07-2870. Demonstration Project on NAFTA Trucking Provisions

AGENCY:

Federal Motor Carrier Safety Administration (FMCSA).

ACTION:

Notice; supplemental request for public comment.

SUMMARY:

The FMCSA announces additional details about the initiation of a project to demonstrate the ability of Mexico-domiciled motor carriers to operate safely in the United States beyond the commercial zones along the U.S.-Mexico border. On May 1, 2007, FMCSA published a notice in the Federal Register announcing its plans to initiate the project as part of the Agency's implementation of the North American Free Trade Agreement (NAFTA) cross-border trucking provisions. In response to section 6901(b)(2)(B) of the “U.S. Troop Readiness, Veterans” Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007,” FMCSA provides for public comment certain additional details concerning the demonstration project. The FMCSA will carefully consider all comments received in response to the May 1, 2007, notice and this supplemental notice before further decisions are made concerning the implementation of the NAFTA trucking demonstration/pilot project.

DATES:

Comments must be received on or before June 28, 2007.

ADDRESSES:

You may submit comments identified by DOT DMS Docket Number FMCSA-2007-28055 by any of the following methods:

• Web Site: http://dms.dot.gov. Follow the instructions for submitting comments on the DOT electronic docket site. Please note that the web site will not be available for use from June 13 through June 17, 2007 (72 FR 28092; May 18, 2007). During this period the Department of Transportation will be relocating the computers that host the electronic dockets. The electronic docket will again be available to users beginning on June 18, 2007. While the electronic docket is down from June 13 through June 17, interested parties may submit comments by fax, mail, or hand delivery, as described below. However, staff will not begin to place documents received during this period into the electronic docket until the computer goes back on line June 18.
• Fax: [phone].
• Mail: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590.
• Hand Delivery: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington DC, 20590 between 9 a.m. and 5 p.m., e.t., Monday through Friday, except Federal holidays.
• Federal eRulemaking Portal: Go to www.regulations.gov. Follow the online instructions for submitting comments. Please note that submission of comments via this web site will be affected by the relocation of the Department's computers which host its electronic docket system.

Instructions: All submissions must include the Agency name and docket number for this notice. For detailed instructions on submitting comments and additional information, see the Public Participation heading below. Note that all comments received will be posted without change to http://dms.dot.gov, including any personal information provided. Please see the Privacy Act heading below.

Docket: For access to the Docket Management System (DMS) to read background documents or comments received, go to http://dms.dot.gov at any time or to the U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington DC, 20590 between 9 a.m. and 5 p.m., e.t., Monday through Friday, except Federal holidays. The DMS is available electronically 24 hours each day, 365 days each year, except as noted above.

Privacy Act: Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-78) or you may visit http://dms.dot.gov.

Public Participation: The DMS is available 24 hours each day, 365 days each year, except during the relocation period noted above. You can get electronic submission and retrieval help and guidelines under the “help” section of the DMS Web site. Comments received after the comment closing date will be included in the docket, and will be considered to the extent practicable.

FOR FURTHER INFORMATION CONTACT:

Mr. Milt Schmidt. Telephone [phone]; E-mail: [e-mail].

SUPPLEMENTARY INFORMATION:

Background

On May 1, 2007, FMCSA announced the initiation of a project to demonstrate the ability of Mexico-based motor carriers to operate safely in the United States beyond the commercial zones along the U.S.-Mexico border (72 FR 23883). The demonstration project will allow up to 100 Mexico-domiciled motor carriers to operate throughout the United States for one year. Up to 100 U.S.-domiciled motor carriers will be granted reciprocal rights to operate in Mexico for the same period. Participating Mexican carriers and drivers must comply with all applicable U.S. laws and regulations, including those concerned with motor carrier safety, customs, immigration, vehicle emissions, vehicle registration and taxation, and fuel taxation. The Agency explained the safety performance of the participating carriers will be tracked closely by FMCSA and its State partners, a joint U.S.-Mexico monitoring group, and an evaluation panel independent of the Department of Transportation (DOT). The FMCSA indicated the resulting data will be considered carefully before further decisions are made concerning the implementation of the NAFTA trucking provisions. The comment period for the notice ended on May 31.

On May 25, 2007, the President signed into law the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 (the Act), (Pub. L. 110-28). Section 6901 of the Act requires that certain actions be taken by the Department of Transportation (the Department) as a condition of obligating or expending appropriated funds to grant authority to Mexico-domiciled motor carriers to operate beyond United States municipalities and commercial zones on the United States-Mexico border. Section 6901(a) of the Act requires that granting of such authority be tested as part of a “pilot program.” The pilot program must comply with section 350 of the DOT and Related Agencies Appropriations Act for Fiscal Year 2002 (Pub. L. 107-87, 115 Stat. 833, at 864) and 49 U.S.C. 31315(c), concerning requirements for pilot programs.

Section 6901(a)—Fulfilling the Requirements of Section 350

Section 350 of the DOT Appropriations Act, 2002 (Pub. L. 107-87), prohibited FMCSA from using Federal funds to review or process applications from Mexico-domiciled motor carriers to operate beyond the border commercial zones until certain conditions and safety requirements were met. The requirements of section 350 have been reenacted in each subsequent DOT Appropriations Act since 2002. The rulemaking requirements of section 350 were met by a series of rules published on March 19, 2002 (67 FR 12652, 67 FR 12702, 67 FR 12758, 67 FR 12776) and a further rule published on May 13, 2002 (67 FR 31978).

In November 2002, Secretary of Transportation Norman Mineta certified, as required by section 350(c)(2), that authorizing Mexican carrier operations beyond the border commercial zones does not pose an unacceptable safety risk to the American public. Later that month, the President modified the longstanding moratorium to permit Mexico-domiciled motor carriers to provide cross-border cargo transportation beyond the border commercial zones. The Secretary's certification was made in response to the June 25, 2002, report of DOT's Office of Inspector General (OIG) on the implementation of safety requirements at the U.S.-Mexico border. In a January 2005 follow-up report, the OIG concluded that FMCSA had sufficient staff, facilities, equipment, and procedures in place to substantially meet all eight requirements under section 350 the OIG was required to review.

