# Unified Registration System

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/fr%3A05-9692

## Record

- **Collection:** Federal Register
- **Document type:** Proposed Rule
- **Published:** May 19, 2005
- **Citation:** 70 FR 28990

## Text

DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety Administration
49 CFR Parts 360, 365, 366, 368, 387 and 390
[Docket No. FMCSA-97-2349]
RIN 2126-AA22
Unified Registration System

AGENCY:

Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT).

ACTION:

Notice of proposed rulemaking (NPRM); request for comments.

SUMMARY:

FMCSA proposes a revised registration system. The Unified Registration System would apply to every motor carrier, freight forwarder and broker required to register with DOT under 49 CFR 390.19 or 49 U.S.C. 13901, except Mexico-domiciled motor carriers registering to operate between Mexico and points in the United States beyond border commercial zones along the U.S.-Mexico international border. The entities covered by this system would be required to register with FMCSA and periodically update registration information provided on a newly proposed registration form. This proposal applies to entities that are already subject to FMCSA Commercial Regulations, the Federal Motor Carrier Safety Regulations (FMCSRs), or the Hazardous Material Regulations (HMRs).

This action is being taken in response to section 103 of the ICC Termination Act of 1995 (ICCTA), which, among other things, requires the Secretary of Transportation (Secretary) to propose regulations to replace four current identification and registration systems with a single, on-line, Federal system. The purpose of this proposal is to consolidate and simplify current Federal registration processes and to increase public accessibility to data about interstate motor carriers, property brokers, and freight forwarders. FMCSA proposes to charge registration fees that will enable FMCSA to recoup costs associated with processing registration applications and administrative filings and maintaining this system.

DATES:

You must submit comments on or before August 17, 2005.

ADDRESSES:

You may submit comments, identified by DOT DMS Docket Number FMCSA-97-2349, by any of the following methods:

• Federal eRulemaking Portal:
http://www.regulations.gov
. Follow the instructions for submitting comments.

• Agency Web Site:
http://dms.dot.gov
. Follow the instructions for submitting comments on the DOT electronic docket site.

• Fax: 1-202-493-2251.

• Mail: Docket Management Facility; U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590-0001.

• Hand Delivery: Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

Instructions:
All submissions received must include the agency name and docket number or Regulatory Identification Number (RIN) for this rule. All comments received will be posted without change to
http://dms.dot.gov
, including any personal information provided. For detailed instructions on submitting comments and additional information on the rulemaking process, see the “Public Participation” heading of the
SUPPLEMENTARY INFORMATION
section of this document. For a summary of DOT's Privacy Act Statement or information on how to obtain a complete copy of DOT's Privacy Act Statement please see the “Privacy Act” heading under Rulemaking Analyses and Notices.

Docket:
For access to the docket to read background documents or comments received, go to
http://dms.dot.gov
at any time or to Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT:

Mr. Robert F. Schultz, Jr., Office of Bus and Truck Standards and Operations, (202) 366-4001, Federal Motor Carrier Safety Administration, Department of Transportation, 400 Seventh Street, SW., Washington, DC 20590.

SUPPLEMENTARY INFORMATION:

Public Participation:
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 DMS 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.

Preamble Table of Contents

The following is an outline of the preamble.

I. Legal Basis

II. Introduction

III. Pre-ICCTA Background

IV. Summary of the Advance Notice of Proposed Rulemaking

V. Congressionally Mandated Policy Issues

A. Funding for State Enforcement of Motor Carrier Safety Regulations

B. Single State Registration System

C. Public Safety; Efficient Delivery of Transportation Services

D. Registration of Private Motor Carriers and Exempt For-hire Motor Carriers

VI. The Proposed Replacement System

A. Registration

B. USDOT Numbers

C. Transfer of Operating Authority

D. Biennial Update Requirement

E. Proposed User Fees for the New System

F. Registration Fees

G. General Fee Policy Changes and Revised Fees

H. Financial Responsibility

1. Bodily Injury and Property Damage Insurance (BI&PD) Requirement

2. Cargo Insurance Requirement

3. Insurance Filings by Insurers, Surety Companies and Financial Institutions

4. Self-Insurance

I. Designation of Process Agents

J. Administrative Filings

K. Cancellation and Reinstatement of USDOT Numbers

L. The New Application Form

M. Multi-Phase Application Process

VII. Special Transit Operation Provisions

VIII. Systems Under Consideration for Merger with the New Unified Registration System

A. Registration for Certain Mexico-Domiciled Motor Carriers

B. Hazardous Materials Safety Permit Application Process

C. Hazardous Materials Cargo Tank Registration Process

IX. Performance and Registration Information Systems Management Program (PRISM)

X. Regulatory Evaluation of the Unified Registration System NPRM Summary of Benefits and Costs

A. Background and Summary

B. Costs

1. New Registration Fees for Private and Exempt For-Hire Carriers

2. New Process Agent Filings Required by FMCSA

3. New Requirement and Fee for Insurance Representatives of Exempt For-Hire Carriers and Private Carriers of Hazardous Materials to File Proof of Liability Insurance

4. New Requirement and Fee for Requiring Private Hazmat and Exempt For-Hire Carriers to File Reinstatement Requests

5. Eliminating Transfers of Operating Authority

6. Revising Other FMCSA Fees

7. Total Costs of URS NPRM

C. Benefits

1. Cost Savings from Streamlined New Entrant Registration Process

2. Safety Benefits from Process Agent Designation Filing Requirement

3. Cost Savings from Eliminating Cargo Insurance Filing Requirement

4. Total Benefits

5. Net Benefits from URS NPRM

XI. Appendix to the Preamble—Proposed Form MCSA-1 and Instructions

XII. Rulemaking Analyses and Notices

List of Subjects

I. Legal Basis for the Rule

The ICC Termination Act of 1995 [Pub. L. 104-88, December 29, 1995, 109 Stat. 888] (ICCTA) created a new 49 U.S.C. 13908 directing “[t]he Secretary, in cooperation with the States, and after notice and opportunity for public comment,” * * * to “issue regulations to replace the current Department of Transportation identification number system, the single State registration system under section 14504, the registration system contained in this chapter, and the financial responsibility information system under section 13906 with a single, on-line, Federal system. The new system shall serve as a clearinghouse and depository of information on and identification of all foreign and domestic motor carriers, brokers, and freight forwarders, and others required to register with the Department as well as information on safety fitness and compliance with required levels of financial responsibility. In issuing the regulations, the Secretary shall consider whether or not to integrate the requirements of section 13304 into the new system and may integrate such requirements into the new system.” Title 49 U.S.C. 13908(c) also authorized the Secretary to “establish, under section 9701 of title 31, a fee system for registration and filing evidence of financial responsibility under the new system under subsection (a). Fees collected under the fee system shall cover the costs of operating and upgrading the registration, including all personnel costs associated with the system.” Congress specified the rule must address:

• Funding for State enforcement of motor carrier safety regulations

• A determination of whether the existing Single State Registration System (SSRS) is duplicative and burdensome;

• The justification and need for collecting the statutory SSRS fee under 49 U.S.C. 14504(c)(2)(B)(iv);

• The public safety;

• The efficient delivery of transportation services; and

• How and under what conditions to extend the registration system to private motor carriers and exempt for-hire motor carriers.

This NPRM proposes a unified registration system and as such is well within the authority of the 1996 Act. The policy issues are addressed in the preamble under section V—Congressionally Mandated Policy Issues.

Today's NPRM is concerned with § 13908, the registration of motor carriers, brokers and freight forwarders. FMCSA proposes a new Federal on-line registration system for every motor carrier, freight forwarder and broker required to register with DOT under 49 CFR 390.19 or 49 U.S.C. 13901, except Mexico-domiciled motor carriers registering to operate between Mexico and points in the United States beyond border commercial zones along the U.S.-Mexico international border. Title 49 CFR 390.19 concerns the safety registration of all for-hire and private motor carriers, while 49 U.S.C. 13901 covers non-exempt for-hire motor carriers, freight forwarders and brokers. The registration systems for Mexico-domiciled carriers requesting to operate between Mexico and points in the United States beyond border commercial zones along the U.S.-Mexico international border, as well as Hazardous Materials Safety Permits and Hazardous Materials Cargo Tanks, are discussed in greater detail under section VIII—Systems under Consideration for Merger with the New Unified Registration System.

FMCSA would integrate three of the four systems stipulated under 49 U.S.C. 13908(a) into a new unified system. Also as directed by that statutory provision, we have considered integration of the fourth system, the Single State Registration System (SSRS) under section 14504. We find that registration and financial responsibility compliance information currently generated by the SSRS is fully duplicated by the information collected under the proposed Unified Registration System and we preliminarily endorse the concept of integrating this fourth system under this rule. We have not proposed elimination of the SSRS at this time, however, because we require additional information to determine whether we can meet the conditions prescribed by Congress for merger and elimination of SSRS under section 13908(d). That provision directs that before we can propose elimination of the SSRS, we must ensure that: (1) Fees collected and distributed to the States under the new Unified Registration System will be sufficient to provide each SSRS-participating State with at least a level of revenue commensurate with what the State received from SSRS fees in fiscal year 1995; and (2) all States would receive a minimum apportionment from the distribution of fees collected under the proposed Unified Registration System. As amplified in the subsequent “Single State Registration System” discussion, we specifically seek public comment on fee structures or alternative measures that would permit full integration of the SSRS into the Unified Registration System and, in turn, would allow elimination of the SSRS program, while preserving the reimbursement and apportionment levels mandated by 49 U.S.C. 13908(d). We also seek public comment on the advisability of recommending legislative change in a report to Congress under 49 U.S.C. 13908(e)(3) in order to create greater latitude for incorporating the SSRS program into the Unified Registration System proposed here.

The new system would incorporate the section 13304 requirement for a motor carrier, freight forwarder, or broker to designate an agent(s) for service of process for each State in which it intends to operate. Under the existing system, only non-exempt for-hire carriers must make such filings. The NPRM would extend the requirement to all registrants, including exempt for-hire and private carriers. Title 49 U.S.C. 503 grants authority to extend the process agent filing requirement to private carriers. When FMCSA (then FHWA) solicited comment on whether to compel private carriers to make such filings, the public responded that exempt for-hire and private carriers should be subject to the same process agent filing requirement as non-exempt for-hire motor carriers, brokers, and freight forwarders (see the advance notice of proposed rulemaking (ANPRM) titled
Motor Carrier Replacement Information/Replacement System
published August 26, 1996 at 61 FR 43816). FMCSA believes extending the requirement to exempt for-hire and private carriers would ensure the agency and the public are able to contact a carrier when necessary.

Title 31 U.S.C. 9701 establishes general authority for agencies to “charge for a service or thing of value provided by the agency.” Accordingly, FMCSA proposes to charge registration fees that will enable the agency to recoup costs associated with processing registration applications and administrative filings. All applicants, except certain FTA grantees and State sub-grantees, would pay a $200 registration fee and pay for certain administrative filings.

The Motor Carrier Safety Act of 1984 requires the Secretary to prescribe regulations on commercial motor vehicle safety. The regulations shall

prescribe minimum safety standards for commercial motor vehicles (CMVs). At a minimum, the regulations shall ensure that (1) CMVs are maintained, equipped, loaded, and operated safely; (2) the responsibilities imposed on operators of CMVs do not impair their ability to operate the vehicles safely; (3) the physical condition of operators of CMVs is adequate to enable them to operate the vehicles safely; and (4) the operation of CMVs does not have a deleterious effect on the physical condition of the operators (49 U.S.C. 31136(a)).

