refused to submit to an     Substances.
                                                                 alcohol or controlled
                                                                 substances test required
                                                                 under part 382.
Acute.............................  382.215                     Using a driver known to     Controlled
                                                                 have tested positive for    Substances.
                                                                 a controlled substance.
Critical..........................  382.301(a)                  Using a driver before the   Controlled
                                                                 motor carrier has           Substances.
                                                                 received a negative pre-
                                                                 employment controlled
                                                                 substance test result.
Critical..........................  382.303(a)                  Failing to conduct post-    Controlled
                                                                 accident testing on         Substances.
                                                                 driver for alcohol.
Critical..........................  382.303(b)                  Failing to conduct post-    Controlled
                                                                 accident testing on         Substances.
                                                                 driver for controlled
                                                                 substances.
Acute.............................  382.305                     Failing to implement a      Controlled
                                                                 random controlled           Substances.
                                                                 substances and/or an
                                                                 alcohol testing program.
Critical..........................  382.305(b)(1)               Failing to conduct random   Controlled
                                                                 alcohol testing at an       Substances.
                                                                 annual rate of not less
                                                                 than the applicable
                                                                 annual rate of the
                                                                 average number of driver
                                                                 positions.
Critical..........................  382.305(b)(2)               Failing to conduct random   Controlled
                                                                 controlled substances       Substances.
                                                                 testing at an annual rate
                                                                 of not less than the
                                                                 applicable annual rate of
                                                                 the average number of
                                                                 driver positions.

Critical..........................  382.309                     Using a driver without a    Controlled
                                                                 return to duty test.        Substances.
Critical..........................  382.503                     Allowing a driver to        Controlled
                                                                 perform safety sensitive    Substances.
                                                                 function, after engaging
                                                                 in conduct prohibited by
                                                                 subpart B, without being
                                                                 evaluated by substance
                                                                 abuse professional, as
                                                                 required by Sec.
                                                                 382.605.
Critical..........................  383.3(a)/383.23(a)          Using a driver who does     Driver Fitness.
                                                                 not possess a valid CDL.
Acute.............................  383.37(a)                   Knowingly allowing,         Driver Fitness.
                                                                 requiring, permitting, or
                                                                 authorizing an employee
                                                                 who does not have a
                                                                 current CLP or CDL, who
                                                                 does not have a CLP or
                                                                 CDL with the proper class
                                                                 or endorsements, or who
                                                                 operates a CMV in
                                                                 violation of any
                                                                 restriction on the CLP or
                                                                 CDL to operate a CMV.
Acute.............................  383.51(a)                   Knowingly allowing,         Driver Fitness.
                                                                 requiring, permitting, or
                                                                 authorizing a driver to
                                                                 drive who is disqualified
                                                                 to drive a CMV.
Acute.............................  391.11(b)(4)                Using a physically          Driver Fitness.
                                                                 unqualified driver.
Acute.............................  391.15(a)                   Using a disqualified        Driver Fitness.
                                                                 driver.
Critical..........................  391.45(a)                   Using a driver not          Driver Fitness.
                                                                 medically examined and
                                                                 certified.
Critical..........................  391.45(b)(1)                Using a driver not          Driver Fitness.
                                                                 medically examined and
                                                                 certified during the
                                                                 preceding 24 months.
Critical..........................  391.51(a)                   Failing to maintain driver  Driver Fitness.
                                                                 qualification file on
                                                                 each driver employed.
Critical..........................  392.2                       Operating a motor vehicle   Unsafe Driving.
                                                                 not in accordance with
                                                                 the safety laws,
                                                                 ordinances, and
                                                                 regulations of the
                                                                 jurisdiction in which it
                                                                 is being operated.
Critical..........................  392.6                       Scheduling a run which      Unsafe Driving.
                                                                 would necessitate the
                                                                 vehicle being operated at
                                                                 speeds in excess of those
                                                                 prescribed.
Critical..........................  392.9(a)(1)                 Requiring or permitting a   Vehicle Maintenance.
                                                                 driver to drive without
                                                                 the vehicle's cargo being
                                                                 properly distributed and
                                                                 adequately secured.
Critical..........................  395.1(h)(1)(i)              Requiring or permitting a   HOS Compliance.
                                                                 property-carrying CMV
                                                                 driver to drive more than
                                                                 15 hours (Driving in
                                                                 Alaska).
Critical..........................  395.1(h)(1)(ii)             Requiring or permitting a   HOS Compliance.
                                                                 property-carrying CMV
                                                                 driver to drive after
                                                                 having been on duty 20
                                                                 hours (Driving in Alaska).
Critical..........................  395.1(h)(1)(iii)            Requiring or permitting a   HOS Compliance.
                                                                 property-carrying CMV
                                                                 driver to drive after
                                                                 having been on duty more
                                                                 than 70 hours in 7
                                                                 consecutive days (Driving
                                                                 in Alaska).
Critical..........................  395.1(h)(1)(iv)             Requiring or permitting a   HOS Compliance.
                                                                 property-carrying CMV
                                                                 driver to drive after
                                                                 having been on duty more
                                                                 than 80 hours in 8
                                                                 consecutive days (Driving
                                                                 in Alaska).
Critical..........................  395.1(h)(2)(i)              Requiring or permitting a   HOS Compliance.
                                                                 passenger-carrying CMV
                                                                 driver to drive more than
                                                                 15 hours (Driving in
                                                                 Alaska).
Critical..........................  395.1(h)(2)(ii)             Requiring or permitting a   HOS Compliance.
                                                                 passenger-carrying CMV
                                                                 driver to drive after
                                                                 having been on duty 20
                                                                 hours (Driving in Alaska).
Critical..........................  395.1(h)(2)(iii)            Requiring or permitting a   HOS Compliance.
                                                                 passenger-carrying CMV
                                                                 driver to drive after
                                                                 having been on duty more
                                                                 than 70 hours in 7
                                                                 consecutive days (Driving
                                                                 in Alaska).
Critical..........................  395.1(h)(2)(iv)             Requiring or permitting a   HOS Compliance.
                                                                 passenger-carrying CMV
                                                                 driver to drive after
                                                                 having been on duty more
                                                                 than 80 hours in 8
                                                                 consecutive days (Driving
                                                                 in Alaska).
Critical..........................  395.1(o)                    Requiring or permitting a   HOS Compliance.
                                                                 property-carrying CMV
                                                                 driver to drive after
                                                                 having been on duty 16
                                                                 consecutive hours.
Critical..........................  395.3(a)(1)                 Requiring or permitting a   HOS Compliance.
                                                                 property-carrying CMV
                                                                 driver to drive without
                                                                 taking an off-duty period
                                                                 of at least 10
                                                                 consecutive hours prior
                                                                 to driving.
Critical..........................  395.3(a)(2)                 Requiring or permitting a   HOS Compliance.
                                                                 property-carrying CMV
                                                                 driver to drive after the
                                                                 end of the 14th hour
                                                                 after coming on duty.
Critical..........................  395.3(b)(1)                 Requiring or permitting a   HOS Compliance.
                                                                 property-carrying CMV
                                                                 driver to drive after
                                                                 having been on duty more
                                                                 than 60 hours in 7
                                                                 consecutive days.
Critical..........................  395.3(b)(2)                 Requiring or permitting a   HOS Compliance.
                                                                 property-carrying CMV
                                                                 driver to drive after
                                                                 having been on duty more
                                                                 than 70 hours in 8
                                                                 consecutive days.
Critical..........................  395.5(a)(1)                 Requiring or permitting a   HOS Compliance.
                                                                 passenger-carrying CMV
                                                                 driver to drive more than
                                                                 10 hours.
Critical..........................  395.5(a)(2)                 Requiring or permitting a   HOS Compliance.
                                                                 passenger-carrying CMV
                                                                 driver to drive after
                                                                 having been on duty 15
                                                                 hours.
Critical..........................  395.5(b)(2)                 Requiring or permitting a   HOS Compliance.
                                                                 passenger-carrying CMV
                                                                 driver to drive after
                                                                 having been on duty more
                                                                 than 70 hours in 8
                                                                 consecutive days.
Critical..........................  395.8(a)                    Failing to require driver   HOS Compliance.
                                                                 to make a record of duty
                                                                 status.
Critical..........................  395.8(e)                    False reports of records    HOS Compliance.
                                                                 of duty status.
Critical..........................  395.8(i)                    Failing to require driver   HOS Compliance.
                                                                 to forward within 13 days
                                                                 of completion, the
                                                                 original of the record of
                                                                 duty status.
Critical..........................  395.8(k)(1)                 Failing to preserve         HOS Compliance.
                                                                 driver's record of duty
                                                                 status for 6 months.
Critical..........................  395.8(k)(1)                 Failing to preserve         HOS Compliance.
                                                                 driver's records of duty
                                                                 status supporting
                                                                 documents for 6 months.

Critical..........................  396.3(b)                    Failing to keep minimum     Vehicle Maintenance.
                                                                 records of inspection and
                                                                 vehicle maintenance.
Acute.............................  396.9(c)(2)                 Requiring or permitting     Vehicle Maintenance.
                                                                 the operation of a motor
                                                                 vehicle declared ``out-of-
                                                                 service'' before repairs
                                                                 were made.
Acute.............................  396.11(c)                   Failing to correct Out-of-  Vehicle Maintenance.
                                                                 Service defects listed by
                                                                 driver in a driver
                                                                 vehicle inspection report
                                                                 before the vehicle is
                                                                 operated again.
----------------------------------------------------------------------------------------------------------------

    In some forums for SMS purposes, the Agency has referred to
violations of certain critical and acute regulations as essential
safety management violations and fundamental violations,
respectively.\67\ However, for the purposes of this rulemaking, the
Agency is not proposing to change the current terminology. Instead,
FMCSA would revise the list in section VII in appendix B to part 385
and retain the terms ``critical'' and ``acute.'' This terminology is
included in the Motor Carrier Safety Improvement Act of 1999, and is
familiar to law enforcement and the industry. Proposed revisions to 49
CFR part 385, appendix B, are explained in detail in Part IX of this
proposed rule.
---------------------------------------------------------------------------

    \67\ See 72 FR 62293, at 62299 (Nov. 2, 2007) and 73 FR 53483,
at 53487 (Sept. 16, 2008).
---------------------------------------------------------------------------

    The critical and acute violations noted in Table 17 above have been
used for the analysis in the Regulatory Evaluation accompanying this
proposal. But the Agency is also considering whether to include the
following violations and seeks comment specifically on these
violations.
     Sec.  390.35--Making, or causing to make, fraudulent or
intentionally false statements or records or reproducing fraudulent
records.
     Sec.  392.4(b)--Requiring or permitting a driver to drive
while under the influence of, or in possession of, a narcotic drug,
amphetamine, or any other substance capable of rendering the driver
incapable of safely operating a motor vehicle.
     Sec.  392.5(b)(1)--Requiring or permitting a driver to
drive a motor vehicle while under the influence of, or in possession
of, an intoxicating beverage.
     Sec.  392.5(b)(2)--Requiring or permitting a driver who
shows evidence of having consumed an intoxicating beverage within 4
hours to operate a motor vehicle.
     Sec.  392.16--A commercial motor vehicle which has a seat
belt assembly installed at the driver's seat shall not be driven unless
the driver has properly restrained himself/herself with the seat belt
assembly.
     Sec.  392.80(a)--No driver shall engage in texting while
driving.
     Sec.  392.80(b)--No motor carrier shall allow or require
its drivers to engage in texting while driving.
     Sec.  392.82(a)(1)--No driver shall use a hand-held mobile
telephone while driving a commercial motor vehicle.
     Sec.  392.82(a)(2)--No motor carrier shall allow or
require its drivers to use a hand-held mobile telephone while driving a
CMV.
     Sec.  396.7(a)--Requiring or permitting operation of a
motor vehicle in a condition likely to cause an accident or breakdown
of the vehicle.
     Sec.  396.17(a)--Using a commercial motor vehicle not
periodically inspected.
    As a result, the Agency seeks comment and data on these regulations
and others that should be considered critical or acute. Lastly, the
Agency seeks comment and data on how critical and acute regulations
should be determined; is associated crash risk the best measurement, or
is there a better or additional reason?
Crashes
    The statute requires the Agency to consider crashes in determining
safety fitness.\68\ A motor carrier's crash experience would impact the
SFD only if the carrier's recordable crashes had first been evaluated
for preventability as part of an investigation. This is consistent with
FMCSA's existing methodology. For this purpose, the Agency will
consider only recordable crashes. A crash is recordable if it involves
a CMV and meets the definition in 49 CFR 390.5 (defining ``accident'').
---------------------------------------------------------------------------