In consideration of the above OIG reports which are available in docket FMCSA-2007-28055, and FMCSA's May 1, 2007, announcement that participating carriers will be required to comply with all rules issued in response to section 350 (in addition to full compliance with all safety regulations applicable to U.S.-domiciled motor carriers), the Agency believes the provision in the 2007 supplemental appropriations act mandating that the demonstration project satisfy the requirements of section 350 has already been satisfied. The Agency requests public comment on this issue.

Section 6901(a)—Fulfilling the Requirements of 49 U.S.C. 31315

Section 4007 of the Transportation Equity Act for the 21st Century (TEA-21) amended 49 U.S.C. 31136(e) and 31315 concerning the Secretary of Transportation's authority to grant waivers from the Federal Motor Carrier Safety Regulations (FMCSRs) for those seeking regulatory relief from those requirements. With the enactment of TEA-21, FMCSA may grant a waiver or exemption that relieves a person from compliance in whole or in part with a regulation if the Agency determines that the waiver is in the public interest, and the waiver or exemption would be likely to achieve a level of safety equivalent to, or greater than, the level that would be achieved by complying with the applicable regulation. Section 4007 of TEA-21 also permits FMCSA to conduct pilot programs to evaluate alternatives to regulations relating to motor carrier, commercial motor vehicle (CMV), and driver safety.^[1]

In a pilot program, the FMCSA collects specific data for evaluating alternatives to the regulations or innovative approaches to safety while ensuring that the safety performance goals of the regulations are satisfied. A pilot program may not last more than 3 years. The number of participants in a pilot program must be large enough to ensure statistically valid findings. Pilot programs must include an oversight plan to ensure that participants comply with the terms and conditions of participation, and procedures to protect the health and safety of study participants and the general public. As part of a pilot program, temporary regulatory relief from one or more FMCSR may be given to a person or class of persons subject to the regulations, or a person or class of persons who intend to engage in an activity that would be subject to the regulations. During the pilot program, these participants would be given an exemption from one or more sections or parts of the regulations.

The FMCSA believes the requirement that the demonstration project satisfy the pilot program statutory provision is satisfied through the May 1, 2007, notice, and the additional details contained in this notice. The Agency notes that during the demonstration project participating Mexico-domiciled motor carriers would not be provided with relief from any of the rules implementing section 350, or any of the safety regulations.

Section 6901(b)(2)(B) of the Act

Section 6901(b)(2)(B) of the Act provides that FMCSA must request public comment on five specific aspects of the demonstration project. For the convenience of the reader, these items are listed below. A complete copy of section 6901 is included in the docket FMCSA-2007-28055.

(1) Comprehensive data and information on the pre-authorization safety audits (PASAs) conducted before and after the date of enactment of this Act of motor carriers domiciled in Mexico that are granted authority to operate beyond the United States municipalities and commercial zones on the United States-Mexico border;

(2) Specific measures to be required to protect the health and safety of the public, including enforcement measures and penalties for noncompliance;

(3) Specific measures to be required to ensure compliance with section 391.11(b)(2) of title 49, CFR, concerning FMCSA's English language proficiency requirement, and section 365.501(b) of title 49, CFR, concerning FMCSA's prohibition against Mexico-domiciled drivers engaging in the transportation of domestic freight within the U.S.;

(4) Specific standards to be used to evaluate the pilot program and compare any change in the level of motor carrier safety as a result of the pilot program; and

(5) A list of Federal motor carrier safety laws and regulations, including the commercial driver's license (CDL) requirements, for which the Secretary of Transportation will accept compliance with a corresponding Mexican law or regulation as the equivalent to compliance with the United States law or regulation, including for each law or regulation an analysis as to how the corresponding United States and Mexican laws and regulations differ.

FMCSA Approach for Fulfilling the Requirements of Section 6901(b)(2)(B) of the Act

Comprehensive Data and Information on Pre-Authorization Safety Audits

As noted above, section 6901(b)(2)(B)(i) of the Act requires FMCSA to publish comprehensive data and information on the PASAs conducted before and after the date of enactment of this Act of motor carriers domiciled in Mexico that are granted authority to operate beyond the United States municipalities and commercial zones on the United States-Mexico border. No carriers have yet been granted authority to operate beyond the municipalities and commercial zones as part of this demonstration project. Consequently, at this time there is no requirement to publish data or information from any of the PASAs conducted. Nonetheless, FMCSA has chosen to go ahead and publish data and information relating to all PASAs conducted to date.

The FMCSA includes one table in the text of this notice and three additional tables at the end of this Federal Register notice. Table 1 below outlines the specific U.S. and Mexican regulations in the three areas where the Mexican regulations or processes are being accepted as meeting U.S. requirements.

Table 2 contains general information on the PASAs the Agency completed before the enactment of the Act, and any completed since then. Table 3 contains the results of each applicant's PASA, if applicable. Table 4 contains data about each applicant's PASA, if applicable. The first three columns of tables 2, 3, and 4 are the same in each table for the ease of the reader. The information for all three tables is in USDOT number order. Applicants who had not been issued a presumptive USDOT number as of May 31, 2007 are listed at the end of the table. Rows 1 through 107 on each of the three tables applies to the same motor carrier applicant. For example, row 6 contains information for David Klassen Peters, USDOT Number 556741 on tables 2, 3, and 4. A narrative description of each column heading contained within tables 2, 3, and 4 is provided below:

A. Column A—Row: Sequential number for ease of reading across tables 2, 3, and 4. Row 6 contains all the information for the same motor carrier split across the three tables. FMCSA has repeated this column on tables 2, 3, and 4.

