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/ March
/ Tuesday, March 19, 2002
[Federal Register: March 19, 2002 (Volume 67, Number 53)]
[Rules and Regulations]
[Page 12701-12755]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19mr02-22]
[[Page 12701]]
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Part III
Department of Transportation
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Federal Motor Carrier Safety Administration
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49 CFR Part 365
Application by Certain Mexico-Domiciled Motor Carriers To Operate
Beyond United States Municipalities and Commercial Zones on the United
States-Mexico Border; Final Rule
[[Page 12702]]
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DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety Administration
49 CFR Part 365
[Docket No. FMCSA-98-3298]
RIN 2126-AA34
Application by Certain Mexico-Domiciled Motor Carriers To Operate
Beyond United States Municipalities and Commercial Zones on the United
States-Mexico Border
AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.
ACTION: Interim final rule; request for comments.
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SUMMARY: The FMCSA revises its regulations and form, OP-1(MX),
governing applications by Mexico-domiciled carriers who want to operate
within the United States beyond the municipalities adjacent to Mexico
in Texas, New Mexico, Arizona and California and beyond the commercial
zones of such municipalities (``border zones''). This interim rule
includes requirements that were not proposed in the NPRM, but which are
necessary to comply with the Fiscal Year 2002 DOT Appropriations Act
enacted into law in December 2001. This action is taken in anticipation
of a presidential order lifting the current statutory moratorium on
authorizing such operations. The form requires additional information
about the applicant's business and operating practices to help the
FMCSA to determine if the applicant will be able to meet the safety
standards established for operating in interstate commerce in the
United States. Carriers that previously submitted an application to
operate beyond the border zones must submit the updated form. Any
Mexico-domiciled motor carrier (of property) that wants to operate
within the United States solely within the border zones must apply
under separate FMCSA regulations that we are issuing elsewhere in
today's Federal Register. The revisions in this action are part of
FMCSA's efforts to ensure the safe operation of Mexico-domiciled motor
carriers in the United States and implement the 2002 DOT Appropriations
Act. This action will ensure that FMCSA receives adequate information
to assess an applicant's ability to comply with U.S. safety standards.
It requires that all Mexico-domiciled carriers subject to this rule
undergo a safety audit before receiving provisional authority to
operate in the United States. Therefore, the FMCSA is publishing this
action as an interim final rule and is delaying the effective date in
order to consider additional public comments regarding pre-
authorization safety audits before grants of provisional authority.
These changes will result in the FMCSA being able to better maintain an
accurate census of Mexico-domiciled carriers operating beyond the
border zones.
DATES: This interim final rule is effective May 3, 2002. We must
receive comments by April 18, 2002.
ADDRESSES: You can mail, fax, hand deliver or electronically submit
written comments to the Docket Management Facility, United States
Department of Transportation, Dockets Management Facility, Room PL-401,
400 Seventh Street, SW., Washington, DC 20590-0001 FAX (202) 493-2251,
on-line at http://dmses.dot.gov/submit. You must include the docket
number that appears in the heading of this document in your comment.
You can examine and copy all comments at the above address from 9 a.m.
to 5 p.m., e.t., Monday through Friday, except Federal holidays. You
can also view all comments or download an electronic copy of this
document from the DOT Docket Management System (DMS) at http://
dms.dot.gov/search.htm and typing the last four digits of the docket
number appearing at the heading of this document. The DMS is available
24 hours each day, 365 days each year. You can get electronic
submission and retrieval help and guidelines under the ``help'' section
of the web site. If you want us to notify you that we received your
comments, please include a self-addressed, stamped envelope or postcard
or print the acknowledgement page that appears after submitting
comments on-line.
Comments received after the comment closing date will be included
in the docket and we will consider late comments to the extent
practicable. FMCSA may, however, issue a final rule at any time after
the close of the comment period.
FOR FURTHER INFORMATION CONTACT: Joanne Cisneros, (909) 653-2299,
Transborder Office, FMCSA, P.O. Box 530870, San Diego, CA 92153-0870.
Office hours are from 7:45 a.m. to 4:15 p.m., p.t., Monday through
Friday, except Federal holidays.
SUPPLEMENTARY INFORMATION:
Background
Before 1982, Mexico-domiciled motor carriers could apply for
authority to operate within the United States by filing an application
for such authority with the former Interstate Commerce Commission
(ICC). Under the Bus Regulatory Reform Act of 1982 (the Act), Congress
imposed a 2-year moratorium on the issuance of new grants of U.S.
operating authority to motor carriers domiciled in a contiguous foreign
country, or owned or controlled by persons of a contiguous foreign
country. The legislation authorized the President to remove or modify
the moratorium upon a determination that such action was in the
national interest. The Act was developed in response to complaints that
neither Mexico nor Canada were permitting U.S. motor carriers the same
access to their markets as Mexican and Canadian motor carriers had to
U.S. markets. While the trade issues with Canada were resolved quickly,
resulting in the moratorium being lifted for Canada-domiciled motor
carriers, the trade issues with Mexico were not addressed until the
North American Free Trade Agreement (NAFTA) was negotiated in the early
1990s. Legislative and executive extensions have maintained the
moratorium for Mexico-domiciled motor carriers since 1982.
A number of Mexico-domiciled motor carriers have been permitted to
operate in the United States because they are not covered by the
moratorium. The moratorium only applies to new grants of operating
authority. Thus, the operations of Mexico-domiciled motor carriers that
had obtained unrestricted operating authority before the moratorium was
enacted were unaffected by the moratorium. Additionally, access has
been allowed for certain motor carriers whose operations fell outside
the ICC's licensing jurisdiction. These carriers receive Certificates
of Registration by filing Form OP-2 under the provisions of what is now
49 CFR part 368. These carriers include those that operate solely
within the border zones. Also included among these are certain types of
carriers whose operations are not restricted to the border zones: U.S.-
owned, Mexico-domiciled private carriers; U.S.-owned, Mexico-domiciled
carriers of exempt goods; and Mexico-domiciled carriers that only
traverse the United States to deliver or pick up cargo or passengers in
Canada.
The terms of NAFTA, Annex I, provide that the United States would
incrementally lift the moratorium on licensing Mexico-domiciled motor
carriers to operate beyond the border zones. Pursuant to the first
phase of NAFTA, on January 1, 1994, the President modified the
moratorium and the ICC began accepting applications from Mexico-
domiciled passenger carriers to conduct international charter
[[Page 12703]]
and tour bus operations in the United States. In December 1995, ICC
promulgated a rule and a revised application form for the processing of
Mexico-domiciled property carrier applications. These rules anticipated
the implementation of the second phase of NAFTA, providing Mexico-
domiciled property carriers with access to the four U.S. States
bordering Mexico, and the third phase, providing access throughout the
United States. The ICC designated the revised application form OP-
1(MX).
Through the ICC Termination Act of 1995 (ICCTA), Congress
authorized the President to remove or modify the moratorium upon the
President's determination that such action is consistent with United
States obligations under a trade agreement or with United States
transportation policy. The ICCTA also dissolved the ICC and transferred
the authority to issue new grants of U.S. operating authority for motor
carriers and some other of its regulatory functions to the Secretary of
Transportation, who delegated this authority to the Office of Motor
Carriers (OMC) of the Federal Highway Administration (FHWA).
On December 15, 1995, the International Brotherhood of Teamsters
(Teamsters) sought an emergency stay of the ICC rule in the United
States Court of Appeals for the District of Columbia. The Teamsters
contended that the ICC rule was arbitrary and capricious because it
failed to address concerns regarding the safe operation of Mexico-
domiciled motor carriers. In their comments on the ICC rule, the
Teamsters had requested the ICC to add additional safety questions to
the applications filed by Mexico-domiciled carriers to ensure that the
applicants were willing and able to comply with applicable safety
regulations.
On December 18, 1995, the Secretary of Transportation announced an
indefinite delay in implementing the NAFTA motor carrier access
provisions. The Court of Appeals subsequently denied the Teamsters'
request for an emergency stay of the ICC rule, which became an FHWA
regulation upon the termination of the ICC, and set the case for
briefing and argument. After the Teamsters' case was briefed and
argued, the court ordered the case held in abeyance until the
Department decided to commence processing applications of Mexico-
domiciled motor carriers seeking authority to operate beyond the border
zones. Approximately 190 Mexico-domiciled carriers have filed OP-1(MX)
applications with the Department.
Mexico filed complaints against the United States under NAFTA's
dispute resolution provisions, challenging the United States' decision
to deny further trucking, investment, and bus access. An arbitration
panel comprised of five individuals with international trade expertise
chosen by the United States and Mexico met in May 2000 to hear the
trucking and investment case. The parties engaged in extensive pre- and
post-hearing briefing on safety and legal issues.
The panel issued a final report on February 6, 2001, that
unanimously concluded that the blanket refusal to process applications
of Mexico-domiciled motor carriers seeking U.S. operating authority out
of concerns over the carriers' safety was in breach of NAFTA
obligations of the United States, specifically NAFTA's provisions
ensuring national treatment and most-favored-nation treatment for
cross-border services. The panel also unanimously decided that the
United States' refusal to permit Mexican nationals to invest in U.S.
enterprises that provide transportation of international cargo within
the United States violated the United States' NAFTA obligations. In
June 2001, the President lifted this part of the moratorium.
With respect to its decision on the U.S. refusal to implement
NAFTA's truck access provisions, the panel stated that it did not
disagree that truck safety is a legitimate regulatory objective and
that it was not limiting U.S. application of its truck safety standards
to Mexican carriers operating in the United States provided that they
are applied in a manner that is consistent with the United States'
NAFTA obligations. The panel noted that compliance with NAFTA
obligations did not require the granting of operating authority to
Mexican trucking companies that might be unable to comply with U.S.
safety regulations. The panel observed that the United States might not
be required to treat applications for operating authority from Mexican
trucking firms in exactly the same manner as applications from U.S. or
Canadian firms, as long as the applications are reviewed on a case-by-
case basis. The panel stated that to the extent that Mexican licensing
and inspection requirements might not be like U.S. requirements, the
United States might be justified in using methods to ensure Mexican
carrier compliance with the U.S. regulatory regime that differ from
those used for U.S. and Canadian carriers, provided that such different
methods are used in good faith to address legitimate safety concerns
and fully conform with all relevant NAFTA provisions.
It is important to note that this interim final rule and the two
related rules published elsewhere in today's Federal Register represent
only part of the FMCSA's effort to ensure the safe operation of Mexico-
domiciled motor carriers in the United States. For example, Mexico-
domiciled motor carriers, their vehicles, and their drivers operating
in the United States have been and will continue to be subject to all
of FMCSA's safety requirements, inspection procedures, enforcement
mechanisms, and fines and out-of-service orders. In addition to being
subject to the various safety audits and compliance reviews contained
in these rules, these carriers and their vehicles and drivers will
continue to be subject to roadside vehicle inspections performed at the
border and throughout the United States by FMCSA inspectors and their
State partners. FMCSA has received additional funding from Congress to
enhance its inspection capabilities at the border. The FMCSA is also
conducting seminars in Spanish for Mexican carriers to help ensure that
they understand U.S. safety requirements. FMCSA personnel also expect
to continue their cooperative efforts with their Mexican Government
counterparts toward enhancing Mexico's motor carrier regulatory regime.
The DOT's Research and Special Programs Administration (RSPA) has
made considerable progress in harmonizing the hazardous materials
standards of the United States and Mexico. Though Mexican hazardous
materials standards are not as comprehensive as U.S. standards, those
in place are compatible with U.S. standards.