This NPRM is intended to streamline the registration process and ensure that FMCSA can more efficiently track CMVs and ensure their safe operation. As such, it implements the section 31136(a)(1) mandate that FMCSA's regulations ensure that CMVs are maintained and operated safely. The Unified Registration System imposes no operational responsibilities on drivers. Therefore, this proposed regulation would not impair a driver's ability to operate vehicles safely (section 31136(a)(2)), would not impact the physical condition of drivers (section 31136(a)(3)), and would not have a deleterious effect on the physical condition of drivers (section 31136(a)(4)). Accordingly, FMCSA has addressed the statutory mandate of section 31136(a) and finds that the proposed regulation is fully responsive to this mandate.

II. Introduction

As noted, FMCSA proposes a unified registration system, as required by section 103 of ICCTA. Section 103, codified as 49 U.S.C. 13908, directs the Secretary of Transportation to issue a rule to replace the following four systems with a “single, on-line, Federal system:”

(1) The current Department of Transportation identification number system (49 CFR part 390);

(2) The Single State Registration System (SSRS) under 49 U.S.C. 14504 (49 CFR part 367);

(3) The registration system under 49 U.S.C. 13901-13905 (49 CFR part 365); and

(4) The financial responsibility information system under 49 U.S.C. 13906 (49 CFR part 387).

A detailed discussion of these systems appears in the 1996 ANPRM. The ANPRM is also available in the docket for this rule; access to the docket is explained above in
ADDRESSES.

The proposed replacement system would identify and house information about all interstate motor carriers, brokers and freight forwarders, and others that must register with the Department of Transportation. It would also be a depository for information on safety fitness and compliance with financial responsibility requirements.

III. Pre-ICCTA Background

The Motor Carrier Act of 1935 [Pub. L. 74-255, 47 Stat. 543] placed regulatory authority over the motor carrier industry with the Interstate Commerce Commission (ICC). ICC was responsible for issuing operating authority and permits and administering matters related to insurance, safety, and enforcement as they applied to non-exempt for-hire common and contract motor carriers.
1

ICC exercised safety oversight over all for-hire and private motor carriers, but its economic oversight encompassed only non-exempt for-hire motor carriers.

1
The Motor Carrier Act and subsequent legislation created numerous exemptions to ICC jurisdiction based upon the commodity transported (
e.g.
, fresh produce and other agricultural products) or circumstances underlying the transportation (
e.g.
, property or passengers having a prior or subsequent movement by air carrier). These exemptions were retained in chapter 139 of ICCTA. For purposes of this document, the term “non-exempt” or “exempt” for-hire carrier refers to whether the carrier is subject to the chapter 139 registration requirements.

In 1967, the Department of Transportation (DOT) was created and responsibility for motor carrier safety activities was transferred from ICC to the Bureau of Motor Carrier Safety within FHWA. The Bureau of Motor Carrier Safety subsequently became the Office of Motor Carriers. FHWA required all interstate motor carriers engaged in interstate or foreign commerce to obtain a USDOT identification number from the agency for safety oversight purposes (53 FR 18042, May 19, 1988). Affected parties included for-hire motor carriers subject to ICC economic oversight, as well as motor carriers exempt from ICC jurisdiction (such as private carriers and exempt for-hire motor carriers).

ICC continued to regulate non-exempt for-hire interstate and foreign motor carriers of property and passengers, issuing certificates of public convenience and necessity (for common carriers), permits (for contract carriers and freight forwarders
2

), or licenses (for property brokers). These entities were assigned an MC or MX number as evidence of ICC authority/licensure, except freight forwarders who received FF numbers. Motor carriers, property brokers and freight forwarders were subject to financial responsibility filing requirements as a condition for receipt and retention of operating authority. ICC maintained an up-to-date, automated insurance monitoring system to validate compliance with the financial responsibility requirements.

2
Following deregulation of the freight forwarding industry in 1986, only freight forwarders of household goods had to be licensed by the ICC. ICCTA subsequently reinstated the registration requirement for all freight forwarders.

ICCTA eliminated ICC, and transferred certain ICC regulatory responsibilities to the DOT. The savings provision in section 204 of ICCTA preserved all effective ICC regulations, rules and decisions until the Secretary finds modification of these documents is warranted, thereby preserving the status quo. FHWA gave public notice of the effectiveness of these ICC documents in 61 FR 14372, April 1, 1996.

IV. Summary of the Advance Notice of Proposed Rulemaking

On August 26, 1996, FMCSA (then FHWA) published an ANPRM (61 FR 43816) announcing plans to create a single, on-line Federal registration system. The ANPRM provided an historical overview to support why a replacement system is necessary, included a description of the four systems to be replaced, and posed specific questions for comment.

FMCSA received 104 comments to the docket that may be viewed on the Internet by visiting
http://dms.dot.gov/search
and typing the last four digits of the docket number in the heading of this document. FMCSA has analyzed the comments to the ANPRM and taken them into consideration in the formulation of this notice.

Most of the commenters supported the proposal of a single, on-line system with the following features:

1. Fees assessed on all applicants and based solely upon the actual costs to operate the system;

2. A requirement to register with a single governmental entity;

3. Elimination of the SSRS and a reimbursement of lost revenue for fees to impacted States;

4. A requirement that all registrants file proof of financial responsibility; and

5. A requirement that all registrants file a designation of persons upon whom court process may be served (designation of agents for service of process).

Several commenters suggested that FMCSA achieve complete regulatory uniformity for all entities under its jurisdiction by either eliminating requirements or broadening their applicability to all entities. Some responded that all carriers should be required to provide similar information in the new registration system. For example, some recommended that FMCSA should require all motor

carriers to file evidence of insurance while others wanted FMCSA to remove the existing insurance filing requirement.

Although FMCSA has considered these suggestions, we cannot propose or implement them in a rulemaking proceeding without first obtaining legal authority through statutory change. Section 13908(e)(3) directs the Secretary to transmit to Congress a report on any findings of this rule and the changes the DOT decides to implement, together with recommendations for any proposed legislative changes. FMCSA plans in that report to address policies it wishes to adopt in response to the 1996 ANPRM comments which require statutory change.

FMCSA has incorporated several of the ANPRM responses in formulating today's proposal. In response to public comment, the USDOT Number would replace the MC, MX, and FF numbers, and all motor carriers under FMCSA jurisdiction would be required to file a process agent designation with FMCSA.

V. Congressionally Mandated Policy Issues

Congress directed the Secretary to address the following policy issues in this rule:

(1) Funding for State enforcement of motor carrier safety regulations;

(2) A determination of whether the existing SSRS is duplicative and burdensome;

(3) The justification and need for collecting the statutory SSRS fee under 49 U.S.C. 14504(c)(2)(B)(iv);

(4) The public safety;

(5) The efficient delivery of transportation services; and

(6) How and under what conditions to extend the registration system to private motor carriers and exempt for-hire motor carriers.

A. Funding for State Enforcement of Motor Carrier Safety Regulations

FMCSA believes that funds provided by the Motor Carrier Safety Improvement Act of 1999 [Pub. L. 106-159, December 9, 1999, 113 Stat. 1764] (MCSIA) and the Transportation Equity Act for the 21st Century [Pub. L. 105-178, June 9, 1998, 112 Stat. 418] (TEA-21) adequately satisfied congressional concerns regarding funding for State enforcement of motor carrier safety regulations. Total funding for State enforcement activities through the FMCSA Motor Carrier Safety Assistance Program (MCSAP) has increased substantially since 1995 and is summarized below.

Fiscal year
Amount in millions

1995
$74

1996
77

1997
78

1998
79

1999
90

2000
90

2001
155

2002
160

2003
165

Although Congress has not yet passed a new surface transportation reauthorization bill for years beyond 2003, FMCSA anticipates Congress will do so and that the legislation will adequately address funding for the State enforcement of Federal Motor Carrier Safety Regulations.

B. Single State Registration System

Under the Single State Registration System (SSRS), currently conducted by 38 States in accord with the requirements of 49 U.S.C. 14504, interstate, for-hire motor carriers are required to register annually with one State and provide evidence to the State of Federal registration under 49 U.S.C. chapter 139. In addition to filing and maintaining evidence of Federal registration, motor carriers are required annually to: (1) File satisfactory proof of required insurance or qualification as a self-insurer; (2) pay required fees directly to the SSRS base State; and (3) file the name of a local agent for service of process. Congress designated the SSRS among those programs that we should consider for inclusion in the Unified Registration System under 13908(a), but further provided in 49 U.S.C. 13908(d) that before we can propose elimination of the SSRS, we must be able to ensure that: (1) Registration fees collected under the proposed Unified Registration System and distributed to the States each fiscal year would be sufficient to provide each SSRS-participating State with at least as much revenue as it received from SSRS fees in fiscal 1995 [49 U.S.C. 13908(d)(1)]; and (2) all States would receive a minimum apportionment from the distribution of fees collected under the proposed Unified Registration System.

Comments received in response to the ANPRM suggest strongly that the existing SSRS is both duplicative and burdensome when assessed against current Federal registration and licensing requirements and particularly when evaluated under the proposed Unified Registration System. The essential information collected through SSRS (evidence of registration by interstate, for-hire carriers and proof of their compliance with financial responsibility requirements) already is available to all States through the FMCSA Licensing and Insurance database and will remain so under the Unified Registration System proposed here. In fact, SSRS participating States currently tap into the Licensing and Insurance database to download verifications of carriers' financial responsibility.

It appears that the only information collected by the SSRS that is not currently available to FMCSA and would not be collected through Form MCSA-1 filings is the operational distribution of vehicles among States where registered carriers perform their interstate service. Because operational distribution data is collected solely for the purpose of apportioning SSRS registration fees among participating States, it is essentially an informational by-product of the SSRS fee collection system, and clearly provides neither safety nor compliance information to State users.

The proposed Unified Registration System would generate the same registration and financial responsibility information captured by the SSRS and, thus, integrates the operational and compliance features of the SSRS. Continuation of the SSRS in tandem with the Unified Registration System proposed here would therefore appear to be duplicative. In view of the relative ease and universality with which the registration and financial responsibility compliance information can be accessed by the States through the FMCSA databases, the SSRS requirement that carriers maintain copies of their SSRS registration receipts in each vehicle also would appear to be unnecessarily burdensome. Although some participating SSRS States may support safety or transportation efficiency initiatives with revenues generated by the SSRS fee system prescribed under 49 U.S.C. 14504(c)(2)(B)(iv), there is no requirement that they do so. Indeed, comments in response to the ANPRM suggest that SSRS revenues are as likely as not to find their way into States' general funds where they may be applied to any programmatic purpose.

Accordingly, when assessed in light of relevant factors prescribed at 49 U.S.C. 13908(b), the SSRS appears to be a viable candidate for integration with the other three systems proposed for unification. Moreover, the SSRS could for all practical purposes be considered already fully integrated under this proposal, inasmuch as all information critical to the SSRS would be captured under Form MCSA-1 and available to

States through the on-line databases maintained by the FMCSA.

Despite these considerations, we cannot at this time propose elimination of the SSRS. To be consistent with the 49 U.S.C. 13908(d) criteria for eliminating the SSRS program, the FMCSA would need to reimburse from Unified Registration System fees an annual amount totaling approximately $96 million to the 38 States currently participating in the SSRS and would further need to ensure availability of additional funds for distribution as a minimum apportionment among all States. Financing the required levels of State reimbursement would result in fees approximating $2300 per carrier, an expense that we believe would be unreasonably burdensome.

The FMCSA specifically seeks public comment on the implications of this fee-based reimbursement to States as a means of preserving their SSRS-generated revenues and allowing for the required minimum apportionment, were the SSRS program to be eliminated. In addition, we seek public comment on alternative means by which we might ensure the required annual reimbursement and minimum apportionment levels under a fee assessment schedule different from that proposed here. Comments to the ANPRM, for example, mentioned, but did not necessarily endorse, the concept of imposing additional fees on insurers or assessing unified registration fees on other than a flat rate per carrier basis—such as per vehicle fees, a graduated rate based on fleet size, or a total carrier revenue basis. We would welcome comments on the viability of these and other alternatives as a means of fully integrating SSRS into the Unified Registration System, eliminating the SSRS program as presently observed by participating States, and still preserving the reimbursement and apportionment obligations imposed by 49 U.S.C. 13908(d).

