes that currently only NYSE Arca makes
available quotes and orders on its book below the NBBO. See http://www.nysedata.com/nysedata/InformationProducts/ArcaBook/tabid/293/Default.aspx.
 The Commission anticipates that to the extent this

display of information proves to be valuable to the options market
as a whole, other exchanges may choose to make this information
available as well.
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    Finally, the commenter recommends removing the poorest performing
single stock names from the Pilot and replacing them with liquid index
or sector products.\28\ The Commission agrees that there should be a
mechanism for removing option classes from the Pilot. The Commission
specifically requested comment in the notice of ISE's proposal on: (1)
Whether there are circumstances under which classes included in the
Pilot should be removed; (2) if so, what factors should be considered
in making the determination to remove a class from the Pilot,
specifically whether an objective standard should be used or whether a
more subjective analysis should be allowed; (3) what concerns might
arise by removing a class from the Pilot, and how could such concerns
be ameliorated; (4) how frequently should such an analysis be
undertaken, or should the evaluation be automated; and (5) if a class
is to be removed from the Pilot, how much notice should be given to
market participants that the quoting increment will change, but did not
receive any comments. The Commission will continue to consider comments
on how to fairly and objectively determine if a class should be removed
from the Pilot. Finally, to the extent that the Exchange files a
proposed rule change to further expand the Pilot, the Commission urges
it to include in any such proposal a methodology for removing classes
from the Pilot.
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    \28\ See supra, note 23.
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    The Commission finds good cause for approving the proposed rule
change, as amended, prior to the thirtieth day after publication of the
notice in the Federal Register.\29\ The Commission notes that in this
filing the ISE is proposing to participate in an industry-wide
extension and expansion of the Penny Pilot, which is scheduled to begin
on September 28, 2007. Concurrent with this approval, the Commission
also is approving proposed rule changes submitted by the other five
options exchanges to extend and expand the Pilot. Accelerating approval
of this filing will permit the Exchange to continue its participation
in the Pilot without interruption.
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    \29\ The Commission notes that the thirtieth day after
publication of notice of this filing in the Federal Register is
September 28, 2007.
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    Accordingly, the Commission finds good cause, consistent with
section 19(b)(2) of the Act,\30\ to approve the proposal, as modified
by Amendment No. 1, on an accelerated basis. For the reasons discussed
above, the Commission believes that the proposed rule change is
consistent with the Act.
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    \30\ 15 U.S.C. 78s(b)(2).

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IV. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\31\ that the proposed rule change (SR-ISE-2007-74), as modified by
Amendment No. 1, be, and hereby is, approved on an accelerated basis,
for a pilot period, which will end on March 27, 2009.
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    \31\ 15 U.S.C. 78s(b)(2).
    \32\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\32\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-19500 Filed 10-2-07; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register: December 29, 2009 (Volume 74, Number 248)]
[Rules and Regulations]
[Page 68703-68709]
[DOCID:fr29de09-16]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Parts 386, 390, 392, and 396

[Docket No. FMCSA-2005-23315]
RIN 2126-AB25

Requirements for Intermodal Equipment Providers and for Motor
Carriers and Drivers Operating Intermodal Equipment

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

ACTION: Final rule; technical amendments, response to petitions for
reconsideration, and; partial extension of deadline.

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SUMMARY: FMCSA amends its December 17, 2008, final rule implementing
section 4118 of the Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users (SAFETEA-LU). The 2008
final rule makes intermodal equipment providers (IEPs) subject to
certain Federal Motor Carrier Safety Regulations (FMCSRs), and
establishes shared safety responsibility among IEPs, motor carriers,
and drivers. These amendments create a fifth marking option for
identifying the IEP responsible for the inspection, repair, and
maintenance of items of intermodal equipment (IME) in response to a
petition for reconsideration from the Intermodal Association of North
America (IANA); clarify regulatory text and correct an inadvertent
error in response to a petition for reconsideration from the Ocean
Carrier Equipment Management Association (OCEMA); and extend the
deadline for IEPs, motor carriers, and drivers operating IME to comply
with certain provisions pertaining to driver-vehicle inspections in
response to a petition filed by OCEMA.

DATES: Effective Date: The amendments in this final rule become
effective December 29, 2009.
    Implementation Date: IEPs must establish systematic inspection,
repair, and maintenance programs, recordkeeping systems and identify
its operations by submitting Form MCS-150C by December 17, 2009, except
for the requirements of Sections 396.9(d), 396.11(a)(2), 396.12(a),
396.12(c), and 396.12(d), which they must comply with by June 30, 2010.
IEPs must mark their intermodal chassis with its legal name or a single
trade name and a USDOT identification number by December 17, 2010.

FOR FURTHER INFORMATION CONTACT: Ms. Deborah M. Freund, Vehicle and
Roadside Operations Division, Office of Bus and Truck Standards and
Operations (MC-PSV), Federal Motor Carrier Safety Administration, 1200
New Jersey Avenue, SE., Washington, DC 20590; telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: Public Access to the Docket: You may view,
print, and download this final rule and all related documents and
background material on-line at http://www.regulations.gov, using the
Docket ID Number FMCSA-2005-23315. These documents can also be examined
and copied for a fee at the U.S. Department of Transportation, Docket
Operations, West Building-Ground Floor, Room W12-140, 1200 New Jersey
Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through
Friday, except Federal holidays.

Background

    FMCSA received petitions for reconsideration, filed timely, from
IANA and OCEMA. IANA requested that FMCSA reconsider the final rule's
requirements for marking of IME. OCEMA requested that FMCSA reconsider
several other items in the final rule. OCEMA also requested a delay in
the implementation requirements for specific documentation-related
items in Part 396 of the final rule. A discussion of each item,
followed by the Agency's assessment and decision, follows.

Legal Basis

    The legal basis of the December 17, 2008 final rule (73 FR 76794)
is also applicable to this final rule.