RSPA has also made significant strides in educating Mexico-
domiciled hazardous materials shippers and carriers in hazardous
materials safety. In 1993, it translated the U.S. Emergency Response
Guide into Spanish. Since then, Mexican emergency response information
requirements have been harmonized with existing U.S. emergency response
information requirements. The U.S., Mexican and Canadian Governments
now jointly issue an Emergency Response Guide. RSPA has also translated
various hazardous materials brochures and pamphlets into Spanish as
well as identified free hazardous materials industry resources to
assist the Mexican Government's Secretaria de Comunicaciones y
Transportes (SCT) in providing hazardous materials and
[[Page 12704]]
emergency response training for its inspectors.
Section 350 of the 2002 DOT Appropriations Act, Public Law 107-87
(Act), prohibits the Secretary of Transportation from obligating or
expending funds for reviewing or processing applications of Mexico-
domiciled motor carriers for authority to operate beyond the United
States municipalities and commercial zones on the United States-Mexico
international border until the FMCSA and DOT complete several
enumerated actions. Many of the requirements of the Act have been
incorporated into this interim final rule and the two companion rules
published elsewhere in today's Federal Register. Under this interim
final rule FMCSA will: (1) Conduct safety examinations or audits on
Mexico-domiciled carriers seeking authority to operate beyond the
border zones encompassing the nine areas of inquiry required by section
350(a)(1)(B); (2) assign a distinctive U.S. DOT number to each Mexico-
domiciled motor carrier operating beyond the border zones, in
accordance with section 350(a)(4); (3) require Mexico-domiciled motor
carriers operating beyond the border zones to certify that they will
have their vehicles inspected by Commercial Vehicle Safety Alliance
(CVSA)-certified inspectors every three months, in accordance with
section 350(a)(5); and (4) require Mexico-domiciled carriers to provide
proof of valid insurance issued by an insurance company licensed in the
United States before granting them authority to operate beyond the
border zones, in accordance with section 350(a)(8).
FMCSA invites comments about how the interim final rule
incorporates these new section 350 provisions into the application and
approval process.
Summary of Notice of Proposed Rulemaking (NPRM)
The FMCSA proposed changes to its regulations and application
procedures for Mexico-domiciled motor carriers desiring to operate
within the United States under the NAFTA liberalized access provisions
in the May 3, 2001 Federal Register (66 FR 22371). Applicants wanting
to conduct transportation services within the United States beyond the
border zones would submit a redesigned Form OP-1(MX). The proposed
application solicited information to indicate the nature of the
operation, demonstrate the applicant's knowledge of the basic
requirements of the Federal Motor Carrier Safety Regulations (FMCSRs)
and describe how it intended to comply with these regulations.
Furthermore, we proposed to require each applicant to make specific
certifications of compliance, such as requiring an applicant to submit
verification from the Mexican Government that it is a registered
Mexico-domiciled carrier authorized to conduct motor carrier operations
up to the United States-Mexico border and that all drivers who operate
in the United States have a valid Licencia Federal de Conductor (LFC)
issued by the Government of Mexico. The applications would also be
subject to the other procedures set forth in part 365 for applications
in the OP-1 series (e.g., protests and publication in the FMCSA
Register).
Discussion of Comments to the NPRM
In response to the three NPRMs relating to NAFTA implementation,
the FMCSA received over 200 comments. Over 90 percent of the comments
opposed the safety monitoring system or the border opening. Most of the
comments focused on the proposed safety monitoring system (66 FR 22415)
and will be fully discussed elsewhere in today's Federal Register. A
large percentage of the commenters addressed all three rules together
in a single submission that may have been filed in one or all three
public dockets. We have carefully considered them and have revised the
Form OP-1(MX) application form and the regulations governing the
application process as noted in the preamble sections titled
``Discussion of the Interim Final Rule'' and ``Final Revisions to Form
OP-1(MX).'' In this section, FMCSA responds to the comments on Form OP-
1(MX) (and common elements to Form OP-2) and part 365.
The Friends of the Earth, Natural Resources Defense Council, Sierra
Club, and Center for International Law (Friends of the Earth et al.)
jointly commented that FMCSA is required to perform additional analysis
to meet the requirements of the National Environmental Policy Act
(NEPA) and Executive Order 13045, concerning the protection of children
from environmental and health and safety risks. The International
Brotherhood of Teamsters (Teamsters) also expressed this viewpoint. The
Friends of the Earth et al. believe that 40 CFR 1501.3(b) requires that
if DOT is not certain that an environmental impact statement is
required, then it must first prepare an environmental assessment.
Regarding compliance with Executive Order 13045, the Friends of the
Earth et al. believe that this action presents increased pollution and
safety concerns that pose a disproportionate risk to children.
The FMCSA is preparing an agency order to meet the requirements of
DOT Order 5610.1C (that establishes the Department of Transportation's
policy for compliance with NEPA by the Department's administrations).
The FMCSA has conducted a programmatic environmental assessment (PEA)
of the three rulemakings in accordance with the DOT Order and the
regulations of the Council on Environmental Quality. A discussion of
the PEA and its findings and the FMCSA's responsibilities under E.O.
13045 is presented later in the preamble under ``Regulatory Analyses
and Notices.'' A copy of the PEA is in the docket to this rulemaking.
The Attorney General for the State of California submitted a
comment in which he asserted that the FMCSA would be required to
perform a ``conformity determination'' pursuant to the Clean Air Act
(CAA), before finalizing these rulemakings. Under the CAA, Federal
agencies are prohibited from supporting in any way, any activity that
does not conform to an approved State Implementation Plan (SIP), (42
U.S.C. 7006). EPA regulations implementing this provision require
Federal agencies to determine whether an action would conform with the
SIP (a ``conformity determination''), before taking the action (40 CFR
93.150). The Attorney General asserts that the FMCSA must make a
conformity determination before taking final action to implement
regulations that would allow Mexican trucks to operate beyond the
border. The Attorney General provided technical information to support
his assertion that allowing Mexican trucks to operate beyond the border
would likely not be in conformity with California's SIP.
We have reviewed our obligations under the CAA, and believe that we
are in compliance with the general conformity requirements as
implemented by the U.S. Environmental Protection Agency (EPA). EPA's
implementing regulations exempt certain actions from the general
conformity determination requirements. Actions which would result in no
increase in emissions or clearly a de minimis increase, such as
rulemaking (40 CFR 93.153(c)(iii)), are exempt from requiring a
conformity determination. In addition, actions which do not exceed
certain threshold emissions rates set forth in 40 CFR 93.153(b) are
also exempt from the conformity determination requirements. The FMCSA
rulemakings meet both of these exemption standards. First, as noted
elsewhere in this preamble to this rule, the actions being taken by the
FMCSA are rulemaking actions to improve
[[Page 12705]]
FMCSA's regulatory oversight, not an action to modify the moratorium
and allow Mexican trucks to operate beyond the border. Second, the air
quality impacts from each of the FMCSA's rules neither individually nor
collectively exceed the threshold emissions rates established by EPA
(see Appendix C of the Environmental Assessment accompanying these
rulemakings for a more detailed discussion of air quality impacts). As
a result, we believe that FMCSA's rulemaking actions comply with the
CAA requirements, and that no conformity determination is required.
The American Insurance Association (AIA) commented that the OP-
1(MX) form does not make clear the fact that layered insurance filings
(primary and excess securities) are acceptable. The AIA suggested
modifying the form to make it clear. The FMCSA does not find this
modification to be necessary because the acceptability of layered
insurance filings is clearly explained in 49 CFR part 387, subpart C.
The International Brotherhood of Teamsters (Teamsters) commented
that the financial responsibility section of the form should be
modified to make clear that we would not grant provisional operating
authority until we receive the appropriate filings for financial
responsibility and service of process agents from the applicant and its
financial responsibility agent(s). The AFL-CIO's Transportation Trades
Department (TTD) commented that various statements and certifications
could be made more understandable. The FMCSA will verify that a carrier
has the necessary financial responsibility as part of the pre-
authorization safety audit. However, there will be no DOT number issued
at that time under which a filing may be made. Therefore, we will
permit insurance companies to file evidence of insurance with FMCSA
after provisional authority is granted. However, provisional operating
authority will not be valid, and the carrier may not operate under that
authority, until an insurance filing is made with, and accepted by, the
agency. This is consistent with the procedure applicable to U.S. and
Canadian carriers required to obtain operating authority under 49
U.S.C. 13901. In a similar vein, we are giving applicants the option of
including with the application a notification that a process agent
service will electronically file the necessary process agent
information within 90 days. As is the case with U.S. and Canadian
carriers subject to 49 U.S.C. 13901, a Mexico-domiciled carrier may not
operate in the United States until the process agent filing is made
with, and accepted by, the agency.
United Parcel Service (UPS) commented that the application and
regulations for Mexico-domiciled carriers requesting operating
authority should identify express delivery as a separate kind of
carrier operation. UPS explains that this distinction would enable the
United States to accelerate the timeline for lifting the moratorium for
express delivery services, without awaiting action on general trucking.
We do not see the need at this time for the rules to distinguish
between express delivery services and general trucking services. We do
not expect that the moratorium will be lifted for express delivery
services before the lifting of the moratorium on general trucking. In
addition, the United States maintains a reservation under the NAFTA on
the transportation of goods other than international cargo between
points in the United States, and the reservation covers both express
delivery services and other motor carrier services.
The Owner-Operator Independent Drivers Association, Inc. (OOIDA)
and the California Trucking Association (CTA) recommended that the form
specify the additional U.S. laws to which Mexico-domiciled carriers
would be subject. The OOIDA commented that since NAFTA requires Mexico-
domiciled carriers to comply with U.S. laws and all applicable State
laws when operating within the United States, the FMCSA should set
forth the particular U.S. laws to which applicants are subject. They
believe form references to other laws are too vague and should be more
fully enumerated. The CTA recommends modifying the form to require an
applicant to certify that it will comply with the laws of other U.S.
agencies.
The FMCSA believes that it is beyond the scope of this rulemaking
to provide an exhaustive listing and explanation on the OP-1(MX) form
of all Federal and State laws to which carriers are subject when
operating within the United States. However, we are conducting
information sessions for potential applicants where, among other
things, we discuss additional information provided by other Federal
agencies and State registration requirements. This information will
also be on the FMCSA web site.
We have worked closely with other Federal agencies, including the
U.S. Department of Labor (DOL), U.S. Environmental Protection Agency
(EPA) and others, in drafting and clarifying the statement that appears
after the signature line of Section VIII--Compliance Certifications.
This statement underscores the importance of complying with all
pertinent Federal, State, local and tribal statutory and regulatory
requirements, including labor, environmental, and immigration laws.
Such compliance includes producing requested records for review and
inspection. It also includes compliance by drivers who must meet the
requirements under the Immigration and Nationality Act, 8 U.S.C. 1101
et seq., and pass inspection by inspectors of the Immigration and
Naturalization Service at the port of entry.
The American Trucking Associations, Inc. (ATA), OOIDA, the
Teamsters, and the TTD expressed concern that the hazardous materials
requirements listed in the safety certification statements were
incomplete, suggesting a more comprehensive listing of requirements,
including the hazardous material registration requirement. They
suggested additional hazardous materials documentation to be submitted
with the application. The Transportation Lawyers Association (TLA)
believes that the current and proposed application procedures have a
loophole regarding identification of hazardous materials carriers. It
contends that the ``check the block'' system, and the fact that none of
the information described in the hazardous materials certification
statements must be submitted with the application, enable the hazardous
materials transporter to escape detection. Neither the form nor
application procedures require a carrier who later decides to transport
hazardous materials to notify the FMCSA or provide evidence of
knowledge of hazardous materials standards--only to increase the amount
of insurance carried.