    \68\ 49 U.S.C. 31144(a)(1).
---------------------------------------------------------------------------

    The Agency proposes to determine preventability by applying the
standards and procedures currently utilized in assessing preventability
of recordable crashes when determining a safety rating. Those
procedures make use of previously issued guidance for making
preventability determinations, set out in FMCSA's A Motor Carrier's
Guide to Improving Highway Safety.\69\
---------------------------------------------------------------------------

    \69\ A Motor Carrier's Guide to Improving Highway Safety, FMCSA-
ESO-08-003, December 2009. Available at http://www.fmcsa.dot.gov/safety-security/eta/index.htm.
---------------------------------------------------------------------------

    The Agency calculates a motor carrier's crash rate by multiplying
the motor carrier's number of recordable interstate and intrastate
crashes in the previous 12 months by 1,000,000. That result is divided
by the motor carrier's fleet mileage during the previous 12 months. The
failure standard for crash rates is 1.5 for general operations and 1.7
for urban operations. If the motor carrier exceeds the failure
standard, the crashes will be reviewed for preventability. The crash
rate will then be recalculated using only preventable crashes. If the
motor carrier's preventable crash rate remains above the failure
standard, the motor carrier would then fail the Crash Indicator BASIC.
    In 1997, FMCSA's predecessor, the Federal Highway Administration,
published a Final Rule (62 FR 60035) indicating that it would use a
carrier's recordable crash rate as a factor in determining its safety
rating, but would continue to consider the preventability of such
crashes when challenged by individual carriers. The thresholds for
unacceptable crash rates were set using recordable crash data from
1994-1996. FMCSA seeks comment on whether either the recordable crash
rate or the preventable crash rate would be more appropriate for use in
calculating a carrier's SFD and whether the recordable crash rates
currently incorporated into 49 CFR part 385, appendix B, should be
retained as thresholds under the new SFD.
3. Unfit Method 3: Combination of Inspection Data and Investigation
Results
    During an investigation, it may be determined that violations of
acute or critical regulations result in only one failed BASIC. However,
the motor carrier may also have one additional BASIC over the SFD
failure standard based on the most recent 24 months of

on-road safety data. When, at the time of the investigation, there is
one failed BASIC as a result of on-road safety data and one or more
additional failed BASICs as a result of violations discovered during
the investigation, the motor carrier would be proposed unfit. Crash and
controlled substances/alcohol information would be considered, as noted
above, only during the investigation.
4. Specific Applications
English Language Proficiency
    It should be noted that the Agency's analysis, including the
estimated number of proposed unfit motor carriers, does not include
violations of 49 CFR 391.11(b)(2) for English Language Proficiency
(ELP). These violations are also not included in the proposed violation
tables in appendix B of part 385. The Agency chose to do the analysis
without this violation based on the Commercial Vehicle Safety
Alliance's (CVSA) 2014 decision to remove this violation from it's out
of service criteria. The Agency specifically seeks comments on this
issue.
Passenger Carriers
    Congress and FMCSA have both acknowledged the increased risk
associated with transportation of passengers. Currently, FMCSA also
holds passenger motor carriers to more stringent intervention
thresholds in SMS.
    The Agency is considering an alternative, more stringent, proposal
for passenger carriers that would result in a proposed unfit SFD. The
proposal would have two elements. First, a passenger carrier would
receive a proposed unfit SFD when it meets or exceeds failure standards
comparable to the 75th percentile for either the Unsafe Driving or HOS
Compliance BASIC. Under this part of the alternative proposal, a
passenger carrier could be proposed unfit for failing either Unsafe
Driving or HOS Compliance, without failing a second BASIC. Secondly,
and in addition, FMCSA is considering a structure where a proposed
unfit SFD would also result if a passenger carrier meets or exceeds SFD
failure standards comparable to the 90th percentile when the absolute
thresholds in two of the three other BASICs--Vehicle Maintenance,
Driver Fitness or HM Compliance.
    The Agency estimates that 270 passenger carriers would be proposed
as unfit using these alternate failure standards. This would result in
93 more passenger carriers being proposed unfit than would result from
using two failed BASICs comparable to the 96th and 99th percentiles, as
elsewhere proposed in this document. Using data from on-road safety
data and investigation results, the estimated crash rate for these 270
passenger carriers is 2.08 applying the same approach used in the
Regulatory Evaluation. The national average for all passenger carriers
is 1.09 crashes per 100 power units. The proposed unfit passenger
carriers using these alternate failure standards had experienced a
crash rate (2.08 per 100 power units) that was almost twice the
national passenger carrier rate (1.09 per 100 power units) or an
increase of 90% ((2.08-1.09/1.09)).
    As a result, the Agency seeks feedback and data on whether
passenger carriers should be held to more stringent SFD failure
standards, that is, at an absolute value equivalent to the 75th
percentile (or some other percentile less than the 96th percentile) for
the Unsafe Driving and HOS Compliance BASICs failure standards, and
equivalent to the 90th percentile (or some other percentile less than
the 99th percentile) for the Driver Fitness, Vehicle Maintenance, HM
Compliance, and Crash Indicator BASICs. The Agency also requests
comment on whether the proposed failure standards are appropriate.
    The Agency is also interested in alternative methods for
identifying high risk passenger carriers during an investigation. It is
considering lowering the minimum rate of violations for a pattern, for
purposes of a critical regulation violation, from 10 percent to 5
percent or a lower number. FMCSA seeks comments on this concept.
Hazardous Materials Carriers
    The SMS also has lower intervention thresholds for HM carriers. As
a result, the Agency seeks feedback and data on whether these carriers
should be held to a more stringent standard (i.e., lower BASIC failure
standards). The Agency is specifically interested in feedback on
whether the failure standard should be different for HM safety permit
carriers.
    Under this proposal, HM safety permit applicants would continue to
be required to have a comprehensive onsite investigation comparable to
the existing CR, conducted at the motor carrier's principal place of
business, and would be issued a HM safety permit as long as they were
not unfit and met other applicable requirements. Either inspections or
another investigation after issuance of the HM safety permit could
result in an unfit determination, however, thus affecting the HM safety
permit status.
Foreign Motor Carriers
    Under this proposal, the Agency notes that Mexican, Canadian, and
Non-North American carriers registered with FMCSA could be found to be
unfit based on their inspection data and investigation results.
    Mexican long-haul carriers permitted to operate in this country
beyond border commercial zones are required to have a compliance review
before being granted standard authority. In the future, if long-haul
authority is granted, the carrier would be required to have a
comprehensive investigation comparable to an existing CR within 18
months of FMCSA granting the carrier provisional operating authority
registration before being granted standard authority. Additionally, on-
road safety data or findings from another investigation could result in
an unfit determination, thus affecting the carrier's provisional
authority status.

D. MAP-21 Requirements for Motor Carriers of Passengers and Operators
of Motorcoach Services

    A MAP-21 amendment requires the Secretary to conduct initial and
periodic safety reviews of for-hire motor carriers of passengers.\70\
Initial reviews of those motor carriers of passengers that are
providers of motorcoach services registered with the Secretary after
October 1, 2012, are to begin no later than two years after the dates
of their respective registrations. Reviews of such providers registered
on or before October 1, 2012, are to begin no later than October 1,
2015.\71\ An uncodified statutory provision of MAP-21 directs the
Secretary to establish requirements to improve the public accessibility
of the safety rating information of providers of motorcoach services,
and advises that the Secretary should also consider requirements for
public display of such information on motorcoaches, at departure
terminals, and at ticket sales locations.\72\
---------------------------------------------------------------------------

    \70\ 49 U.S.C. 31144(i)(1), (2) and (4).
    \71\ 49 U.S.C. 31144(i)(1)(B). A ``motorcoach'' is defined for
this purpose to be the same as an ``over-the-road bus,'' a bus
characterized by an elevated passenger deck located over a baggage
compartment, except a bus used by a public transportation agency or
a school bus. See Section 32702(6) of MAP-21 and section 3038(a)(3)
of TEA-21 (set out as a note to 49 U.S.C. 5310).
    \72\ MAP-21 section 32707(b), 126 Stat. 814.
---------------------------------------------------------------------------

    MAP-21 requires the Secretary to determine the safety fitness of
each motor carrier of passengers through a simple and understandable
rating system that allows passengers to compare their safety
performance. MAP-21 also requires the Secretary to assign a safety
fitness rating to each

such motor carrier, which is reassessed at least once every 3 years,
although motor carriers of passengers that serve primarily urban areas
with high passenger volume are to be reassessed annually.\73\ In
addition, section 32707(b) of MAP-21 requires that FMCSA improve public
access to safety fitness information for motorcoach services and
operations in interstate commerce.
---------------------------------------------------------------------------

    \73\ 49 U.S.C. 31144(i)(1), (2) and (4), added by section
32707(a) of MAP-21.
---------------------------------------------------------------------------

    As discussed previously, the Agency is proposing to determine only
one category of safety fitness--unfit. This determination would also be
made for some motor carriers of passengers through the monthly
assessment of the inspection data. If the passenger carrier did not
have 11 inspections in the previous 24 months by which to be adequately
assessed, an investigation of the carrier's safety performance would be
conducted.
    Section 32707(b) also requires the Agency to consider requiring the
prominent display of safety fitness rating information in each
motorcoach terminal of departure, on the inside of the motorcoach
vehicle, and at all points of sale for motorcoach services. The public
has access to critical information about the safety record and ratings
of motor carriers of passengers, including providers of motorcoach
services, on the FMCSA Web site and through the Agency's SaferBus
application.\74\ FMCSA believes that implementing the statutory
requirement to consider prominently displaying SFD information at
terminals, ticket sale locations, and on motorcoaches could result in
fraudulent information being displayed, and, therefore, is better
addressed by directing the traveling public to FMCSA's Web site and the
SaferBus application. FMCSA seeks comments on whether the public's
access to a for-hire motorcoach operator's safety record on the FMCSA
Web site and SaferBus application is sufficient to meet the public
access and display requirements of section 32707(b)(2) of MAP-21.
---------------------------------------------------------------------------

    \74\ This application is available without charge to Google
Android users and Apple iPhone and iPad users from the respective
App Stores, or by going to the FMCSA's ``Look Before You Book'' Web
site at www.fmcsa.dot.gov/saferbus.
---------------------------------------------------------------------------

E. Summary Justification for SFD Proposal

    FMCSA has structured this SFD proposal to identify those motor
carriers with the highest crash risk. Carriers identified through two
failed BASICs based solely on on-road safety data (using the 96/99
percentile threshold standard) have a crash rate of 8.28 crashes per
100 power units. All carriers with two failed BASICs (including
carriers failing a BASIC due to a finding during an investigation and
on-road safety data) have a crash rate of 4.39 crashes per 100 power
units. This is compared to the nation-wide average crash rate of 2.13
crashes per 100 power units for all carriers.
    The proposed use of on-road safety data would allow the Agency to
identify and take action against unsafe motor carriers. Table 18 below
illustrates both the number of carriers proposed unfit and the
associated crash rate for two different options for failure standards
for SFDs. Option 2 is the option proposed in this rulemaking.