Marking of Intermodal Equipment

    On December 21, 2006 (71 FR 76795), FMCSA published a notice of
proposed rulemaking (NPRM) in response to Congressional direction in
section 4118 of SAFETEA-LU. It proposed, among other things, to require
display of the USDOT Number, or other unique identifier, issued by
FMCSA, on each intermodal container chassis offered for transportation
in interstate commerce.
    On May 21, 2007, IANA and other parties (American Association of
Port Authorities (AAPA), Association of American Railroads (AAR), the
Institute of International Container Lessors (IICL), OCEMA, the
National Association of Waterfront Employers (NAWE), and the United
States Maritime Alliance, Ltd. (USMX), collectively known as the
Consensus Group) submitted supplemental comments to the docket for the
NPRM. IANA and its co-signatories presented a different solution to the
challenge of identifying the responsible IEP for individual items of
IME. The Consensus Group supported use of the 10-character alphanumeric
identifier currently in use to mark IME, and recommended the
establishment of a Web-based equipment registry that IANA would
administer by recording and maintaining the identifying information for
IEPs and their equipment. This registry would take the form of an
online database that would be accessible to Federal, State, and local
enforcement authorities, as well as industry participants, on a real-
time basis.
    In its comments to the NPRM, dated March 21, 2007, OCEMA stated
that ``the Intermodal Association of North America already maintains a
substantial database of intermodal truckers and equipment providers. As
an association already providing various facilitation services to
intermodal stakeholders, this may be an appropriate task for IANA to
undertake. Additionally, OCEMA is in the process of developing a
software system for its CCM \1\ chassis pool program that could be
modified to include a chassis identification module. The CCM system is
expected to be implemented by the beginning of 2008.''
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    \1\ CCM LLC was formed in 2005 to develop and own chassis pools.
It is an affiliate of the Ocean Carrier Equipment Management
Association, Inc.
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    On January 2, 2008, IANA et al. requested that FMCSA consider
initiating a pilot program to evaluate an alternative approach to meet
the IME marking requirements of 49 CFR 390.21. IANA suggested that use
of its proposed Global Intermodal Equipment Registry (GIER), a
centralized, Web-based IME database, would enable IEPs and motor
carrier safety enforcement personnel to identify the responsible IEP
without a need to physically mark each item of IME, as proposed in the
NPRM. IANA stated that the GIER would identify each intermodal chassis
by its existing unique alphanumeric identifier (ID), which consists of
four letters followed by six numbers. It would also include the USDOT
number of the IEP responsible for the intermodal equipment on a given
day and at any given time, so this information could be accurately
recorded on roadside inspection records. The database would be
accessible to Federal, State, and local enforcement authorities, as
well as, industry participants, on a real time basis. The Agency denied
IANA's initial request because there were no rules in effect that could
preclude them from testing the GIER concept. Therefore, a pilot
program, as provided under 49 CFR part 381, was not necessary.

    In addition, many commenters to the NPRM expressed concerns with
the proposed marking requirements, citing the large population of IME
(over 850,000 units in service) and the IME turnover in some IEP's
operations (for example, a Virginia port experiences turnover amounting
to several hundred chassis each month).
    FMCSA determined that it would be reasonable and appropriate to
offer additional regulatory alternatives that would meet the statutory
requirements to (1) identify IEPs responsible for inspection and
maintenance, and (2) to match IME to an IEP through a unique
identifying number. For this reason, the final rule of December 17,
2008 (73 FR 76794) offered four options for the IEP to identify its
IME: (1) A label or other method of marking; (2) identification of the
IME on the interchange agreement, if that document includes additional
information to identify the specific item of IME; (3) marking the IME
with a USDOT number in the same manner required under Sec.  390.21,
except the marking would only be required on the curb side of the
equipment; or (4) identification of the IEP on trailer documentation
carried in a weatherproof compartment attached to the item of IME. In
order to provide IEPs sufficient time to inventory their equipment and
implement procedures to identify their IME, the final rule allows IEPs
two years from the publication date of the final rule (that is, until
December 17, 2010) to comply with this requirement.
    Although FMCSA did not accept the proposal outlined by IANA and its
co-applicants in their NPRM comments, it acknowledged the logistical
challenges IEPs will collectively face in accounting for and marking
their 800,000-plus chassis. The final rule stated that, during the
implementation period, IANA and its partners may continue their efforts
to demonstrate the feasibility of their system for future consideration
by the Agency (73 FR at 76801). While FMCSA stated in the final rule
that the Administrator had denied IANA's request to initiate a pilot
program, the Agency asked IANA to communicate with it in the future
concerning its progress in developing the GIER. In the preamble to the
final rule, the Agency said it would consider allowing the GIER if its
use could serve as an additional alternative method of complying with
the provisions of 49 CFR 390.21 (73 FR at 76810).
    On January 16, 2009, IANA petitioned FMCSA to reconsider the same
provisions of 49 CFR 390.21 that formed the basis of its earlier
petition. Two other parties that co-signed the 2008 petition, the
Intermodal Carriers Conference of the American Trucking Associations
and the Commercial Vehicle Safety Alliance (CVSA), submitted letters
supporting IANA's request. For the most part, the technical elements of
the January 2009 petition for reconsideration are essentially the same
as those contained in the January 2008 request to initiate a pilot
program.