We have corrected and modified the hazardous material
certifications in response to these comments. The hazardous materials
certification statements have been revised to more thoroughly reference
applicable hazardous materials requirements and request the
supplemental information required by the Hazardous Materials
Regulations. Please reference the section ``Final Revisions to the Form
OP-1(MX)'' for a detailed discussion of revisions to the certification
statements. Information regarding hazardous materials operations will
be verified during the pre-authorization safety audit established in
this interim final rule pursuant to section 350 of the DOT
Appropriations Act.
Section 350 of the Act prohibits Mexico-domiciled motor carriers
from transporting hazardous materials in a placardable quantity beyond
the border zones until the United States has completed an agreement
with the Government of Mexico ensuring that
[[Page 12706]]
drivers of such placardable quantities of hazardous materials meet
substantially the same requirements as U.S. drivers carrying such
materials. Section 1012(b) of the ``Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001'' (USA PATRIOT Act) [Pub. L. 107-56, October 26,
2001] amended the Hazardous Materials Transportation Act (49 U.S.C.
5101-5127) and the Commercial Motor Vehicle Safety Act of 1986 (49
U.S.C. 31301-31317) by placing limitations on the issuance or renewal
of hazardous materials licenses. (The DOT interprets the term
``hazardous materials licenses'' to mean a hazardous materials
endorsement for a commercial driver's license because of the reference
to section 31305 in section 1012(b).) The OP-1(MX) form will require
additional information regarding cargo tank certification, hazardous
materials training, and persons responsible for ensuring compliance
with the Hazardous Materials Regulations.
The CTA commented that the FMCSA should distribute an applicant's
Single State Registration System (SSRS) filing to the appropriate SSRS
members. The FMCSA does not have the resources to coordinate the SSRS
filings for Mexico-domiciled carriers. We have also removed specific
references to the SSRS from the form instructions (although the
requirement still remains), because it is one of many State
requirements. We do not wish to imply that the SSRS requirement is the
sole State requirement for Mexico-domiciled carriers or that it has
greater importance than other laws or regulations.
The TLA commented that the definition of private carrier in the
instructions to the application form includes a phrase that has
historically described a for-hire carrier and suggests that the form be
modified. In Section III of the instructions, a motor private carrier
is defined as an entity that is ``transporting its own goods, including
an entity that is performing such operations under an agreement or
contract with a U.S. shipper or other business.''
This definition is an attempt to rephrase, in plain language, the
text of 49 U.S.C. 13102(7). Section 13102(7) defines foreign motor
private carrier to include persons (except motor carriers of property
or motor private carriers) that provide interstate transportation of
property by motor vehicle under agreements or contracts with persons
who are not motor carriers of property or motor private carriers. The
form instructions may be confusing because they do not reference the
for-hire motor carrier exclusion in defining a private carrier.
Therefore, we have modified the form to provide clarity.
Camara Nacional del Autotransporte de Cargo (CANACAR) commented
that we must more fully explain the need for a process agent in the
United States and link this requirement directly to safety and NAFTA.
CANACAR believes we should require only one process agent in the United
States. It commented that requiring more than one would violate NAFTA.
Contrary to CANACAR's suggestion, nothing in the NAFTA limits the
rights of the United States to require firms to designate more than one
process agent. Requiring Mexico-domiciled carriers to comply with 49
CFR part 366 would not violate NAFTA because the same requirement
applies to U.S. and Canadian motor carriers. A process agent service
may be used to maintain service of process agents in multiple States,
thus eliminating the need for carriers themselves to retain agents in
each State. A process agent service is an association or corporation
that files with the FMCSA a list of process agents for each State in
which the carrier intends to operate.
CANACAR believes that FMCSA must remove registration requirements
for agricultural, private, and exempt carriers, because we do not
require U.S. and Canadian agricultural, private, and exempt carriers to
register under 49 U.S.C. chapter 139.
The Motor Carrier Safety Act of 1984, Public Law 98-554, 98 Stat.
2832, required Mexican motor carriers conducting operations otherwise
exempt from the economic regulation requirements (i.e., for-hire
carriers of exempt commodities, agricultural and private carriers) to
register with the Interstate Commerce Commission to conduct operations
in the United States. These requirements are an important element of
FMCSA's effort to ensure the safe operation of Mexican motor carriers
on U.S. highways. From a safety standpoint, there is no distinction
between agricultural, private, and exempt carriers and the Mexican
carriers that would otherwise be required to register.
CANACAR also believes that the OP-1(MX) and OP-2 form questions
about affiliates will violate section 219 of the Motor Carrier Safety
Improvement Act (MCSIA), which it interprets to mean that ``once NAFTA
is implemented'' questions about affiliates would no longer be needed.
CANACAR commented that section 219 of MCSIA only applies to
``carriers'' and not ``nationals.''
The FMCSA will continue to require OP-1(MX) applicants to submit
information on affiliations because it is useful in deterring
operations by disqualified carriers. Section 219 of MCSIA authorizes
FMCSA to penalize and disqualify foreign motor carriers for operating
beyond the border zones before the implementation of NAFTA, but it does
not prohibit enforcement after NAFTA's implementation (nor the
collection of information on a foreign carrier's affiliations). FMCSA
requires similar information from U.S. and Canadian applicants to
ensure that unsafe carriers do not evade out-of-service orders or
registration suspensions by continuing operations under a different
identity.
The Free Trade Alliance San Antonio recommends that we provide a
sample completed OP-1(MX) form, including attachments, as a guide to
applicants. The FMCSA will address this comment in training materials
and in our workshops for potential applicants.
The TLA commented that the proposed forms require a carrier
operating ``small vehicles (GVWR under 10,000 pounds)'' to certify that
``it is exempt from the U.S. DOT Federal Motor Carrier Safety
Regulations * * * .'' The TLA believes that the certification does not
accurately reflect the accompanying instructions stating that an
``exempt'' carrier ``must certify that [it is] familiar with and will
observe general operational safety fitness guidelines and applicable
State and local laws relating to the safe operation of commercial motor
vehicles.'' The TLA further commented that the safety certification
mentioned in the instructions was originally authored by the ICC in
response to comments filed by it in Ex Parte No. 55 (Sub-No. 94),
Revision of Application Procedures and Corresponding Regulation, 10 ICC
2d 386, 398-399 (1994). The TLA commented that certification that a
carrier who is exempt from the FMCSRs, ``will observe'' applicable
Texas State Law is meaningless. The TLA believes that local law has no
ability to influence a carrier's adherence to good highway safety
practices beyond its extremely limited reach.
Carriers that are exempt from direct DOT oversight-because they
operate smaller vehicles which generally operate only locally and do
not pose a significant enough public threat to warrant Federal
involvement-are nonetheless subject to State safety oversight. Many
MCSAP States have not fully exempted smaller vehicles from their safety
oversight and are not required to exempt them under MCSAP. Consistent
with the Congressional
[[Page 12707]]
mandate that safety is our highest priority, the FMCSA will require
that OP-1(MX) applicants certify their willingness to inform themselves
concerning any State, local and tribal safety laws to which they are
subject and to pledge to abide by them.
The Teamsters commented that instead of the check boxes on the
form, we should require narratives describing systems and procedures
that the applicant now uses or intends to use in the future. They
contend that all applicants should be required to submit accident
records with the applications and that ``* * * (A)ny responsible
carrier would have the information required to compile such a record at
the time the application is prepared'' even if it had not been
maintaining an accident record as such. The TLA recommends that we
require a narrative response about the content of an applicant's
household goods arbitration program.
The FMCSA will evaluate information provided in the OP-1(MX) form
and will conduct a safety audit of each carrier before deciding to
grant provisional operating authority and allowing it to commence
operations in the United States. Requests for additional narrative
descriptions have been restricted to information necessary to evaluate
an applicant's willingness and ability to comply with our safety
standards and are not meant to be overly burdensome. The FMCSA will not
burden Mexico-domiciled carriers with a requirement to provide a
narrative description of their household goods arbitration programs
because it is not critical to the safety mission of the agency and can
be evaluated during the pre-authorization safety audit.
The Teamsters and Public Citizen commented that applicants should
complete a proficiency exam testing their knowledge of the FMCSRs as a
part of the application procedure, as allowed by MCSIA. The FMCSA does
not find it necessary to require a proficiency exam at this time given
the detailed requirements of this interim final rule. These detailed
requirements include the application, including safety certifications,
the pre-authorization safety audit, and the requirement in the Act that
Mexico-domiciled commercial vehicles be inspected at each border
crossing during the time they hold provisional authority and until they
hold permanent authority for three consecutive years, unless the
vehicles have a current CVSA inspection sticker affixed to the vehicle.
Identifying the appropriate company individual to take the proficiency
test would be problematic as well. In addition, it is not clear that a
proficiency exam requirement would meaningfully enhance safety because
it would only test the ``proficiency'' of a single carrier employee.
The Teamsters also commented that we should require financial
reporting based on the Mexico-domiciled applicant's prior year revenue.
Since the nature of a Mexico-domiciled carrier's business within Mexico
may be unrelated to planned operations within the United States, that
information might not be valid for the purpose of evaluating its
fitness to operate within the United States. FMCSA also believes this
suggestion is outside of the scope of this rulemaking and FMCSA
jurisdiction.
Public Citizen believes the proposed application process for
Mexico-domiciled trucks will not ensure compliance for several reasons.
First, the SCT database to be used in evaluating a Mexico-domiciled
carrier's safety fitness is ``unpopulated'' and ``currently lacks the
basic information necessary to process applications or to perform a
safety review.'' It proposes as a precondition for granting operating
authority that FMCSA set minimum levels of inspection, crash, and other
performance and enforcement data to be amassed for an applicant. For
example, there must be sufficient data to calculate a score in
Safestat(tm), the information system used to determine a domestic
carrier's safety fitness. Public Citizen also believes that information
reported on the form may be distorted through error or fraud, and the
driver's safety records may not be available. It commented that
insurance and proof of insurance requirements are dangerously
inadequate to protect other drivers on public highways.
The SCT database inquiry is but one component of the planned safety
evaluation of OP-1(MX) applicants. The FMCSA will use information in
its own databases and will conduct a pre-authorization safety audit to
validate an applicant's responses and assess its safety fitness.
Furthermore, the insurance requirements for Mexico-domiciled carriers
are identical to those applicable to domestic and Canadian carriers.
Minimum levels of financial responsibility are set forth in 49 CFR part
387. The FMCSA will verify proof of financial responsibility during the
pre-authorization safety audit. Furthermore, a Mexico-domiciled carrier
will be unable to operate in the United States beyond the border zones
unless evidence of adequate financial responsibility is filed with the
FMCSA by an insurance company licensed in the United States. Evidence
of insurance must also be maintained on the motor vehicle when
operating within the United States and border inspectors will verify
proof of financial responsibility electronically by checking the
FMCSA's insurance database.
The CTA commented that applicants should file proof of insurance
with the application, rather than after FMCSA grants the applicant
operating authority. Current 49 CFR part 387 requires the insurer, not
the applicant, to make insurance filings with the FMCSA. This
requirement allows insurance companies to retain control of the
insurance certification documents, thereby significantly decreasing
opportunities for fraudulent activity. Section 350(a)(8) of the Act,
however, requires the FMCSA to verify proof of financial responsibility
with a financial responsibility provider licensed in the United States
during the pre-authorization safety audit. Although FMCSA will
independently verify a Mexico-domiciled motor carrier applicant's proof
of financial responsibility during the pre-authorization audit, the
carrier will not have been issued a DOT number under which a filing may
be made. Therefore, we will not require actual filing of the insurance
at the time of the audit. However, once the carrier is granted
provisional operating authority, it must have evidence of acceptable
insurance on file with the FMCSA before it may operate within the
United States.