                                     Table 18--Number of Carriers Proposed Unfit--Identified With Two Failed BASICs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      All proposed unfit methods:                                                        Proposed unfit
                                       ---------------------------------------------------------   Proposed unfit     Proposed unfit    method 3: Number
                                                                                method 1: Number   method 2: Number     of carriers
                                                                                of carriers        of carriers       proposed unfit
                                                            Total number of                        proposed unfit     proposed unfit        based on
        Failure standard option          Total number of      crashes for      Associated crash       based on           based on        inspection and
                                        carriers proposed  carriers proposed     rate per 100     inspection data     investigations     investigation
                                              unfit              unfit        power units (PUs)   (and associated    (and associated    (and associated
                                                                                crash rate per     crash rate per     crash rate per
                                                                                100 PUs)           100 PUs)           100 PUs)
--------------------------------------------------------------------------------------------------------------------------------------------------------
No. 1--Equivalent to 95 and 98                      3,291              2,124               3.93         479 (3.75)       2,656 (3.94)         156 (4.66)
 percentiles..........................
No. 2--Equivalent to 96 and 99                      3,056              1,862               4.39         262 (8.28)       2,674 (3.98)         120 (4.61)
 percentiles..........................
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The Agency used lessons learned from SMS and feedback from
stakeholders \75\ in crafting the proposed SFD process. These include
requiring a higher number of inspections before assessing the motor
carrier's performance, a higher number of inspections with violations
before making an SFD, and using absolute failure standards equivalent
to higher compliance levels than SMS uses for prioritization. Because
SMS intervention thresholds are lower than the proposed thresholds for
SFD, under this proposal it is very unlikely that a proposed unfit SFD
would be the first time that the Agency had an intervention with the
motor carrier. Most often, the motor carrier would have been subject to
previous interventions, such as warning letters, focused reviews, and/
or civil penalty enforcement actions. If the safety deficiencies were
not corrected, however, the carrier could ultimately meet or exceed the
safety failure standards that result in a proposed unfit SFD.
---------------------------------------------------------------------------

    \75\ See docket FMCSA-2004-18898 titled Comprehensive Safety
Analysis 2010 Initiative.
---------------------------------------------------------------------------

VII. Revised SFD Appeals Process

    After receiving a proposed unfit safety fitness determination, a
motor carrier would have various administrative proceedings available
to it before the proposed determination becomes final.\76\ In this
proposal, four different administrative proceedings would be available.
However, consistent with current procedures, requests for
administrative reviews would not automatically stay the unfit
determination.
---------------------------------------------------------------------------

    \76\ See section IV.A. History of SFDs above for an explanation
of the 45- and 60-day periods set by statute before a proposed unfit
SFD becomes final. 49 U.S.C. 31144(c).
---------------------------------------------------------------------------

A. Administrative Review of Material Errors

    This proposal would continue the existing administrative review
procedure to challenge alleged errors committed in assigning the
proposed unfit SFD. These requests are decided by FMCSA's Assistant
Administrator. The proposed administrative review procedures in revised
49 CFR 385.15 would provide sufficient opportunity

for a motor carrier to allege errors in an SFD, including allegations
of error in the validity of violations recorded on a driver/vehicle
inspection report, even where State administrative or judicial
proceedings might not be adequate or available. The burden of proof for
this review would remain with the motor carrier. Such review would now
have to be sought within 15 days after service of the notice of
proposed unfit SFD. If no such review is sought within 30 days after
service of the notice, or the Agency does not agree with the
allegations of material error, the proposed unfit SFD may become a
final unfit SFD as described above.
    As indicated above, FMCSA proposes to reduce the time for filing a
petition for administrative review from the current maximum of 90 days
to 15 days after the issuance of the proposed unfit SFD. FMCSA
specifically requests comment on this proposed change in the general
time for filing of petitions for administrative review, which will
ensure that decisions will be made before the statutory time periods
expire.

B. Claiming Unconsidered Inspection Data

    The second proposed administrative review procedure would be new
and would provide for review based on missing data. Requests for such
review would be decided by FMCSA's Field Administrators \77\ of the
FMCSA Service Center responsible for the State, province, or country
where the carrier's principal place of business is located. Procedures
would be added at new Sec.  385.16 for administrative review of an
unfit determination that allegedly did not include all reported data
from qualifying inspections of the motor carrier's vehicles or drivers,
such as missing inspections citing no violations during the SFD period.
For this new review, the burden of proof to show that the missing data
would impact the proposed unfit SFD would rest with the motor carrier.
This review would have to be requested within 10 days after service of
the notice of proposed unfit SFD.
---------------------------------------------------------------------------

    \77\ The proposed definition of the term Field Administrator
includes the term Regional Field Administrator.
---------------------------------------------------------------------------

C. Requests To Operate Under a Compliance Agreement

    The third proposed administrative process would revise FMCSA's
existing process by allowing carriers that have a proposed unfit SFD to
defer the final unfit SFD and continue to operate under a compliance
agreement. The carrier would submit a corrective action plan and would
agree to monitoring and performance terms. If the corrective action
plan is found to be acceptable to the Agency, the motor carrier could
operate under a compliance agreement. This proposal would not remove
the proposed unfit determination unless the terms of the compliance
agreement were met throughout an agreed upon period of time. In
addition, the Agency's Web site would reflect that a motor carrier
would be operating under a compliance agreement during the agreement
period.
    To initiate this process, a carrier would have to submit an
acceptable corrective action plan within the time frames specified in
proposed Sec.  385.17(d). To be accepted, a corrective action plan
would have to demonstrate that the carrier is willing and able to
comply with applicable safety statutes and regulations and demonstrate
significant changes in its deficient safety management processes. For
example the carrier may have to demonstrate clearly defined safety
policies and procedures, documented organizational roles and
responsibilities for safety compliance, written qualification and
hiring standards, training and communication plans, and ongoing
compliance monitoring and tracking procedures. Other potential
requirements might include, but would not be limited to, installing
safety technology, providing reports or other documents, and training.
While decisions on the terms of each compliance agreement would be made
by FMCSA, standard requirements would include: (1) Monitoring for a
defined period of time; and (2) strict safety performance standards
that would have to be met or the carrier would be immediately declared
unfit. Motor carriers would be expected to maintain performance below
the SMS intervention thresholds established in the agreement. See Table
3 earlier in this preamble for the current SMS intervention thresholds.
Meeting the terms of the compliance agreement for an agreed upon period
of time with inspections would provide evidence that the motor carrier
was willing and able to comply with applicable statutes and regulations
and would result in withdrawal of the proposed unfit SFD. A motor
carrier would have limited opportunities for administrative review of
any action denying it an entry into a deferral and compliance
agreement.

D. Requests To Resume Operations After a Final Unfit Determination

    The fourth unfit SFD administrative review available to a motor
carrier would be added to establish the new procedures that a motor
carrier would follow to resume interstate motor carrier operations
following a final unfit SFD. FMCSA would require a motor carrier that
has received a final unfit SFD, and wants to begin operating again, to
have its safety fitness evaluated. The carrier would also need to have
received new safety registration and, if necessary, new operating
authority.\78\
---------------------------------------------------------------------------

    \78\ The carrier will retain the same USDOT number. See Unified
Registration System final rule, August 23, 2013 (78 FR 52608).
---------------------------------------------------------------------------

    Therefore, an unfit motor carrier would be required to submit a
corrective action plan with its applications for USDOT and operating
authority registration. The corrective action plan must describe the
actions the motor carrier completed or is taking to address its safety
deficiencies. An unfit motor carrier must receive approval of its
corrective action plan from the appropriate Field Administrator before
FMCSA would issue a new registration for the motor carrier.
    The unfit motor carrier would also be required to demonstrate to
FMCSA that it meets the safety fitness standard and is willing and able
to comply with all statutory and regulatory requirements before
receiving an updated registration to operate. Finally, the unfit motor
carrier would have to participate in the New Entrant Safety Assurance
Program--subpart D of part 385, or, if applicable, either subpart B of
part 385 for Mexico-Domiciled Carriers or subpart H of part 385 for New
Entrant Non-North America-Domiciled Carriers, upon resuming motor
carrier operations in the United States.

E. Carriers Expected To Receive a Final Unfit SFD

    FMCSA estimates that 364 more motor carriers than the number that
currently receive a final unsatisfactory safety rating will receive a
final unfit SFD after one or more of the administrative review
proceedings discussed above. However, these four proceedings provide
greater opportunities for motor carriers to comply with the federal
safety regulations. For carriers that would have been rated
unsatisfactory under the old methodology and would be determined to be
unfit under the new methodology, the proposed appeals proceedings give
them an opportunity to continue operating while complying with the
federal safety regulations under more intense scrutiny from FMCSA.
Carriers that do not successfully appeal the proposed unfit SFD, or
that choose not to appeal or submit a corrective action plan, would
receive a final determination of unfit. In addition, in instances where
a motor carrier is

operating under a compliance agreement, a carrier would be issued a
final unfit SFD if it violates any of the terms specified in the
compliance agreement.
    Using MCMIS data from September 2010 to September 2012, the Agency
analyzed the hypothetical effect of this proposed compliance agreement
rule. The results of the Agency's analysis showed that 490 motor
carriers would have received a proposed unfit SFD in the first month of
the analysis period--September 2010. To determine how many carriers
would receive a final unfit determination within the next 24 months
after entering into a compliance agreement in September 2010, the
Agency assumed that a carrier with a proposed unfit determination would
be required to operate below the more stringent SMS intervention
thresholds noted in Table 3 above.
    Of the 490 carriers that would have received proposed unfit SFDs in
the first analyzed month of September 2010, the Agency's analysis
showed that 74 (15%) went inactive or ceased operations within 24
months. Of the remaining 416 carriers, 122 (29%) never had sufficient
data in the next 24 months to recalculate their performance measure
and, therefore, would be found unfit. Another 169 (41%) would have had
sufficient data and would have continued to observe the terms of their
compliance agreement and then the proposed unfit would have been
retracted, and 125 (30%) would be out of compliance at some time before
September 2012 and would be found unfit. This baseline analysis
indicated that about half (48%) of the final unfit determinations would
occur within the first 6 months of the compliance agreement. The Agency
acknowledges that the real rate of carriers becoming unfit is expected
to be lower because these carriers would be aware of the consequences
of failing to comply with the regulations.

VIII. Implementation of and Transition to Final Rule

A. Proposed MCSAP Requirements

    FMCSA proposes one revision to the conditions required for the
Agency to provide funds under its MCSAP grant program. FMCSA proposes
to amend existing 49 CFR 350.201(a) to add the phrase ``by enforcing
orders on commercial motor vehicle safety and HM transportation
safety.'' This change would make it clear that States receiving MCSAP
grants would be expected to enforce various orders issued by FMCSA, for
example, motor carrier out-of-service orders entered by FMCSA under 49
CFR 385.13, 386.72, 386.73, 386.83, or similar provisions. This
provision would assist the stopping of vehicles at the roadside when
they are operated by motor carriers that disregarded such out-of-
service orders, thereby preventing them from continuing to operate CMVs
on the Nation's highways. FMCSA notes that for-hire carriers determined
to be unfit will have their operating authority revoked. Therefore,
each of the company's vehicles are currently required to be placed out
of service during a roadside inspection.
    For this population of unfit carriers, the proposed change to the
MCSAP rules would impose no additional burden on the States. However,
for private motor carriers and exempt for-hire carriers, some States
may need legislative or regulatory action to enable their roadside
inspectors to place CMVs operated by these carriers out of service. The
States would have 3 years from the effective date of the final rule to
accomplish these legislative or regulatory actions. FMCSA specifically
seeks comments on the impacts to the States from these changes and
requests information on implementation impacts that should be
considered in finalizing this rule.