B. Column B—Name of Carrier: The legal name of the Mexico-domiciled motor carrier that applied for authority to operate in the United States (U.S.) beyond the municipalities and commercial zones and was considered for participation in the cross border demonstration project. FMCSA has repeated this column on tables 2, 3, and 4.

C. Column C—US DOT Number: The identification number presumptively assigned to the Mexico-domiciled motor carrier and required to be displayed on each side of the power unit. If granted provisional operating authority, the Mexico domiciled motor carrier will be required to add the suffix “X” to the ending of its assigned U.S. DOT Number. FMCSA has repeated this column on tables 2, 3, and 4.

D. Column D—PASA Scheduled: The date the PASA was scheduled to be initiated.

E. Column E—PASA Completed: The date the PASA was completed.

F. Column F—PASA Results: The results upon completion of the PASA. The PASA undergoes a quality assurance review prior to approval. The quality assurance process involves a dual review by the FMCSA Division Office Supervisor of the Auditor assigned to conduct the PASA and the FMCSA Service Center New Entrant Specialist designated for the specific FMCSA Division Office. The dual review ensures the successfully completed PASA was conducted in accordance with FMCSA policy, procedures and guidance. Upon approval the PASA is uploaded into the FMCSA Motor Carrier Management Information System (MCMIS). The PASA information and results are then recorded in the Mexico-domiciled motor carrier's safety performance record in MCMIS.

1. “Passed” status refers to a motor carrier that has successfully completed the PASA and the quality assurance process and is listed as approved in MCMIS.

2. “Pending” status refers to a motor carrier that has successfully completed a PASA, but the results are pending FMCSA approval through the quality assurance review.

3. “Failed” status refers to a motor carrier for which FMCSA was unable to verify one or more of the five mandatory elements in Part 365, Subpart E, Appendix A, Section III; or a motor carrier that has inadequate basic safety management controls in three or more factors set forth in Part 365, Subpart E, Appendix A, Section IV(f).

4. “Withdrew” status refers to a motor carrier that, after being contacted by the Safety Auditor, has chosen to withdraw from participating in the cross border demonstration project, or has withdrawn its application required to obtain authority to operate beyond the municipalities and commercial zones.

5. “Unable to contact” status refers to a motor carrier that the assigned FMCSA Safety Auditor has been unable to contact based on the information submitted or filed by the motor carrier in its application.

G. Column G—FMCSA Register: The date the publication notice was generated in the FMCSA Register of a successfully completed PASA. The FMCSA Register notice advises interested parties that the application has been preliminarily granted and that protests to the application must be filed within 10 days of the publication date. Protests are filed with FMCSA Headquarters in Washington, DC. The FMCSA Register can be viewed by going to: http://li-public.fmcsa.dot.gov/​LIVIEW/​pkg_​html.prc_​limain and then selecting “FMCSA Register” from the drop-down box in the upper right corner of the screen. The notice in the FMCSA Register lists the following information:

1. Current registration number (e.g., MX-123456);

2. Date the notice was filed in the FMCSA Register;

3. The applicant name and address, and 4.Representative or contact information for the applicant.

H. Column H—Drivers Identified Who Motor Carrier Intends to Operate in the United States: The total number of drivers the motor carrier intends to operate in the United States.

I. Column I—Vehicles Identified Which Motor Carrier Intends to Operate in the United States: The total number of power units the motor carrier intends to operate in the United States.

J. Column J—Passed Verification 5 Elements (Yes/No): A Mexico-domiciled motor carrier will not be granted provisional operating authority if FMCSA cannot verify all of the following five mandatory elements. FMCSA must:

1. Verify a controlled substances and alcohol testing program consistent with 49 CFR part 40.

2. Verify a system of compliance with hours-of-service rules consistent with 49 CFR part 395, including recordkeeping and retention;

3. Verify proof of financial responsibility consistent with 49 CFR part 387;

4. Verify records of periodic vehicle inspections consistent with 49 CFR part 396; and

5. Verify the qualifications of each driver the carrier intends to use under such authority, as required by parts 383 and 391, including confirming the validity of each driver's Licencia Federal de Conductor.

K. Column K—If Motor Carrier Failed Pre-Authorization Safety Audit, Which Element(s) Failed: If FMCSA could not verify one of the five mandatory elements outlined in Part 365, Appendix A, Section III, this column will specify which mandatory element(s) could not be verified.

Please note that for columns L through P below and shown on table 3 at the end of this notice, during the PASA, after verifying the five mandatory elements discussed in column J above and also shown on table 3, FMCSA will gather additional information. The additional information FMCSA will gather is to review a motor carrier's compliance with “acute and critical” regulations of the FMCSRs and Hazardous Materials Regulations (HMRs). This is nearly identical to new entrant audits and compliance reviews of U.S.- and Canada-domiciled motor carriers, except for those statutory provisions unique to Mexico-domiciled motor carriers. Acute regulations are those where noncompliance is so severe as to require immediate corrective actions by a motor carrier regardless of the overall basic safety management controls of the motor carrier. Critical regulations are those where noncompliance relates to management and/or operational controls. These are indicative of breakdowns in a carrier's management controls. A list of acute and critical regulations is included in part 385, Appendix B, Section VII.

Parts of the FMCSRs and HMRs having similar characteristics are combined together into six regulatory areas called “factors.” The regulatory factors are intended to evaluate the adequacy of carrier's management controls.

Factor 5 relates to the transportation of hazardous materials and was omitted below, as Mexico-domiciled motor carriers that transport hazardous materials are not permitted to participate in the cross border demonstration project.

L. Column L—Passed Phase 1, Factor 1: A “yes” in this column indicates the carrier has successfully met Factor 1 (listed in Part 365, Subpart E, Appendix A, Section IV(f)). Factor 1 includes the General Requirements outlined in Parts 387 (Minimum Levels of Financial Responsibility for Motor Carriers) and 390 (Federal Motor Carrier Safety Regulations-General).