A number of parties, including OOIDA, Public Citizen, and the
Teamsters, urged that Mexico-domiciled motor carriers should not be
allowed to operate beyond the border zones at this time, citing what
they view as an inadequate Mexican Government motor carrier safety
infrastructure, inadequate inspection facilities at border crossings,
and other factors. The Teamsters, for example, note that for these
reasons full implementation of NAFTA's motor carrier access provisions
is premature and urge FMCSA to ``postpone the border opening.''
FMCSA believes that the regulations being published today, and the
other safety measures the agency is taking with respect to Mexico-
domiciled motor carriers operating outside the border zone, will give
the agency sufficient assurance that these carriers are capable of
complying with U.S. safety standards, notwithstanding any shortcomings
in the Mexican Government's motor carrier safety infrastructure. FMCSA
also believes that, in conjunction with its State partners, it will be
able to maintain an adequate safety inspection program at the border.
It should be noted, however, that these and other
[[Page 12708]]
comments urging a delay in the implementation of NAFTA assume that the
regulations published today ``open the border'' or lift the current
moratorium on the granting of operating authority. The regulations do
neither. The President, not the FMCSA, has that authority pursuant to
49 U.S.C. 13902. The President has announced that the United States
will comply with its NAFTA obligations regarding Mexico-domiciled motor
carrier access in a manner that will not weaken motor carrier safety.
The regulations help ensure motor carrier safety in anticipation of
presidential action lifting the moratorium.
In addition, section 350(c)(1) of the Act requires the DOT
Inspector General (OIG) to conduct a comprehensive review of FMCSA
border operations before the FMCSA may spend any Federal funds to
review or act on OP-1(MX) applications. The OIG must assess whether the
statutory requirements have been met to ensure the opening of the
border does not pose an unacceptable safety risk to the American
public. Section 350(c)(2) also requires the Secretary of Transportation
to certify in writing in a manner addressing the Inspector General's
findings that the opening of the border does not pose an unacceptable
safety risk to the American public before the FMCSA may spend any
Federal funds to review or act on OP-1(MX) applications.
ABA and Greyhound urge that we not implement our motor carrier-
related NAFTA obligations until Mexico reciprocates by implementing its
motor carrier-related NAFTA obligations. Again, none of the regulations
published today ``open the border'' or lift the current moratorium on
the grant of operating authority. In any event, NAFTA itself provides
procedures to ensure that each party fulfills its obligations under the
Agreement.
In response to comments about the need for ensuring that vehicles
operated by Mexico-domiciled motor carriers comply with the applicable
Federal Motor Vehicle Safety Standards (FMVSS), we note that
enforcement of these safety standards by FMCSA and its State partners
will be accomplished through roadside inspections, including
inspections at the border. Roadside inspections provide a means of
ensuring that vehicles meet the applicable FMVSSs in effect on the date
the vehicle was manufactured.
Title 49 CFR part 393 of the FMCSRs currently includes cross-
references to most of the FMVSSs applicable to heavy trucks and buses.
The rules require that motor carriers operating in the United States,
including Mexico-domiciled carriers, must maintain the specified safety
equipment and features that the National Highway Traffic Safety
Administration (NHTSA) requires vehicle manufacturers to install.
Failure to maintain these safety devices or features is a violation of
the FMCSRs. If the violations are discovered during a roadside
inspection, and they are serious enough to meet the current out-of-
service criteria used in roadside inspections (i.e., the condition of
the vehicle is likely to cause an accident or cause a mechanical
breakdown), the vehicle would be placed out of service until the
necessary repairs are made. The FMCSA also has the option of imposing
civil penalties for violations of 49 CFR part 393. Any FMVSS violations
that involve noncompliance with the standards presently incorporated
into part 393 could subject motor carriers to a maximum civil penalty
of $10,000 per violation. If the FMCSA determines that Mexico-domiciled
carriers are operating vehicles that do not comply with the applicable
FMVSSs, this information could be used to take appropriate enforcement
action for making a false certification on the application for
operating authority.
The FMCSA and NHTSA are initiating several regulatory actions
(published elsewhere in today's Federal Register) to ensure that
labeling requirements of the FMVSSs are enforced against motor vehicles
entering the United States. The FMCSA is proposing to amend the FMCSRs
to require that all motor carriers ensure that their CMVs have a
certification label that meets the requirements of 49 CFR part 567,
applied by the vehicle manufacturer or by a registered importer. United
States motor carriers typically would only have access to vehicles that
meet the applicable FMVSSs and have a certification label that meets
the requirements of 49 CFR part 567, but Mexico-domiciled and Canada-
domiciled carriers purchasing vehicles for operation within their
respective countries may be using vehicles which have not been
certified as FMVSS-compliant.
The FMCSA is proposing that U.S. motor carriers comply with the
certification label proposal on the effective date of the FMVSS
certification rule. The agency is also proposing that foreign motor
carriers that begin operations in the United States on or after the
effective date of the certification label rule, or expand their
operations to go beyond the border zones for the first time, ensure
that all CMVs used in the new or expanded operations have the necessary
certification label before entering the United States. All other Canada
and Mexico-domiciled motor carriers operating in the United States
prior to the effective date of the interim final rule would be allowed
24 months to bring their vehicles into compliance with the
certification requirements.
NHTSA is taking three separate actions relating to the
certification label. The first action is publication of a policy
statement that addresses commercial motor vehicles that were not
originally manufactured for sale in the United States, and thus were
not required at the time of manufacture to be certified as complying
with the FMVSSs, but are subsequently sought to be imported into the
United States. The statement provides that a vehicle manufacturer may,
if it has sufficient basis for doing so, retroactively apply a label to
a commercial motor vehicle certifying that the vehicle complied with
all applicable FMVSSs in effect at the time it was originally
manufactured.
NHTSA recognizes that there are many commercial motor vehicles used
by motor carriers in Mexico and Canada that were manufactured in
accordance with the FMVSSs, but were not certified as complying with
those standards because the vehicles were manufactured for sale in
Canada or Mexico. NHTSA is proposing two additional actions related to
the FMVSS and foreign-domiciled motor carriers. The first would
establish recordkeeping requirements for foreign manufacturers that
retroactively certify vehicles. The second would codify, in 49 CFR Part
591, its long-standing interpretation of the term ``import,'' as used
in the National Traffic and Motor Vehicle Safety Act of 1966, Public
Law 89-563, to include bringing a commercial motor vehicle into the
United States for the purpose of transporting cargo or passengers.
Discussion of the Interim Final Rule
The FMCSA has made changes in this interim final rule to the
proposed revisions to part 365, based on the comments, section 350 of
the 2002 DOT Appropriations Act, and our own review of the proposal.
Section 365.503 has been revised to allow both hard copy and
electronic submission of required information on designation of process
agents (Form BOC-3) as part of the application process. The FMCSA
currently allows only process agent services to electronically file the
Form BOC-3. If a carrier elects to use a process agent service, it must
include a letter to that effect with the Form OP-1(MX) and ensure that
the service electronically files the Form BOC-3 with the FMCSA.
[[Page 12709]]
Otherwise, the hard copy Form BOC-3 must accompany the application. The
carrier may not begin operations until the Form BOC-3 has been filed
with the FMCSA.
Section 365.505 has been revised to extend to 18 months the
deadline for filing Form OP-1(MX) by carriers holding a Certificate of
Registration issued before April 18, 2002, authorizing operations
beyond the municipalities along the U.S.-Mexico border and beyond the
commercial zones of such municipalities. These carriers, as well as
those carriers who filed the previous version of the OP-1(MX)
application form, do not need to submit another fee when filing a new
OP-1(MX) application. The FMCSA may suspend or revoke the Certificate
of Registration of any carrier that fails to comply with this re-
registration requirement and 18-month deadline. Certificates of
Registration issued before April 18, 2002, will remain valid until the
FMCSA acts on the newly submitted OP-1(MX) application.
The FMCSA has revised the heading of Sec. 365.507 in both the table
of sections and the regulatory text to ``FMCSA action on the
application'' to accurately reflect how the FMCSA will consider and act
on each application. The section now provides that the FMCSA will
validate all data and certifications in an application with information
in its own databases, in the appropriate databases of the Mexican
Government to which it has access as part of the NAFTA implementation
process, and with information discovered during a pre-authorization
safety audit. The FMCSA will grant provisional operating authority if
it determines that the application and the results of the safety audit
are consistent with the FMCSA's safety fitness policy. The safety
fitness criteria published in new Appendix A to part 365 for the pre-
authorization safety audit is similar to the safety fitness criteria
for post-operational safety audits for Mexico-domiciled carriers in new
Appendix A to part 385 that is being published elsewhere in today's
Federal Register. We will also assign a distinctive USDOT Number that
distinguishes the carrier as a Mexico-domiciled carrier authorized to
operate beyond the border zones.
In the companion rule establishing a safety monitoring system for
new entrant Mexico-domiciled carriers (published elsewhere in today's
Federal Register), FMCSA will require commercial motor vehicles to have
a valid CVSA inspection decal denoting a successful inspection of the
commercial motor vehicle at all times while operating under provisional
operating authority in the United States beyond the border zones.
Provisional authority to operate beyond the border zones cannot become
permanent for at least 18 months, until the carrier has successfully
completed an 18-month safety monitoring program, including a compliance
review resulting in the assignment of a Satisfactory safety rating as
required by Sec. 350(a)(2) of the 2002 DOT Appropriations Act.
Section 365.511 has been added in response to the 2002 DOT
Appropriations Act. This section will require that a Mexico-domiciled
carrier must continue to seek out and have CVSA inspectors perform CVSA
Level I inspections for the first three consecutive years after being
granted permanent operating authority.
We have made conforming amendments to Secs. 365.101(h) and
365.105(a). We revised Sec. 365.101(h) to reflect the expanded scope of
operations authorized by the Form OP-1(MX)-from Mexico to all points in
the United States. The previous reference to the four border States was
originally designed to register applicants to operate from Mexico to
points only within the border States of California, Texas, Arizona and
New Mexico.
There are three revisions to Sec. 365.105(a). First, we have
specified that household goods carriers and motor passenger carriers
are required to submit the OP-1(MX) when applying to operate within the
United States beyond the border zones. The previous regulations
generally required motor property carriers to use the form. Next, we
removed an obsolete reference to Form OP-1(W) because we do not have
authority to register water carriers. Finally, we updated the cross-
reference to filing fee requirements to reflect the recodification of
these requirements in 49 CFR part 360.
Revisions to Form OP-1(MX)
The interim final rule reflects numerous typographical corrections
and adjustments to the OP-1(MX) application form to make it consistent
with the OP-2 form. All requests for supplemental information that must
accompany the application are in bold typeface so that they are
conspicuous to the applicant. The substantive revisions are discussed
below.
The OP-1(MX) application instructions have been revised to
discontinue the requirement that applicants submit Internal Revenue
Service (IRS) Form 2290, Schedule 1 (Schedule of Heavy Highway
Vehicles) with the OP-1(MX) application. Unlike the OP-1(MX)
application procedure, taxes imposed by 26 U.S.C. 4481 are assessed
annually. The IRS Form 2290 would only provide evidence of compliance
for the current year. However, the applicant must still certify
compliance with 26 U.S.C. 4481 under Section VIII of the application.
The instructions clarify the definition of ``applicant'' for
purposes of determining who must sign the various certifications and
the Section IX--Application Oath.
Next, applicants are cautioned to enter only the city code and
telephone numbers when listing Mexican telephone numbers on the form
because previous applicants often submitted invalid or incomplete
telephone numbers.