Agency's Assessment and Decision

    For the reasons set forth below, FMCSA amends Sec.  390.21 to
include a fifth option for marking/identifying IME. The Agency has
determined that the use of publicly-accessible identification systems
which, under the conditions prescribed below, utilize existing, unique
alpha-numeric control numbers associated with items of IME to match IME
to the responsible IEP at any given time (1) meet the marking/
identification requirements outlined in the statute and (2) will be at
least as effective as the current requirements of Sec.  390.21 of the
FMCSRs.
    The December 2008 final rule requires IME to be marked/identified
so it can be matched to the IEP that is responsible for its systematic
inspection, repair, and maintenance. Because IME tends to change hands
quite often, it will be costly for many IEPs to apply a permanent
marking (stenciled or applied identification code) to the equipment. It
is also unlikely that such marking would effectively identify the
appropriate party for those scenarios in which the change of hands
occurs faster than the vehicle marking could be completed. Also, as
commenters noted, there is a large population of IME subject to these
requirements. According to IANA, tracking the responsible IEPs through
the use of its identification system will (1) save IEPs time and the
costs of physically marking IME, and (2) provide FMCSA and its State
partners an alternative way to ``match'' IME to the IEP. The Agency
agrees.
    Importantly, while IANA's development of the GIER provided the
impetus for this regulatory amendment, FMCSA emphasizes that the fifth
marking option established by today's rulemaking is not limited
specifically to the GIER.
    To ensure that the IEP responsible for the inspection, repair, and
maintenance of any item of IME can be definitively identified through
an identification system permitted under the fifth option, the Agency
requires that the following conditions be satisfied:
    1. The identification system must utilize a unique alpha-numeric
control number associated with each item of IME to match the IME to the
responsible IEP at any given time. The identification system shall use
at least one of the following:
    a. Standard Carrier Alpha Code (SCAC) plus 6 trailing digits;
    b. License plate number and State of license;
    c. Vehicle Identification Number (VIN)
    2. The identification system shall be publicly-available, and offer
read-only access for inquiries on individual items of IME without
requiring advance user registration, a password, or a usage fee. The
identification system must be accessible through:
    a. Real-time internet access via a public web portal; and
    b. Toll-free telephonic access
    IEPs' interest in maintaining the accuracy of their IME inventory
is likely to serve as an incentive for them to maintain the accuracy
and currency of the information contained in an identification system.
Furthermore, FMCSA will benefit from permitting the alternative
identification system by having accurate and current information on
IEPs responsible for IME at a given point in time, allowing the Agency
to identify patterns of noncompliance rapidly. State partners' interest
in this fifth option is indicated by CVSA's status as co-petitioner.

Operating Condition of Intermodal Equipment

Background

    In its 2006 NPRM, FMCSA proposed language for a new Sec.  390.40
concerning IEPs' responsibilities under the FMCSRs. Proposed Sec.
390.40(h) (71 FR at 76828) reads as follows:

    ``At facilities at which the intermodal equipment provider makes
intermodal equipment available for interchange, develop and
implement procedures to repair any equipment damage, defects, or
deficiencies identified as part of a pre-trip inspection, or replace
the equipment, prior to the driver's departure. The repairs or
replacement must be made in a timely manner after being notified by
a driver of such damage, defects, or deficiencies''.

    Many of the commenters to the rulemaking indicated that the phrase
``timely manner'' was vague, impractical, and possibly unenforceable.
    As discussed in the 2008 final rule (73 FR at 76800), FMCSA
considered several potential revisions to this regulatory text. The
first was to replace the word ``timely'' with a fixed period of time.
FMCSA rejected that option because it could result in an overemphasis
on the time element of the IME interchange process compared to the
quality and completeness of repairs.

A second alternative considered was to remove the word ``timely.''
However, the Agency believed this could be viewed as allowing a
continuation of the status quo--some IEPs would continue their practice
of tendering equipment in need of repairs and requiring drivers to
decide between operating faulty equipment, with the attendant risk of
fines or roadside breakdowns, and the certainty of delay if they
requested repairs or a different chassis.
    In the final rule, FMCSA removed the term ``timely'' from the
regulatory text, but also added a new provision to Sec.  390.40(d),
Ensure that intermodal equipment intended for interchange with motor
carriers is in safe and proper operating condition.
    This revision was intended to serve two purposes. First, it
reemphasized the language of 49 U.S.C. 31151(a)(l): ``* * * equipment
used to transport intermodal containers is safe and systematically
maintained.'' Second, it acknowledged that a subjective requirement
(``timely'') was not necessarily in the best interests of the tendering
or receiving party (73 FR at 76800).
    On January 16, 2009, OCEMA filed a petition for reconsideration of
the final rule. A copy of the petition is in the docket referenced at
the beginning of this notice. OCEMA asserts that Sec.  390.40(d) of the
new regulation adds a non-statutory duty for IEPs to ``ensure'' the
operating condition of IME prior to interchange.
    OCEMA is concerned that the word ``ensure'' in paragraph (d) places
a greater level of responsibility on IEPs than the SAFETEA-LU
provisions intended. OCEMA believes the use of this term is
inconsistent with the ``shared responsibility'' approach, delineating
specific obligations for each stakeholder (IEP, motor carrier, driver),
that was part of the legislation.
    Furthermore, OCEMA believes that the use of the word ``ensure,''
commonly construed as ``to secure or guarantee,'' would have the effect
of requiring IEPs to perform constant, virtually daily inspections of
IME. In contrast, OCEMA points out that the regulatory analysis for the
final rule requires IEPs to conduct inspections and preventive
maintenance at more regularly scheduled intervals, but sets no explicit
requirements for the number of inspections per chassis under a
systematic inspection, repair, and maintenance program.
    OCEMA suggests that FMCSA delete Sec.  390.40(d) and revise Sec.
390.1 to read as follows, with its proposed text revisions underlined:

    This part establishes general applicability, definitions,
general requirements and information as they pertain to persons
subject to this chapter. Requirements relating to the interchange,
operation, inspection, or maintenance and repair of intermodal
equipment are intended to ensure that intermodal equipment used to
transport intermodal containers is safe and systematically
maintained.

Agency's Assessment and Decision

    FMCSA believes OCEMA's proposed amendment is appropriate. However,
there is a simpler solution. FMCSA has decided to revise Sec.
390.40(d) to read: ``Provide intermodal equipment intended for
interchange that is in safe and proper operating condition.'' This
revision responds to the petitioner's request by removing the
problematic word ``ensure'' while continuing to stress the requirement
to provide IME in safe and proper operating condition.

Section 390.5, Definition of ``Intermodal Equipment Provider''

    OCEMA requests that FMCSA confirm (1) that there will be only one
IEP for a particular piece of equipment, which is the party that
identifies itself as such to FMCSA as required under the final rule,
and (2) that the IEP can be either the interchanging party or a party
having contractual responsibility for the systematic inspection,
maintenance and repair of the equipment. OCEMA believes this can be
achieved by providing guidance through additional comments to the
supplementary information to the final rule, rather than requiring a
change to the text of the rule itself.