M. Column M—Passed Phase 1, Factor 2: A “yes” in this column indicates the carrier has successfully met Factor 2, which includes the Driver Requirements outlined in Parts 382 (Controlled Substances and Alcohol Use and Testing), 383 (Commercial Driver's License Standard; Requirements and Penalties) and 391 (Qualifications of Drivers and Longer Combination Vehicle (LCV) Driver Instructors).

N. Column N—Passed Phase 1, Factor 3: A “yes” in this column indicates the carrier has successfully met Factor 3, which includes the Operational Requirements outlined in Parts 392 (Driving of Commercial Motor Vehicles) and 395 (Hours of Service of Drivers).

O. Column O—Passed Phase 1, Factor 4: A “yes” in this column indicates the carrier has successfully met Factor 4, which includes the Vehicle Requirements outlined in Parts 393 (Parts and Accessories Necessary for Safe Operation) and 396 (Inspection, Repair and Maintenance) and vehicle inspection and out-of-service data for the last 12 months.

P. Column P—Passed Phase 1, Factor 6: A “yes” in this column indicates the carrier has successfully met Factor 6, which includes Accident History. This factor is the recordable accident rate per million miles traveled during the past 12 months. A recordable “accident” is defined in 49 CFR 390.5, and means an accident involving a commercial motor vehicle operating on a public road in interstate or intrastate commerce which results in: A fatality; a bodily injury to a person who, as a result of the injury, immediately received medical treatment away from the scene of the accident; or one or more motor vehicles incurring disabling damage as a result of the accident requiring the motor vehicle to be transported away from the scene by a tow truck or other motor vehicle.

Note:

If the Mexico-domiciled motor carrier has successfully met all five mandatory elements, but the PASA reveals the motor carrier has inadequate basic safety management controls in at least three separate factors, the motor carrier will fail the PASA and not be granted provisional operating authority.

Q. Column Q—Number of Vehicles Inspected Which Carrier Intends to Operate in the US: The total number of vehicles (power units and trailers) the motor carrier intends to operate in the United States that received a vehicle inspection during the PASA. During a PASA, FMCSA inspected available vehicles that did not display a current Commercial Vehicle Safety Alliance (CVSA) inspection decal. This number reflects the vehicles that were inspected.

R. Column R—Number of Vehicles Issued CVSA Decal During PASA Which Carrier Intends to Operate in the US: The total number of inspected vehicles (power units and trailers) the motor carrier intends to operate in the United States that received a CVSA inspection decal as a result of an inspection during the PASA.

S. Column S—Number of Vehicles Displaying Current CVSA Decal During PASA Which Carrier Intends to Operate in the US: The total number of vehicles (power units and trailers) the motor carrier intends to operate in the United States that displayed a current Commercial Vehicle Safety Alliance (CVSA) inspection decal at the time of the PASA.

T. Column T—Controlled Substances Collection: Refers to the applicability and/or country of origin of the controlled substance and alcohol collection facility contracted to use/or will be used by a motor carrier who has successfully completed the PASA.

1. ”US” means the controlled substance and alcohol collection facility is based in the United States.

2. ”MX” means the controlled substance and alcohol collection facility is based in Mexico. Currently there are not any collection facilities certified in Mexico to collect controlled substance and alcohol specimens in accordance with 49 CFR part 40.

3. ”Non-CDL” means that during the PASA, FMCSA verified that the motor carrier is not utilizing commercial motor vehicles subject to the commercial driver's license requirements as defined in 49 CFR 383.5 (Definition of Commercial Motor Vehicle).

Note:

Any motor carrier that does not operate commercial motor vehicles as defined in § 383.5 is not subject to controlled substance and alcohol testing requirements.

U. Column U—Name of Controlled Substances and Alcohol Collection Facility: “Name of Controlled Substances and Alcohol Collection Facility” is the name and location of the U.S. drug and alcohol collection facility for a Mexico-domiciled motor carrier who has successfully completed the PASA.

Measures To Protect the Health and Safety of the Public

The FMCSA has developed an extensive oversight system to protect the health and safety of the public and FMCSA will apply it to Mexico-domiciled motor carriers. These measures are outlined in 49 CFR parts 350-396 and include providing grants to States for commercial vehicle enforcement activities, regulations outlining the application procedures, regulations explaining how FMCSA will assess safety ratings and civil penalties as well as amounts of possible civil penalties, insurance requirements, drug and alcohol testing requirements, commercial driver's license (CDL) requirements, general operating requirements, driver qualification requirements, vehicle parts and maintenance requirements, and hours-of-service requirements. These requirements apply to Mexico-domiciled carriers operating in this demonstration project, just as they do to any commercial motor vehicle, driver, or carrier operating in the United States. The description below is limited to the main features of FMCSA's system to protect the health and safety of the public during this demonstration project, but is not intended to imply that all regulations outlined above do not apply at all times.

Application Process

The process begins with a 28-page application that gathers specific information about the carrier, its affiliations, its insurance, its safety programs, and its compliance with U.S. laws. In addition to providing general information, the carrier must complete up to 35 safety and compliance certifications and provide information regarding its systems for monitoring hours-of-service and accidents and complying with DOT drug and alcohol testing requirements.

Pre-Authorization Safety Audits

The next step in the oversight system is the PASA. Upon completion of the application and its review, FMCSA will then schedule a PASA. The PASA evaluation process developed by the FMCSA is used to evaluate safety management controls and determine if a Mexico-domiciled carrier and each driver is able to operate safely in the United States. It also identifies motor carriers and drivers that have safety problems and need to improve their compliance with the FMCSRs, before FMCSA grants the carrier's provisional authority to operate beyond the U.S. municipalities and commercial zones on the US-Mexico international border.