Under the Insurance Instructions, we emphasize that although
evidence of coverage is not required at the time the application is
submitted, a carrier has up 90 days after filing an OP-1(MX)
application to submit proof of financial responsibility.
The information on how to receive additional assistance in
completing the Forms OP-1(MX) and MCS-150 was revised to list a toll-
free telephone number accessible from Mexico. We also updated the
information for obtaining assistance with hazardous materials
registration procedures and regulations.
The instructions also state that applicants that use a process
agent service to designate multiple agents for service of process must
attach a letter to the application informing the FMCSA of this option.
The applicant must also ensure that the service electronically files
the Form BOC-3 with the FMCSA within 90 days after submitting the
application. The applicant is also notified that it may not begin
operations in the United States until the Form BOC-3 has been filed
with FMCSA.
The FMCSA has modified Section IA to add a question asking
applicants whether they previously held provisional operating authority
that was revoked. If that is the case, the applicant must show how it
has corrected the deficiencies that resulted in the revocation, explain
what effectively functioning basic safety management systems it now has
in place, and provide any information and documents that support its
arguments.
The FMCSA has corrected references in Section IA, and in the
corresponding instructions, to an ``SCT registration number.'' An
applicant must be registered with SCT to be issued operating authority.
However, the SCT does not issue an SCT registration number. It uses the
RFC number, a Mexican Federal Taxpayer Registration identifier issued
by a separate
[[Page 12710]]
Government agency, to track the carrier's information in the SCT
database. A company is issued a Registro Federal de Contribuyente;
individuals are issued a Registro Federal de Causante. The applicant
must complete Question 5a under Section IA based upon the applicant's
form of business: (1) if the applicant is a sole proprietorship, enter
the Registro Federal de Causante; (2) all other business forms should
complete Question 5a using the Registro Federal de Contribuyente.
We have deleted a redundant question regarding the applicant's
domicile from Section IA and Ownership and Control information from
Section II. This information was used to substantiate claims that a
carrier was U.S.-owned or controlled and therefore eligible to operate
beyond the border zones under a Certificate of Registration. With the
implementation of NAFTA's access provisions, Mexico-domiciled carriers
applying to operate beyond the border zones will no longer file the OP-
2 form. They must file an OP-1(MX), and ownership and control
information will not be the basis for granting authority.
Several safety certifications have been modified or added to
Section V. The safety certification for applicants that are exempt from
the Federal Motor Carrier Safety Regulations because of the weight of
their vehicles and because they will not transport hazardous materials
(as was discussed in the proposed form instructions but inadvertently
omitted from the proposed form) has been restored. These applicants
must certify that they will observe safe operating practices and comply
with applicable State, local and tribal safety laws.
Under Driver Qualifications, applicants must certify, consistent
with 49 CFR 391.23, that they will investigate their drivers' 3-year
employment and driving histories. The certification statement
concerning the need for carriers to establish a system and instructions
for drivers to report criminal convictions has been removed. Current
regulations only require domestic drivers to report violations of motor
vehicle traffic laws and ordinances. The certification statement
relating to the use of properly licensed drivers has been modified to
require that the driver's Licencia Federal de Conductor be registered
in the SCT database.
The four certification statements proposed under certification
section V.8, pertaining to requirements that must be in place once
operations within the United States have begun, have been modified to
emphasize that they are post-operational requirements and have been
integrated into the Hours of Service, Driver Qualifications, and
Vehicle Condition certification sections, as appropriate.
In response to comments from the ATA, Teamsters, OOIDA, and the
TTD, we have extensively revised the Hazardous Materials (HM) and Cargo
Tank certification statements. The HM training certification was
modified to cite the relevant HM training regulations (49 CFR part 172,
subpart H and 49 CFR 177.816) and the specific hazardous materials
safety compliance information that must accompany the application.
We reworded the certification statement regarding the establishment
of a system and procedures for inspecting, repairing and maintaining
``vehicles for HM transportation in a safe condition.'' The Hazardous
Materials Regulations (HMR) require a system and procedures for
inspection, repair and maintenance of reusable hazardous materials
packages in a safe condition. The vehicle inspection, repair and
maintenance requirement is covered in the Vehicle Condition
certification statements.
We added a new certification statement requiring carriers to ensure
that all HM vehicles are marked and placarded in compliance with 49 CFR
part 172, subparts D and F.
The HM registration certification statement, which is not
restricted to Cargo Tank carriers, has been corrected and moved to the
Hazardous Materials section.
The Section VIII--Compliance Certification statement concerning
process agent(s) has been modified to replace the phrase ``judicial
filings and notices'' with ``filings and notices.'' Two new Compliance
Certification statements have been added. In the first, responsive to
section 350(a)(5) of the DOT Appropriations Act, the applicant must
certify it is willing and able to have all vehicles operated in the
United States inspected at least every 90 days by a certified CVSA
inspector and have decals affixed attesting to satisfactory compliance
with Level I CVSA Inspection criteria. This provision will require a
Mexico-domiciled motor carrier to seek out a qualified CVSA inspector
to conduct a CVSA inspection at least every 90 days until it has
operated under permanent authority for at least 3 consecutive years.
Mexico-domiciled carriers should seek out and have Mexico-domiciled
CVSA inspectors perform such inspections in Mexico before the carrier
sends its vehicles to United States ports of entry. This will help the
carriers to minimize disruptions to the efficient use of their
vehicles, minimize time in the U.S. ports of entry, and provide a more
efficient border crossing enroute to its U.S. and Canadian
destinations.
The second compliance certification added to Section VIII is
designed to ensure that Mexico-domiciled carriers whose registration
has been suspended or revoked are not reapplying for operating
authority while under suspension or sooner than 30 days after the date
of revocation, as prohibited in part 385 subpart B. A signature line
also has been placed beneath the Compliance Certification statements,
consistent with Section V--Safety Certifications and Section VI--
Household Goods Arbitration Certifications.
Certain other changes were made to the Section VIII--Compliance
Certifications after discussions with the U.S. Department of Labor and
the U.S. Environmental Protection Agency. The proposed Form OP-1(MX)
included a certification that the applicant is willing and able to
comply with U.S. labor laws. Although the certification is included in
a section that is prefaced by the direction ``All applicants must
certify as follows:'', the instructions for the form, after first
stating that FMCSA considered compliance with labor laws to be
``extremely important,'' then indicated that ``registration will not be
withheld based solely on the failure by an applicant to certify that it
is willing and able to comply with such [DOL and OSHA] requirements * *
*.'' The FMCSA has removed those certification statements and the
accompanying instructions. We have added new language that compliance
with all pertinent Federal, State, local and tribal statutory and
regulatory requirements, including labor and environmental laws, is
mandatory. Such compliance includes producing requested records for
review and inspection, and that inspectors of the Immigration and
Naturalization Service at the port of entry must determine the driver
of the vehicle meets the requirements under the Immigration and
Nationality Act. The statements do not require certification--they are
informational in nature--and thus have been placed after the signature
line.
The Filing Fee Policy and Computation Box that formerly appeared in
the form instructions have been moved to the back of the form because a
carrier cannot provide filing fee information until completing Section
III--Types of Registration. The fee policy also discloses that the
FMCSA will place a 30-day hold on the application if the filing fee
payment is made by personal check.
[[Page 12711]]
Finally, FMCSA will translate the form and instructions into
Spanish to help applicants understand what each question asks and what
types of answers they need to provide.
Rulemaking Analyses and Notices
Executive Order 12866 (Regulatory Planning and Review) and
Department of Transportation Regulatory Policies and Procedures
The FMCSA has determined that this action is a significant
regulatory action within the meaning of Executive Order 12866, and is
significant within the meaning of Department of Transportation
regulatory policies and procedures (44 FR 11034, February 26, 1979)
because of public interest. It has been reviewed by the Office of
Management and Budget under Executive Order 12866. However, it is
anticipated that the economic impact of the revisions in this
rulemaking will be minimal. The new or revised Form OP-1(MX) is
intended to foster and contribute to safety of operations, adherence to
U.S. law and regulations, and compliance with U.S. insurance and tax
payment requirements on the part of Mexico-domiciled carriers.
Nevertheless, the subject of safe operations by Mexico-domiciled
carriers in the United States has generated considerable public
interest within the meaning of Executive Order 12866. The manner in
which the FMCSA carries out its safety oversight responsibilities with
respect to this international motor carrier transportation has been of
substantial interest to the domestic motor carrier industry, the
Congress, and the public at large. The 2002 DOT Appropriations Act
includes specific requirements FMCSA must complete to begin reviewing
and processing the application Form OP-1(MX) under this interim final
rule.
The Regulatory Evaluation analyzes the costs and benefits of this
rule and the two companion NAFTA-related rules published elsewhere in
today's Federal Register. Pursuant to Executive Order 12866, because
these rules are so closely interrelated, we did not attempt to prepare
separate analyses for each rule.
The evaluation estimated costs and benefits based on three
different scenarios, with a high, low and medium number of Mexico-
domiciled carriers assumed covered by the rules. The costs of these
rules are minimal under all three scenarios. Over 10 years, the costs
range from $53 million for the low scenario to approximately $76
million for the high scenario. Forty percent of these costs are borne
by the FMCSA, while the remaining costs are paid by Mexico-domiciled
carriers. The largest costs are those associated with conducting pre-
authorization safety audits, compliance reviews within 18-months of a
carrier's receiving provisional operating authority, and the loss of a
carrier's ability to operate in the United States.
The FMCSA used the cost effectiveness approach to determine the
benefits of these rules. This approach involves estimating the number
of crashes that would have to be deterred in order for the proposals to
be cost effective. Over 10 years, the low scenario would have to deter
640 forecast crashes to be cost beneficial, the medium scenario would
have to deter 838, and the high scenario would have to deter 929. While
the overall number of crashes to be avoided under the medium and high
scenario is fairly high, the number falls rapidly over the 10-year
analysis period and beyond. The tenth year deterrence rate is one-
quarter to one-sixth the size of the first year's rate.
A copy of the Regulatory Evaluation is in the docket for this
rulemaking.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (Pub. L. 96-354, 5 U.S.C. 601-
612), as amended by the Small Business Regulatory Enforcement and
Fairness Act (Pub. L. 104-121), requires Federal agencies to analyze
the impact of rulemakings on small entities, unless the Agency
certifies that the rule will not have a significant economic impact on
a substantial number of small entities.
The United States did not have in place a special system to ensure
the safety of Mexico-domiciled carriers operating in the United States.
Mexico-domiciled carriers will be subject to all the same safety
regulations as domestic carriers. However, FMCSA's enforcement of the
FMCSRs has become increasingly data dependent in the last several
years. Several programs have been put in place to continually analyze
crash rates, out-of-service rates, compliance review records, and other
data sources to allow the agency to focus on high-risk carriers. This
strategy is only effective if the FMCSA has adequate data on carriers'
size, operations, and history. Thus, a key component of this rule and
the companion application rule for border-zone carriers is the
requirement that Mexico-domiciled carriers operating in the United
States must complete a Form MCS-150-Motor Carrier Identification
Report, and must update their Form OP-1(MX)-Application to Register
Mexican Carriers for Motor Carrier Authority To Operate Beyond U.S.
Municipalities and Commercial Zones on the U.S.-Mexico Border or Form
OP-2-Application for Mexican Certificate of Registration for Foreign
Motor Carriers and Foreign Motor Private Carriers Under 49 U.S.C. 13902
when their situation changes. This will allow the FMCSA to better
monitor these carriers and to quickly determine whether their safety or
out-of-service record changes.