B. Implementation of a Final Rule and Transition Provisions

    FMCSA proposes to begin applying the proposed methodology to all
motor carriers registered with the Agency on the effective date of the
final rule. FMCSA proposes that the final rule be effective 90 days
after publication. As a result, the proposed unfit SFDs would result
from failed BASICs resulting from the monthly update of inspection data
or from an investigation initiated on or after the 91st day after
publication of the final rule.
    FMCSA seeks comments on how the Agency might phase in the
implementation of the final rule to lessen the initial burden on the
motor carrier industry, the Agency, and its enforcement partners.
    FMCSA also proposes procedures for carriers that receive a
notification of safety rating and fitness determination under the
current provisions of 49 CFR 385.11 in the period before this proposed
rule is issued as a final rule and becomes effective. Proceedings
regarding fitness determinations for such carriers, including
administrative reviews under 49 CFR 385.15 and corrective action plans
under 49 CFR 385.17, would continue to be handled under the provisions
in existence when the proceeding was initiated until those proceedings
are completed.

C. General Statements of Enforcement Policy Regarding Violation
Severity Weights and Time Weights

    The explanation of the SFD methodologies are contained in proposed
appendix B to part 385. Although most elements of appendix B are
proposed as regulations, FMCSA proposes to issue certain other elements
of appendix B as guidance for regulated entities and the public in the
form of general statements of enforcement policy. Such statements would
be included as part of the text of appendix B and published in the
Federal Register (and the Code of Federal Regulations), but they would
be designated in the final rule as general statements of enforcement
policy.
    The elements of the proposed SFD methodology that would be treated
as statements of enforcement policy in appendix B to part 385 would
include the following:
    1. Violation Severity Weights in Tables 1 to 5 in section 5 of
appendix B to part 385; and
    2. Time Weights for violations in BASICs in section 2.3.2 of
appendix B to part 385.
    Safety-based violations documented through inspections and
associated with each BASIC are assigned severity weights. The stronger
the relationship between a violation and crash risk, the higher its
assigned weight. The Agency based these weights on the ``Carrier Safety
Measurement System (CSMS) Violation Severity Weights'' \79\ study
(December 2010) that quantifies the associations between violation and
crash risk. FMCSA adds additional weight for violations that result in
a driver or vehicle being placed OOS. This study details how the Agency
assigns the violation severity weights.
---------------------------------------------------------------------------

    \79\ John A. Volpe National Transportation Systems Center,
``Carrier Safety Measurement System (CSMS) Violation Severity
Weights,'' December 2010.
---------------------------------------------------------------------------

    Publication of the severity and time weights as guidance would
advise affected persons and the public of the details of the
methodology that the Agency expects to follow. At the same time, it
would allow the Agency the flexibility to modify these minor technical
elements of the proposed methodology, as needed, based on experience
and additional data.
    Future revisions or adjustments of these elements would be
published in the Federal Register, together with an explanation of the
basis for the changes. They would not be operative until such
publication occurred. If appropriate, public comment would be sought on
possible changes in the guidance

elements before final publication and implementation.
    As explained earlier in this preamble, American Trucking
Associations, Inc. v. U.S. DOT \80\ and other judicial decisions
recognize that agencies are to be afforded some deference in
determining the level of specificity called for in regulation and
related interpretive guidance. Publishing some elements of the SFD
methodology as guidance is similar to procedures used in other aspects
of the Agency's safety regulations. Adjustments to the severity and
time weights would be similar, for example, to the adjustments in the
threshold crash rates and out-of-service rates for determining when a
motor carrier can be issued a Hazardous Materials Safety Permit.\81\ If
the Agency decides to treat any elements of the proposed methodology as
guidance, the final rule will clearly identify those elements, publish
them with the final rule, and indicate that they are subject to change
in accordance with the procedure outlined above.
---------------------------------------------------------------------------

    \80\ 166 F.3d 374 (D.C. Cir. 1999).
    \81\ 49 CFR 385.407 and Change to FMCSA Policy on Calculating
and Publicizing the Driver, Vehicle, and Hazardous Materials Out-of-
Service Rates and Crash Rates, 77 FR 38215 (June 27, 2012).
---------------------------------------------------------------------------

IX. Section-by-Section Description of Proposed Rule

    To implement the proposed SFD methodology, FMCSA would amend parts
350, 365, 385, 386, 387, and 395. The primary changes would be in
subpart A (Sec. Sec.  385.1 through 385.21) and appendix B to part 385.
Most regulatory changes are to the terms used in the proposed new
methodology. FMCSA proposes to make conforming changes in all the
places where the terms ``satisfactory,'' ``conditional,''
``unsatisfactory,'' ``less than satisfactory,'' and ``rating'' occur.
These include subparts B, D, E, F, H, and I in part 385, as well as
part 350, part 365, appendix B to part 386, subparts A and C of part
387, and part 395.

A. Part 350

    FMCSA proposes to amend existing 49 CFR 350.201 to add the phrase
``by enforcing FMCSA orders on commercial motor vehicle safety and
hazardous materials transportation safety and by'' in paragraph (a).
This provision would make it clear that States receiving MCSAP grants
would be expected to enforce various orders issued by FMCSA, for
example, motor carrier out-of-service orders and Orders to Cease
Operations entered by FMCSA under 49 CFR 385.13, 385.325, 386.72,
386.73, 386.83, or similar provisions for for-hire and private motor
carriers. This provision would assist FMCSA in stopping vehicles at the
roadside that are operated by motor carriers that disregard such out-
of-service orders, and would prevent them from continuing to operate
CMVs on the Nation's highways.

B. Part 365

    FMCSA proposes to revise Sec. Sec.  365.109(a)(3) and 365.507(f) to
make the language consistent with the proposed new methodology.

C. Part 385

Section 385.1 Purpose and Scope
    Conforming amendments would be made to paragraph (a) of this
section, to delete references to ``safety ratings'' and
``unsatisfactory.'' Current text directing motor carriers to take
remedial action when required, and prohibiting motor carriers
determined to be unfit from operating a CMV, would remain.
Section 385.3 Definitions and Acronyms
    Roughly half of the definitions in Sec.  385.3 would remain
substantially the same. However, definitions for the terms ``Reviews''
and ``Safety rating or rating'' (including all four subsidiary
definitions) would be removed. Definitions of the terms ``Acute
regulation,'' ``Assistant Administrator,'' ``Behavior Analysis and
Safety Improvement Category,'' ``Compliance review,'' ``Comprehensive
investigation,'' ``Crash,'' ``Critical regulation,'' ``Failure
standard,'' ``Field Administrator,'' ``Inspection,'' ``Intervention,''
``Investigation,'' ``Measure,'' ``Operating authority registration,''
``Performance standard,'' ``Registration,'' ``Roadability review,''
``Safety audit,'' ``Safety event group,'' ``Safety management
controls,'' ``Safety registration,'' and ``Unfit'' would replace the
deleted terms with language to reflect the new SFD terminology and
procedures. The new definition of ``Compliance review'' is much shorter
than the definition under ``Reviews . . . (1) Compliance review'' that
is being removed. The current version has extraneous information, such
as when such a review may be done and what a possible outcome could be,
which is not directly relevant to defining what the term means. The
substantive definition of ``Preventable accident'' would not change,
but the term itself would be changed by replacing the word ``accident''
with the word ``crash.'' FMCSA uses the terms ``crash'' and
``accident'' interchangeably, but prefers the term ``crash.''
Section 385.5 Safety Fitness Standard
    The section would be revised to add a new paragraph (a) to reflect
the inclusion of the alcohol and controlled substances testing
requirements in 49 CFR parts 40 and 382. Current paragraphs (a) through
(k) would be redesignated as (b) through (l). In addition, in the
second sentence of the undesignated introductory paragraph of this
section, the words ``To meet the safety fitness standard'' would be
replaced by ``To avoid a safety fitness determination of unfit.''
Section 385.7 Factors To Be Considered in Making a Safety Fitness
Determination
    This section would be revised to add the main data elements of the
proposed methodology. The proposed changes to this section would
specifically include, in the factors to be considered in the SFD
process, information obtained from driver/vehicle inspections, crashes,
or investigations. The title of Sec.  385.7 would be changed by
replacing the words ``determining a safety rating'' with the words
``making a safety fitness determination,'' so that the title would read
``Factors to be considered in making a safety fitness determination.''
    In the first sentence of the undesignated introductory paragraph,
all the words after ``The factors to be considered . . .'' would be
removed and replaced with language stating that the factors to be
considered during a safety fitness determination may include
information from operations in the United States, Canada, and Mexico
from driver/vehicle inspections, an examination of the carrier's
records during investigations, or crash data. FMCSA would also remove
the term ``safety review'' because it is obsolete.
    Paragraph (a) would be changed by replacing the word ``accidents''
with the word ``crashes.'' As was stated in the analysis for Sec.
385.3, FMCSA uses the terms ``crash'' and ``accident'' interchangeably,
but prefers the use of the term ``crash.'' Paragraphs (b), (c), (d) and
(e) would be revised to set out the different sources of data and the
factors considered in the new methodology. In addition, the word
``accident'' would be replaced with ``crash.'' Existing paragraph (g)
would be redesignated as new paragraph (f). In redesignated paragraph
(f), the term ``hazardous material,'' would be added between the words
``CMV'' and ``and motor carrier safety rules.'' A new paragraph (g)
would be added to provide for the admissibility as evidence in safety
fitness proceedings inspection reports

and data contained in FMCSA's data systems.
Section 385.8 Service and Filing of Documents
    A new section 385.8 is proposed to be added to provide specific and
clear rules governing the filing and service of documents in safety
fitness proceedings.
Section 385.9 Determining a Carrier's Safety Fitness
    The title of Sec.  385.9 would be changed to read ``Determining a
carrier's safety fitness.''
    Paragraph (a) would be revised to describe the new methodology in
proposed new appendix B to part 385. The proposed appendix describes in
detail the methodology and the standards for determining a carrier's
fitness.
    Existing paragraph (b) would be redesignated as new paragraph (d)
and everything after the phrase ``Unless otherwise specifically
provided in this part, a'' would be changed to state that safety
fitness determination based upon an investigation of a carrier's safety
management controls in accordance with the standard set forth in Sec.
385.5(a) will be issued as soon as practicable. A new paragraph (b)
would be added to clarify that a motor carrier's SFD will be based on
data received through the date of the proposed SFD under Sec.
385.11(c).
    A new paragraph (c) would be added to clarify that the motor
carrier's status as unfit would not change during the administrative
review process under either Sec.  385.15 or Sec.  385.16, or a review
of a request under Sec.  385.18. This new paragraph utilizes a
provision moved from current Sec.  385.17(j) with revisions for
clarification.
Section 385.11 Notification of Unfit Safety Fitness Determination
    Throughout this section, including the heading, changes are made to
conform the language to the proposed methodology. In paragraph (a), the
words ``safety rating resulting from a compliance review'' and ``the
review'' would both be replaced by the words ``unfit safety fitness
determination.'' Also, FMCSA is replacing the phrase ``FMCSA's
headquarters office'' in the last sentence of paragraph (a) with the
word ``FMCSA''. This change would allow the Agency to issue the
proposed unfit SFD notice from other FMCSA offices that may be closer
to the subject motor carrier or may allow the Agency to realize savings
for labor and production costs or contracted services in markets other
than Washington, DC Provisions would be added governing service of the
notice of proposed unfit SFD on representatives of the carrier in
accordance with new Sec.  385.8.
    Existing paragraph (b) would be removed because it would no longer
be applicable to this proposed rule.
    Existing paragraphs (c) through (e) would be redesignated as new
paragraphs (b) through (d) with appropriate terminology changes in each
paragraph. A new paragraph (e) would be added to alert a motor carrier
that it may request FMCSA to perform an administrative review of a
proposed or final unfit SFD based upon a claim of unconsidered
inspection data as described in proposed new Sec.  385.16.
    Existing paragraph (f) would be amended to include appropriate
terminology changes to reflect the use of compliance agreements instead
of corrective action plans to defer the entry of a final unfit SFD.
    A new paragraph (g) would be added to alert a motor carrier of the
process set out in new Sec.  385.18 for applying to resume operations
after an SFD has become final.
Section 385.12 Revocation Procedures for Unfit Safety Fitness
Determinations
    A new Sec.  385.12 would provide that issuance of proposed safety
fitness determination would also serve as notice to the carrier that
its registration would be revoked if the fitness determination becomes
final.
Section 385.13 Unfit Motor Carriers: Prohibition on Transportation;
Ineligibility for Federal Contracts
    Most of the changes we are proposing in this section are conforming
amendments to reflect the nomenclature of the proposed methodology. For
example, the words ``unsatisfactory safety rating'' would be replaced
throughout with ``unfit safety fitness determination.'' Paragraph
(a)(2) would be amended by removing the last sentence that allows a
motor carrier to operate for up to 60 additional days if FMCSA
determines that the motor carrier is making a good-faith effort to
improve its safety fitness. Although this provision is allowed by
statute,\82\ in the interest of safety FMCSA disfavors such extensions,
and the Agency is therefore not expressly restating the permissive
language in the proposed regulation.
---------------------------------------------------------------------------