Upon evaluation of the comments received in response to this issue, we will consider whether to recommend in a report to Congress under 49 U.S.C. 13908(e)(3) legislative changes to eliminate (1) the SSRS program as prescribed under 49 U.S.C. 14504; and/or (2) the reimbursement and apportionment requirements of 49 U.S.C. 13908(d). It is our preliminary conclusion, based on comments submitted in response to the ANPRM and upon our assessment of a viable fee structure for the Unified Registration System, that all informational benefits of the existing SSRS program are fully captured by the rule proposed here and that reasonable registration fees associated with the proposed system could not sustain the reimbursement and apportionment requirements of the present statute. We encourage commentors to address specifically the policy and legislative implications of this preliminary conclusion.

C. Public Safety; Efficient Delivery of Transportation Services

FMCSA believes the proposals in this rule address public safety and the efficient delivery of transportation services as intended by Congress. FMCSA has established a requirement under 49 CFR 390.19 for interstate carriers operating in the U.S. to update their information biennially and proposes to continue that requirement in this rule. The effectiveness and usefulness of FMCSA safety-related initiatives such as the Motor Carrier Safety Status Measurement System (SafeStat) and the Performance and Registration Information Systems Management Program (PRISM) are directly linked to the accurate and efficient collection and reporting of motor carrier safety data. Timely and accurate safety information has multiple benefits—it enables FMCSA to: (1) Track safety performance trends; (2) develop more effective driver and vehicle safety programs; (3) monitor the safety status of individual carriers; (4) ensure carrier compliance with FMCSRs; and (5) track any changes in the motor carrier industry that may affect carrier safety.

D. Registration of Private Motor Carriers and Exempt For-Hire Motor Carriers

FMCSA has carefully considered the extent to which the registration process should include private motor carriers and exempt for-hire motor carriers. This rule proposes to extend the public liability insurance filing requirements to private carriers of hazardous materials and exempt for-hire motor carriers. FMCSA does not propose to extend the insurance filing requirement to private carriers of non-hazardous commodities because there is currently no statutory authority to do so. Additionally, FMCSA proposes to require all motor carriers to file a process agent designation with FMCSA as a condition for registration. FMCSA believes there is an inherent crash risk in all interstate commercial motor vehicle operations due to the vehicle miles traveled and exposure to other vehicles on the highway. Accordingly, this rule proposes that most carriers, except private carriers of non-hazardous materials, be required to provide proof of financial responsibility and that all carriers be equally accessible for service of legal process. Expanding these filing requirements would result in greater safety benefits to the general public and enhance the ability to easily obtain motor carrier information when necessary.

Motor carriers conducting operations in interstate commerce have been required to file the MCS-150 prior to commencing operations since July 2000, pursuant to ICCTA and 49 CFR 390.19. Shortly after receipt of a completed MCS-150, FMCSA assigns a USDOT Number to the motor carrier and notifies it of the number assigned. All safety performance data on each motor carrier are linked to the USDOT Number. This includes roadside inspection data, crash data, and safety and compliance review information. The USDOT Number is used to link data together to produce summaries or reports on specific motor carriers.

VI. The Proposed Replacement System

A. Registration

FMCSA intends to create a unified registration process consistent with ICCTA requirements. All private or for-hire motor carriers transporting property or passengers in interstate commerce in the U.S. would be required to register with FMCSA except Mexico-domiciled motor carriers registering to operate between Mexico and points in the United States beyond border commercial zones along the U.S.-Mexico international border. Requiring these entities to register allows FMCSA to have a more complete census of motor carriers under its jurisdiction. This information could then be shared with other Federal and State regulatory agencies, as well as the general public, which would aid in promoting safety. The majority of comments to the ANPRM in this docket support the creation of a more simplified registration system that includes the universe of motor carriers subject to FMCSA jurisdiction.

FMCSA also proposes that property brokers and freight forwarders be included in the unified system because ICCTA requires us to register them and ensure that they maintain the necessary evidence of financial responsibility.

The proposed registration system would simplify the registration process for motor carriers in that motor carriers would only be required to complete one form, proposed Form MCSA-1—FMCSA Registration Form (USDOT Number Application). Under the current system, there are six forms, with most carriers being required to file at least two of the six. Motor carriers will no longer have to decide which form(s) to

complete, hoping to complete the correct form(s) on the initial application.

This proposal encourages continued use of electronic filing because it significantly reduces processing time for registration applications and related documents. Currently, motor carriers and other applicants have the option of using the Safety and Fitness Electronic Records System (SAFER) on-line site to apply for operating authority, obtain a USDOT Number and make safety certifications. Applicants pay registration fees and civil forfeiture fines by credit card using an electronic link from SAFER to the U.S. Department of Treasury's on-line financial management service (Pay.Gov). Electronic filing reduces current paper-based processing time by between 2 to 4 weeks (based on the additional time required for applications to reach FMCSA by mail and to manually process them.)

If this notice is promulgated as a final rule, the new integrated on-line application process would replace the existing electronic options for filing applications for operating authority, a USDOT Number and related documents. FMCSA believes the proposed on-line registration system would significantly reduce application-processing time. An applicant would not need to determine the appropriate application to file, and the on-line replacement system would feature a built-in error-checking feature to alert the applicant when incorrect information has been entered, prompting for valid information. This quality control feature would decrease time spent by agency employees contacting applicants to correct the application. Incomplete applications would automatically be rejected by the system. As a result, application processing would be more efficient for both customers and FMCSA.

FMCSA proposes an on-line application process because: (1) More than 70 percent of motor carriers in the United States now have Internet access, with the trend clearly increasing; (2) there is widespread public access to computers and the Internet in public libraries, Internet cafes, or other commercial establishments; (3) automated error-checking would result in more accurate information about the applicant; (4) on-line filing would allow USDOT Numbers to be issued in a more timely manner, and (5) electronic filing is more cost-effective for FMCSA compared to manually processing applications.

Although FMCSA would not mandate electronic filing of registration applications and related documents at this time, we invite comments and suggestions regarding the following issues:

(1) What would be the impact (benefits or hardships) on applicants of a mandatory on-line filing requirement?

(2) Should FMCSA immediately require on-line filing or should there be a phase-in period for mandatory on-line filing? If so, how long should the phase-in period be?

Current registration procedures in 49 U.S.C. 13902 allow anyone to oppose a request for permanent operating authority by non-exempt for-hire motor carriers, property brokers, and freight forwarders, provided the protest is based upon the applicant's failure to comply with: (1) The registration procedures; (2) applicable DOT regulations, including the FMCSRs and the HMRs; (3) the safety fitness standards; and/or (4) financial responsibility requirements. This proposed Unified Registration System would continue to allow protests for applications covered under section 13902, but would not extend the right of protest to applications for registration filed by private motor carriers or exempt for-hire motor carriers. Information on opposing a registration is under proposed 49 CFR part 360, subpart B of this proposal.

B. USDOT Numbers

The current registration systems administered by FMCSA use four identification numbers: the USDOT Number, which most motor carriers subject to FMCSA jurisdiction are required to obtain, the Motor Carrier (MC) number, which is assigned to non-exempt for-hire motor carriers and brokers registering under chapter 139; the FF number which is assigned to freight forwarders; and the MX number, which is assigned to Mexico-domiciled carriers operating in the U.S. border commercial zones.

FMCSA proposes to discontinue issuance of MC, MX and FF numbers and to phase out the use of current MC, MX and FF numbers within 2 years of the effective date of a final rule. The USDOT Number would become the sole identification number for all entities registered by DOT. This approach is prudent and simple because all registered motor carriers have a USDOT Number and because 16 States have elected to use the USDOT numbering system for registering intrastate motor carriers and their vehicles. Pursuant to 49 CFR 390.21, motor carriers would not need to remove the obsolete numbers from their vehicles.

FMCSA would issue a USDOT Number with a distinctive suffix to any Mexico-domiciled carrier granted registration. This unique USDOT Number would display on the side of the vehicle pursuant to the CMV marking requirement under 49 CFR 390.21, and would meet DOT's obligation under section 350(a)(4) of the 2002 Department of Transportation Appropriations Act [Pub. L. 107-87, Title III, section 350, Dec. 18, 2001, 115 Stat. 864] by allowing FMCSA to distinguish Mexico-domiciled motor carriers authorized to conduct operations beyond the border commercial zones from those authorized for only within-zone operations.

C. Transfer of Operating Authority

As stated above, FMCSA now assigns a unique USDOT Number to each corporation, partnership or individual proprietorship that is responsible for the safety of interstate motor carrier operations. FMCSA also assigns unique USDOT Numbers to subsidiary corporations. Generally speaking, USDOT Numbers are assigned to one carrier and remain assigned to that carrier. Motor carriers that obtain a USDOT Number under 49 CFR 390.19, but are not required to register with FMCSA under 49 U.S.C. Chapter 139, are encouraged but not required to notify the agency when changes in ownership occur. Motor carriers that register under section 13901 are however subject to notification requirements.

Current part 365, subpart D permits for-hire motor carriers, brokers and freight forwarders that register under chapter 139 to merge, transfer or lease their operating authority (identified by MC or FF numbers), and establishes procedures for agency approval of these transactions. These entities are required to file transfer applications with FMCSA and pay a $300 fee.

ICCTA removed the provisions governing transfers of operating authority by repealing former 49 U.S.C. 10926. As a result, FMCSA (then FHWA) proposed removing the transfer regulations in a February 13, 1998, NPRM (63 FR 7362). In response to this proposal, the Distribution & LTL Carriers Association (DLTL), the Transportation Lawyers Association (TLA), Landstar System, Inc., the American Bus Association (ABA), and Federal Express Corporation argued that disallowing transfer of registration would subject motor carriers to a more expensive registration process when ownership changes occur—a cost without a corresponding safety benefit. Most of these additional costs would result from having to change MC numbers on vehicles. DLTL contended

that continuing to allow transfers would “assist * * * in keeping track of the existing applicant universe and calculating new entrants.” TLA, Landstar, and ABA commented about the costs and burdens resulting from elimination of transfer approval, but did not provide specific figures.

On May 16, 2001, FMCSA published a notice in the
Federal Register
(66 FR 27059) announcing the withdrawal of the February 1998 NPRM with the intention of addressing the transfer issue in today's rulemaking action.

FMCSA proposes to remove regulations in 49 CFR part 365, subpart D that govern the transfer of operating authority. As a result of this action, MC numbers would no longer be subject to transfer. Although commenters to the February 1998 NPRM were concerned about the cost of re-marking vehicles with new MC numbers if transfers were not allowed, FMCSA has discontinued use of the MC number to identify vehicles and now requires all FMCSA regulated motor carriers to mark their commercial motor vehicles with their USDOT Number and the legal or “doing business as” name of the business entity that owns the motor carrier. See the final rule entitled
Federal Motor Carrier Safety Regulations, General; Commercial Motor Vehicle Marking,
published in the June 2, 2000,
Federal Register
at 65 FR 352387. Furthermore, as discussed above, FMCSA proposes to issue only a USDOT Number and discontinue use of MC, MX and FF numbers.

Unlike chapter 139 certificates and permits, which have traditionally been considered transferable motor carrier assets, a USDOT Number is a unique identifier used to monitor a carrier's safety performance. As such, the USDOT Number never has been subject to transfer. In order to preserve the sanctity of the number as an identifier of each entity's operational profile and safety history, the proposed rule preserves the prohibition on transfers.