The PASA will be conducted at the carrier's principal place of business in Mexico in accordance with the procedures in Appendix A to Subpart E of Part 365. The carrier will not be granted provisional operating authority unless FMCSA can:

(1) Verify a controlled substances and alcohol testing program consistent with DOT requirements in 49 CFR part 40;

(2) Verify a system of compliance with FMCSA's hours-of-service rules in 49 CFR part 395, including recordkeeping and retention;

(3) Verify proof of financial responsibility;

(4) Verify records of periodic vehicle inspections; and

(5) Verify the qualifications of each driver the carrier intends to assign to operate under such authority, as required by 49 CFR parts 383 and 391, including confirming the validity of each driver's Licencia Federal de Conductor.

Upon verification of the five essential elements listed above, FMCSA will then:

(1) Verify performance data and safety management programs;

(2) Review data concerning the carrier's safety history, and other information necessary to determine the carrier's preparedness to comply with the Federal Motor Carrier Safety Regulations, 49 CFR parts 382 through 399,

(3) Inspect commercial motor vehicles to be used under provisional operating authority, if any of these vehicles do not display a current Commercial Vehicle Safety Alliance (CVSA) inspection decal required by 49 CFR 385.103(d);

(4) Evaluate the carrier's safety inspection, maintenance, and repair facilities or management systems, including verification of records of periodic vehicle inspections; and

(5) Interview carrier officials to review safety management controls and evaluate any written safety oversight policies and practices.

In addition to sampling records for compliance, FMCSA will also compile a list of vehicles and drivers the carrier intends to use in the U.S. and will conduct vehicle inspections of any trucks and trailers intended to be used in the U.S. which does not display a current CVSA inspection decal. Once all this information is collected and/or verified, it will then be evaluated according to the criteria set forth in Section IV of Appendix A to Subpart E of part 365. The results of the PASA are reviewed at the FMCSA Division Office where the auditor is assigned and the respective FMCSA Service Center for that Division office. Upon approval by the Division Office and Service Center, the PASA is uploaded into FMCSA's information system (MCMIS).

FMCSA Register—Public Comment

If the carrier has passed the PASA, FMCSA will publish the carrier's request for authority in the FMCSA Register. The FMCSA Register can be viewed by going to: http://li-public.fmcsa.dot.gov/​LIVIEW/​pkg_​html.prc_​limain and then selecting “FMCSA Register” from the drop-down box in the upper right corner of the screen. Any member of the public may, within ten days of publication in the FMCSA Register, protest the carrier's application before the Agency on the grounds that the carrier is not fit, willing, or able to provide the transportation services for which it has requested approval.^[2] FMCSA will consider all protests before determining whether to grant provisional operating authority. Under FMCSA regulations, all motor carriers receive provisional operating authority for 18 months after receiving a USDOT number and are subject to enhanced safety scrutiny during the provisional operating period.

Financial Responsibility and Process Agent Filing Requirements

If FMCSA grants the carrier's application, it will not issue provisional operating authority until:

(1) An insurance company licensed in the United States files with FMCSA verification that the carrier maintains the legally required level of public liability insurance coverage; and

(2) The carrier provides FMCSA with a list of agents for the service of legal process for each State in which the carrier will operate.

Limitation on Authority

Carriers that successfully complete the PASA will receive provisional operating authority to provide long-haul transportation in the U.S. under this demonstration program. However, their authority will be limited in several ways compared to U.S.-domiciled carriers. They will not be permitted to transport hazardous materials or passengers, and they will not be permitted to provide point-to-point transportation while operating in the United States.

In addition, as a condition of participating in the demonstration program, Mexico-domiciled motor carriers must sign a form that allows FMCSA to revoke their authority.

Cross Border Monitoring

Any carrier that receives provisional operating authority to provide transportation outside the commercial zone will be subject to inspection each time it crosses the border. Because these vehicles will have a DOT number that ends in an “X,” they will be easily identifiable to FMCSA, State, or Customs and Border Protection staff. All commercial motor vehicles used by a Mexican carrier with long-haul authority will be required to have current CVSA inspection decals at all times when operating in the U.S. The CVSA inspection decal is evidence that the vehicle passed a comprehensive 38-point inspection within the past 90 days. When crossing the border these trucks will, at a minimum, be checked to verify that the driver is properly licensed and that the vehicle displays a current CVSA inspection decal. If the vehicle lacks a current decal, the driver and vehicle will receive a comprehensive inspection and will not be permitted to proceed unless both the driver and vehicle pass this inspection.

License checks will be conducted through the Mexican LFIS (Licencias Federales de Conductor Information System) database and the FMCSA repository of Mexican driver convictions while in the U.S., known as the “52nd State” system. Any driver who is not properly licensed in the Mexican database will not be allowed to provide transportation in the U.S. In addition, any Mexican driver with traffic convictions in the U.S. that would have resulted in disqualification from driving a commercial motor vehicle under 49 CFR 383.51 will be prohibited from providing transportation in the U.S.

In addition to the check of the CVSA inspection decal and Mexican drivers' licenses described above, all vehicles used by a carrier with long-haul authority will be subject to more comprehensive driver inspections, walk-around inspections, or full vehicle inspections. During 2006, FMCSA and its State partners performed over 210,000 inspections of Mexican vehicles entering the U.S.

On-Going Monitoring

The FMCSA will be providing on-going performance monitoring of carriers participating in the demonstration project. Monitoring will include checking the carrier's compliance during cross-border and roadside inspections as well as any vehicle crashes that occur in the United States. The FMCSA will conduct a compliance review if the carrier is flagged as high-risk in FMCSA's SafeStat ^[3] system. In addition, 49 CFR 385.105 sets forth certain violations and conditions that, if discovered, will prompt FMCSA to conduct a compliance review or require the carrier to provide written response demonstrating corrective action. These conditions include:

• Using a driver not possessing or operating with a valid Licencia Federal de Conductor (an invalid Licencia Federal de Conductor includes one that is falsified, revoked, expired or missing a required endorsement),
• Operating vehicles that have been placed out of service for violations of the CVSA North American Standard Out-of-Service Criteria without making repairs,
• Using a driver who tests positive for controlled substances or alcohol or who refuses to submit to testing,
• Operating within the U.S. without valid insurance, or
• Having a driver or vehicle out-of-service rate of more than 50 percent based on at least three inspections occurring within a consecutive 90-day period.