Agency's Assessment and Decision

    OCEMA's understanding is correct. The statutory definition of
``intermodal equipment provider'' is clear: ``* * * any person that
interchanges intermodal equipment with a motor carrier * * * or has a
contractual responsibility for the maintenance of the intermodal
equipment.'' [emphasis added] (49 U.S.C. 31151(f)(3)).
    FMCSA has posted new Frequently Asked Questions to the IEP area of
its web site to clarify this point. The web address is:
www.fmcsa.dot.gov/iep

Sanction for Failure To Pay Civil Penalties or Abide by Payment Plan

    Section 386.83(a)(1) reads as follows:
    General rule. A CMV owner or operator, or intermodal equipment
provider that fails to pay a civil penalty in full within 90 days after
the date specified for payment by FMCSA's final agency order, is
prohibited from operating in interstate commerce starting on the next
(i.e., the 91st) day [emphasis added].
    OCEMA requested FMCSA to confirm that any restrictions on an IEP's
operations in interstate commerce would be limited to the IEP's
tendering of intermodal equipment, and would not affect the IEP's other
interstate transportation operations. OCEMA believes this can be
achieved by additional guidance in the supplementary information to the
final rule, rather than requiring a change to the text of the rule
itself.

Agency's Assessment and Decision

    FMCSA agrees with OCEMA's reading of Sec.  386.83(a)(1). The scope
of the prohibition against an IEP is limited to the tendering of IME.
These technical amendments revise the text of Sec.  386.83(a)(1) to
clarify this.

Section 392.7 Equipment, Inspection, and Use; Sec.  396.11 Driver
Vehicle Inspection Report(s)

    FMCSA made limited revisions to Sec.  392.7 and Sec.  396.11 in the
final rule. This was done to provide new regulatory language consistent
with the legislative direction and also to maintain the integrity of
the existing regulatory text. The new text at Sec.  392.7(b) applies to
the pre-trip inspections of IME, and the new text of Sec.  396.11 to
post-trip inspections.
    Although OCEMA acknowledges that IME components that drivers are
required to inspect are clearly described in the final rule, it
questions why the lists are different for the pre- and post-trip
inspections. In order to maximize the effectiveness and impact on
equipment safety resulting from driver pre-trip inspections, OCEMA
recommends the Agency adopt a pre-trip inspection list which mirrors
the post-trip inspection list.
    Agency's Assessment and Decision:
    FMCSA believes OCEMA's request is reasonable, and that it could aid
both drivers and IMEs in performing and reporting the results of pre-
trip and post-trip inspections. The Agency revises the text of Sec.
392.7(b) to make it more consistent with Sec.  396.11 and also revises
the order of the items in Sec.  396.11 so they conform to that of Sec.
392.7(b).
    The Agency also revises the text of Sec.  396.11(a) to clarify its
application to commercial motor vehicles other than intermodal
equipment.
    Finally, FMCSA clarifies its intent and corrects an error in the
text of Sec.  396.12(d) concerning the driver's pre-trip assessment.
The last paragraph of the discussion of Sec.  392.7 in the preamble of
the final rule (73 FR 76804) reads as follows:

    ``Responding to commenters who expressed concern about (1) the
documentation of IME defects and (2) how citations of equipment
violations are assigned (to the IEP or to the motor carrier), the
first is a matter to be addressed during the driver's pre-trip
assessment of the IME. Drivers must document the results of their
pre-trip assessment, and the IEP must have a process to receive that
document and determine how to resolve deficiencies that are noted.
Drivers operating CMVs currently must submit a driver vehicle
inspection report to the motor carrier at the completion of each
day's work on each vehicle operated. The new provision in 49 U.S.C.
31151(a)(3)(L) calls for an analogous process: IEPs must establish a
process by which drivers or motor carriers transporting their IME
may report to the IEP or the IEP's designated agent any defects or
deficiencies the driver or motor carrier are aware of at the time
the IME is returned to the IEP's facility.''

    FMCSA clarifies that drivers must advise the IEP of the results of
their pre-trip assessment, and the IEP must have a process to determine
how to resolve the deficiencies that the driver reports. There is no
explicit requirement for documentation of the pre-trip assessment.
Neither the underlying statute, nor the rule itself, requires a written
pre-trip inspection report. The regulation gives the IEP the choice of
providing FMCSR-compliant IME; repairing defects or deficiencies the
driver brings to the IEP's attention; or providing the driver with a
different piece of IME. The outcome would be the same in each case: the
IME tendered for operation in interstate commerce should not have any
defects or deficiencies that would make it non-compliant with the
FMCSRs.
    FMCSA recognizes that IEPs and motor carriers may voluntarily
choose to use a written or electronic pretrip inspection form. Provided
the content of the form does not conflict with the FMCSRs, FMCSA has no
objections to use of such forms. However, the Agency emphasizes that
there is no requirement for written documentation of driver pre-trip
assessments.