The proposed rule would continue to permit retention of the existing USDOT Number in instances where there is a change in legal name, form of business, or address, provided that there is no change in the ownership, management, or control of the involved entity. Circumstances in which retention of the USDOT Number would be permissible include: (1) A change in the legal name of a sole proprietorship, corporation, or partnership: (2) a change in the trade name or assumed name of an entity; and (3) a change in the form of a business, such as the incorporation of a partnership or sole proprietorship. We specifically invite commenting parties to identify additional instances in which FMCSA might permit retention of a USDOT Number following structural, practical, or ministerial changes to a registered entity.

To ensure the continuing relevance and viability of the USDOT Number as a unique identifier and repository for safety data associated with a particular entity, the proposed rule would require all entities requesting a change in legal name, form of business, or address to: (1) File a revised From MCSA-1 within 20 days of the precipitating change; and (2) submit a certification accompanying the revised Form MCSA-1 confirming that there has been no change in the ownership, management, or control of the entity holding the involved USDOT Number. This prescribed process would allow FMCSA to monitor more closely and in a timely manner informational changes affecting all entities holding USDOT Numbers. The proposed 20-day notification period would impose a time limit for submitting changes in key information for the first time on most registrants and would abbreviate the 45-day notification period currently applicable to Mexico-domiciled carriers operating in border commercial zones under 49 CFR 368.4. The 20-day notification period would apply to all carriers, including Mexico-domiciled carriers operating in border commercial zones.

D. Biennial Update Requirement

Under current § 390.19, carriers are required to file Form MCS-150, Motor Carrier Identification Report biennially, as provided by section 217 of MCSIA. Carriers now file Form MCS-150 on-line, by mail or by fax without a fee. The registration updates provide valuable information about carriers and their fleets, and provide useful data for assessing safety performance. This rule proposes to replace Form MCS-150 with the MCSA-1, which contains a section specifically developed for the biennial update. The requirement to update identification information would be removed from § 390.19, re-designated as § 360.25 and made applicable to all entities under FMCSA jurisdiction, including passenger and property carriers, freight forwarders, and property brokers, except Mexico-domiciled motor carriers registering to operate between Mexico and points in the United States beyond border commercial zones along the U.S.-Mexico international border. This rule also proposes at § 360.25 that notice of changes to key identifying information, such as changes in the legal name, form of business, or address be filed with FMCSA within 20 days of the change. This requirement is also a critical component of the goal of obtaining and maintaining accurate, current and timely information, as required by section 217 of MCSIA.

States participating in the joint Federal-State PRISM program check motor carriers' MCS-150 “date of last update” in FMCSA information systems as part of their annual International Registration Plan (IRP) license plate renewal processes. If the motor carrier's MCS-150 data will exceed 24 months old before the end of the license plate registration period, the State requires them to update their MCS-150 data as a condition for receiving their IRP license plate. This approach ensures that motor carriers who obtain IRP license plates in PRISM states cannot let their MCS-150 data expire. FMSCA has determined that motor carriers who update their MCS-150 data in this manner already meet the periodic filing requirement of the current 49 CFR 390.19 and would require no additional filing with FMCSA. Such carriers would need to continue to comply with the § 360.25 requirement to file accurate information. The PRISM process is discussed in more detail later in this document.

E. Proposed User Fees for the New System

This rule proposes revised and new fees to maintain the information systems necessary to accurately identify motor carriers, brokers, and freight forwarders operating in interstate commerce. Until this rule, FMCSA had not proposed a fee schedule for recouping costs associated with its increased responsibilities for maintaining complete and accurate information on entities it regulates.

Title 49 U.S.C. 13908 specifically directs the Secretary to create and implement a unified on-line registration system that captures information about the identification, safety fitness, and financial responsibility of registered entities. Section 13908(c) grants the Secretary discretion to establish a fee system that covers the costs of this registration system.

In accordance with section 13908(c), FMCSA proposes separate fees to cover a number of distinct, but related, activities associated with registration. (The full breakout of proposed fees is discussed in the section entitled “Regulatory Evaluation of the Unified Registration System (URS) NPRM: Summary of Benefits and Costs” and in the full Regulatory Evaluation that has been placed in the public docket.) The principle underlying the assignment of

the proposed user fees is that the users would pay only for costs that they incur.

F. Registration Fees

Currently, non-exempt for-hire motor carriers, freight forwarders and brokers initially seeking operating authority under 49 U.S.C. chapter 139 pay a $300 filing fee. However, private carriers and exempt for-hire carriers are not subject to a filing fee when requesting a USDOT Number under 49 CFR part 390. As proposed in this NPRM, all entities under FMCSA jurisdiction would pay a $200 registration fee at the time the application is filed.

G. General Fee Policy Changes and Revised Fees

In addition to the $200 initial registration fees, FMCSA is proposing changes to a number of other licensing and insurance fees. The section in this notice entitled “Regulatory Evaluation of the Unified Registration System (URS) NPRM: Summary of Benefits and Costs” includes a detailed explanation and complete list of the proposed licensing and insurance filing fee changes.

FMCSA has changed the fee scale in various ways in an effort to administer system costs more equitably among users. Certain fees would be entirely eliminated. Currently, for example, carriers that are subject to chapter 139 registration requirements must pay a $14 fee for name change requests. Yet private and exempt for-hire carriers that are not subject to chapter 139 registration requirements are not charged for making name changes. Under this proposal, the name change fee would be eliminated for all registrants.

Other fees would change and be made applicable to a broader scope of carriers. Currently, only those carriers that are subject to the chapter 139 registration requirements must pay an $80 fee to reinstate operating authority that has been revoked (voluntarily or involuntarily). FMCSA proposes to increase to $100 the reinstatement fee for chapter 139 registrants. Additionally, a reinstatement fee would be made applicable to private and exempt for-hire motor carriers. If a private or exempt for-hire motor carrier failed to comply with financial responsibility or process agent filing requirements, FMCSA would de-activate its USDOT Number and charge a $100 reinstatement fee to reactivate the USDOT Number. The $100 fee would compensate the agency for expenses related to processing reinstatement requests.

Based on our experience in reinstating chapter 139 operating authority, the reinstatement process often involves substantial FMCSA staff time. Usually, the carriers have to be contacted several times before the appropriate information is obtained to conclude the reinstatement process. We believe the same would be true for private and exempt for-hire carriers seeking reinstatement.

H. Financial Responsibility

1. Bodily Injury and Property Damage Insurance (BI&PD) Requirement

The Motor Carrier Act of 1980 [Pub. L. 96-296, 94 Stat. 820] prescribed for safety reasons minimum levels of financial responsibility for certain motor carrier classifications. The motor carrier classifications include: For-hire interstate motor carriers of property in vehicles with a gross vehicle weight rating (GVWR) in excess of 10,000 lbs. (including ICC-exempt); private and for-hire interstate motor carriers of certain hazardous materials; and interstate and intrastate carriers of hazardous materials in bulk. In 1982, the Bus Regulatory Reform Act of 1982 [Pub. L. 97-261, 96 Stat. 1120] granted FMCSA (then FHWA) authority to regulate the levels of financial responsibility covering for-hire motor carriers of passengers operating in interstate commerce. These carriers are not currently required to provide proof of insurance or other financial responsibility as a condition for receiving a USDOT Number. Instead, FMCSA verifies financial responsibility as a part of its compliance review process. The actual review of financial responsibility requires that an enforcement official ensure that there is at the motor carrier's place of business a valid endorsement (Form MCS-90 or Form MCS-82), or valid authorization to self-insure that indicates that the carrier possesses the required financial responsibility coverage meeting the minimum prescribed limits.

For-hire motor carriers, brokers and freight forwarders that are subject to the chapter 139 registration requirements must file evidence of BI&PD insurance with FMCSA on prescribed forms as a precondition to receiving and holding authorities and permits. Their financial responsibility requirements take the form of certificates of insurance, surety bonds, proof of qualifications as a self-insurer, endorsements, or trust agreements.

FMCSA proposes at § 360.9 to continue the filing requirement for these carriers and extend its applicability to exempt for-hire motor carriers, including passenger carriers, and private interstate motor carriers transporting hazardous materials. These carriers are already required by statute (49 U.S.C. 31138 and 31139) and regulations (49 CFR part 387) to obtain and maintain BI&PD insurance. This rule would merely require the filing of evidence of financial responsibility with FMCSA.

Motor carriers transporting hazardous materials in intrastate commerce are similarly required by statute and regulations to obtain and maintain BI&PD insurance. The requirement to file evidence of financial responsibility with FMCSA would not extend to them. They would continue to maintain proof of the required financial responsibility at the motor carrier's principal place of business as required under 49 CFR 387.7(d)(1).

The proposed filing requirement would provide the public with assurances that all for-hire motor carriers, and private carriers transporting hazardous materials in interstate commerce, have the financial means to compensate members of the public for injuries or damages caused by their negligence. These filings would also increase public accessibility to insurance information and would enable FMCSA to more effectively track insurance cancellations. Under the current system, FMCSA receives a notice of cancellation only if the carrier is registered under chapter 139. A carrier not subject to the chapter 139 requirements could lose its insurance coverage, but FMCSA would generally not be made aware unless the fact was discovered during a compliance review of the carrier. The proposed extension of the BI&PD insurance filing to all carriers subject to the Motor Carrier Act of 1980 and Bus Regulatory Reform Act of 1982 insurance requirements would, therefore, better enable FMCSA to identify and bring into compliance uninsured motor carriers or remove them from the public highways.

2. Cargo Insurance Requirement

Title 49 U.S.C. 13906(a)(3) authorizes the Secretary to require motor carriers to file evidence of cargo insurance to cover loss or damage to property transported by them. Under current 49 CFR 387.303(c), non-exempt for-hire common carriers of property and freight forwarders are required to maintain cargo insurance of $5,000 per vehicle, and $10,000 per occurrence, and file evidence of this insurance with FMCSA. Under the proposed revised § 387.303(c), FMCSA would require only motor carriers and freight forwarders engaged in transportation of household goods to maintain and file

evidence of cargo insurance with the agency. Penalties for failure to comply would remain the same.

There does not appear to be a need to require non-exempt for-hire motor carriers of property to maintain cargo insurance since these carriers typically have cargo insurance well above FMCSA limits because their shipper clients generally require it as a condition of doing business. Where motor carriers of property and freight forwarders deal directly with individual members of the public, such as in the transportation of household goods, the agency believes it is in the public interest to continue to require cargo insurance. FMCSA has found that shippers of household goods tend to be less knowledgeable about the regulations than most shippers of other types of property, and therefore need the protection afforded by the current regulatory scheme. Therefore, FMCSA proposes to retain the requirement that household goods carriers and freight forwarders of household goods obtain and file minimum levels of cargo insurance, as provided by part 387. FMCSA requests comments about its proposal to eliminate the cargo insurance requirement for non-exempt for-hire carriers of property and freight forwarders.

3. Insurance Filings by Insurers, Surety Companies and Financial Institutions

FMCSA proposes to require all insurers, surety companies, and financial institutions to file evidence of insurance using the web-based (HTML) format. FMCSA currently accepts insurance filings in three formats: paper filings, electronic (ASCII) filings, and web-based (HTML) filings. The current paper-based insurance system is very labor intensive.

On August 15, 2001, FMCSA began allowing Internet filings. FMCSA also allows the public to access carrier licensing and insurance information through the Internet by selecting keyword “L&I System” at
http://www.fmcsa.dot.gov.

With the implementation of the registration and financial responsibility filing requirements of 49 U.S.C. 13906 and 13908, FMCSA will have the capability and financial resources to improve the accuracy and timeliness of insurance application processing.