Compliance Reviews

The FMCSA may conduct a compliance review on a motor carrier for a variety of reasons including but not limited to:

• The carrier is identified as being “high-risk” based on FMCSA's SafeStat system,
• The carrier is the subject of a non-frivolous complaint,
• FMCSA discovers one or more of 11 violations during a pre-authorization safety audit that requires a compliance review.

Carriers participating in the demonstration project will be subject to compliance reviews for the above conditions, as would any other carrier operating in the U.S.

The compliance review is an in-depth examination of a carrier's safety management practices. During the compliance review the FMCSA investigator will look at the carrier's compliance with all applicable regulations including driver qualifications, hours of service, drug and alcohol testing, insurance, maintenance, and operating authority. The compliance review will result in a safety rating based on five factors^[4] as outlined in Appendix B to Part 385.

Penalties

Any Mexico-domiciled carrier operating as part of this demonstration program will immediately be subject to suspension and revocation of its registration if it receives an Unsatisfactory safety rating. Any Mexico-domiciled carrier that receives a Conditional safety rating as a result of a compliance review will have its authority revoked unless it can demonstrate corrective action within 30 days. In addition, any carrier in the demonstration project will have its authority suspended if it fails to maintain insurance on file with FMCSA. Any vehicles found operating in the United States by a carrier without active operating authority will be placed out of service.

In addition to loss of authority for less than satisfactory safety ratings or absence of insurance, drivers and carriers participating in the demonstration project, like all commercial motor vehicle drivers and motor carriers operating in the U.S., are subject to civil penalties for violations of the Federal Motor Carrier Safety Regulations. The amounts of the civil penalties are laid out in Appendices A and B to 49 CFR Part 386 and include:

• Up to $2,100 per violation for operating a vehicle after being placed out of service (driver),
• Up to $16,000 per violation for requiring or permitting a driver to operate a vehicle after being placed out of service (carrier),
• Up to $550 per day for each recordkeeping violation, up to $5,500,
• Up to $5,500 for knowingly falsifying documents,
• Up to $11,000 for each non-recordkeeping violation ^[5]

• Up to $3,750 for each violation of the CDL regulations,
• Up to $16,000 for each violation of financial responsibility (insurance) regulations.

Finally, FMCSA has the authority under 49 U.S.C. 521(b)(5) to shut down any vehicle, driver, or carrier operation, whether U.S., Canadian, or Mexican, whose regulatory violations are so serious that they constitute an imminent hazard.

Measures to Ensure Compliance with 49 CFR 391.11(b)(2) and 365.501(b)

English proficiency

Section 391.11(b)(2) requires drivers operating commercial motor vehicles, as defined in 49 CFR 390.5, in interstate commerce to be able to “read and speak the English language sufficiently to converse with the general public, to understand highway traffic signs and signals in the English language, to respond to official inquiries, and to make entries on reports and records.” CVSA recently adopted English proficiency as a part of its North American Standard Out-of-Service criteria; CVSA gave the States guidance on this matter.

FMCSA and its State partners will check each driver and vehicle entering the U.S. as part of this demonstration project. During that check, which will include verification of a current CVSA decal on the vehicle and the driver's Mexican CDL, inspectors will interact with the driver in English. If there appears to be a communication problem, the driver will be directed to a secondary inspection site where a full driver inspection will be conducted. If this inspection results in a finding the driver does not speak sufficient English to satisfy the regulation, the violation will be cited on the inspection report and the driver will be placed out-of-service. English proficiency will also be evaluated during any other vehicle inspections occurring in the U.S. and will likewise result in an out-of-service order if the driver can not meet the requirements of this section.

Prohibition Against Point-to-Point Transportation Services Within the U.S.

Section 365.501(b) requires that “a Mexico-domiciled carrier may not provide point-to-point transportation services, including express delivery services, within the United States for goods other than international cargo.” The transportation of domestic freight between points in the United States is known as “cabotage.”

The provisional operating authority granted to a Mexican domiciled motor carrier to operate beyond the commercial zone is limited to the transportation of international freight. Therefore, a carrier providing point-to-point transportation services in the U.S. is operating beyond the scope of its operating authority and is in violation of 49 CFR 392.9a(a). Commercial vehicles found to be operating beyond the scope of the carrier's provisional operating authority will be placed out of service, and the motor carrier may be subject to penalties.

The FMCSA has trained all State truck inspectors in the enforcement of operating authority restrictions and conducted significant outreach to the law enforcement community to ensure they are aware of these provisions and that they will examine MX trucks to determine if they are violating these restrictions. Additionally, we have and will continue to provide training to State and local law enforcement agencies on conducting roadside vehicle/driver traffic stops and detecting cabotage violations during stops of commercial motor vehicles for traffic violations. This training, aimed at law enforcement agents who are not full-time truck inspectors, but may encounter a Mexican truck during a traffic stop, is being conducted in association with the International Association of Chiefs of Police.

The FMCSA's training on enforcement of operating authority has been successful. In 2006 the Southern border States (California, Arizona, New Mexico, and Texas) discovered 2,328 instances (from 951,229 inspections) where a Mexico-domiciled carrier was found to be operating outside the scope of its operating authority. While these carriers may have been operating outside the scope of their authority for reasons other than cabotage (i.e., operating beyond the commercial zones or having not received authority), this data shows State and Federal enforcement personnel are enforcing this regulation.

The Agency will also use records like logbooks and associated supporting documents, such as bills of lading, during compliance reviews to determine if a Mexican carrier has operated beyond the scope of its authority by engaging in cabotage.