The more stringent oversight procedures established in our safety
monitoring interim final rule, RIN 2126-AA35, will also allow the FMCSA
to respond more quickly when safety problems emerge. Required safety
audits, compliance reviews and CVSA inspections will provide the FMCSA
with more detailed information about Mexico-domiciled carriers, and
allow the FMCSA to act appropriately upon discovering safety problems.
The objective of these rules is to help ensure the safe operation
of Mexico-domiciled carriers in the United States. The rules describe
what additional information Mexico-domiciled carriers will have to
submit, and outline the procedure for dealing with possible safety
problems.
The safety monitoring system, the safety certifications and other
information to be submitted in the OP-1(MX) and OP-2 applications, and
the pre-authorization safety audit are means of ensuring that: (1)
Mexico-domiciled applicants are sufficiently knowledgeable about safety
requirements before commencing operations (a prerequisite to being able
to comply); and (2) their actual operations in the United States are
conducted in accordance with their application certifications and the
conditions of their registrations.
These rules will primarily affect Mexico-domiciled small motor
carriers who wish to operate in the United States. The amount of
information these carriers will have to supply to the FMCSA has been
increased, and we estimate that they will spend two additional hours
gathering data for the OP-1(MX) and OP-2 application forms. Mexico-
domiciled carriers subject to this rule will also have to undergo pre-
authorization safety audits and demonstrate continuous compliance with
motor vehicle safety standards by undergoing compliance reviews and
displaying valid CVSA inspection decals on their vehicles. We presented
three growth scenarios in the regulatory evaluation: A high option,
with 11,787 Mexico-domiciled carriers in the baseline; a medium
scenario, with 9,500 Mexico-domiciled carriers in the
[[Page 12712]]
baseline; and a low scenario, with 4,500 Mexico-domiciled carriers in
the baseline. Under all three options, the FMCSA believes that the
number of applicants will match approximately that observed in the last
few years before this publication date, approximately 1,365 applicants
per year.
A review of the Motor Carrier Management Information System census
file reveals that the vast majority of Mexico-domiciled carriers are
small, with 75 percent having three or fewer vehicles. Carriers at the
95th percentile had only 15 trucks or buses.
These rules should not have any impact on small U.S.-based motor
carriers.
The Regulatory Evaluation includes a description of the
recordkeeping and reporting requirements of these rules. Applicants
filing both the OP-1(MX) and OP-2 will also have to submit the Form
MCS-150 and the Form BOC-3-Designation of Agent for Service of Process.
In addition, Mexico-domiciled carriers will have to notify the FMCSA of
any changes to certain information.
The MCS-150 is approximately two pages long. In addition to
requiring basic identifying information, it requires that carriers
state the type of operation they run, the number of vehicles and
drivers they use, and the types of cargo they haul. The BOC-3 form
merely requires the name, address and other information for a domestic
agent to receive legal notices on behalf of the motor carrier. The
rules also include other modest changes in the OP-1(MX) and OP-2 forms.
None of these forms require any special expertise to complete. Any
individual with knowledge about the operations of a carrier should be
able to fill out these forms.
The FMCSA is not aware of any other rules that duplicate, overlap
with, or conflict with these rules.
The FMCSA did not establish any different requirements or
timetables for small entities. As noted above, we do not believe these
requirements are onerous. Most covered carriers will be required to
spend two extra hours to complete the relevant forms, undergo a safety
audit and a compliance review or one safety audit (depending on the
type of authority they apply for) at four to six hours each and display
a valid CVSA inspection decal. The part 385 rule would not achieve its
purposes if small entities were exempt. In order to ensure the safety
of Mexico-domiciled carriers, the rule must have a consistent procedure
for addressing safety problems. Exempting small motor carriers (which,
as was noted above, are the vast majority or Mexico-domiciled carriers
who would operate in the United States) would defeat the purpose of
these rules.
The FMCSA did not consolidate or simplify the compliance and
reporting requirements for small carriers. Small U.S.-based carriers
already have to comply with the paperwork requirements in part 365.
There is no evidence that domestic carriers find these provisions
confusing or particularly burdensome. Apropos the part 385 provisions,
we believe the requirements are fairly straightforward, and it would
not be possible to simplify them. A simplification of any substance
would make the rule ineffectual. Given the compelling interest in
guaranteeing the safety of Mexico-domiciled carriers operating in the
United States, and the fact that the majority of these carriers are
small entities, no special changes were made.
Therefore, the FMCSA certifies that this rule will not have a
significant economic impact on a substantial number of small entities.
Executive Order 13211 (Energy Supply, Distribution, or Use)
We have analyzed this action under Executive Order 13211, Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use. This action is not a significant energy action
within the meaning of section 4(b) of the Executive Order because as a
procedural action it is not economically significant and will not have
a significant adverse effect on the supply, distribution, or use of
energy.
Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4; 2 U.S.C.
1532) requires each agency to assess the effects of its regulatory
actions on State, local, and tribal governments and the private sector.
Any agency promulgating a final rule likely to result in a Federal
mandate requiring expenditures by a State, local, or tribal government
or by the private sector of $100 million or more in any one year must
prepare a written statement incorporating various assessments,
estimates, and descriptions that are delineated in the Act. The FMCSA
has determined that the changes effected by this rulemaking would not
have an impact of $100 million or more in any one year. The Federal
Government reimburses inspectors, funds facilities, and provides
support through the MCSAP grant program.
Executive Order 12988 (Civil Justice Reform)
This action meets applicable standards in sections 3(a) and 3(b)(2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity and reduce burden.
Executive Order 13045 (Protection of Children)
Executive Order 13045, ``Protection of Children from Environmental
Health Risks and Safety Risks'' (April 23, 1997, 62 FR 19885), requires
that agencies issuing ``economically significant'' rules that also
concern an environmental health or safety risk that an agency has
reason to believe may disproportionately affect children must include
an evaluation of the environmental health and safety effects of the
regulation on children. Section 5 of Executive Order 13045 directs an
agency to submit for a ``covered regulatory action'' an evaluation of
its environmental health or safety effects on children.
The agency has determined that this rule is not a ``covered
regulatory action'' as defined under Executive Order 13045. First, this
rule is not economically significant under Executive Order 12866
because the FMCSA has determined that the changes in this rulemaking
would not have an impact of $100 million or more in any one year. The
costs range from $53 to $76 million over 10 years. Second, the agency
has no reason to believe that the rule would result in an environmental
health risk or safety risk that would disproportionately affect
children. Mexico-domiciled motor carriers who intend to operate
commercial motor vehicles anywhere in the United States must comply
with current U.S. Environmental Protection Agency regulations and other
United States environmental laws under this rule and others being
published elsewhere in today's Federal Register. Further, the agency
has conducted a programmatic environmental assessment as discussed
later in this preamble. While the PEA did not specifically address
environmental impacts on children, it did address whether the rule
would have environmental impacts in general. Based on the PEA, the
agency has determined that the proposed rule would have no significant
environmental impacts.
Executive Order 12630 (Taking of Private Property)
This rule will not effect a taking of private property or otherwise
have
[[Page 12713]]
taking implications under E. O. 12630, Governmental Actions and
Interference with Constitutionally Protected Property Rights.
Executive Order 13132 (Federalism Assessment)
This action has been analyzed in accordance with the principles and
criteria contained in Executive Order 13132, dated August 4, 1999 (64
FR 43255, August 10, 1999). The FMCSA has determined that this action
would not have significant Federalism implications or limit the
policymaking discretion of the States.
Executive Order 12372 (Intergovernmental Review)
Catalog of Federal Domestic Assistance Program Number 20.217 Motor
Carrier Safety. The regulations implementing Executive Order 12372
regarding intergovernmental consultation on Federal programs and
activities do not apply to this program.
Executive Order 13166 (Limited English Proficiency)
Executive Order 13166, Improving Access to Services for Persons
With Limited English Proficiency, requires each Federal agency to
examine the services it provides and develop reasonable measures to
ensure that persons seeking government services but limited in their
English proficiency can meaningfully access these services consistent
with, and without unduly burdening, the fundamental mission of the
agency. The FMCSA plans to provide a Spanish translation of the form
OP-1(MX) application and instructions. We believe that this action
complies with the principles enunciated in the Executive Order.
Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-
3520), Federal agencies must obtain approval from the Office of
Management and Budget (OMB) for each collection of information they
conduct, sponsor, or require through regulations. The FMCSA has
determined that this proposal would impact a currently approved
information collection, OMB No. 2126-0016.
The information collection requirements of Form OP-1(MX) have been
approved by the OMB under the control number 2126-0016, titled
``Revision of Licensing Application Forms, Application Procedures, and
Corresponding Regulations.'' This approval includes forms OP-1(MX), OP-
1(P), OP-1(FF), and OP-1 and totals 40,060 burden hours. Of that
amount, 2,060 annual burden hours was estimated as the OP-1(MX)
baseline (1,030 respondents per year @ 2 hours each to complete the
form).
Carriers anticipating that the moratorium on new grants of
operating authority to Mexico-domiciled carriers would be lifted filed
190 applications, but soon ceased to file applications when it became
evident that the forms were not being processed due to a delay in
implementing the NAFTA agreement. For this reason, OP-1(MX) filings
fell well below the 1,000 respondent estimate.
Revisions to OP-1(MX) Baseline: A PRA review normally involves
determining the information collection impacts of a rulemaking,
comparing those impacts with the current regulation (baseline) and
measuring the resulting change. The FMCSA finds it necessary to amend
the baseline (1) to be consistent with updated demographic data on
Mexico-domiciled carriers from the PEA and Regulatory Flexibility
Analysis to this rule, and (2) to take into account an imminent
Presidential action that is not subject to PRA review-the issuance of a
Presidential Order lifting the moratorium on grants of operating
authority to Mexico-domiciled motor carriers to operate within the
United States beyond the border zones. The Regulatory Evaluation to
this rule projects a high, medium and low estimate for the number of
Mexico-domiciled carriers now operating within the United States. The
PRA review is based on the medium estimate of 9,500 active carriers.
Therefore, the revised baseline assumes that the moratorium is lifted
and that Mexico-domiciled carriers are filing the existing OP-1(MX)
application form. The agency is revising the form title to
``Application to Register Mexican Carriers for Motor Carrier Authority
To Operate Beyond U.S. Municipalities and Commercial Zones on the U.S.-
Mexico Border.''
The FMCSA estimates that 5,108 Mexico-domiciled carriers will
request OP-1(MX) operating authority in year one (includes half of the
9,500 active Mexico-domiciled carriers (4,750) plus 25 percent of 1,430
new applicants (358)), and 358 Mexico-domiciled carriers will apply in
subsequent years. The existing form takes approximately 2 hours to
complete. Since Mexico-domiciled carriers currently are not required to
update carrier identification information, there would be zero updates
received in year one and subsequent years. The revised baseline is
calculated as follows:
OP-1(MX) filings (year one): 10,216 hours [5,108 x 2 hours per form]
OP-1(MX) filings (subsequent years): 716 hours [358 x 2 hours per
form]
The revised baseline results in the following annual burden hour
estimate for control no. 2126-0016:
Year One: 48,216 hours [38,000 + 10,216]
Subsequent Years: 38,358 [38,000 + 358]
Impact of the interim final rule. This action proposes to amend 49
CFR part 365 and revise Form OP-1(MX). Under the amended regulations,
Mexico-domiciled motor carriers seeking to operate within the United
States beyond the border zones, including carriers that previously
filed pending Form OP-1(MX) applications, would be required to submit
the revised Form OP-1(MX). Under the revised Form OP-1(MX), the FMCSA
will collect more detailed information on an applicant motor carrier's
size, operations, and history than can be collected using the current
form. In addition, all grants of operating authority issued under the
revised form would be conditioned upon the carrier's successful
completion of a pre-operational safety audit and an 18-month safety
monitoring program (established in an interim final rule published
elsewhere in today's Federal Register), including a compliance review.