Accordingly, FMCSA proposes to require all carriers, property brokers, and freight forwarders subject to 49 CFR part 387 to have their insurers use Internet filings to file the necessary evidence of surety bonds, trust fund agreements, bodily injury and property damage insurance, household goods cargo insurance, and notices of cancellations. We believe web-based filings will promote efficiencies for FMCSA, insurers, sureties, financial institutions, and the public. FMCSA seeks comment on whether the proposed mandatory web-based filing would be a significant burden on small insurers, surety companies, and financial institutions. FMCSA also invites comments, ideas and suggestions regarding a potential phase-in approach as opposed to immediate mandatory on-line filing. FMCSA invites comments on any anticipated hardships that mandatory on-line filing may cause.

4. Self-Insurance

Existing regulations provide a motor carrier with the option to meet its financial responsibility obligations through self-insurance, but only with FMCSA approval following review of the carrier's financial health and safety rating. Risks for which a carrier may self-insure include bodily injury and property damage liability (BI&PD), as well as cargo liability. The self-insurance program is specifically authorized by statute (49 U.S.C. 13906, 31138, and 31139), and is also apparently beneficial to the industry. Comments filed in response to FMCSA's (then FHWA) August 26, 1996 Unified Registration System ANPRM strongly favored retaining the self-insurance program.

On May 5, 1999, FMCSA separately proposed procedural changes to the self-insurance process for for-hire motor carriers (see
Qualifications of Motor Carriers to Self-Insure Their Operations and Fees to Support the Approval and Compliance Process
at 66 FR 24123). Specifically, FMCSA would have reevaluated the security and collateral requirements of any self-insured carrier that fails to generate from operations, after payment of all expenses except annual self-insurance claims expenses, twice the level of cash needed to pay the self-insurance claims. An additional application fee of $2,500 would be assessed to cover carrier requests for any modifications and alterations to self-insurance authorizations that required a reevaluation of the carrier's financial condition. FMCSA had also proposed to reduce the fee for processing the initial application for authority to self-insure from $4,200 to $3,000 for an economic cost savings of $1,200. The NPRM proposed implementing additional procedures necessary for motor carriers to establish billing accounts to pay all insurance-related fees required by the agency. Finally, a carrier would be charged a fee to cover FMCSA's cost for analyzing quarterly and annual reports to monitor the carrier's ongoing financial health and claims history. A carrier would be charged a single annual fee of $2,600 to file four quarterly reports and its annual report.

FMCSA received a total of 12 comments in response to the 1999 NPRM. None of the commenters agreed with the proposed self-insurance fees. They believed the proposed fees were unreasonable and that the agency had not provided adequate information to justify the proposed fees. Some made the point that most participants in the self-insurance program are part of carrier groups and that assessing fees based on individual carriers would be burdensome. Commenters also stated it would be unfair to impose additional reporting requirements for all self-insured carriers. Some recommended that the additional reporting requirements should apply only to those self-insured motor carriers that the agency identified as having specific financial problems.

Because the issue of self-insurance falls within the scope of financial responsibility, and the financial responsibility information system is one of the four systems being merged into the proposed new Unified Registration System, FMCSA believes it is prudent to consider revisions to the self-insurance regulations within the context of the Unified Registration System. Therefore, the agency will withdraw the 1999 self-insurance NPRM in a separate withdrawal notice. The self-insurance issues set forth in the 1999 NPRM and public comments regarding that action are being addressed in today's proposed action.

Today's action would rescind the 1999 proposal that FMCSA use only the criteria that self-insured carriers must generate, after certain expenses, twice the level of cash needed to pay self-insurance claims when determining whether a carrier would become subject to adjustments in collateral or security requirements. The proposal was in response to agency concerns that the public be adequately protected against uncompensated losses.

The process of demonstrating whether a carrier has established and will maintain an insurance program that will protect the public as effectively as commercial coverage is complex. It is based upon a wide range of variables that do not conform to a one-size-fits-all standard. The 1999 proposed standard did not in itself take into account other aspects of a carrier's financial condition that are traditionally used to determine a company's financial strength. FMCSA now believes it should continue its current practice of adjusting collateral

and security requirements on a case-by-case basis.

Likewise, the agency would not impose a fee for a request to modify one's self-insurance authorization if the request resulted in the need to reevaluate the carrier's financial condition. FMCSA now recognizes such requests are rare (less than two requests per year).

FMCSA currently approves individual, and not group (also known as “self-insurance pools”) self-insurance requests. That policy would remain unchanged under this proposal.

Current procedures require all motor carriers approved to self-insure against BI&PD and cargo liability to file four quarterly reports and one annual report per year. (Under this proposal, only motor carriers and freight forwarders of household goods would retain the cargo insurance filing requirement. FMCSA seeks comment on whether to continue the option of self-insuring for cargo insurance.) FMCSA uses these quarterly and annual reports to monitor the financial health of self-insured carriers and ensure that each motor carrier continues to meet the financial requirements of the program. The quarterly reports are due within 60 days of the end of the quarter and generally must cover the periods defined in Table 1:

Table 1

Quarter
Period covered

1
January 1-March 31.

2
April 1-June 30.

3
July 1-September 30.

4
October 1-December 31.

The annual report is a summary of information included in the four preceding quarterly reports, and is due not later than 90 days after the end of each annual reporting year (December 31) or the end of March.

FMCSA proposes changes to self-insurance quarterly and annual report filing fees, as authorized under 49 U.S.C. 13908(c). Self-insured carriers would be assessed $500 for each quarterly report filing. There would be no fee for filing the annual report. The annual cost for these filings would total $2,000, a $600 reduction from the 1999 NPRM proposal of $2,600.

In developing the new fees for quarterly filings, the agency consulted the private contractor that reviews the quarterly reports on behalf of the agency, The Meridian Group. Data submitted by The Meridian Group indicates that the contractor incurs an average of $520 in costs to review each simple quarterly report filing. (Rounding to the nearest $50 in accordance with existing § 360.5, FMCSA adjusted the cost to $500) The proposed $500 fee would assist in recouping labor costs associated with reviewing the quarterly filings. The agency proposes no fees for annual report filings.

Currently, the self-insurance program is not self-supporting but is subsidized by other licensing fees. The proposal to retain the $4,200 initial application fee and to assess a new quarterly filing fee would bring the program closer to the goal of being entirely self-supporting. The Regulatory Evaluation for this rule provides a more detailed explanation to support fees regarding self-insurance. FMCSA seeks comment regarding these proposed self-insurance fees.

Finally, the 1999 proposal to require additional procedures for motor carriers to establish billing accounts to pay all insurance-related fees required by FMCSA would be superceded by procedures under subpart E to 49 CFR part 360 in this proposal.

I. Designation of Process Agents

Today's action proposes to include private and exempt for-hire motor carriers among those that must file process agent information with FMCSA.

Current regulations require only those entities that must register under chapter 139 to designate a process agent by filing Form BOC-3—Designation of Agents—Motor Carriers, Brokers and Freight Forwarders with FMCSA. Chapter 139 registrants generally include non-exempt for-hire motor carriers, property brokers and freight forwarders. A motor carrier (including a private carrier) that operates in the United States in the course of transportation between points in a foreign country must also file the BOC-3. Motor carriers, property brokers and freight forwarders may only change the designation of process agent by filing a new designation with FMCSA. This requirement ensures a valid, up-to-date designation is on file at all times during which an entity is subject to, in whole or in part, the designation requirement under § 360.605.

A carrier may use a commercial or blanket service of process agent company or it may designate an individual employee or relative who resides in the State(s) in which the carrier operates to serve as its process agent. The process agent must be U.S.-domiciled. If a State official is designated, evidence of the official's willingness to serve as process agent must be provided to FMCSA.

Today's action retains the requirement for the fiduciary of a motor carrier, property broker or freight forwarder to designate a process agent as of the moment of succession. Title 49 CFR 387.319(a) defines a fiduciary as “any person authorized by law to collect and preserve property of incapacitated, financially disabled, bankrupt, or deceased holders of operating rights and assignees of such holders.”

FMCSA provides public access to process agent information on the Internet and by telephone. The public uses the information when seeking compensation for losses resulting from a crash involving a commercial motor vehicle. The information enables them to serve lawsuits on the correct party in any State in which the motor carrier, broker or freight forwarder operates. FMCSA uses the information to serve notices for enforcement actions such as out-of-service orders and other administrative proceedings.

Pursuant to 49 U.S.C. 503, FMCSA is empowered to also require private carriers to designate process agents and to file those designations with the Secretary of Transportation. It was not until the publication of the August 26, 1996 ANPRM that the agency asked whether all private carriers should be compelled to make such filings. Commenters urged that private and exempt for-hire motor carriers be subject to the same process agent filing requirements as non-exempt for-hire motor carriers, brokers and freight forwarders.

Based upon those comments, FMCSA proposes to maintain the current requirements in effect for designation of process agents and to extend them to private and exempt for-hire motor carriers.

J. Administrative Filings

FMCSA further proposes to increase to 90 days the maximum time allowed an applicant to submit proof of insurance and process agents before its application is dismissed. Under existing procedures, an applicant is allotted 20 days from the application date to complete the filings. If the filings are not made within 20 days, the agency may grant one 60-day grace period before taking action. As a result, applicants may be given up to 80 days to satisfy insurance and process agent filing requirements.

FMCSA believes that a 90-day filing period for these administrative filings more realistically reflects the actual time necessary to arrange insurance and process agent coverage. Therefore, this NPRM would require the administrative filings within 90 days after submission

of the Form MCSA-1, with no further grace periods. If either the insurance or process agent filings were not completed within this 90-day period, the agency would dismiss the registration request. FMCSA requests comments on the proposed 90-day time frame for making administrative filings.

In addition, FMCSA proposes that any registered entities that are not presently required to file evidence of insurance or designation of process agent be allowed 180 days from the date the final rule takes effect to make the required filings. For example, exempt for-hire carriers and private interstate motor carriers transporting hazardous materials are already required to maintain minimum levels of financial responsibility, but they have not been required to file evidence of that coverage with FMCSA. Many registered carriers have never been required to file a designation of agent for service of process. This proposal would provide these entities 180 days after the rule becomes final to make the filings. If registered entities failed to make the required filings timely, their registration would be revoked.

The extended insurance filing period for existing motor carriers would have no bearing on revocation procedures for lapses in insurance coverage. Insurance companies only report lapses in coverage for motor carriers for which they have already made insurance filings. Carriers impacted by the 180-day extension would have never had evidence of financial responsibility filed on their behalf.

FMCSA believes this extended grace period would enable the agency to efficiently process the anticipated 300,000+ filings in this category as well as provide registrants with adequate time to comply with the new filing requirements.

K. Cancellation and Reinstatement of USDOT Numbers

Under existing procedures, if a motor carrier whose operations are authorized under chapter 139 wishes to voluntarily cancel its operating authority, it must submit a notarized Form OCE-46—Voluntary Revocation Request or electronically file its request. Although not required, many of these carriers use the Form OCE-46 to notify the agency that they are ceasing operations. FMCSA proposes to replace the voluntary revocation request procedure with the simpler procedure now used by motor carriers requesting to discontinue use of a USDOT Number. Carriers would be required to mail or electronically submit to FMCSA a cancellation request and certification statement under § 360.701. Use of the Form OCE-46 and its associated complex processing requirements would be discontinued.