Specific Standards to be Used to Evaluate the Pilot Program

The Secretary has appointed a panel of three transportation experts to assess the safety performance of Mexico-domiciled carriers operating beyond the border commercial zone in the United States. The team is Mortimer L. Downey III, former Deputy Secretary of Transportation, Kenneth M. Mead, former DOT Inspector General, and James T. Kolbe, former U.S. Congressman from Arizona. The FMCSA has entered into a Memorandum of Understanding (MOU) with the Research and Innovative Technology Administration's Transportation Safety Institute (TSI) to provide independent management of the project.

The evaluation will provide an assessment of whether the safety performance of Mexico-domiciled carriers operating beyond the border commercial zone in the U.S. differs from the performance exhibited by U.S.-domiciled carriers. Specifically, the evaluation will focus on answering the following five key safety questions:

• Are the available crash data for Mexico-domiciled carriers participating in the project statistically different from comparable U.S.-domiciled carriers?
• Do Mexico-licensed commercial drivers pose a greater risk to the traveling public than U.S. CDL holders in terms of demonstrated unsafe driving practices, such as speeding, improper lane changes, controlled substances use/alcohol misuse?
• Are the trucks operated by Mexico-domiciled motor carriers maintained at levels similar to those of U.S.-domiciled carriers, or do they have higher out-of-service rates?
• In the course of conducting PASAs, did FMCSA detect violations of the 11 critical safety regulations in any greater proportion than found in new entrant audits of U.S.-domiciled carriers?
• What other safety problems are being experienced by enforcement personnel and others in the course of implementing the demonstration project?

Crash Rate (Recordable Crashes Per Million Miles)

Consistent with the New Entrant Safety Assurance Process, the evaluation will consider whether the crash rate of a participating carrier is indicative of a carrier with inadequate basic safety management controls.

Driver Behavior (Violations for Unsafe Driving Practices)

The evaluation will assess the number of moving violations, such as excessive speed and unsafe lane changes, and for violations of regulations relating to licenses, hours of service, and controlled substances use/alcohol misuse, compared to the national average for U.S.-domiciled driver.

Violation/Driver Safety Compliance (Number of Out-of-Service Orders)

The evaluation will assess the number of times a motor carrier's drivers or vehicles are placed out of service for violations of the FMCSRs or compatible State laws and regulations, compared to the average for U.S. carriers.

Carrier Safety Compliance (Number of Pre-Authorization Safety Audit Violations)

Using carrier PASA data, the evaluation will assess the number of carriers that had violations of 11 critical safety regulations, compared to the average found for U.S. carriers. The FMCSA has determined that a violation of any of the following 11 critical regulations is so significant that it merits failure of the safety audit:

1. Failing to implement an alcohol and/or controlled substances testing program.

2. Using a driver who has refused to submit to an alcohol or controlled substances test required under 49 CFR part 382.

3. Using a driver known to have tested positive for a controlled substance.

4. Knowingly allowing, requiring, permitting, or authorizing an employee with a CDL which is suspended, revoked, or canceled by a State or who is disqualified to operate a commercial motor vehicle.

5. Knowingly allowing, requiring, permitting, or authorizing a driver to operate a commercial motor vehicle while the driver is disqualified.

6. Operating a commercial motor vehicle without having in effect the required minimum levels of financial responsibility.

7. Using a disqualified driver.

8. Using a physically unqualified driver.

9. Failing to require a driver to make a record of duty status.

10. Requiring or permitting the operation of a commercial motor vehicle declared “out of service” before repairs are made.

11. Using a commercial motor vehicle that has not been periodically inspected.

Carrier Safety Compliance (Number of Post-Authorization Safety Audit Violations)

The evaluation will consider the number of violations of critical safety regulations found when a safety audit is triggered by operating violations, compared to the average found for U.S. carriers. Following the PASA, few carriers are expected to be cited for violations. However, under 49 CFR 385.105, violations of six regulations, identified through roadside inspections or any other established means, may subject the Mexico-domiciled carrier to an expedited safety audit, compliance review, or submission of evidence of correcting the deficiency. The six violations include:

1. Using a driver without a valid license.

2. Using a vehicle that has been placed out of service without completing the required repairs.

3.Involvement in, due to an act or omission of the carrier, a hazardous materials incident within the U.S.

4.Using a driver who tests positive for controlled substances or alcohol or refuses to submit to required tests.

5.Operating in the U.S. without the required minimum levels of financial responsibility.

6.Having a driver or vehicle out-of-service rate of 50 percent or more, based on at least three inspections occurring within a 90 consecutive-day period.

List of Federal Motor Carrier Safety Laws and Regulations for Which FMCSA Will Accept Compliance With a Corresponding Mexican Law or Regulation

The Secretary of Transportation will accept only three areas of Mexican regulations as being equivalent to United States regulations. The first area is the regulations governing Mexican Commercial Driver's Licenses (CDL). The U.S. acceptance of a Mexican CDL, known as the Licencia Federal de Conductor, dates back to November 21, 1991, when the Federal Highway Administrator determined that the Mexican CDLs are equivalent to the standards of the U.S. regulations. Mexico will disqualify a driver's CDL for safety infractions or testing positive for the use of drugs. However, since Mexico's disqualification standards are not identical to U.S. standards, FMCSA, working with the States, has developed a system to monitor the performance of Mexican drivers while in the U.S. and take steps to disqualify these drivers if they incur violations that would result in a U.S. driver's license being suspended. Therefore, the U.S. is not relying solely on Mexico's disqualification standards, but is imposing its own standards in addition to any disqualifications that may be taken by the Mexican government.