Partial Extension of Compliance Date

Background

    On October 27, 2009, OCEMA requested that the FMCSA extend the
December 17, 2009 deadline for complying with specific elements of part
396 of the IME safety rule until June 30, 2010.
    1. Sec.  396.9(d)--Requirements for drivers to deliver Driver
Vehicle Examination Reports (DVERs) to IEP, corrective actions, and
recordkeeping requirements.
    2. Sec.  396.11(a)(2) and Sec.  396.12(a)--Every intermodal
equipment provider must have a process to receive driver reports of
defects or deficiencies in the intermodal equipment operated.
    3. Sec.  396.12(c)--Corrective action
    4. Sec.  396.12(d)--Retention period for Driver Vehicle Inspection
Reports (DVIRs).
    A copy of the petition for rulemaking is in the docket referenced
at the beginning of this notice.
    OCEMA believes that IEPs' processes and systems required by the
December 2008 regulations, relating to pre-trip inspection, periodic
maintenance, systematic maintenance, and recordkeeping, should be
substantially in place by the December 17, 2009 compliance date.
However, requirements in sections 396.9, 396.11, and 396.12, relating
to the DVIR and the DVER physically cannot be implemented at the over
1,000 facilities where interchanges take place nationwide by that date.
    OCEMA states that it was an active participant in all phases of the
rulemaking process and was a key stakeholder in the negotiations that
led to the compromise roadability legislation that was enacted in
SAFETEA-LU. The Petitioner estimates that its member IEPs own or have
under long term lease over 50% of all intermodal chassis operated in
the United States (approximately 450,000 units). An OCEMA affiliate,
CCM, has organized regional chassis pools at numerous locations in the
U.S. The pools will serve as the IEPs for over 100,000 chassis. As
such, Petitioners have a significant interest in the rule at issue in
this proceeding.
    OCEMA provides several reasons for requesting an extension of the
compliance date for the provisions of the December 2008 rule that form
the subject of its petition:
     The Regulations inadvertently create a gap by requiring
IEPs to have in place a process to receive Driver Vehicle Inspection
Reports (DVIRs), including identification of the IEP, by December 17,
2009, while not requiring marking of the IEP on the equipment until
December 17, 2010.
     The in-gate procedures and communication technologies are
so varied at marine terminals, rail facilities, container yards, and
other inland locations that any effort to implement the subject
requirements without the ready availability of IEP information will
lead to congestion and gate delays, while undermining existing systems
for handling inbound defects.
     Failure to extend the compliance date will place much of
the intermodal industry in the position of having to choose between
non-compliance with regulatory requirements and discontinued
operations.
     OCEMA is building an open architecture paperless DVIR
Receipt System (DRS) that, when implemented, will significantly
facilitate the ability of all segments of the industry to comply with
DVIR requirements. Design of the DRS is expected to be complete on or
around the compliance date. However, OCEMA members will still need to
work with the over 1,000 facilities at which chassis are interchanged
to complete deployment, including establishment of communication links
and gate procedures.
     A key component of the DRS is interface with the GIER
system currently under development by IANA. The GIER database will
provide a mechanism for matching the IEP to the IME. However, as of the
date of OCEMA's request, the GIER is not yet available.

Agency's Assessment and Decision

    FMCSA has carefully reviewed OCEMA's petition for an extension of
the compliance date. The Agency acknowledges the need for considerable
planning and coordinating among IEPs, motor carriers, and the operators
of terminals and other intermodal facilities that are necessary so that
the vehicle safety oversight activities contemplated by Congress in the
SAFETEA-LU provision, as well as by FMCSA in the implementing
regulation, can move forward. The large number of intermodal
facilities, and the significant variations in their operating
practices, make the implementation of the enhanced IME safety oversight
activities a challenging task.
    Although OCEMA and its member organizations have made considerable
progress since the final rule was published nearly a year ago, they
have also noted the challenges they continue to face. The Agency
believes they have made a compelling argument for extending the
compliance date for these specific elements of the new regulations as
they apply to IME. The Agency also agrees that a six-month extension of
the compliance date for these elements would enable IEPs and the
terminal operators they work with sufficient time to complete any
necessary adjustments to their IME operational procedures.
    FMCSA also agrees with OCEMA's assertion that, even with a delayed
compliance date for the requested sections of the FMCSRs, IEPs'
operations will continue to be subject to all the inspection, repair,
and maintenance requirements essential to ensuring safety and
compliance with the December 17, 2008 final rule. By the December 17,
2009 implementation

date, IEPs will have identified themselves to the FMCSA and obtained
USDOT numbers. They will also have in place a process to repair or
replace defective equipment prior to its departure from terminal, in
response to notification by drivers after their pre-trip inspection.
IEPs will have in place systematic inspection, maintenance and repair
programs, periodic inspection procedures, and their associated
recordkeeping systems.
    The Agency acknowledges OCEMA's point, that, considering that the
DVIR and DVER requirements cannot be fully implemented at this point in
time, safety cannot be said to be sacrificed by delaying enforcement of
such requirements. In addition, OCEMA states that existing systems for
receipt of driver damage or defect information will continue to be
used. The Agency takes note of this, and anticipates a smooth
transition between existing and new systems during the next few months.
    Accordingly, FMCSA grants the petition to extend the effective date
portions of Sections 396.9, 396.11, and 396.12 of the FMCSRs as they
apply to IEPs and the IME they are responsible for maintaining.

Rulemaking Analyses and Notices

Administrative Procedure Act

    If an agency determines that the prior notice and opportunity for
public comment on a rule normally required by the Administrative
Procedure Act are impracticable, unnecessary, or contrary to the public
interest (the so-called ``good cause'' finding), it may publish the
rule without such notice. (See 5 U.S.C. 553(b).)
    The amendments made by this final rule accomplish three purposes.
They provide an additional option for IEPs to identify their IME for
FMCSA and State enforcement personnel. The Agency believes that this
method will allow IEPs to meet the marking/identification requirements
in a manner that will be comparable to or as effective as the current
requirements of Sec.  390.21 of the FMCSRs.
    The amendments also make minor changes to improve clarity and
consistency and correct an inadvertent error. Although the amended list
of items in the pre-trip inspection checklist at Sec.  392.7(b) is more
substantial, it simply reflects the requirements of the current post-
trip inspection checklist and therefore does not impose requirements
unfamiliar to drivers.
    Finally, the amendments suspend the deadline for compliance with
specific provisions of part 396 of the FMCSRs as they apply to IEPs.
However, the Agency believes that, even with a delayed compliance date
for those provisions, IEPs' operations will very likely be at a level
of safety comparable to, or as effective as, the provisions of the
December 17, 2008 final rule. FMCSA believes there is no discernable
impact on safety because the substantive requirements that have the
greatest impact on safety will go into effect on schedule. These
include a process to repair or replace defective equipment prior to its
departure from terminal, in response to notification by drivers after
their pre-trip inspection, as well as systematic inspection,
maintenance and repair programs, periodic inspection procedures, and
their associated recordkeeping systems.
    For these reasons, FMCSA finds good cause that notice and public
comment are unnecessary. Further, the Agency finds good cause under 5
U.S.C. 553(d)(3) to make the amendments effective upon publication. The
partial extension of the deadline for compliance with the specified
elements of part 396 will remain in effect until June 30, 2010.

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

    FMCSA has determined that this action is not a significant
regulatory action within the meaning of Executive Order 12866 or within
the meaning of Department of Transportation regulatory policies and
procedures. The Office of Management and Budget (OMB) did not review
this document. We expect the final rule will have minimal costs;
therefore, a full regulatory evaluation is unnecessary.

Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-
612), FMCSA has evaluated the effects of this rule on small entities.
The rule provides an additional option for IEPs to mark their IME in
accordance with the requirements of Sec.  390.21. This change reflects
current operational practices of physically marking IME and thus places
no new requirements on the regulated industry. The rule also makes
several changes to improve clarity and consistency and to correct an
inadvertent error. Although the change to make two inspection
checklists is more substantial, it reflects current operational
practices and thus places no new requirements on the regulated
industry. It also provides a partial extension of the compliance date
for specific elements of Part 396 as they apply to the operations of
IEPs. The partial extension will promote a smoother and more effective
transition towards IEPs' compliance with the December 2008 rule. For
these reasons, FMCSA therefore certifies that this action will not have
a significant economic impact on a substantial number of small
entities.

Unfunded Mandates Reform Act of 1995

    This rulemaking does not impose an unfunded Federal mandate, as
defined by the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532, et
seq.), that will result in the expenditure by State, local, and tribal
governments, in the aggregate, or by the private sector, of $141.3
million or more in any 1 year.

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)

    FMCSA analyzed this action under Executive Order 13045, Protection
of Children from Environmental Health Risks and Safety Risks. We
determined that this rulemaking does not concern an environmental risk
to health or safety that may disproportionately affect children.

Executive Order 12630 (Taking of Private Property)

    This rulemaking does 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)

    FMCSA analyzed this rule in accordance with the principles and
criteria contained in Executive Order 13132. Although the 2008 final
rule had Federalism implications, FMCSA determined that it did not
create a substantial direct effect on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government.
This rulemaking does not change that determination in any way.

Executive Order 12372 (Intergovernmental Review)

    The regulations implementing Executive Order 12372 regarding

intergovernmental consultation on Federal programs and activities do
not apply to this action.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires
that FMCSA consider the impact of paperwork and other information
collection burdens imposed on the public. We have determined that no
new information collection requirements are associated with the
technical amendments to this final rule.

National Environmental Policy Act

    FMCSA analyzed this final rule for the purpose of the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and
determined under our environmental procedures Order 5610.1, published
March 1, 2004 (69 FR 9680), that this action does not have any effect
on the quality of the environment. Therefore, this final rule is
categorically excluded from further analysis and documentation in an
environmental assessment or environmental impact statement. FMCSA also
analyzed this rule under the Clean Air Act, as amended (CAA), section
176(c) (42 U.S.C. 7401 et seq.), and implementing regulations
promulgated by the Environmental Protection Agency. Approval of this
action is exempt from the CAA's general conformity requirement since it
has no effect on the environment.

Executive Order 13211 (Energy Effects)

    FMCSA analyzed this action under Executive Order 13211, Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use. We determined that it is not a ``significant
energy action'' under that Executive Order because it is not
economically significant and is not likely to have an adverse effect on
the supply, distribution, or use of energy.

List of Subjects

49 CFR Part 386

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

49 CFR Part 390

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

49 CFR Part 392

    Highway safety, Intermodal equipment providers, Motor carriers.

49 CFR Part 396

    Highway safety, Intermodal equipment providers, Motor carriers,
Motor vehicle.

0
In consideration of the foregoing, FMCSA amends title 49, Code of
Federal Regulations, subtitle B, chapter III, as follows:

PART 386--RULES OF PRACTICE FOR MOTOR CARRIER, INTERMODAL EQUIPMENT
PROVIDER, BROKER, FREIGHT FORWARDER, AND HAZARDOUS MATERIALS
PROCEEDINGS

0
1. The authority citation for part 386 continues to read as follows:

    Authority: 49 U.S.C. 521, 5123, 13301, 13902, 14915, 31132-
31133, 31136, 31144, 31151, 31502, 31504; Sec. 204, Pub. L. 104-88,
109 Stat. 803, 941 (49 U.S.C. 701 note); Sec. 217, Pub. L. 105-159,
113 Stat. 1748, 1767; and 49 CFR 1.73.

0
2. Amend Sec.  386.83 by revising paragraph (a)(1) to read as follows:

Sec.  386.83  Sanction for failure to pay civil penalties or abide by
payment plan; operation in interstate commerce prohibited.

    (a)(1) General rule. (i) A CMV owner or operator that fails to pay
a civil penalty in full within 90 days after the date specified for
payment by FMCSA's final agency order, is prohibited from operating in
interstate commerce starting on the next (i.e., the 91st) day. The
prohibition continues until the FMCSA has received full payment of the
penalty.
    (ii) An intermodal equipment provider that fails to pay a civil
penalty in full within 90 days after the date specified for payment by
FMCSA's final agency order, is prohibited from tendering intermodal
equipment to motor carriers for operation in interstate commerce
starting on the next (i.e., the 91st) day. The prohibition continues
until the FMCSA has received full payment of the penalty.
* * * * *

PART 390--FEDERAL MOTOR CARRIER SAFETY REGULATIONS; GENERAL

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

    Authority: 49 U.S.C. 508, 13301, 13902, 31133, 31136, 31144,
31151, 31502, 31504; sec. 204, Pub. L. 104-88, 109 Stat. 803, 941
(49 U.S.C. 701 note); sec. 114, Pub. L. 103-311, 108 Stat. 1673,
1677; sec. 217, 229, Pub. L. 106-159, 113 Stat. 1748, 1767, 1773;
and 49 CFR 1.73.

0
4. Amend Sec.  390.21 by adding paragraph (g)(4)(v) to read as follows:

Sec.  390.21  Marking of self-propelled CMVs and intermodal equipment.

* * * * *
    (g) * * *
    (4) * * *
    (v) The USDOT number of the intermodal equipment provider is
maintained in a database that is available via real-time internet and
telephonic access. The database must:
    (A) Identify the name and USDOT number of the intermodal equipment
provider responsible for the intermodal equipment, in response to an
inquiry that includes:
    (i) Standard Carrier Alpha Code (SCAC) plus trailing digits, or
    (ii) License plate number and State of license, or
    (iii) Vehicle Identification Number (VIN) of the item of intermodal
equipment.
    (B) Offer read-only access for inquiries on individual items of
intermodal equipment, without requiring advance user registration, a
password, or a usage fee.