Proposed § 360.705 clarifies that FMCSA would deactivate a carrier's USDOT Number if it fails to comply with the financial responsibility and process agent filing requirements. A carrier may not operate in interstate commerce without an active USDOT Number. Under proposed § 360.707, carriers may reactivate their USDOT Numbers within 2 years of being marked inactive by making the necessary filings, paying a reactivation fee, and re-completing the requirements of the New Entrant Safety Assurance Program (unless they have previously completed the new entrant requirements). FMCSA believes carriers that have been inactive for more than 2 years are functionally equivalent to new entrants and should be required to demonstrate that they have the necessary basic safety management controls in place before being allowed to resume interstate operations. Therefore, we propose requiring such carriers to file Form MCSA-1 to reactivate the previously-issued USDOT Number and complete the new entrant safety assurance program in part 385. We invite comments on whether the 2-year threshold for re-completing the New Entrant Safety Assurance Program is appropriate or if it should be lowered.

L. The New Application Form

FMCSA proposes to combine the data elements now captured on several different licensing, registration and certification forms into a single, new application form called the Form MCSA-1—FMCSA Registration Form (USDOT Number Application). The Form MCSA-1 would replace the forms and certifications listed below:

1. Motor Carrier Identification Report (Application for USDOT Number), Form MCS-150;

2. Application for Motor Property Carrier and Broker Authority, Form OP-1;

3. Application for Motor Passenger Carrier Authority, Form OP-1(P);

4. Application for Freight Forwarder Authority, Form OP-1(FF);

5. Safety Certification for Applications for USDOT Number,

Form MCS-150A; and

6. Application for Mexican Certificate of Registration for Foreign Motor Carriers and Foreign Motor Private Carriers Under 49 U.S.C. 13902, Form OP-2.

Proposed Form MCSA-1 is included as an appendix to this preamble for public review and comment. The proposed form would capture all of the information and certifications required under relevant statutes, including ICCTA and MCSIA. The agency believes that use of one comprehensive form would streamline the application process and reduce the paperwork burden for all affected entities. Every motor carrier, freight forwarder or broker required to register with DOT under 49 CFR 390.19 or 49 U.S.C. 13901, except Mexico-domiciled motor carriers registering to operate between Mexico and points in the United States beyond border commercial zones along the U.S.-Mexico international border, would use the same proposed form to register with FMCSA.

The proposed form has eliminated fields that captured duplicative information common to the applications for operating authority and the motor carrier identification report. This would reduce the preparation time for those entities that were required to complete both forms. Additionally, FMCSA has attempted to group similar information requests and categories within the same sections on the proposed form. Further, the form is designed to have applicants complete only those areas of the form that are relevant to the type of operation for which they would register. For example, certain applicants are instructed to skip safety-related questions and other sections that do not apply to them.

Comments submitted to the ANPRM suggested that FMCSA, when considering any new registration system, collect only information necessary to ensure public safety. FMCSA believes that it is necessary to include on the proposed Form MCSA-1 fields regarding the identification of carrier and cargo classification type. Capturing this information would continue to benefit Federal and State regulatory agencies, as well as other interested parties, and allow tracking of trends among various transportation categories and cargo classification types. Tracking industry trends and practices would continue to aid in the design of better driver and vehicle safety-related programs. Therefore, this proposal retains motor carrier designation and cargo type categories that are currently included on the OP-1, OP-2, and MCS-150 forms.

The MCSA-1 would solicit certain revenue data about applicants. FMCSA and the Bureau of Transportation Statistics (BTS) have discussed the benefits of collecting revenue data from registrants. Each believes that collecting gross annual operating revenue on the same form as safety and equipment data would allow analyses of safety/financial inter-relationships and improve

compliance rates for requirements of both agencies. For example, MCSA-1 revenue data would provide the first public sector financial data on new carriers that are not yet subject to FMCSA financial reporting regulations (formerly BTS) (49 CFR part 1420). Broad revenue data would help FMCSA gain a better understanding of distribution of the motor carrier industry by revenue size, particularly the number of small entities within the industry. Such information would help the agency to more effectively evaluate the impacts of its regulations on small carriers, and provide the basis for studying the relationship between financial performance and safety performance within the industry.

In view of congressional and agency concerns regarding transportation of household goods, FMCSA has also proposed including on the new MCSA-1 information under the Household Goods Arbitration section of the current OP-1 form. That form requires household goods applicants to provide information regarding their program for arbitrating loss and damage claims and to certify that their tariffs are available for review upon request. The agency believes that this would continue to provide important information for assisting consumers with household goods movement complaints.

Under this proposal, FMCSA plans to design, integrate and implement information systems and technology that would allow real time processing of registration applications. FMCSA and its predecessor agencies have routinely made motor carrier safety-related information available to the general public, as well as other regulatory agencies. FMCSA collects and maintains information on interstate motor carriers, vehicles and drivers. Four basic types of information are collected: Census information that identifies and describes each motor carrier operation; safety inspection records conducted on carrier vehicles and drivers; crash reports; and records of administrative and judicial enforcement actions. These data are maintained by FMCSA on the following systems:

• Motor Carrier Management Information System (MCMIS). MCMIS is FMCSA's central repository for safety data on motor carriers, vehicles, and drivers.

• Licensing and Insurance System (L&I). The L&I system is FMCSA's system for issuing carrier operating authority, recording insurance coverage, and maintaining process agents.

• Motor Carrier Safety Status Measurement System (SafeStat). SafeStat, a FMCSA safety-performance indexing algorithm, uses data from MCMIS records to score and rank motor carriers by their safety performance as a pointer system for enforcement.

• Safety and Fitness Electronic Records System (SAFER). SAFER is FMCSA's safety data exchange system. It provides snapshots of a motor carrier's safety performance, registration, and permit status, and provides a platform for the exchange of these data between Federal and State agencies.

FMCSA plans to continue working closely with its Federal, State and local partners to ensure that all carrier registration and safety information databases and systems are integrated to the greatest extent possible. FMCSA intends to design a system that utilizes one web portal with links to other FMCSA databases, as suggested by many of the comments to the ANPRM. The agency believes this would reduce the aggregate cost of operating these systems, increase their value in saving lives and reducing injuries, and facilitate access by interested parties.

M. Multi-Phase Application Process

Under the proposed new requirements, an applicant would request an application package by accessing the FMCSA website,
http://www.fmcsa.dot.gov,
or by contacting FMCSA headquarters or Division offices located in each State by mail, fax or telephone. FMCSA strongly recommends that applicants use the electronic on-line application procedure since it has built-in edit checks and quick lists for easy, accurate completion. The proposed application package would include the following:

1. Educational and technical assistance material regarding the safety and operational requirements of the FMCSRs and the HMRs, if applicable.

2. Application form MCSA-1, along with instructions.

The educational and technical assistance package would consist of material designed to assist the applicant in complying with the FMCSRs and HMRs, if applicable, and in establishing good safety management practices. It would include information on driver qualifications; controlled substances and alcohol use testing; commercial driver licenses; minimum levels of financial responsibility; crash reports; requirements applicable to the driving of motor vehicles; vehicle inspection, repair and maintenance; hours of service and records of duty status of drivers; and requirements applicable to the transportation of hazardous materials.

After FMCSA receives an MCSA-1 application, it would process the application in multiple phases. Step one would involve initial screening of the application. FMCSA would assign a temporary number to track the application through the registration process. The applicant's insurer, surety company, or financial institution would use the tracking number to file evidence of financial responsibility that must accompany the application. An applicant's process service agent would use the number to make Form BOC-3 (designation of process agent) filings. FMCSA would review the application for completeness and accuracy; ensure that financial responsibility and process agent filings are received in a timely manner; and make necessary non-material corrections. If the application is rejected during this stage, the registration filing fees would not be refunded. The agency would not refund registration fees under any circumstances.

If a motor carrier's application passed the initial screening, it would enter step two—provisional registration. FMCSA would issue provisional registration and assign a USDOT Number. A motor carrier applicant would not be allowed to begin operations until FMCSA had granted provisional registration.

Under the proposed process, registration for non-Mexico-domiciled carriers would only become permanent if the applicant satisfactorily completes the new entrant safety assurance process set forth in 49 CFR part 385. The agency announced the new entrant safety assurance process in an Interim final rule (IFR) on May 13, 2002 (at 67 FR 31978, titled
New Entrant Safety Assurance Process.
The new entrant safety assurance process implements section 210 of MCSIA by requiring new entrants to successfully complete a safety review within 18 months after receiving their USDOT Numbers.

Registrations for Mexico-domiciled motor carriers operating exclusively within the border commercial zones are not subject to the new entrant safety assurance process but must satisfactorily complete the safety monitoring system codified at 49 CFR 385.101
et seq.

The special procedures under step two(a) of the multi-phase application process would delay the issuance of a provisional registration to motor carriers that are subject to the protest provisions under U.S.C. 13902. Section 13902 requires FMCSA to allow a time period for persons to oppose an application for registration. FMCSA would publish notification of the registration application in the on-line FMCSA

Register. Anyone may protest the application for registration, provided the protest is based upon the applicant's failure to comply with: (1) The registration procedures; (2) applicable DOT regulations, including the FMCSRs and the HMRs; (3) the safety fitness standards; and/or (4) financial responsibility requirements.

Freight forwarders and brokers are not issued provisional registration. If their registration application is not successfully opposed, their registration is permanent when FMCSA issues it at the conclusion of the publication and protest process.

Section 13902 does not authorize anyone to protest the registration application of a Mexico-domiciled motor carrier seeking to operate only within the border commercial zones, exempt for-hire motor carriers, or private motor carriers. For this reason, step two(a) would not apply to these carrier types. FMCSA would not entertain protests against their registration applications or publish notification of them in the FMCSA Register.

In step three, FMCSA would issue permanent registration if the motor carrier had successfully completed the applicable monitoring program and the registration application was not successfully opposed.

FMCSA seeks comment regarding the proposed form and registration process discussed in this NPRM.

VII. Special Transit Operation Provisions

ICCTA amended the financial responsibility provisions of 49 U.S.C. 31138(e) by adding a new subsection (4). This provision applies to passenger service provided within a transit service area under an agreement with a Federal, State, or local government, funded, in whole or in part, with a grant under 49 U.S.C. 5307, 5310, or 5311. Where the transit service area is located in more than one State, in lieu of the minimum Federal levels of financial responsibility required of motor passenger carrier registrants generally, such transit operators (hereinafter identified as “Federal Transit Administration (FTA) grantees” or “transit service providers”) are permitted to maintain as their minimum financial responsibility obligation the highest level of insurance required by any of the States in which they operate.

FTA grantees operating in interstate transit service areas that exceed commercial zone limits generally provide service of a nature that does not conform with any of the statutory exemptions that might otherwise remove carriers from FMCSA jurisdiction and, thus, relieve them of registration obligations—such as the commercial zone exemption of 49 U.S.C. 13506(b)(1), the “casual, occasional, or reciprocal” transportation exemption of 49 U.S.C. 13506(b)(2), or the taxicab exemption of 49 U.S.C. 13506(a)(2). In addition, FTA grantees are advised that there are no exemptions from registration requirements related to vehicle capacity, frequency of interstate operations, or the non-profit status of a transportation operation.

Further, FMCSA believes that no meaningful relief from statutory registration requirements can be made available to FTA grantees under the general exemption authority of 49 U.S.C. 13541. The statute expressly constrains the Secretary from exercising that exemption authority to relieve a person from the application of, and compliance with, any law or regulation pertaining to specified matters including insurance and safety fitness—matters integral to the registration process.

ICCTA amendment to 49 U.S.C. 31138(e) only adjusted the minimum financial responsibility levels FTA grantees are required to observe. It did not relieve FTA grantees with interstate transit service areas of their obligation to register with FMCSA as required of all interstate for-hire carriers under 49 U.S.C. 13902. Similarly, ICCTA amendment did not relieve FTA grantees of their obligation under 49 U.S.C. 13906 to file with FMCSA evidence of insurance under 49 CFR part 387 as a condition of registration. However, this proposal would waive the otherwise applicable $200 registration and $10 financial responsibility filing fees for such applicants. These applicants would also be eligible to apply to self-insure their operations, and the fees for such applications would be waived as well.