    \82\ 49 U.S.C. 31144(c)(4).
---------------------------------------------------------------------------

    Paragraph (b) would consolidate the existing provisions of
paragraphs (b) and (c) prohibiting a Federal agency from using any
motor carrier receiving a final unfit determination.
    The date the out-of-service order issued under paragraph (d)
becomes effective would be the date that the SFD becomes final under
paragraph (a). FMCSA seeks comment on this approach. Provisions would
also be in revised paragraph (e) to allow for revocation of safety
registration and any operating authority registration for any motor
carrier receiving a final unfit determination.
Section 385.15 Administrative Review--Material Error
    This section is largely based on current administrative review
provisions, with some revisions and additions. First, in several
paragraphs, the terms ``safety rating'' or ``rating'' would be replaced
by the term ``safety fitness determination,'' and the word
``unsatisfactory'' would be replaced with ``unfit.'' The title
``Assistant Administrator'' would be substituted for ``Chief Safety
Officer.'' While Assistant Administrator and Chief Safety Officer are
titles for the same position within FMCSA, the change in terminology is
made for consistency with the administrative review provisions of 49
CFR part 386.
    A new paragraph (b) would specify the minimum requirements for the
contents of the petition. New provisions would be added to paragraph
(c) to require that the original petition for administrative review be
served on the appropriate Field Administrator (which would be the
official filing). Copies of the petition for administrative review
would also be required to be served both on: (1) Adjudications Counsel
for the Assistant Administrator; and (2) with the Agency through the
U.S. Department of Transportation, Docket Services. Paragraph (c) also
provides the time limits within which a motor carrier must petition for
administrative review.
    A new paragraph (d) provides the Field Administrator with an
opportunity to respond to the petition for administrative review.
    Paragraph (e) would allow the Assistant Administrator to ask the
motor carrier or the Field Administrator for more information or to
attend a conference. If the motor carrier did not provide the
information, the Assistant Administrator could dismiss the request for
review.
    Paragraph (f) would establish the time for a decision by FMCSA on
the request for review and provide time frames within which FMCSA would
complete its review as soon as practicable.
    Paragraph (g) would provide for a standard of review that places
the burden on the motor carrier to show material error. It also
provides a definition of what constitutes material error for the
purpose of such review.

    Proposed paragraph (h) provides that the Assistant Administrator
makes the final and conclusive decision as to the compliance and
inspection data underlying the SFD. It also establishes that in
subsequent administrative reviews the Assistant Administrator will not
re-review factual matters decided in a prior administrative review.
    Proposed paragraph (i) provides that a decision by the Assistant
Administrator constitutes final Agency action unless reconsideration is
requested.
    Proposed paragraph (j) provides the procedures for either the motor
carrier or the Field Administrator to petition the Assistant
Administrator for reconsideration of a decision. However, the petition
does not stay the imposition of a final SFD unless a stay is granted by
the Assistant Administrator pursuant to new paragraph (k).
Section 385.16 Request for Review Claiming Unconsidered Inspection Data
    Proposed paragraph (a) would provide that a motor carrier may file
a request for FMCSA to conduct an administrative review of a proposed
unfit SFD because of unconsidered, valid data from an inspection that
occurred before the proposed determination. The request would be based
on a motor carrier's determination of an FMCSA failure to include
inspection data which, if included, would have resulted in a different
SFD.
    Proposed paragraph (b) would provide that the motor carrier must
file its request for administrative review in writing and serve it on
the appropriate Field Administrator.
    Proposed paragraph (c) would provide that the motor carrier's
request for an administrative review of a proposed SFD with
unconsidered inspection data must include specific information to be
considered a valid request.
    Proposed paragraph (d) would provide that such a request must be
filed no later than the 10th day after the issuance of the proposed
unfit.
    Proposed Paragraph (e) would provide that FMCSA would issue a
decision and notify the carrier within 10 days after receiving a
request from an HM or passenger motor carrier that has received a
proposed unfit SFD, and within 20 days after receiving a request from
any other motor carrier.
    Proposed Paragraph (f) would provide the standard of review of the
submitted unconsidered inspection data. The burden of proof would be on
the motor carrier to demonstrate that FMCSA did not include all
inspection report data.
    Proposed paragraph (g) would provide that the decision of the Field
Administrator would constitute final Agency action, and no additional
request for administrative review by FMCSA would be available.
Paragraph (h) would provide that a stay of the final SFD could be
requested from and granted by the Field Administrator.
Section 385.17 Request To Defer Final Unfit Safety Fitness
Determination and Operate Under a Compliance Agreement
    This section is based on the current provisions of Sec.  385.17,
with significant revisions, primarily to include the use of compliance
agreements between FMCSA and the motor carrier to defer a final unfit
determination. Throughout the section, the language would be changed to
conform to the proposed SFD methodology. In several places, the term
``safety rating'' or ``rating'' would be replaced by the term ``safety
fitness determination.'' FMCSA would also replace the word
``unsatisfactory'' with ``unfit,'' wherever it occurs. In paragraph
(a), the Agency would also remove the term ``conditional.''
    Existing paragraph (b) would be revised to require service of the
request on the appropriate Field Administrator in accordance with
proposed new Sec.  385.8. Existing paragraph (c) would be expanded to
address the documentation a motor carrier must submit to show that it
has taken appropriate corrective action. Paragraph (d) would set the
time for submission of a request for deferral and to operate under a
compliance agreement. Failure to submit a timely request for deferral
and to continue to operate under a compliance agreement would waive any
opportunity to seek such administrative relief.
    Existing paragraphs (e) through (j) would be removed and replaced
with new paragraphs that would establish the procedures and standards
for operating under a compliance agreement, as well as providing for
the appropriate outcomes if the carrier either complies with or does
not comply with the terms of the compliance agreement. Paragraph (f)
provides that the Field Administrator's actions either deferring a
final SFD or declining to enter into a compliance agreement would not
be subject to administrative review, except in certain limited
circumstances involving an abuse of discretion, as specified in
paragraph (j).
Section 385.18 Resuming Operations After a Final Unfit Determination
    A new Sec.  385.18 would be added to describe the procedures a
motor carrier would follow to resume interstate and intrastate motor
carrier operations following an unfit SFD. In paragraph (a), FMCSA
would require a motor carrier that has received a final unfit SFD and
wants to begin operating again to demonstrate why it should no longer
be considered unfit. The carrier would also need to have received
reactivated safety registration and, if required, new operating
authority registration. The procedures in this section may be revised
in the final rule in order to coordinate with any changes proposed or
adopted for the Agency's ``MAP-21 Enhancements and Other Updates to the
Unified Registration System,'' Regulatory Identification Number 2126-
AB56.
    Paragraph (b) would inform the unfit motor carrier that it must
submit a corrective action plan (CAP) consistent with Sec.  385.17(c)
along with its applications for safety and operating authority
registration. The corrective action plan must describe the actions the
motor carrier is taking to resolve its safety deficiencies.
    Paragraph (c) would provide that the corrective action plan
submitted by the unfit motor carrier must be acceptable to FMCSA, and
the carrier and the Agency would have to enter into a compliance
agreement that conforms to Sec.  385.17(c) and (e) before new
registration could be issued.
    Paragraph (d) would inform the motor carrier that it may not resume
operations until it is notified that it has been granted registration
and its USDOT number is active.
Section 385.19 Availability of Safety Fitness Determinations
    The heading of Sec.  385.19 would be revised to read,
``Availability of safety fitness determinations.'' In paragraph (a),
the word ``ratings'' would be replaced by ``fitness determinations.''
FMCSA would also replace the outdated phrase ``by remote'' with the
phrase ``on the Internet available through'' to inform the public that
final SFDs will be available on the Agency's Web site.
    Paragraph (b) would change the method the Agency would use to make
final SFDs and would make information about carriers operating under a
compliance agreement available to the public.
Section 385.21 Transition Provisions
    A new Sec.  385.21 would be added containing transition provisions
that would govern the status of motor carriers that have been issued a
final determination of unfit on the basis of an unsatisfactory safety
rating under the current procedures. In addition, paragraph (b)
contains proposed procedures for carriers that receive a notification
of safety rating and fitness determination under the current provisions
of 49 CFR 385.11 in the

period immediately before these proposed rules would go into effect.
Subpart B (Sec. Sec.  385.101-385.117)--Safety Monitoring for Mexico-
Domiciled Carriers
    FMCSA proposes several conforming amendments to 49 CFR part 385,
subpart B, Safety Monitoring System for Mexico-Domiciled Carriers, in
light of the proposed changes to the general safety fitness procedures.
FMCSA proposes to make conforming amendments to Sec. Sec.  385.101,
385.105, 385.109, and 385.117.
    Currently, Mexico-domiciled carriers seeking permanent operating
authority to operate beyond the municipalities and commercial zones on
the United States-Mexico border must fulfill certain statutory
requirements, including obtaining a satisfactory safety rating after a
compliance review under 49 CFR part 385. This proposal, however, would
change the number of fitness categories from three to one--``unfit.''
As proposed, a carrier that is not determined to be unfit would have an
acceptable degree of safety fitness and would not be prohibited from
operating in commerce.\83\ Therefore, for the purposes of the
requirements of section 350 of the 2002 Department of Transportation
Appropriations Act, and subsequent appropriations,\84\ a comprehensive
investigation resulting in a determination that a Mexico-domiciled
motor carrier seeking permanent operating authority is not unfit would
be equivalent to a compliance review and finding that the carrier has
received a satisfactory rating.
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    \83\ 49 U.S.C. 31144(c).
    \84\ See sec. 350(a)(2) of the Department of Transportation and
Related Agencies Appropriations Act, 2002, Pub. L. 107-87, 115 Stat.
833, 864-865, December 18, 2001, 49 U.S.C. 13902 note.
---------------------------------------------------------------------------

    For several reasons, FMCSA believes that the proposed SFD process
for long-haul Mexican carriers would be sufficiently stringent to
satisfy Congress's intent that carriers possess a satisfactory degree
of safety. First, a Mexico-domiciled carrier must satisfactorily
complete the FMCSA-administered Pre-Authorization Safety Audit (PASA)
required under 49 CFR part 365, to ensure the existence of sound
management programs, including compliance with controlled substances,
alcohol, and hours-of service regulations, before it is granted
provisional authority to operate in the United States. Second, the
proposed methodology in Appendix B is more stringent than the current
methodology for determining safety fitness, and this proposal for
conforming changes ensures continued stringent and comparable oversight
of long-haul Mexican carriers. As a result of this proposal, Mexican
carriers could be proposed unfit based on on-road safety data, or an
investigation, or a combination of these two sources of data. Under 49
CFR 385.119, Mexico-domiciled motor carriers are subject to the safety
monitoring system in part 385, subpart B. They are also subject to the
general safety fitness procedures established in subpart A of part 385
and to compliance and enforcement procedures applicable to all carriers
regulated by the FMCSA.
Subpart C (Sec. Sec.  385.201-385.205)--Certification of Safety
Auditors, Safety Investigators, and Safety Inspectors
    FMCSA proposes conforming amendments to 49 CFR part 385, subpart C,
Certification of Safety Auditors, Safety Investigators, and Safety
Inspectors. In light of the proposed addition of the term
``investigation'' in relation to the types of interventions that may
result in an unfit SFD, FMCSA would amend Sec. Sec.  385.201 and
385.203.
    Currently, an FMCSA employee, or a State or local government
employee funded through the MCSAP, must be certified to perform a
compliance review, safety audit, roadability review, or roadside
inspection.\85\ Certified FMCSA, State, and local government employees
must obtain and maintain certification through quality-control and
periodic re-training requirements adopted by FMCSA in 2002 to ensure
the maintenance of high standards and familiarity with amendments to
the FMCSRs and HMRs.\86\
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    \85\ Section 211 of the Motor Carrier Safety Improvement Act of
1999 (MCSIA) (Pub. L. 106-159), 113 Stat. 1765, Dec. 9, 1999,
codified at 49 U.S.C. 31148. Section 211 of the MCSIA required the
Secretary of Transportation to improve training and provide for the
certification of motor carrier safety auditors, investigators, and
inspectors to conduct safety inspection audits and reviews. The
legislation also gave the Secretary oversight responsibility for the
motor carrier auditors and investigators it certifies, including the
authority to decertify them.
    \86\ 67 FR 12776, March 19, 2002, as amended at 72 FR 55701,
Oct. 1, 2007; 73 FR 76819, Dec. 17, 2008.
---------------------------------------------------------------------------