Second, the Secretary of Transportation will also consider that physical examinations conducted by Mexican doctors and drug testing specimens collected by Mexican collection facilities are equivalent to examinations and test specimens conducted or collected in the United States. In Mexico, in order to obtain the Licencia Federal de Conductor a driver must meet the requirements established by the Ley de Caminos, Puentes y Autotransporte Federal (LCPAF or Roads, Bridges and Federal Motor Carrier Transportation Act) Article 36, and Reglamento de Autotransporte Federal y Servicios Auxiliares (RAFSA, or Federal Motor Carrier Transportation Act) Article 89, which state a Mexican driver must pass the medical exam performed by Mexico's Secretariat of Communications and Transportation (SCT), Directorship General of Protection and Prevention Medicine in Transportation (DGPMPT). This is the same medical exam performed on applicants in all modes of transportation (airline pilots, merchant mariners, and locomotive operators). It is conducted by government doctors instead of the private physicians performing the examination on U.S. drivers.

Third, controlled substances testing in Mexico is also conducted by personnel from Mexico's SCT. The U.S. DOT and SCT have a Memorandum of Understanding (MOU) under which Mexico has agreed to collect drug testing specimens using U.S. specimen collection procedures and U.S. collection forms. The U.S. DOT has translated its drug testing collection forms into Spanish as part of this MOU. While to date all Mexican carriers that have undergone a PASA from the FMCSA are sending their drivers to U.S. collection facilities, the Secretary of Transportation would accept a drug test using a specimen collected in Mexico using our forms and procedures.

Table 1 below outlines the specific U.S. and Mexican regulations in the three areas where the Mexican regulations or processes are being accepted as meeting U.S. requirements.

Table 1

Description	United States	Mexico
Drug and Alcohol Testing Procedures—Random Testing	• 49 CFR Part 382	• Requires random drug testing by motor carrier at a 50 percent rate. • Reglamento del Servicio de Medicina Preventiva del Transporte. • Government conducts random drug testing at terminals, ports of entry, and specific areas along corridors.
Drug and Alcohol Testing Procedures—Collection of Samples	49 CFR Part 40 • Collection of procedures outlined and detailed description of the custody.	• Reglamento del Servicio de Medicina Preventiva del Transporte. • DGPMPT-IT-02-01; DGPMPT-PE-02-F-01. •-DGPMPT-PE-02. • DGPMPT-IT-02-01 thru 08. • Collection procedures have been ISO certified. • The U.S. and Mexico have a Memorandum of Understanding that Mexico will, when collecting samples to satisfy U.S. drug testing regulations, use U.S. collection procedures and forms. These forms have been translated into Spanish and provided to Mexico.
Drug and Alcohol Testing Procedures—Laboratory Testing	• 49 CFR Part 40 • Laboratories approved by the U.S. Department of Health and Human Services.	Reglamento del Servicio de Medicina Preventiva del Transporte. • DGPMPT-PE-01-IE-01. • Regulations and procedures are equivalent to U.S. standards. • Laboratory is not certified due to lack of proper equipment and other procedural requirements.
Commercial Driver's License—Issuance	• 49 CFR Part 383 • Outlines the knowledge, skills and testing procedures required to obtain a commercial driver's license.	• Ley de Caminos, Puentes y Autotransporte Federal. • Articlos 89 y 90, Reglamento de Autotransportes Federal y Servicio Auxilares. • Driver must provide proof of medical qualification, proof of address, and training(both skills and knowledge). • Must be renewed every 2 years.
Commercial Driver's License—Disqualifications	• 49 CFR Part 383 • Outlines CDL disqualifications for major and serious traffic violations.	• Ley de Caminos, Puentes y Autotransporte Federal. • Reglamento del Servicio de Medicina Preventiva del Transporte. • Provides for the disqualification of drivers for major and serious traffic violations. • License can be canceled by a judge. • License can be canceled for three speeding violations in a one year period. • License can be canceled for leaving the scene of an accident without notifyingthe closest authority or abandoning the vehicle. • License can be canceled for altering the license. • License can be canceled for failing to a drug test. • License cannot be obtained after failing a drug test without proof of success completion of a rehabilitation program. • License can be suspended for failing to provide accurate information on application. • Cancellation is valid for 10 years—cannot obtain a license for 10 years.
Medical Standards	• 49 CFR Part 391 • US—Requires a comprehensive physical and psychological examination. • Medical examination is not part of the CDL issuance process.	Reglamento del Servicio de Medicina Preventiva del Transporte. MX—Requires a comprehensive physical and psychological examination. • Medical Medical examination is a pre-requisite to obtaining a Licencia de Federal de Conductor. • Medical examination may be required while the driver is “in operation” (on duty) to determine if the driver is still qualified to drive.

Request for Comments

In accordance with the Act, FMCSA requests public comment from all interested persons on the Agency's plan for fulfilling the requirements of sections 6901(a) and 6901(b)(2)(B)(i) through (v). All comments received before the close of business on June 28, 2007 will be considered and will be available for examination in the docket at the location listed under the address section of this notice. Comments received after the comment closing date will be filed in the public docket and will be considered to the extent practicable. In addition to late comments, the FMCSA will also continue to file, in the public docket, relevant information that becomes available after the comment closing date. Interested persons should continue to examine the public docket for new material.

Issued: June 5, 2007.

John H. Hill,

Administrator.

Footnotes

1.  On August 20, 2004, FMSCA published a final rule implementing section 4007.

2.  See 49 CFR 365.201 through 365.207 on how to oppose requests for FMCSA provisional operating authority.

3.  SafeStat (short for Motor Carrier Safety Status Measurement System) is an automated, data driven analysis system designed by FMCSA. For more information, see http://ai.fmcsa.dot.gov/​safestat/​disclaimer.asp?​RedirectedURL=​/​safestat/​safestatmain.asp.

4.  While there are 6 factors considered in determining a motor carrier's safety rating, only 5 will be applicable to carriers operating in the demonstration project because transportation of hazardous materials will not be authorized.

5.  Violations of the English proficiency and cabotage rules are both non-recordkeeping violations.