Accordingly, FTA grantees that provide interstate service within areas that exceed commercial zone limits are required to register their operations with FMCSA and, as part of that process, to file evidence that they maintain the minimum levels of financial responsibility coverage required under 49 U.S.C. 31138(e). This notice proposes to amend the 49 CFR part 387 regulations governing minimum levels of financial responsibility for motor carriers to reflect the revised compliance option made available by ICCTA to transit service providers.

VIII. Systems Under Consideration for Merger With the New Unified Registration System

A. Registration for Certain Mexico-Domiciled Motor Carriers

Today's notice requests comment on whether the proposed unified registration system should include the registration process for Mexico-domiciled motor carriers seeking to operate between Mexico and points in the United States beyond the border commercial zones along the United States-Mexico international border. The agency announced the registration process for this group of motor carriers in a March 19, 2002, interim final rule (IFR) (see
Application by Certain Mexico-Domiciled Motor Carriers to Operate Beyond United States Municipalities and Commercial Zones on the United States-Mexico Border
at 67 FR 12702). Regulations governing the registration process for this group of motor carriers are published in Subpart E of 49 CFR part 365. The process includes requirements applicable only to Mexico-domiciled carriers seeking authority to operate between Mexico and points in the United States beyond the border commercial zones along the United States-Mexico international border. FMCSA seeks comment on whether the unique conditions related to these carriers warrant retaining a separate registration procedure and application form for them.

The unique registration requirements arise from Section 350 of the 2002 DOT Appropriations Act (the Act), Public Law 107-87. In effect, Section 350 prohibits the Secretary of Transportation from obligating or expending funds for reviewing or processing applications of Mexico-domiciled motor carriers to transport 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 until the DOT satisfies conditions imposed by Section 350. FMCSA satisfied part of Section 350 by incorporating registration requirements prescribed by the section into its regulations published in the 2002 IFR and companion rules published concurrently with the 2002 IFR. Among other things, these carriers:

• Are uniquely required to successfully complete a preauthorization safety audit (PASA) encompassing the nine areas of inquiry required by section 350(a)(1)(B) prior to being granted operating authority;

• Must be assigned a distinctive U.S. DOT Number in accordance with section 350(a)(4); and

• Must provide proof of valid insurance issued by an insurance company licensed in the United States before being granted authority to operate beyond the border commercial zones, in accordance with 350(a)(8)

Additional conditions apply to Mexico-domiciled carriers that have had operating authority for less than three consecutive years. In accordance with section 350(a)(5), each of their commercial motor vehicles that do not display a valid Commercial Vehicle Safety Alliance (CVSA) inspection decal issued by a CVSA-certified inspector must successfully pass a Level 1 inspection. Each vehicle must display a valid CVSA decal as evidence of having met the inspection criteria, and the vehicles must be re-inspected every three months by a CVSA-certified inspector.

The agency is exploring the possibility of bringing this group of Mexico-domiciled motor carriers under the Unified Registration System and requests public comment on whether to proceed.

Several changes would result from merging their registration system under the Unified Registration System. The MCSA-1 would replace the OP-1(MX) as the registration application form. These carriers would provide additional identifying information and certifications. The proposed Form MCSA-1 captures approximately 22 additional new or modified items of information relating to the operation type, form of business, revenue, contact information, and certifications that are not on the Form OP-1(MX): FMCSA estimates these fields would increase the paperwork burden for these carriers. Any changes in the paperwork burden or costs and benefits would be reflected in the final rule's supporting documentation. For a detailed discussion of the information collection burdens associated with the OP-1(MX), see the May 19, 2002 IFR.

Additional impacts to these carriers would include a modified application process. They would be subject to the proposed multi-phase application process which involves the assignment of a temporary tracking number in lieu of a USDOT Number until certain conditions are met. Unlike other applicants, a Mexico-domiciled carrier seeking to operate in the United States beyond the border commercial zones would additionally need to successfully complete a PASA before receiving a USDOT Number. FMCSA would need to incorporate consideration of the PASA results as well as its associated due process procedures into the Unified Registration System.

Under the Unified Registration System the initial registration fee would decrease from $300 to $200. Form OP-1(MX) filers now have multiple options for payment of fees, including checks and money orders. The only approved payment methods for the initial registration and administrative filing fees under the Unified Registration System would be approved credit cards, electronic funds transfers, and charge cards.

FMCSA specifically invites comment on these and other potential impacts, whether FMCSA should incorporate the OP-1(MX) registration with the Unified Registration System and, if so, how the agency can most effectively integrate the two systems.

B. Hazardous Materials Safety Permit Application Process

On June 30, 2004, FMCSA published a final rule requiring any carrier that desires to haul certain high-hazard materials in interstate or intrastate commerce to obtain a hazardous materials safety permit (HM Safety Permit). (See
Federal Motor Carrier Safety Regulations: Hazardous Materials Safety Permits,
published at 69 FR 39350.) Applicants must complete the Form MCS-150B when initially applying for or renewing the HM Safety Permit under the biennial renewal process. For these carriers, the MCS-150B is submitted in lieu of the MCS-150 as the application for the USDOT Number.

Today's NPRM does not merge the HM Permitting Process under the Unified Registration System for two reasons: (1) Congress did not, under sec. 103 of the ICC Termination Act, specify the HM Safety Permitting Process as one of the systems for inclusion in the new on-line unified registration system; and (2) the final rule announcing the HM Safety Permitting Process was published after the URS NPRM was in the final stages of development. The agency is exploring the possibility of integrating the HM Safety Permitting Process with the Unified Registration System, however, and requests public comment on whether we should proceed.

The primary impact of merging the HM Safety Permitting Process under the Unified Registration System would be the modification of Form MCSA-1 to capture the data on the MCS-150B—which is identical to the MCS-150 with an additional six fields related to the permit program requirements. We believe incorporating the MCS-150B into the MCSA-1 would result in a small net efficiency in time and money. FMCSA estimates these fields would increase the paperwork burden for completing the MCSA-1 by six minutes. Any changes in the paperwork burden or costs and benefits would be reflected in the final rule's supporting documentation. For a detailed discussion of the information collection burdens associated with the MCS-150B, see the June 30, 2004 final rule.

Additional HM Safety Permitting Process components being considered for integration with the Unified Registration System include the HM permit suspension and revocation procedures; appeals process; and permit evidence requirements for the vehicle/shipping paper.

One particular challenge presented by integrating the HM Safety Permitting Process would involve the treatment of certain intrastate carriers. Intrastate carriers are not normally required to obtain a USDOT Number, and most of the FMCSRs do not apply to intrastate carriers. However, the HM Safety Permitting Process regulations were promulgated under hazardous materials statutes (49 U.S.C. 5105(e), 5109, and 5113) and apply to both interstate and intrastate haulers of high-hazard materials. The June 30 final rule specifies a carrier must have a “Satisfactory” safety rating to qualify for the HM Safety Permit. This means that, in order to procure an HM Safety Permit, intrastate carriers must now obtain a USDOT Number and submit to a compliance review. The USDOT Number ensures that such carriers are targeted for a compliance review. The compliance review is solely for the purpose of obtaining a safety rating to qualify for an HM Safety Permit and is based upon the HMRs and FMCSR-compatible State regulations.

Other than the requirement to obtain a USDOT Number and pass a compliance review, the additional proposed provisions under the URS NPRM that do not already apply to intrastate carriers would continue to not apply if HM Safety Permitting and the Unified Registration System were to be integrated. Examples of URS NPRM provisions that would not apply to intrastate carriers include the requirement to file evidence of financial responsibility with FMCSA or to designate a process agent.

FMCSA specifically invites comments on whether it should incorporate the HM Safety Permitting Process with the Unified Registration System and, if so, how the agency can most effectively integrate the two systems.

C. Hazardous Materials Cargo Tank Registration Process

On April 18, 2003, the Research and Special Programs Administration (RSPA) published a final rule titled,
Hazardous Materials: Requirements for Cargo Tanks
at 68 FR 19258. Among other things, RSPA's rule transferred to FMCSA responsibility for administering the Cargo Tank Registration Program for all persons who are engaged in the manufacture, assembly, inspection and testing, certification, or repair of a cargo tank or a cargo tank motor vehicle manufactured in accordance with a DOT specification under 49 CFR parts 100 to 185 or under terms of an exemption issued under 49 CFR part 107 (see 49 CFR 107.502(d)). Facility applicants applying for a new Cargo Tank (CT) number must complete the registration statement when initially registering with the Department. For facilities currently registered with the Department, this process is used to add facility locations or to update registration statements as required by 49 CFR 107.504(c). Facility applicants submit the MCS-150 to obtain a USDOT Number which is used only for tracking purposes in MCMIS.

Today's NPRM does not merge the Cargo Tank Registration Program with the Unified Registration System for two reasons: (1) Congress did not, under sec. 103 of the ICC Termination Act, specify the Cargo Tank Registration Process as one of the systems for inclusion in the new on-line unified registration system; and (2) the final rule transferring the Cargo Tank Registration program from RSPA to FMCSA was published after the URS NPRM was in the final stages of development. The agency is nonetheless exploring the possibility of integrating the Cargo Tank Registration Process with the Unified Registration System and requests public comment on whether, and if so how, we should proceed.

Except for the requirement to obtain a USDOT Number, the URS NPRM is not expected to increase the regulatory requirements already applicable to cargo tank facilities. Examples of URS NPRM provisions that would not apply to cargo tank facilities include the requirement to file evidence of financial responsibility with FMCSA or (for U.S. residents) to designate a process agent. Persons who are not residents of the United States are still required in accordance with 49 CFR 107.107 to designate a permanent resident of the United States as their agent for service of process.

FMCSA specifically invites comments on incorporating the Cargo Tank Registration Process into the Unified Registration System and on the best method of integrating the two systems.

IX. Performance and Registration Information Systems Management Program (PRISM)

The PRISM program is a priority FMCSA initiative comprised of two major processes: (1) The Motor Carrier Safety Improvement Process (MCSIP) and (2) the Commercial Vehicle Registration Process. These processes work in parallel to identify motor carriers and hold them responsible for the safety of their operation. The performance of unsafe carriers is improved through a comprehensive system of identification, education, awareness, safety monitoring and treatment.

FMCSA provides grants to approved States. As of September 2004, 37 States have entered into grant agreements with FMCSA to implement PRISM. At least 19 of these States are currently collecting MCS-150 Forms and issuing USDOT Numbers to interstate motor carriers.

The PRISM program uses MCSIP to hold motor carriers responsible for the safety of their operations. The MCSIP is designed to improve the safety performance of motor carriers with demonstrated poor safety performance through accurate identification, performance monitoring, and interventions such as on-site compliance reviews at a motor carrier's principal place of business. MCSIP carriers that do not improve their safety performance face progressively more stringent penalties that may result in a Federal Operations Out-of-Service Order and possible concurrent suspension or denial of vehicle registration privileges by the State.

A State's International Registration Plan commercial vehicle registration process provides the framework for the PRISM program and serves two vital functions. First, it establishes a system of accountability by ensuring that no vehicle receives license plates without the identification of the carrier responsible for the safety of the vehicle during the registration year. Second, the use of registration sanctions serves as a powerful incentive for unsafe carriers to improve their safety performance.

The commercial vehicle registration process of PRISM creates a new Federal-State partnership that improves safety and strengthens Congressionally-mandated enforcement policies such as those related to the consequences of unsatisfactory safety ratings (Section 4009 of TEA-21), failure to pay civil penalties (Section 206 of the MCSIA of 1999) and biennial data update requirements (Section 217 of the MCSIA of 1999). One of the fundamental tenets of the PRISM program is that State vehicle registration agencies will:

• Suspend a motor carrier's International Registration Plan (IRP) license plates in conjunction with an FMCSA order to cease interstate operation; and/or

• Deny renewal of IRP license plates to any motor carrier that is prohibited from operating in interstate commerce by FMCSA.