    The proposed SFD relies to a much greater extent on on-road safety
data and investigations, regardless of whether the investigations are
done offsite, onsite, or are focused or comprehensive. Because this
proposal would replace the term ``compliance review'' in many places
throughout the FMCSRs, FMCSA needs to add ``investigation'' to the
types of interventions for which FMCSA, State, and local government
employees must obtain and maintain certification as required by
statute.
    FMCSA proposes to add the phrase ``an investigation'' before the
phrase ``a compliance review'' wherever it appears in Sec. Sec.
385.201 and 385.203. This proposal would require that any FMCSA, State,
or local government employee who performs any review of a motor
carrier's operations to determine compliance with the appropriate
regulations (i.e., the FMCSRs and HMRs as defined in 49 CFR 385.3) be
certified as required by 49 U.S.C. 31148.
Section 385.307--What happens after a motor carrier begins operations
as a new entrant?
    FMCSA would modify the New Entrant Safety Assurance Program by
adding a new paragraph (a) to Sec.  385.307 and redesignating current
paragraphs (a), (b), and (c) as paragraphs (b), (c), and (d). This
proposed new paragraph (a) would adopt provisions similar to Sec. Sec.
385.119 and 385.717 on the continuing applicability of safety fitness
and enforcement procedures. FMCSA proposes to add this provision to
ensure that each new entrant is aware that during the monitoring period
under the New Entrant Safety Assurance Program, these new entrants are
subject to:
    (1) The general safety fitness procedures established in subpart A
of part 385 and any final rule modifying subpart A; and
    (2) Compliance and enforcement procedures applicable to all
carriers regulated by FMCSA.
Part 385, Subpart E (Sections 385.407, 385.409, 385.413, 385.421, and
385.423)--HM Safety Permits
    FMCSA proposes conforming amendments to 49 CFR part 385, subpart E,
HM Safety Permits. Sections 385.407, 385.409, 385.413, 385.421, and
385.423 would all be changed to reflect changes in the language and
procedures for the SFD methodology proposed in this rulemaking.
Section 385.503 Results of Roadability Review
    In Sec.  385.503(a), FMCSA proposes to delete the term ``safety
rating'' and replace it with the term ``safety fitness determination,''
to conform the language to the proposed SFD methodology.
Part 385 subparts H (Sec.  385.607) and I (Sec. Sec.  385.701, 385.707,
385.709, 385.711, 385.713, and 385.715)--Non-North America-Domiciled
Carriers
    FMCSA proposes conforming and nomenclature changes to the Non-North
America-domiciled carrier provisions,

part 385, subparts H (Sec.  385.607) and I (Sec. Sec.  385.701,
385.707, 385.709, 385.711, 385.713, and 385.715). These changes are
largely parallel to the changes to all other motor carriers, explained
above.
Appendix B to Part 385 Explanation of Safety Fitness Determination
Methodology
    Because appendix B to part 385 would set out all of the proposed
SFD methodology, it would be considerably changed. FMCSA would replace
certain terms in the headings and body of appendix B consistent with
the changes discussed above for other sections of part 385. Current
terms would be replaced with new terms, including ``safety fitness
determination'' and ``unfit.'' The codification system for the appendix
would be changed to make it easier to reference and amend, and the
introductory paragraphs would be considerably revised.
Five Proposed New Sections
    Proposed section 1, Safety Fitness Determination (SFD) Background,
would serve as a roadmap for appendix B. It incorporates the sense of
what is currently in introductory paragraphs (a), (b), and (c) of
existing appendix B, much changed to reflect the proposed new
methodology. Existing paragraphs (d), (e), and (f) would be removed.
    Proposed section 2, Role of BASICs in the SFD Process, describes
the BASICs, their data sources and the process for determining a failed
BASIC. Under section 2.4, SFD BASIC Failure Standards, sections 2.4.1
through 2.4.7 describe the mechanics for determining the severity for
each applicable BASIC violation. They provide tables of failure
standards, where appropriate, and descriptions of applicable
violations. Tables 2-1 through 2-8 of proposed section 2 show the
proposed SFD BASIC failure standards. The proposed failure standards
are equivalent to the measures that would place a motor carrier at the
96th percentile for the Unsafe Driving and HOS Compliance BASICs and
the 99th percentile for the Driver Fitness, Vehicle Maintenance, and
Hazardous Materials (HM) Compliance BASICs for each safety-event group
on the day the requirements are established when the final rule is
published.
    Proposed section 3, Investigation Results in the SFD Process,
describes the violations that the Agency would use to determine safety
fitness for each motor carrier. The proposed critical violations are
listed in Table 3-1 of proposed section 3. The proposed acute
violations are listed in Table 3-2. The standards and procedures for
assessing a carrier's crash experience for safety fitness purposes are
described in section 3.3 of appendix B.
    Proposed section 4, SFD Methodology, describes the proposed
methodology, including the criteria for a carrier receiving an unfit
determination. Section 4 provides an example of a proposed SFD
worksheet, and it also gives several examples of how SFDs could be
calculated for sample motor carriers.
    Proposed section 5, Appendix B Violation Severity Tables, contains
five tables that describe violations and the applicable severity
weightings for the five BASICs that use such weights as part of the
determination of safety performance under SMS. They are:

 Table 1 Unsafe Driving BASIC Violations
 Table 2 HOS Compliance BASIC Violations
 Table 3 Driver Fitness BASIC Violations
 Table 4 Vehicle Maintenance BASIC Violations
 Table 5 Hazardous Materials Compliance BASIC Violations

    FMCSA is considering the use of low, medium, and high weightings
rather than the numeric weightings currently used in SMS and
specifically seeks comments on this issue.
Certain Portable and Cargo Tank Citations in Table 5
    In Table 5 of the violation severity tables, HM Compliance BASIC
Violations, 43 violations of 49 CFR part 178 have been marked with a
(\1\) or a (\2\) to indicate their dates of publication in the Code of
Federal Regulations.\87\ These 43 violations are HM portable tank and
cargo tank specification packages that PHMSA allows motor carriers to
continue to use if the HM tanks are maintained properly in accordance
with applicable regulations.\88\
---------------------------------------------------------------------------

    \87\ Violation citations from previous editions of 49 CFR part
78 marked with a (\1\) may also be found at 29 FR 18652 (December
29, 1964) and those violation citations marked with a (\2\) may also
be found at 32 FR 3452 (March 2, 1967).
    \88\ See 49 CFR 180.405, Qualification of cargo tanks, and
180.603, Qualification of portable tanks. PHMSA, however, forbids
manufacturers from building these as new specification cargo and
portable tanks after certain dates in 1967, 1990, 1993, and 2005.
Because these HM packages are still in use by motor carriers in
commerce, FMCSA regularly finds and cites these violations of the
old design specification regulations that were in effect before
PHMSA and its predecessors removed the regulations from the annual
CFRs.
---------------------------------------------------------------------------

    The applicable regulations for MC 330 compressed gas cargo tanks
are referenced in Table 5 with a (\1\). Current PHMSA regulations \89\
authorize continued use of specification MC 330 cargo tanks if the
tanks are maintained according to the applicable cargo tank testing and
inspection regulations.\90\
---------------------------------------------------------------------------

    \89\ See 49 CFR 173.240(b), 173.241(b), 173.242(b), 173.243(b),
173.244(b), 173.247(b), 173.315(a)(2), 180.405, and 180.603 of the
October 1, 2010, edition of the CFRs.
    \90\ See 49 CFR 180.407, Requirements for test and inspection of
specification cargo tanks.
---------------------------------------------------------------------------

    The applicable regulations for DOT 51, 56, and 57, and IM 101 and
102, portable tanks are also referenced in Table 5 with a (\1\). DOT
51, 56, and 57, and IM 101 and 102 portable tanks may continue to be
used in commerce, if the tanks are maintained according to the
applicable portable tank testing and inspection regulations.\91\
---------------------------------------------------------------------------

    \91\ See 49 CFR 180.605, Requirements for periodic testing,
inspection and repair of portable tanks.
---------------------------------------------------------------------------

    The applicable regulations for MC 306, 307, and 312 concerning
cargo tanks are referenced in Table 5 with a (\2\). Current PHMSA
regulations \92\ authorize continued use of specification MC 306, 307,
and 312 cargo tanks if the tanks are maintained according to the
applicable cargo tank testing and inspection regulations.\93\
---------------------------------------------------------------------------

    \92\ See Sec. Sec.  173.33, 173.240, 173.241, 173.242, and
173.247 for authorized DOT 51, 56, 57, and IM 101 and 102 portable
tanks and MC 306, 307, 312, and 330 cargo tanks that may be used in
commerce, but are no longer allowed to be constructed in the U.S.
    \93\ See 49 CFR 180.407, Requirements for test and inspection of
specification cargo tanks.
---------------------------------------------------------------------------

    FMCSA will make the applicable former rules for these HM
specification tanks, as well as the applicable ICC and DOT final rules
concerning these HM specification tanks, available on the FMCSA Web
site at www.fmcsa.dot.gov. These materials are also available through
Federal Depository Libraries.\94\ Anyone may visit a Federal depository
library and will have free access to all collections.
---------------------------------------------------------------------------

    \94\ See http://www.gpo.gov/libraries. Accessed on April 6,
2015.
---------------------------------------------------------------------------

D. Part 386

    Appendix B to part 386 would be changed to conform the language to
the new SFD methodology. Throughout paragraph (f), everywhere the
phrase ``final `unsatisfactory' safety rating'' appears it would be
replaced by the phrase ``final unfit safety fitness determination.''
    A new paragraph (j) would be added to describe the violations that
the Agency proposes to take into account for purposes of section 222 of
the Motor Carrier Safety Improvement Act of 1999, Public Law 106-159,
49 U.S.C. 521 note (``Minimum and Maximum Assessments'').\95\ Section
222 generally

requires that the Agency assess maximum civil penalties where it finds
that a person has either committed a pattern of violations of critical
or acute regulations or has previously committed the same or a related
violation of critical or acute regulations. The proposed list in new
paragraph (j) is different than the proposed lists of critical and
acute regulations found earlier in preamble Table 17 and in Tables 3-1
and 3-2 in proposed appendix B to part 385. The proposed list in
paragraph (j) is based on regulations currently designated as critical
and acute. The critical and acute regulations set forth in Tables 3-1
and 3-2 above include new regulations. The Agency seeks comment whether
these should be included for maximum civil penalty assessments under
section 222.
---------------------------------------------------------------------------

    \95\ See http://www.gpo.gov/fdsys/pkg/USCODE-2013-title49/pdf/USCODE-2013-title49-subtitleI-chap5-subchapII-sec521.pdf. Accessed
on April 6, 2015.
---------------------------------------------------------------------------

E. Part 387

    Sections 387.7 and 387.309 would be changed to reflect the proposed
new SFD determination methodology, removing references to the former
safety rating system.