0
5. Revise Sec.  390.40(d) to read as follows:

Sec.  390.40  What responsibilities do intermodal equipment providers
have under the Federal Motor Carrier Safety Regulations (49 CFR parts
350-399)?

* * * * *
    (d) Provide intermodal equipment intended for interchange that is
in safe and proper operating condition.
* * * * *

PART 392--DRIVING OF COMMERCIAL MOTOR VEHICLES

0
6. The authority citation continues to read as follows:

    Authority: 49 U.S.C. 13902, 31136, 31151, 31502; and 49 CFR
1.73.

0
7. Revise Sec.  392.7(b) to read as follows:

Sec.  392.7  Equipment, inspection and use.

* * * * *
    (b) Drivers preparing to transport intermodal equipment must make
an inspection of the following components, and must be satisfied they
are in good working order before the equipment is operated over the
road. Drivers who operate the equipment over the road shall be deemed
to have confirmed the following components were in good working order
when the driver accepted the equipment:

--Service brake components that are readily visible to a driver
performing

as thorough a visual inspection as possible without physically going
under the vehicle, and trailer brake connections
--Lighting devices, lamps, markers, and conspicuity marking material
--Wheels, rims, lugs, tires
--Air line connections, hoses, and couplers
--King pin upper coupling device
--Rails or support frames
--Tie down bolsters
--Locking pins, clevises, clamps, or hooks
--Sliders or sliding frame lock

PART 396--INSPECTION, REPAIR, AND MAINTENANCE

0
8. The authority citation continues to read as follows:

    Authority: 49 U.S.C. 31133, 31136, 31151, and 31502; and 49 CFR
1.73.

0
9. Revise Sec.  396.11(a)(1) introductory text and (a)(2) to read as
follows:

Sec.  396.11  Driver vehicle inspection report(s).

    (a) Report Required--(1) Motor Carriers. Every motor carrier shall
require its drivers to report, and every driver shall prepare a report
in writing at the completion of each day's work on each vehicle
operated, except for intermodal equipment tendered by an intermodal
equipment provider. The report shall cover at least the following parts
and accessories:
* * * * *
    (2) Intermodal equipment providers. Every intermodal equipment
provider must have a process to receive driver reports of defects or
deficiencies in the intermodal equipment operated. The driver must
report on, and the process to receive reports must cover, at least the
following parts and accessories:

--Brakes
--Lighting devices, lamps, markers, and conspicuity marking material
--Wheels, rims, lugs, tires
--Air line connections, hoses, and couplers
--King pin upper coupling device
--Rails or support frames
--Tie down bolsters
--Locking pins, clevises, clamps, or hooks
--Sliders or sliding frame lock

* * * * *

0
10. Revise Sec.  396.12(d) to read as follows:

Sec.  396.12  Procedures for intermodal equipment providers to accept
reports required by 390.42(b) of this chapter.

* * * * *
    (d) Retention period for reports. Each intermodal equipment
provider must maintain all documentation required by this section,
including the original driver report and the certification of repairs
on all intermodal equipment, for a period of three months from the date
that a motor carrier or its driver submits the report to the intermodal
equipment provider or its agent.

    Issued on: December 18, 2009.
Anne S. Ferro,
Administrator.
[FR Doc. E9-30654 Filed 12-28-09; 8:45 am]

BILLING CODE 4910-EX-P


[Federal Register: March 3, 2009 (Volume 74, Number 40)]
[Rules and Regulations]
[Page 9172-9173]
[DOCID:fr03mr09-6]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Parts 356, 365, and 374

[Docket No. FMCSA-2008-0235]
RIN 2126-AB16

Elimination of Route Designation Requirement for Motor Carriers
Transporting Passengers Over Regular Routes: Proposed Delay in
Effective Date

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

ACTION: Proposed delay in effective date.

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SUMMARY: In accordance with the memorandum of January 20, 2009, from
the Assistant to the President and Chief of Staff, entitled
``Regulatory Review,'' published in the Federal Register on January 26,
2009, FMCSA is seeking public comment on a contemplated delay of 90
days in the effective date of its January 16, 2009, final rule entitled
``Elimination of Route Designation Requirement for Motor Carriers
Transporting Passengers over Regular Routes.'' The final rule announced
the discontinuation of the administrative requirement that applicants
seeking for-hire authority to transport passengers over regular routes
submit a detailed description and a map of the route(s) over which they
propose to operate. The effective date of the rule is March 17, 2009,
with a compliance date of July 15, 2009. The FMCSA is considering a
temporary 90-day extension in the effective date to June 15, 2009, to
allow the Agency the opportunity for further review and consideration
of the final rule. FMCSA acknowledges that the January 20, 2009,
memorandum only recommends 60 days, but is allowing for 90 days to give
us enough time to consider and respond to comments.

DATES: Comments must be received on or before March 9, 2009.

ADDRESSES: You may submit comments identified by the Federal Docket
Management System Number in the heading of this document by any of the
following methods. Do not submit the same comments by more than one
method. The Federal eRulemaking portal is the preferred method for
submitting comments, and we urge you to use it.
    Federal eRulemaking Portal: Go to http://www.regulations.gov.
Follow the online instructions for submitting comments. In the Comment
or Submission section, type Docket ID Number ``FMCSA-2008-0235'',
select ``Go'', and then click on ``Send a Comment or Submission.'' You
will receive a tracking number when you submit a comment.
    Telefax: 1-202-493-2251.
    Mail, Courier, or Hand-Deliver: Docket Management Facility; U.S.
Department of Transportation, Room W12-140, 1200 New Jersey Avenue,
SE., Washington, DC 20590-0001. Office hours are between 9 a.m. and 5
p.m., e.t., Monday through Friday, except Federal holidays.
    Privacy Act: Regardless of the method used for submitting comments,
all comments will be posted without change to the Federal Docket
Management System (FDMS) at http://www.regulations.gov. Anyone can
search the electronic form of all our dockets in FDMS, by the name of
the individual submitting the comment (or signing the comment, if
submitted on behalf of an association, business, labor union, etc.).
DOT's complete Privacy Act Statement was published in the Federal
Register on April 11, 2000 (65 FR 19476), and can be viewed at the URL
http://docketsinfo.dot.gov.