For these reasons, the FMCSA anticipates that the number of carriers
would be lower than the revised baseline. The FMCSA estimates that
5,091 Mexico-domiciled carriers would apply for OP-1(MX) authority in
year one, and 341 carriers thereafter. Due to the additional
information requested on the form, the FMCSA estimates that it will
take 4 hours to complete.
The FMCSA must be notified in writing of certain key changes in the
information on the form within 45 days of the change. For changes and
updates, the agency anticipates that annually approximately one quarter
of those granted authority will update their applications. It will take
approximately 30 minutes to complete the updates. For simplicity's
sake, we based the number of individuals granted authority on the
estimated total number of first-year applicants.
OP-1(MX) Updates/Changes:
(In year one): 1,273 = (5,091 x .25 = 1272.75 rounded)
(In subsequent years): 1,358 (5,091 + 341 = 5,432 x .25)
Therefore, the FMCSA estimates that the interim final rule will
adjust the annual burden hour estimate for the OP-1(MX) as follows:
Mexico-domiciled carrier filings of the Form OP-1(MX):
(In first year): 20,364 hours [5,091 x 4 hours per form]
[[Page 12714]]
(In subsequent years): 1,364 hours [341 x 4 hours per form]
Updates/Changes:
(In first year): 1,273 x .50 hour per form = 637 hours (rounded)
(In subsequent years): 1,358 x .50 hour per form = 679 hours
The total burden hours for this information collection in the first
year is 59,001 hours [(38,000 hours + 20,364 hours + 637 hours)] and in
subsequent years is 40,043 hours [38,000 hours + 1,364 hours + 679
hours].
OMB Control Number: 2126-0016
Title: Revision of Licensing Application Forms, Application
Procedures, and Corresponding Regulations.
Respondents: Mexico-domiciled motor carriers.
Estimated Annual Hour Burden for this Interim Final Rule: Year 1 =
59,001 hours; Subsequent years = 40,043 hours.
You may submit any additional comments on the information
collection burden addressed by this interim final rule to the Office of
Management and Budget (OMB). The OMB must receive your comments by
April 18, 2002. You must mail or hand deliver your comments to:
Attention: Desk Officer for the Department of Transportation, Docket
Library, Office of Information and Regulatory Affairs, Office of
Management and Budget, Room 10102, 725 17th Street, NW., Washington, DC
20503.
National Environmental Policy Act
The FMCSA is a new administration within the Department of
Transportation (DOT). The FMCSA is currently developing an agency order
that will comply with all statutory and regulatory policies under the
National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). We
expect the draft FMCSA Order to appear in the Federal Register for
public comment in the near future. The framework of the FMCSA Order is
consistent with and reflects the procedures for considering
environmental impacts under DOT Order 5610.1C. FMCSA has analyzed this
rule under the NEPA and DOT Order 5610.1C, and has issued a Finding Of
No Significant Impact (FONSI). The FONSI and the environmental
assessment are in the docket to this rule.
List of Subjects in 49 CFR Part 365
Administrative practice and procedure, Brokers, Buses, Freight
forwarders, Motor carriers, Moving of household goods, Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, the FMCSA amends 49 CFR
part 365 as follows:
PART 365--RULES GOVERNING APPLICATIONS FOR OPERATING AUTHORITY
1. The authority citation for part 365 is revised to read as
follows:
Authority: 5 U.S.C. 553 and 559; 16 U.S.C. 1456; 49 U.S.C.
13101, 13301, 13901-13906, 14708, 31138, and 31144; 49 CFR 1.73.
2. In Sec. 365.101, revise paragraph (h) to read as follows:
Sec. 365.101 Applications governed by these rules.
* * * * *
(h) Applications for Mexico-domiciled motor carriers to operate in
foreign commerce as common, contract or private motor carriers of
property (including exempt items) between Mexico and all points in the
United States. Under NAFTA Annex I, page I-U-20, a Mexico-domiciled
motor carrier may not provide point-to-point transportation services,
including express delivery services, within the United States for goods
other than international cargo.
3. In Sec. 365.105, revise paragraph (a) to read as follows:
Sec. 365.105 Starting the application process: Form OP-1.
(a) All applicants must file the appropriate form in the OP-1
series, effective January 1, 1995. Form OP-1 for motor property
carriers and brokers of general freight and household goods; Form OP-
1(P) for motor passenger carriers; Form OP-1(FF) for freight forwarders
of household goods; and Form OP-1(MX) for Mexico-domiciled motor
property carriers, including household goods and motor passenger
carriers. A separate filing fee in the amount set forth at 49 CFR
360.3(f)(1) is required for each type of authority sought in each
transportation mode.
* * * * *
4. Add a new subpart E to part 365 to read as follows:
Subpart E--Special Rules for Certain Mexico-Domiciled Carriers
Sec.
365.501 Scope of rules.
365.503 Application.
365.505 Re-registration and fee waiver for certain applicants.
365.507 FMCSA action on the application.
365.509 Requirement to notify FMCSA of change in applicant
information.
365.511 Requirement for CVSA inspection of vehicles during first
three consecutive years of permanent operating authority.
Appendix A to Subpart E of Part 365--Explanation of Pre-
Authorization Safety Audit Evaluation Criteria for Mexico-Domiciled
Motor Carriers
Subpart E--Special Rules for Certain Mexico-domiciled Carriers
Sec. 365.501 Scope of rules.
(a) The rules in this subpart govern the application by a Mexico-
domiciled motor carrier to provide transportation of property or
passengers in interstate commerce between Mexico and points in the
United States beyond the municipalities and commercial zones along the
United States-Mexico international border.
(b) 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.
Sec. 365.503 Application.
(a) Each applicant applying under this subpart must submit an
application that consists of:
(1) Form OP-1 (MX)--Application to Register Mexican Carriers for
Motor Carrier Authority To Operate Beyond U.S. Municipalities and
Commercial Zones on the U.S.-Mexico Border;
(2) Form MCS-150--Motor Carrier Identification Report; and
(3) A notification of the means used to designate process agents,
either by submission in the application package of Form BOC-3--
Designation of Agents-Motor Carriers, Brokers and Freight Forwarders or
a letter stating that the applicant will use a process agent service
that will submit the Form BOC-3 electronically.
(b) The Federal Motor Carrier Safety Administration (FMCSA) will
only process your application if it meets the following conditions:
(1) The application must be completed in English;
(2) The information supplied must be accurate, complete, and
include all required supporting documents and applicable certifications
in accordance with the instructions to Form OP-1 (MX), Form MCS-150,
and Form BOC-3;
(3) The application must include the filing fee payable to the
FMCSA in the amount set forth at 49 CFR 360.3(f)(1); and
(4) The application must be signed by the applicant.
(c) You must submit the application to the address provided in Form
OP-1(MX).
(d) You may obtain the application forms from any FMCSA Division
Office or download it from the FMCSA website at: http://
www.fmcsa.dot.gov/factsfigs/formspubs.htm.
[[Page 12715]]
Sec. 365.505 Re-registration and fee waiver for certain applicants.
(a) If you filed an application using Form OP-1(MX) before May 3,
2002, you are required to file a new Form OP-1(MX). You do not need to
submit a new fee when you file a new application under this subpart.
(b) If you hold a Certificate of Registration issued before April
18, 2002, authorizing operations beyond the municipalities along the
United States-Mexico border and beyond the commercial zones of such
municipalities, you are required to file an OP-1(MX) if you want to
continue those operations. You do not need to submit a fee when you
file an application under this subpart.
(1) You must file the application by November 4, 2003.
(2) The FMCSA may suspend or revoke the Certificate of Registration
of any applicable holder that fails to comply with the procedures set
forth in this section.
(3) Certificates of Registration issued before April 18, 2002, will
remain valid unbvtil the FMCSA acts on the OP-1(MX) application.
Sec. 365.507 FMCSA action on the application.
(a) The FMCSA will review and act on each application submitted
under this subpart in accordance with the procedures set out in this
part.
(b) The FMCSA will validate the accuracy of information and
certifications provided in the application by checking data maintained
in databases of the governments of Mexico and the United States.
(c) Pre-authorization safety audit. Every Mexico-domiciled carrier
that applies under this part must satisfactorily complete an FMCSA-
administered safety audit before FMCSA will grant provisional operating
authority to operate in the United States. The safety audit is a review
by the FMCSA of the carrier's written procedures and records to
validate the accuracy of information and certifications provided in the
application and determine whether the carrier has established or
exercises the basic safety management controls necessary to ensure safe
operations. The FMCSA will evaluate the results of the safety audit
using the criteria in Appendix A to this subpart.
(d) If a carrier successfully completes the pre-authorization
safety audit and the FMCSA approves its application submitted under
this subpart, FMCSA will publish a summary of the application as a
preliminary grant of authority in the FMCSA Register to give notice to
the public in case anyone wishes to oppose the application, as required
in Sec. 365.109(b) of this part.
(e) If the FMCSA grants provisional operating authority to the
applicant, it will assign a distinctive USDOT Number that identifies
the motor carrier as authorized to operate beyond the municipalities in
the United States on the U.S.-Mexico international border and beyond
the commercial zones of such municipalities. In order to operate in the
United States, a Mexico-domiciled motor carrier with provisional
operating authority must:
(1) Have its surety or insurance provider file proof of financial
responsibility in the form of certificates of insurance, surety bonds,
and endorsements, as required by Sec. 387.301 of this subchapter;
(2) File a hard copy of, or have its process agent(s)
electronically submit, Form BOC-3--Designation of Agents-Motor
Carriers, Brokers and Freight Forwarders, as required by part 366 of
this subchapter; and
(3) Comply with all provisions of the safety monitoring system in
subpart B of part 385 of this subchapter, including successfully
passing CVSA Level I inspections at least every 90 days and having
decals affixed to each commercial motor vehicle operated in the United
States as required by Sec. 385.103(c) of this subchapter.
(f) The FMCSA may grant permanent operating authority to a Mexico-
domiciled carrier no earlier than 18 months after the date that
provisional operating authority is granted and only after successful
completion to the satisfaction of the FMCSA of the safety monitoring
system for Mexico-domiciled carriers set out in subpart B of part 385
of this subchapter. Successful completion includes obtaining a
satisfactory safety rating as the result of a compliance review.
Sec. 365.509 Requirement to notify FMCSA of change in applicant
information.
(a) A motor carrier subject to this subpart must notify the FMCSA
of any changes or corrections to the information in parts I, IA or II
submitted on the Form OP-1(MX) or the Form BOC-3--Designation of
Agents--Motor Carriers, Brokers and Freight Forwarders during the
application process or after having been granted provisional operating
authority. The carrier must notify the FMCSA in writing within 45 days
of the change or correction.
(b) If a carrier fails to comply with paragraph (a) of this
section, the FMCSA may suspend or revoke its operating authority until
it meets those requirements.
Sec. 365.511 Requirement for CVSA inspection of vehicles during first
three consecutive years of permanent operating authority.
A Mexico-domiciled motor carrier granted permanent operating
authority must have its vehicles inspected by Commercial Vehicle Safety
Alliance (CVSA)-certified inspectors every three months and display a
current inspection decal attesting to the successful completion of such
an inspection for at least three consecutive years after receiving
permanent operating authority from the FMCSA.