F. Part 395

    Section 395.15 would be changed to reflect the proposed new SFD
determination methodology, removing references to the former safety
rating system.

X. Regulatory Analyses and Notices

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

    FMCSA has determined that this action is a significant regulatory
action within the meaning of Executive Order 12866, as supplemented by
Executive Order 13563, 76 FR 3821 (January 21, 2011), and within the
meaning of the Department of Transportation regulatory policies and
procedures, because the annualized net benefits are $231.1 million and
because of the level of public interest. Congress, industry, NTSB, and
safety advocates alike have significant interest in how FMCSA
determines the safety fitness of motor carriers. All of these groups
have expressed concerns over how the Agency currently determines the
safety fitness of motor carriers.
    The revised SFD would be used to identify and take action against
unfit motor carriers that have failed to implement and maintain
adequate safety management controls for achieving compliance with the
FMCSRs and HMRs. It would also evaluate the degree to which a motor
carrier complies with applicable regulations. The additional carriers
found unfit under the proposed rule may bear compliance costs to return
to compliance, which as discussed further in the separate Regulatory
Evaluation are not quantified at this stage of the rulemaking. FMCSA
expects that the proposed rule would also impose costs on drivers of
carriers ordered out-of-service, specifically, those drivers who would
have to search for new driving work. Nevertheless, the new SFD
methodology would involve more efficient and effective utilization of
currently available data and resources. The Agency's proposed approach
would ensure that only the worst performing motor carriers would be
issued a proposed unfit determination based solely on on-road safety
performance data, while striking a balance between the population
identified and the ability of enforcement resources to handle the
associated workload. The full Regulatory Evaluation is in the docket
for this rulemaking, and a brief summary is set out below.
    Under the proposed SFD methodology, every month a carrier's
performance would be compared to an absolute failure standard that
would be set in regulation based on each safety event group. Because
the absolute failure standard would not change from month to month,
changes in another company's performance would not impact the motor
carrier. The carrier's SFD measure reflects its own performance against
the failure standard, not other carriers' performance.
    The Agency considered options for failure standards based on
absolute measures. Using today's levels of safety performance across
all carriers in SMS, these measures would equate roughly to the 95th,
96th, 98th, and 99th percentiles for all carriers in SMS. In addition,
before failing the BASIC, the carrier would have to have 11 or more
inspections, each with 1 or more violations, for the previous 24-month
period. The proposed failure standards for each BASIC, as calculated by
analyzing inspections with violations, are presented in tables in the
NPRM. The Agency's preferred Option 2 proposes to use the absolute
failure standards that equate to the 99th percentile for the Driver
Fitness, Vehicle Maintenance, and HM Compliance BASICs. This failure
standard, which would be set in the final rule, is equivalent to SMS
percentile that defines the worst 1 percent of motor carriers with 11
or more inspections, each with 1 or more violations.
    The Regulatory Evaluation in the docket examines two options for
failure standards used to identify motor carriers for a proposed unfit
SFD. For Option 1, identification of unfit carriers under the proposed
process uses failure standards equivalent to the measures that would
place a motor carrier at the 95th percentile for the Unsafe Driving and
HOS Compliance BASICs and the 98th percentile for the Driver Fitness,
Vehicle Maintenance, HM Compliance, and Crash Indicator BASICs. For
Option 2 (the Agency's preferred option), these failure standards are
equivalent to measures based on the 96th and 99th percentiles,
respectively. For example, a carrier at the 96th percentile in the
Unsafe Driving BASIC has worse safety performance in that BASIC than 96
percent of carriers. Carriers that are identified at or above these
failure standards are proposed as unfit and then either placed OOS or
remain in service under a compliance agreement subject to approval by
FMCSA.
    Carriers that are identified at or above these failure standards
would be proposed as unfit and then would be either placed OOS or
remain in service under a compliance agreement subject to approval by
FMCSA. Motor carriers that remain in service but fail to significantly
improve their safety performance within a set period of time under the
compliance agreement--for example, those that fail to achieve an
appropriate level of compliance with the applicable regulations--would
be required to cease operations. That is, the initial proposed unfit
determination would be made final.
    Under this proposal's preferred Option 2--with the failure
performance standards at or above the 96th and 99th percentiles--the
proposed method identified 1,805 more poor-performing carriers than the
current SFD process, while the current SFD process identified 106
carriers that the proposed unfit SFD method would not, and 1,017
carriers were identified by both the current and proposed methods.
    Given that identification and the final unfit date remove a portion
of the poorly-performing carriers from active service while the
remainder improve their safety performance and remain in service, a
portion of the crashes of these carriers that takes place in the next
12 months (from the time of the final unfit) are thus prevented, and
comprise the annual benefits of the rule. The annual benefits of the
rule are net reductions in crashes that come from switching from the
current to the proposed process. The proposed process identifies
carriers that suffered an additional 41 fatal crashes (41 = 43-2), 508
injury crashes (508 = 526-18), and 872 tow-away crashes (872 = 887-15)
when compared with the current process. Table 19 below

presents a comparison of data between the effectiveness of the current
SFD and that proposed in this rulemaking.

                             Table 19--Annual Crash Reduction From Switch From Current to Proposed SFD for Option 2 (96/99)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Fatal        Injury      Tow-away
 Carriers identified as unfit under:          Relation           Carriers   Power units    Crashes     Crash rate    crashes      crashes      crashes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed SFD \A\....................  A......................        2,822       42,437        1,862         4.39           55          688        1,119
Current SFD \B\.....................  B......................        1,123       11,365          441         3.88           14          180          247
Both Current and Proposed SFD.......  C......................        1,017       10,123          406         4.01           12          162          232
Proposed SFD, But Not Current SFD...  A--C...................        1,805       32,314        1,456         4.51           43          526          887
Current SFD, But Not Proposed SFD...  B--C...................          106        1,242           35         2.82            2           18           15
Net Gain Attributable to Proposed     A--B...................        1,699       31,072        1,421         4.57           41          508          872
 SFD.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\A\ The ``proposed SFD'' category includes 1,017 of the 1,123 carriers identified under the current SFD. Therefore, the ``proposed SFD'' category is a
  hybrid of carriers that were proposed unfit that remained in operation by entering into compliance agreements and carriers that would have been
  proposed unfit if the proposed rule had been in effect during the period studied. Crash rates specific to the subset of carriers identified under the
  current SFD may reflect improvements in response to receipt of proposed unfit ratings.
\B\ The ``current SFD'' category consists solely of the 1,123 carriers that were proposed unfit under the current SFD and remained in operation by
  entering into compliance agreements. Crash rates specific to carriers identified under the current SFD may reflect improvements in response to receipt
  of proposed unfit ratings.

    In 2011, under the current process, 16.1 percent of identified
carriers were deemed unfit and ordered OOS upon completion of the SFD
process. Relatedly, a pending rating of unsatisfactory under the
current process equates such carriers with an SFD of ``proposed unfit''
under the proposed process. Given the performance comparison between
the current and proposed SFD-process-identified groups (as measured by
both having crash rates per 100 power units considerably greater than
the national average), it is assumed that 16.1 percent of the
additional carriers identified under the proposed SFD process will
ultimately be ordered out of service.
    The remaining 83.9 percent of carriers identified but not
ultimately shut down improve their safety-performance. These
improvements (specifically, those involving the net differential group
of carriers identified by the proposed process relative to the current
process) should be credited as benefits to the proposed process. The
Compliance Review Effectiveness Model (CREM) \96\ estimates the safety
improvement of carriers that receive a compliance review, in terms of
crashes avoided. For the four most recent years of analysis (since
measurement based on fiscal years (rather than calendar years) began in
2005), the estimated percentage reduction in the average crash rate due
to compliance reviews was 16.3 percent in 2005, 18.6 percent in 2006,
14.7 percent in 2007, and 19.9 percent in 2008.\97\ We assume that
issuing a proposed unfit SFD to a carrier identified under the proposed
process would result in performance improvement similar to that of a
compliance review. Given the year-to-year variability in the estimated
reduction from 2005-08, the Agency uses the four-year average for the
period of 17.4 percent. As such, the safety improvement percentages
estimated in the Compliance Review Effectiveness Model can be applied
to the crashes attributed to the 83.9 percent of carriers that were not
ordered out of service.
---------------------------------------------------------------------------

    \96\ Volpe National Transportation Center, ``FMCSA Safety
Program Effectiveness Measurement: Compliance Review Effectiveness
Model, Results for Carriers with Compliance Reviews in Fiscal Year
2008''.
    \97\ http://ai.fmcsa.dot.gov/PE/PEReport.aspx?rp=crNat accessed
on April 6, 2015.
---------------------------------------------------------------------------

    The CREM has several limitations that are common to transportation
safety research. For one, there is no pure control group, because FMCSA
does not have the option to not intervene with carriers it knows to be
unsafe. Workarounds for the lack of pure statistical control are
discussed in more detail in the CREM. The newer model, Carrier
Intervention Effectiveness Model (CIEM), which has been peer reviewed,
uses size group-specific comparison groups and measures the statistical
significance of the net improvement in crash rates of reviewed
carriers. While the two models' results are not directly comparable due
to their differing methodologies, their estimates of crash rate
reductions among reviewed carriers have similar orders of magnitude
across the carrier size groups.
    There is also the potential for ``regression to the mean'' to
obscure the true benefits of interventions. This phenomenon is a
possible statistical consequence of the rarity of crash events. It can
occur when an individual carrier experiences a period of high crash
rate; this is likely to be followed by a period of low crash rate,
regardless of interventions or changes in safety practices, simply due
to the infrequency of crash events.
    However, the low probability of a spike in crashes at any given
time makes it unlikely that ``regression to the mean'' is a substantial
contributor to the reduction in crash rate attributed by the CREM to
the compliance review process. Carriers that receive a compliance
review may not be in the midst of a crash spike. Carriers that have a
crash spike may not get a compliance review shortly after the spike.
This is because carriers are not primarily selected for compliance
reviews based on their current crash rate, but rather their overall
safety performance as assessed through roadside inspection and/or
investigation results. For ``regression to the mean'' to be a
substantial issue for this analysis, it would need to be the case that
carriers are being identified during a period of usually high crash
rate for that carrier. As the intervention process is implemented now,
if a carrier's crash rate drops after they receive a compliance review,
there is no reason to assume that drop is a correction to the carrier's
``actual'' mean crash rate as opposed to a response to FMCSA's
intervention.
    Next, consider that most of the services provided by the 16.1
percent of carriers that are ordered out of service are likely to be
shifted to new or existing carriers. This contrasts with a crash rate
of 4.51 crashes per 100 power units for those carriers identified under
the proposed process. This suggests the replacement of an identified
carrier with one from the carrier population in general would result in
a 52.8 percent improvement (0.528 = (4.51-2.13) / 4.51).\98\ The Agency
believes that the subset of carriers placed OOS would likely perform
worse than the total carrier group identified as unfit by the proposed
SFD, and therefore that the 52.8 percent improvement is a conservative
estimate for the gains in safety resulting from the replacement of

carriers ordered OOS with carriers of average overall safety
performance.
---------------------------------------------------------------------------

    \98\ The crash rate of the general carrier population (2.13 per
100 power units) was calculated on a consistent time frame as that
(4.51 per 100 power units) of the carriers identified under the
proposed process.
---------------------------------------------------------------------------