FOR FURTHER INFORMATION CONTACT: Mr. David Miller, Regulatory
Development Division,<PHONE_NUMBER> or by e-mail at:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:
    On January 16, 2009, FMCSA published a final rule announcing the
discontinuation of the administrative requirement that applicants
seeking for-hire authority to transport passengers over regular routes
submit a detailed description and a map of the route(s) over which they
propose to operate (74 FR 2895). The Agency indicated that it will
register such carriers as regular-route carriers without requiring the
designation of specific regular routes and fixed end-points. Once motor
carriers have obtained regular-route, for-hire operating authority from
FMCSA, they will no longer need to seek additional FMCSA approval in
order to change or add routes. The rule amended certain provisions of
49 CFR Parts 356, 365 and 374 to make them consistent with the Agency's
discontinuation of the route designation requirement. Each

registered regular-route motor carrier of passengers will continue to
be subject to the full safety oversight and enforcement programs of
FMCSA and its State and local partners.
    The effective date of the rule is March 17, 2009, with a compliance
date of July 15, 2009.

Contemplated Extension of the Effective Date

    In accordance with January 20, 2009 (74 FR 4435) memorandum from
the Assistant to the President and Chief of Staff, FMCSA is
contemplating an extension of the effective date of its January 16,
2009, final rule from March 17, 2009, to June 15, 2009. This will
provide us sufficient time to address issues that have been raised
about whether the new rule will make it more difficult for us to
enforce our requirements concerning safety and access for individuals
with disabilities. Although we believe the final rule fully addressed
these issues, in light of the Assistant to the President and Chief of
Staff's memorandum, we are proposing to delay the effective date of the
final rule to allow the Agency the opportunity for further review and
consideration of these issues.
    The Agency solicits comments specifically on the contemplated delay
in the effective date.

List of Subjects

49 CFR Part 356

    Administrative practice and procedure, Routing, Motor carriers.

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 374

    Aged, Blind, Buses, Civil rights, Freight, Individuals with
disabilities, Motor carriers, Smoking.

    Issued on: February 25, 2009.
Rose A. McMurray,
Acting Deputy Administrator.
[FR Doc. E9-4454 Filed 3-2-09; 8:45 am]

BILLING CODE 4910-EX-P


[Federal Register Volume 78, Number 104 (Thursday, May 30, 2013)]
[Notices]
[Page 32414]
[FR Doc No: 2013-12803]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Internal Agency Docket No. FEMA-4116-DR; Docket ID FEMA-2013-0001]

Illinois; Major Disaster and Related Determinations

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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SUMMARY: This is a notice of the Presidential declaration of a major
disaster for the State of Illinois (FEMA-4116-DR), dated May 10, 2013,
and related determinations.

DATES: Effective Date: May 10, 2013.

FOR FURTHER INFORMATION CONTACT: Dean Webster, Office of Response and
Recovery, Federal Emergency Management Agency, 500 C Street SW.,
Washington, DC 20472,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: Notice is hereby given that, in a letter
dated May 10, 2013, the President issued a major disaster declaration
under the authority of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act, 42 U.S.C. 5121 et seq. (the ``Stafford
Act''), as follows:

    I have determined that the damage in certain areas of the State
of Illinois resulting from severe storms, straight-line winds, and
flooding during the period of April 16 to May 5, 2013, is of
sufficient severity and magnitude to warrant a major disaster
declaration under the Robert T. Stafford Disaster Relief and
Emergency Assistance Act, 42 U.S.C. 5121 et seq. (the ``Stafford
Act''). Therefore, I declare that such a major disaster exists in
the State of Illinois.
    In order to provide Federal assistance, you are hereby
authorized to allocate from funds available for these purposes such
amounts as you find necessary for Federal disaster assistance and
administrative expenses.
    You are authorized to provide Individual Assistance in the
designated areas and Hazard Mitigation throughout the State.
Consistent with the requirement that Federal assistance is
supplemental, any Federal funds provided under the Stafford Act for
Hazard Mitigation and Other Needs Assistance will be limited to 75
percent of the total eligible costs.
    Further, you are authorized to make changes to this declaration
for the approved assistance to the extent allowable under the
Stafford Act.

    The time period prescribed for the implementation of section
310(a), Priority to Certain Applications for Public Facility and Public
Housing Assistance, 42 U.S.C. 5153, shall be for a period not to exceed
six months after the date of this declaration.
    The Federal Emergency Management Agency (FEMA) hereby gives notice
that pursuant to the authority vested in the Administrator, under
Executive Order 12148, as amended, W. Michael Moore, of FEMA is
appointed to act as the Federal Coordinating Officer for this major
disaster.
    The following areas of the State of Illinois have been designated
as adversely affected by this major disaster:

    Cook, DeKalb, DuPage, Fulton, Grundy, Kane, Kendall, Lake,
LaSalle, McHenry, and Will Counties for Individual Assistance.
    All counties within the State of Illinois are eligible to apply
for assistance under the Hazard Mitigation Grant Program.

    The following Catalog of Federal Domestic Assistance Numbers
(CFDA) are to be used for reporting and drawing funds: 97.030,
Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis
Counseling; 97.033, Disaster Legal Services; 97.034, Disaster
Unemployment Assistance (DUA); 97.046, Fire Management Assistance
Grant; 97.048, Disaster Housing Assistance to Individuals and
Households In Presidentially Declared Disaster Areas; 97.049,
Presidentially Declared Disaster Assistance--Disaster Housing
Operations for Individuals and Households; 97.050, Presidentially
Declared Disaster Assistance to Individuals and Households--Other
Needs; 97.036, Disaster Grants--Public Assistance (Presidentially
Declared Disasters); 97.039, Hazard Mitigation Grant.

W. Craig Fugate,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2013-12803 Filed 5-29-13; 8:45 am]
BILLING CODE 9111-23-P