Appendix A to Subpart E of Part 365--Explanation of Pre-Authorization
Safety Audit Evaluation Criteria for Mexico-Domiciled Motor Carriers
I. General
(a) Section 350 of the Fiscal Year 2002 DOT Appropriations Act
(Pub. L. 107-87) directed the FMCSA to perform a safety audit of
each Mexico-domiciled motor carrier before the FMCSA grants the
carrier provisional operating authority to operate beyond United
States municipalities and commercial zones on the United States-
Mexico international border.
(b) The FMCSA will decide whether it will conduct the safety
audit at the Mexico-domiciled motor carrier's principal place of
business in Mexico or at a location specified by the FMCSA in the
United States, in accordance with the statutory requirements that 50
percent of all safety audits must be conducted onsite and on-site
inspections cover at least 50 percent of estimated truck traffic in
any year. All records and documents must be made available for
examination within 48 hours after a request is made. Saturdays,
Sundays, and Federal holidays are excluded from the computation of
the 48-hour period.
(c) The safety audit will include:
(1) Verification of available performance data and safety
management programs;
(2) Verification of a controlled substances and alcohol testing
program consistent with part 40 of this title;
(3) Verification of the carrier's system of compliance with
hours-of-service rules in part 395 of this subchapter, including
recordkeeping and retention;
(4) Verification of proof of financial responsibility;
(5) Review of available 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, parts 382 through 399 of this subchapter, and the
Federal Hazardous Material Regulations, parts 171 through 180 of
this title;
(6) Inspection of available commercial motor vehicles to be used
under provisional operating authority, if any of these vehicles have
not received a decal required by Sec. 385.103(d) of this subchapter;
[[Page 12716]]
(7) Evaluation of the carrier's safety inspection, maintenance,
and repair facilities or management systems, including verification
of records of periodic vehicle inspections;
(8) Verification of drivers' qualifications, including
confirmation of the validity of the Licencia de Federal de Conductor
of each driver the carrier intends to assign to operate under its
provisional operating authority; and
(9) An interview of carrier officials to review safety
management controls and evaluate any written safety oversight
policies and practices.
(d) To successfully complete the safety audit, a Mexico-
domiciled motor carrier must demonstrate to the FMCSA that it has
the required elements in paragraphs (c)(2), (3), (4), (7), and (8)
above and other basic safety management controls in place which
function adequately to ensure minimum acceptable compliance with the
applicable safety requirements. The FMCSA developed a ``safety audit
evaluation criteria,'' which uses data from the safety audit and
roadside inspections to determine that each applicant for
provisional operating authority has basic safety management controls
in place.
(e) The safety audit evaluation process developed by the FMCSA
is used to:
(1) Evaluate basic safety management controls and determine if
each Mexico-domiciled carrier and each driver is able to operate
safely in the United States beyond municipalities and commercial
zones on the United States-Mexico international border; and
(2) Identify motor carriers and drivers who are having safety
problems and need improvement in their compliance with the FMCSRs
and the HMRs, before FMCSA grants the carriers provisional operating
authority to operate beyond United States municipalities and
commercial zones on the United States-Mexico international border.
II. Source of the Data for the Safety Audit Evaluation Criteria
(a) The FMCSA's evaluation criteria are built upon the
operational tool known as the safety audit. The FMCSA developed this
tool to assist auditors and investigators in assessing the adequacy
of a Mexico-domiciled carrier's basic safety management controls.
(b) The safety audit is a review of a Mexico-domiciled motor
carrier's operation and is used to:
(1) Determine if a carrier has the basic safety management
controls required by 49 U.S.C. 31144;
(2) Meet the requirements of Section 350 of the DOT
Appropriations Act; and
(3) In the event that a carrier is found not to be in compliance
with applicable FMCSRs and HMRs, the safety audit can be used to
educate the carrier on how to comply with U.S. safety rules.
(c) Documents such as those contained in driver qualification
files, records of duty status, vehicle maintenance records, and
other records are reviewed for compliance with the FMCSRs and HMRs.
Violations are cited on the safety audit. Performance-based
information, when available, is utilized to evaluate the carrier's
compliance with the vehicle regulations. Recordable accident
information is also collected.
III. Overall Determination of the Carrier's Basic Safety Management
Controls
(a) The carrier will not be granted provisional operating
authority if the FMCSA fails to:
(1) Verify a controlled substances and alcohol testing program
consistent with part 40 of this title;
(2) Verify a system of compliance with hours-of-service rules of
this subchapter, including recordkeeping and retention;
(3) Verify proof of financial responsibility;
(4) Verify records of periodic vehicle inspections; and
(5) Verify drivers' qualifications of each driver the carrier
intends to assign to operate under such authority, as required by
parts 383 and 391 of this subchapter, including confirming the
validity of each driver's Licencia de Federal de Conductor.
(b) If the FMCSA confirms each item under II (a)(1) through (5)
above, the carrier will be granted provisional operating authority,
except if FMCSA finds the carrier has inadequate basic safety
management controls in at least three separate factors described in
part III below. If FMCSA makes such a determination, the carrier's
application for provisional operating authority will be denied.
IV. Evaluation of Regulatory Compliance
(a) During the safety audit, the FMCSA gathers information by
reviewing a motor carrier's compliance with ``acute'' and
``critical'' regulations of the FMCSRs and HMRs.
(b) 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.
(c) Critical regulations are those where noncompliance relates
to management and/or operational controls. These are indicative of
breakdowns in a carrier's management controls.
(d) The list of the acute and critical regulations, which are
used in determining if a carrier has basic safety management
controls in place, is included in Appendix B, VII. List of Acute and
Critical Regulations to part 385 of this subchapter.
(e) Noncompliance with acute and critical regulations are
indicators of inadequate safety management controls and usually
higher than average accident rates.
(f) Parts of the FMCSRs and the HMRs having similar
characteristics are combined together into six regulatory areas
called ``factors.'' The regulatory factors, evaluated on the
adequacy of the carrier's safety management controls, are:
(1) Factor 1--General: Parts 387 and 390;
(2) Factor 2--Driver: Parts 382, 383 and 391;
(3) Factor 3--Operational: Parts 392 and 395;
(4) Factor 4--Vehicle: Part 393, 396 and inspection data for the
last 12 months;
(5) Factor 5--Hazardous Materials: Parts 171, 177, 180 and 397;
and
(6) Factor 6--Accident: Recordable Accident Rate per Million
Miles.
(g) For each instance of noncompliance with an acute regulation,
1.5 points will be assessed.
(h) For each instance of noncompliance with a critical
regulation, 1 point will be assessed.
(i) Vehicle Factor. (1) When at least three vehicle inspections
are recorded in the Motor Carrier Management Information System
(MCMIS) during the twelve months before the safety audit or
performed at the time of the review, the Vehicle Factor (part 396)
will be evaluated on the basis of the Out-of-Service (OOS) rates and
noncompliance with acute and critical regulations. The results of
the review of the OOS rate will affect the Vehicle Factor as
follows:
(i) If the motor carrier has had at least three roadside
inspections in the twelve months before the safety audit, and the
vehicle OOS rate is 34 percent or higher, one point will be assessed
against the carrier. That point will be added to any other points
assessed for discovered noncompliance with acute and critical
regulations of part 396 to determine the carrier's level of safety
management control for that factor.
(ii) If the motor carrier's vehicle OOS rate is less than 34
percent, or if there are less than three inspections, the
determination of the carrier's level of safety management controls
will only be based on discovered noncompliance with the acute and
critical regulations of part 396.
(2) Over two million inspections occur on the roadside each year
in the United States. This vehicle inspection information is
retained in the MCMIS and is integral to evaluating motor carriers'
ability to successfully maintain their vehicles, thus preventing
them from being placed OOS during roadside inspections. Each safety
audit will continue to have the requirements of part 396,
Inspection, Repair, and Maintenance, reviewed as indicated by the
above explanation.
(j) Accident Factor. (1) In addition to the five regulatory
factors, a sixth factor is included in the process to address the
accident history of the motor carrier. This factor is the recordable
accident rate, which the carrier has experienced during the past 12
months. Recordable accident, as defined in 49 CFR 390.5, 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 receives 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.
(2) Experience has shown that urban carriers, those motor
carriers operating entirely within a radius of less than 100 air
miles (normally urban areas), have a higher exposure to accident
situations because of their environment and normally have higher
accident rates.
(3) The recordable accident rate will be used in determining the
carrier's basic safety management controls in Factor 6, Accident. It
will be used only when a carrier incurs two
[[Page 12717]]
or more recordable accidents within the 12 months before the safety
audit. An urban carrier (a carrier operating entirely within a
radius of 100 air miles) with a recordable rate per million miles
greater than 1.7 will be deemed to have inadequate basic safety
management controls for the accident factor. All other carriers with
a recordable accident rate per million miles greater than 1.5 will
be deemed to have inadequate basic safety management controls for
the accident factor. The rates are the result of roughly doubling
the United States national average accident rate in Fiscal Years
1994, 1995, and 1996.
(4) The FMCSA will continue to consider preventability when a
new entrant contests the evaluation of the accident factor by
presenting compelling evidence that the recordable rate is not a
fair means of evaluating its accident factor. Preventability will be
determined according to the following standard: ``If a driver, who
exercises normal judgment and foresight, could have foreseen the
possibility of the accident that in fact occurred, and avoided it by
taking steps within his/her control which would not have risked
causing another kind of mishap, the accident was preventable.''
(k) Factor Ratings
(1) The following table shows the five regulatory factors, parts
of the FMCSRs and HMRs associated with each factor, and the accident
factor. Each carrier's level of basic safety management controls
with each factor is determined as follows:
(i) Factor 1--General: Parts 390 and 387;
(ii) Factor 2--Driver: Parts 382, 383, and 391;
(iii) Factor 3--Operational: Parts 392 and 395;
(iv) Factor 4--Vehicle: Parts 393, 396 and the Out of Service
Rate;
(v) Factor 5--Hazardous Materials: Part 171, 177, 180 and 397;
and
(vi) Factor 6--Accident: Recordable Accident Rate per Million
Miles;
(2) For paragraphs III (k)(1)(i) through (v) (Factors 1 through
5), if the combined violations of acute and or critical regulations
for each factor is equal to three or more points, the carrier is
determined not to have basic safety management controls for that
individual factor.
(3) For paragraphs III (k)(1)(vi), if the recordable accident
rate is greater than 1.7 recordable accidents per million miles for
an urban carrier (1.5 for all other carriers), the carrier is
determined to have inadequate basic safety management controls.
(l) Notwithstanding FMCSA verification of the items listed in
part II (a)(1) through (5) above, if the safety audit determines the
carrier has inadequate basic safety management controls in at least
three separate factors described in part III, the carrier's
application for provisional operating authority will be denied. For
example, FMCSA evaluates a carrier finding:
(1) One instance of noncompliance with a critical regulation in
part 387 scoring one point for Factor 1;
(2) Two instances of noncompliance with acute regulations in
part 382 scoring three points for Factor 2;
(3) Three instances of noncompliance with critical regulations
in part 396 scoring three points for Factor 4; and
(4) Three instances of noncompliance with acute regulations in
parts 171 and 397 scoring four and one-half (4.5) points for Factor
5.
Under this example, the carrier will not receive provisional
operating authority because it scored three or more points for
Factors 2, 4, and 5 and FMCSA determined the carrier had inadequate
basic safety management controls in at least three separate factors.
Issued on: March 7, 2002.
Joseph M. Clapp,
Administrator.
Note: The following form will not appear in the Code of Federal
Regulations.
BILLING CODE 4910-EX-P
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[FR Doc. 02-5891 Filed 3-14-02; 8:45 am]
BILLING CODE 4910-EX-C
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/ March
/ Tuesday, March 19, 2002
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