Additionally the commercial vehicle registration process of PRISM allows participating States to check motor carriers' MCS-150 “date of last update” in FMCSA information systems as part of their annual IRP license plate renewal processes. If the motor carrier's MCS-150 data (census data) is more than 24 months old before the end of the license plate registration period, the State requires them to update this data as a condition for receiving their IRP license plate. This approach ensures that motor carriers who obtain IRP license plates in PRISM states cannot let their census data expire. The FMSCA has determined that motor carriers who update their census data in this manner already meet the periodic filing requirement of the current 49 CFR 390.19 and would require no additional filing with FMCSA. However, they would be subject to the penalties for filing false or misleading information (see proposed § 360.25(a)(4)). For clarification purposes, the data contained on the MCS-150 would now be incorporated into the new MCSA-1.

States participating in the PRISM program also routinely issue USDOT Numbers to interstate motor carriers who do not have them as part of their commercial vehicle registration processes. This, in essence, has allowed participating States to serve as a one-stop shop where motor carriers could receive a USDOT Number, apply for or renew IRP license plates, and meet the biennial data updating requirements.

Under this proposed rule, carriers are required to file an MCSA-1 prior to receiving a U.S. DOT number. FMCSA cannot delegate to PRISM States its responsibility to ensure that the MCSA-1 Form is correct and complete, and otherwise consistent with our safety fitness policy. States will, however, be able to issue USDOT Numbers to “registrants” (such as leasing companies) and intrastate carriers. Therefore, we are particularly interested in comments from States now participating in the PRISM program regarding the impact of the inability to continue issuing USDOT Numbers to

interstate motor carriers concurrently with the commercial vehicle registration process.

FMCSA invites comments and questions on anticipated impacts of this rule.

X. Regulatory Evaluation of the Unified Registration System (URS) NPRM: Summary of Benefits and Costs

A. Background and Summary

FMCSA has determined that this NPRM constitutes a significant regulatory action as defined under section 3(f)(3) of Executive Order 12866 and under Department of Transportation policies and procedures. While the costs of this NPRM do not exceed the $100 million annual threshold as defined in Executive Order 12866, it is expected to generate extensive public interest.

Section 103 of ICCTA, as codified at 49 U.S.C. 13908, directs the Secretary of Transportation to issue a rule to replace four systems with a “single, on-line, Federal system.” Title 49 U.S.C. 13908(c) provides the Secretary the option of establishing a fee system for registration and filing of evidence of financial responsibility, and states that, “Fees collected under the fee system shall cover the costs of operating and upgrading the registration system, including all personnel costs associated with the system.” Several fee changes are identified in the discussion below and are proposed with the goal of ensuring that the “single, on-line, Federal (registration) system” will be self-sustaining. Additionally, since 49 U.S.C. 13908 directs the Secretary to create a single unified system, we propose several changes to the registration requirements for certain segments of the motor carrier population (such as exempt for-hire carriers) in an attempt to harmonize the registration process for all types of motor carriers.

The major proposed URS NPRM provisions for which direct costs have been estimated include:

• Requiring private and exempt for-hire motor carriers to pay the same FMCSA registration fee as that paid by non-exempt for-hire carriers;

• Requiring private and exempt for-hire motor carriers to file proof of process agent designation with FMCSA;

• Requiring insurance representatives of exempt for-hire carriers and insurers of private interstate carriers of hazardous materials to file proof of liability insurance with FMCSA;

• Requiring private and exempt for-hire carriers to file reinstatement requests with FMCSA;

• Eliminating the ability of motor carriers to transfer operating authority; and

• Cost to industry from revising other motor carrier filing fees. Direct benefits of this NPRM include:

• Time savings to industry and FMCSA personnel resulting from streamlining the motor carrier registration process;

• Time savings to FMCSA in locating and serving private and exempt for-hire motor carriers for compliance and other reviews as a result of the process agent designation filing;

• Additional crashes avoided as a result of FMCSA being able to conduct additional compliance reviews annually due to time saved in searching for, locating, and serving private and exempt for-hire motor carriers for reviews; and

• Time savings to the industry's insurance representatives from eliminating cargo insurance filing requirements for common carriers and freight forwarders of non-household goods.

A summary of the costs and benefits associated with this NPRM are presented in Table 2.

Table 2.—Summary of 10-Year Costs and Benefits of the URS NPRM
[In millions of discounted dollars]

Costs
Benefits
Net direct benefit (benefits—costs)

Total
$75.4
$91.4
$16

Total discounted costs of this proposed rule equal $75.4 million over the 10-year analysis period. Total discounted benefits of this proposed rule equal $91.4 million over 10 years, resulting in net discounted benefits of $16 million. The detailed costs and benefits associated with this NPRM are discussed in the next two sections, respectively.

B. Costs

The categories of costs are summarized in Table 3.

Table 3.—Costs of URS NPRM by Major Provision
[Millions of discounted dollars]

URS provision or proposed change

First-year
costs

Total 10-year discounted costs

New Registration Fees
$1.5
$11.6

Filing Proof of Process Agent Designation
20.5
47.1

Filing Proof of Liability Insurance
1.5
4.5

Filing Reinstatement Requests
0.4
4.4

Eliminating Transfers of Operating Authority
0.7
6.9

Revising Other FMCSA Fees
0.08
0.9

Total Discounted Costs
24.7
75.4

Note:
Subtotals may not add exactly to totals due to rounding.

The present value of total costs resulting from this NPRM is estimated to be $75.4 million for the 10-year analysis period. All dollar figures were discounted using a discount rate of 7 percent, based on Office of Management and Budget guidelines. The following discussion represents a summary of calculations performed for the benefit-cost analysis. A full discussion of the data used, assumptions made, and calculations performed can be found in the stand-alone regulatory evaluation (Preliminary Regulatory Evaluation: Unified Registration System (URS) Notice of Proposed Rulemaking (NPRM)) contained in the public docket for this rule.

1. New Registration Fees for Private and Exempt For-Hire Carriers

Under the current registration system, a carrier's operating status, such as non-exempt for-hire, exempt for-hire, or private, determines what specific forms that carrier must file with FMCSA and what specific fees, if any, are paid. For example, new entrants registering as non-exempt for-hire motor carriers must now file an OP series form (Application for Motor Carrier and Broker Authority), an MCS-150 form (Motor Carrier Identification Report), and an MCS-150A form (Safety Certification) and pay a $300 registration fee. Conversely, private and exempt for-hire carriers file only the MCS-150 and MCS-150A forms and pay no fee.

Under the new registration system, all new entrants, including all non-exempt for-hire, exempt for-hire, and private motor carriers, as well as brokers and freight forwarders, would be required to file the new MCSA-1 form (which combines most elements of the OP series, MCS-150, and MCS-150A forms), and all would be assessed a $200 registration fee. This revised fee would reduce by $100 the registration costs of non-exempt for-hire motor carriers, brokers and freight forwarders. At the same time, it would increase by $200 the registration costs of private, exempt for-hire, and other new entrant carriers, such as private passenger (non-business) carriers, private carriers of migrant workers by motor vehicle, and various government entities.

Data from FMCSA Office of Information Management indicate that the number of new entrants applying for operating authority or a USDOT Number with FMCSA averaged 47,535 annually between the years 1995 and 2002. Further details on the breakdown of these numbers appear in Table 4.

Table 4.—Average Annual Number of New Entrants by Operation Classification, 1995-2002

Operation classification
Number (average per year)
Percent of total

Non-exempt For-Hire
23,440
49

Exempt For-Hire
3,758
8

Private (Property & Passengers (business))
16,551
35

Other (includes private passenger carriers (non-business) and various government entities)
664
1

Mexico-domiciled (commercial zone & long-haul)
1

1,200
3

Brokers, Freight Forwarders
1,922
4

Total
47,535
100

Source: Motor Carrier Management Information System (MCMIS) and Licensing and Insurance System (L&I), 1995-2002 data.

1
Represents projected estimate of number of Mexico-domiciled new entrant applicants based on 2003 data.

Examining the numbers in Table 4, a total of 20,973 new entrants (Exempt For-Hire + Private + Other) would each see their registration fee increase from no fee to $200. Conversely, 26,562 new entrants (non-exempt for-hire carriers, Mexico-domiciled carriers, and brokers/freight forwarders) would each see their registration fee reduced from $300 to $200. Combining these two offsetting effects, the net regulatory cost of revising the new entrant registration fee would be $1.5 million annually. Over the 10-year analysis period, the total discounted cost of this provision would be $11.6 million, using a seven percent annual discount rate and assuming an average annual growth rate of seven percent for the industry.

A special note is required here regarding how we arrived at the proposed $200 registration fee for all new entrants. Projected fiscal year 2005 (FY05) personnel and support costs (including labor, and direct/indirect operations support) to implement and manage the new licensing and registration system proposed here were estimated at $9.7 million. This total represents the projected FMCSA personnel and related costs to handle, review, and process new entrant applications, as well as to initiate follow-up phone calls with new entrants in those cases where additional information is needed to process the application. Dividing this number ($9.7 million) by our estimate of the average annual number of new entrants (47,535) results in an average registration cost per applicant of $204 per filing. Rounding to the nearest $50, in accordance with proposed § 360.5 regulations addressing the rounding of FMCSA fees, we arrive at a registration fee of $200 per new entrant. It should be noted here that these costs were not included in the FY05 FMCSA information systems budget request developed by the FMCSA Information Management and Budget Offices, since the agency intends to cover these personnel costs through the revenues it collects from new entrant registration fees.

As discussed earlier in this evaluation, guidance regarding fee levels for the new registration system is provided by 49 U.S.C. 13908, which indicates that the Secretary may assess a fee to cover all costs associated with upgrading and operating the registration system. Additionally, guidance provided by the Office of Management and Budget Circular A-25, “User Charges,” is consistent in this regard, since it states that “each service, sale or use of Government goods or resources provided by an agency to specific recipients be self-sustaining.”

2. New Process Agent Filings Required by FMCSA

Currently, non-exempt for-hire carriers are required to verify that they have designated a process agent for those States in which they intend to operate. There is currently no charge to file this form (known as a “BOC-3” form) with FMCSA. This NPRM proposes to extend this filing requirement to private and exempt for-hire carriers, and proposes to begin charging a fee of $10 per filing. In 2005, this provision would affect approximately 20,000 exempt for-hire and private new entrants and 319,000

existing carriers. Since no existing exempt for-hire or private carrier has been required in the past to file proof of process agent designation with FMCSA, we assume all would file such proof in the first year of the rule's implementation period. Although the process agent designation form is generally a one-time filing, we would expect some existing carriers to re-file this form with FMCSA in any given year because of changes in their operations (
i.e.
, changing process agents, business address, etc.). And current regulations (49 CFR parts 365 and 368) require motor carriers to notify FMCSA within 45 days of a change or correction in their process agent designation filing. As such, in future years we estimate that this provision would affect approximately 20,000 new entrants and 10 percent of the carriers who initially filed in calendar year (CY) 2005. In CY 2006, 10 percent of this motor carrier population would equal 34,100, if we assume an average annual industry growth rate of seven percent (
i.e.
, 31,900 * 1.07 = 34,100).

Compliance costs associated with this provision include: (1) The opportunity (time) cost for a private or exempt for-hire motor carrier to contact and secure the services of a process agent (we assumed that none has yet secured such service

[Text truncated at 120,000 characters. The full text is on the page linked above.]

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A05-9692. Public record. Not legal advice.