    In sum, the safety performance and thus the frequency of crashes
attributed to the 83.9 percent of carriers that were not ordered OOS
realize an improvement of 17.4 percent, and the safety performance and
thus the frequency of crashes attributed to the 16.1 percent of
carriers put OOS and replaced by an average carrier realize an
improvement of 52.8 percent.
    As stated above, the 41 fatal, 508 injury, and 872 tow-away crashes
(under Option 2) attributable to the additional carriers identified by
the proposed SFD process are where the benefits of the change are
realized. Assuming the final rule goes into effect in 2017, the carrier
population is assumed to increase at an annual rate of 2.17 percent,
and applying that rate to these crashes results in 45 fatal (44.68 = 41
x (1.0217\4\), 554 injury (553.55 = 508 x (1.0217\4\)), and 950 tow-
away crashes (950.19 = 872 x (1.0217\4\) in 2017.
    Allocating 83.9 percent of these crashes to carriers that improved
performance and were not ordered OOS results in 38 fatal, 465 injury,
and 797 tow-away crashes apportioned. Allocating the remaining 16.1
percent of crashes to carriers that were permanently put OOS, results
in 7 fatal, 89 injury, and 153 tow-away crashes apportioned. Given that
the carriers permanently placed OOS are believed by the Agency to have
worse safety performance than that of the carriers that improved,
proportioning the crashes by percentage results in a conservatively low
number of crashes assigned to those put out of service. Since the
carriers permanently placed OOS are replaced with ones realizing an
improvement of 52.8 percent, rather than 17.4 percent, assigning by
proportion results in a conservatively-low estimate of the overall
crash reduction of the rule.
    The 83.9 percent of carriers opting to make the necessary changes
to become compliant realize improvements of 17.4 percent. Given the
17.4 percent improvement, 7 fewer fatal crashes (6.6 = 17.4% of 38), 81
fewer injury crashes (80.9 = 17.4% of 465), and 139 fewer tow-away
crashes (138.7 = 17.4% of 797) occur. The 16.1 percent of carriers
placed permanently OOS are replaced with carriers realizing
improvements of 52.8 percent. Given the 52.8 percent improvement, 4
fewer fatal crashes (3.70 = 52.8% of 7), 47 fewer injury crashes (46.99
= 52.8% of 89), and 81 fewer tow-away crashes (80.78 = 52.8% of 153)
occur. So the total estimated crash reduction for 2017, the first year
of the rule, is 11 fewer fatal crashes (11 = 7 + 4), 128 fewer injury
crashes (128 = 81 + 47), and 220 fewer tow-away crashes (220 = 139 +
81). The same process applies for all subsequent years. The number of
carriers--and thus crashes--is increased by 2.17 percent from the
previous year; these crashes are allocated as described above to those
carriers put permanently OOS and those that opted to make the necessary
changes, and then the improvement rates of 52.8 percent and 17.4
percent are applied to the respective groups.
    The average cost of a fatal crash is estimated at $11,019,000 (in
2013 dollars), $10,885,000 of which is the monetized value of a
statistical life (VSL) component. The remaining $134,000 is comprised
of medical costs, emergency services, property damages, lost
productivity from roadway congestion, and environmental costs. It is
assumed that the VSL increases at a rate of 1.18 percent annually.\99\
By 2017 the VSL component (in 2013 dollars) increases from $10,885,000
to $11,408,000 ($11,408,000 = $10,885,000 x (1.0118\4\)). Together with
the remaining $134,000 in costs, the cost of a fatal crash in 2017 is
estimated to be $11,542,000 in 2013 dollars ($11,542,000 = $11,408,000
+ $134,000).
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    \99\ The real growth rate of the VSL is in keeping with DOT's
Office of the Secretary of Transportation guidance, available on the
web at http://www.dot.gov/sites/dot.gov/files/docs/VSL_Guidance_2014.pdf. This growth factor represents real growth in
the median hourly wage at a macroeconomic level and is not specific
to drivers or the motor carrier industry. While real median hourly
wages are projected to grow at 1.18% per year at a macroeconomic
level, this assumption does not apply to drivers, as the real median
hourly wage of drivers has declined or remained static in recent
years. Nevertheless, the Agency considered a sensitivity analysis
regarding real wage growth of drivers to demonstrate the costs of
this proposed rule in the event that drivers' wages grow at 1 or 2
percent per year.
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    The average cost of an injury crash is estimated at $453,000 (in
2013 dollars), $393,000 of which is the monetized VSL component. The
remaining $60,000 is comprised of medical costs, emergency services,
property damages, lost productivity from roadway congestion, and
environmental costs. By 2017, the VSL component (in 2013 dollars)
increases from $393,000 to $412,000 ($412,000 = $393,000 x
(1.0118\4\)). Together with the remaining $60,000 in costs, the cost of
a fatal crash in 2017 is estimated to be $472,000 in 2013 dollars
($472,000 = $412,000 + $60,000).
    The average cost of a tow-away crash is estimated at $72,000 (in
2013 dollars), $50,000 of which is the monetized VSL component. The
remaining $22,000 is comprised of medical costs, property damages, lost
productivity from roadway congestion, and environmental costs. By 2017,
the monetized VSL component (in 2013 dollars) increases from $50,000 to
$52,000 ($52,000 = $50,000 x (1.0118\4\)). Together with the remaining
$22,000 in costs, the cost of a fatal crash in 2017 is estimated to be
$74,000 in 2013 dollars ($74,000 = $52,000 + $22,000).
    The same process applies for all subsequent years. The monetized
VSL component is increased by 1.18 percent from the previous year, and
added to the $134,000 other costs of a fatal crash, resulting in that
year's benefits in 2013 dollars.
    Given the cost of a fatal crash of $11,542,000, an injury crash of
$472,000, and a tow-away crash of $74,000 in 2017 (in 2013 dollars),
and given the 11 fewer fatal, 128 fewer injury, and 220 fewer tow-away
crashes estimated in 2017, the benefits of the rule for Option 2 that
occur in 2017 total $203.7 million. The fatal crash component is $127
.0 million ($126,962,000 = $11,542,000 x 11), the injury crash
component is $60.4 million ($60,416,000 = $472,000 x 128), and the tow-
away crash component is $16.3 million ($16,280,000 = $74,000 x 220).
The same process applies for all subsequent years. Table 20 below
summarizes the benefits for the first year of the rule for preferred
Option 2.

Table 20--Annual Benefit (in 2017) to Crash Reduction From Switch From Current to Proposed SFD for Option 2 (96/
                                                       99)
----------------------------------------------------------------------------------------------------------------
                                                                     Net crash                        Benefit
                       Net gain to new SFD                           reduction    Cost per crash    (millions)
----------------------------------------------------------------------------------------------------------------
Fatal Crashes...................................................              11     $11,542,000          $127.0
Injury Crashes..................................................             128         472,000            60.4
Tow-Away Crashes................................................             220          74,000            13.3

Benefit of the Switch (Millions)................................  ..............  ..............           203.7
----------------------------------------------------------------------------------------------------------------

    For preferred Option 2, ten-year projected benefits are $1.692
billion discounted at seven percent and $1.998 billion discounted at
three percent. The rule is proposed to have its first full year of
implementation in 2017 based on this proposed rule in 2015 and a final
rule in 2016. The costs of the rulemaking are those incurred by:
    (1) Drivers who were employed by additional carriers ordered OOS
who are now forced to seek new employment. Under preferred Option 2,
1,855 drivers are estimated to be adversely affected in this manner
annually.
    (2) The additional carriers identified as deficient under the
proposed SFD that opt to improve performance, thereby incurring costs
to achieve compliance.
    (3) FMCSA, resulting from information system update and
modification expenses (estimated as a one-time cost of $3.0 million
incurred in year 2017 under both Option 1 and Option 2).
    The carrier population is assumed to increase at an annual rate of
2.17 percent,\100\ so that by 2017 the 1,824 identified carriers under
Option 2 would increase to 1,988 (1,988 = 1,824 x (1.0217\4\)).
Assuming that 16.1 percent remain permanently OOS, 320 carriers (16.1
percent of 1,988) are affected. Given that carriers ordered OOS have on
average 4.97 power units per carrier and 1.27 drivers per power unit,
this results in 2,020 drivers (2,020 drivers = 1.27 drivers per power
unit x 4.97 power units per carrier x 320 carriers) working for
carriers ordered OOS that would be adversely affected in this manner.
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    \100\ FMCSA's estimated annual growth rate of 2.17 percent is
similar to the BLS estimate of 2.38 percent (Employment by industry,
occupation, and percent distribution, 2010 and projected 2020 484000
Truck Transportation. http://www.bls.gov/emp/ep_table_109.htm).
FMCSA used the growth rate obtained from MCMIS data because it
captures the dynamic nature of the industry and allows for a
separate growth rate for carriers with recent activity and new
entrants.
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    Assuming that the real wages of drivers remain constant, then the
total cost (in 2013 dollars) for each affected driver working for non-
compliant carriers ordered OOS affected remains $4,003. So the total
cost of the rule to drivers working for non-compliant carriers ordered
OOS in 2017, the first year of the rule, is $8.1 million in 2013
dollars ($4,003 per driver x 2,020 drivers = $8,086,060, rounded to the
nearest tenth of a million). Assuming the projected 2.17-percent
carrier population increase continues through 2026 and real wages for
drivers remain constant, then under Option 2, for the ten years from
2017 through 2026, the annualized costs of the rule to drivers working
for non-compliant carriers ordered OOS at a seven percent discount rate
are $9.4 million ($9.43 million, rounded to the nearest tenth of a
million).
    In addition to drivers, deficient carriers ordered OOS also
adversely affect the shippers, brokers, and freight forwarders that use
them regularly. These entities must spend time finding replacement
carriers. However, turnover in the trucking and passenger carrying
industries is significant enough that establishing new commercial
relationships with motor carriers is a routine course of business for
shippers, and many shippers have relationships with several carriers
that compete for their business. The Agency does not perceive the
marginal increase in carrier turnover that may result from this
proposed rule as an impact that has quantifiable costs, nor as an
impact for which the costs rise to a level of significance. Short-term
decreases in the supply of shipping services resulting from deficient
carriers being placed OOS may marginally increase the cost of shipping
as other carriers adjust to meet the demand for services; however, this
also incentivizes market entry by new carriers, thereby minimizing the
potential for a shift in the real long-term equilibrium price for
shipping services.
    Deficient carriers identified by the current or proposed system are
either ordered OOS or improve their safety performance to the point
that they become compliant. Those carriers opting to improve to achieve
compliance incur expenses in making these required improvements. This
is true of carriers under both the current and proposed processes, so
the additional expenditures related to the rule are those incurred by
the additional carriers identified by the proposed process.
    FMCSA recognizes that the social benefits of this proposed rule are
associated with increased compliance with regulations that motor
carriers are already expected to bear the compliance costs of. However,
FMCSA notes that a carrier that may be newly identified as deficient
under the proposed SFD may under the current SFD be given a conditional
safety rating and allowed to continue operating. While the regulations
that carriers are expected to be in compliance with are not changing
under the proposed SFD, the differing identification methodology
introduced with this proposed rule--such that a portion of borderline
carriers under the current SFD would be identified as deficient under
the proposed SFD--argues in favor of characterizing the costs borne by
the newly-identified carriers in order to achieve compliance as new
costs resulting from the proposed rule.
    The Agency lacks data to evaluate the magnitude of the costs to
those additional carriers that would be identified as deficient under
the proposed SFD that seek to achieve compliance in order to remain in
operation. There are many types of violations that can contribute to a
carrier's identification as deficient and the range of compliance costs
may differ--even across carriers with similar violations--due to
factors such as: Size of carrier, experience and training levels of
drivers, and experience of fleet maintenance personnel. For this
reason, this cost element is noted as ``not estimated'' throughout
summary-level tables in both this document and the supporting
Regulatory Evaluation.
    The Agency welcomes input on ways to estimate costs that would be
borne by these newly-identified carriers to achieve compliance.
    FMCSA has placed the complete Regulatory Evaluation for this
proposal in the docket identified above. FMCSA seeks comment on any
aspect of the Regulatory Evaluation for this proposal.

Regulatory Flexibility Act

    Under the Regulatory Flexibility Act (RFA), as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121,
Title II, 110 Stat. 857), when an agency issues a rulemaking proposal,
the agency must ``prepare and make available for public comment an
initial regulatory flexibility analysis'' that will