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[Federal Register Volume 76, Number 239 (Tuesday, December 13, 2011)]
[Proposed Rules]
[Pages 77458-77465]
From the Federal Register Online via the Government Printing Office [http://www.gpo.gov/]
[FR Doc No: 2011-31858]
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DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety Administration
49 CFR Part 386
[Docket No. FMCSA-2011-0259]
RIN 2126-AB38
Amendment to Agency Rules of Practice
AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.
ACTION: Notice of proposed rulemaking.
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SUMMARY: FMCSA proposes to amend its Rules of Practice for Motor
Carrier, Intermodal Equipment Provider, Broker, Freight Forwarder, and
Hazardous Materials Proceedings in three respects. First, the Agency
proposes to clarify that paying the full proposed civil penalty in an
enforcement proceeding, either in response to a Notice of Claim (NOC)
or later in the proceeding, would not allow respondents to unilaterally
avoid an admission of liability for the violations charged. Second,
FMCSA proposes to establish procedures for issuing out-of-service
orders to motor carriers, intermodal equipment providers, brokers, and
freight forwarders it determines are reincarnations of other entities
with a history of failing to comply with statutory or regulatory
requirements. These procedures would provide for administrative review
before the out-of-service order takes effect. Finally, the Agency
proposes procedures for consolidating Agency records of reincarnated
companies with their predecessor entities.
DATES: Comments must be received on or before January 12, 2012.
ADDRESSES: You may submit comments identified by Docket Number FMCSA-
2011-0259 using any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov/.
Follow the online instructions for submitting comments.
Mail: Docket Management Facility, U.S. Department of
Transportation, 1200 New Jersey Avenue SE., West Building, Ground
Floor, Room W12-140, Washington, DC 20590-0001.
Hand Delivery or Courier: West Building, Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE., between 9 a.m. and 5 p.m.
E.T., Monday through Friday, except Federal holidays.
Fax: (202) 493-2251.
To avoid duplication, please use only one of these four methods.
See the ``Public Participation and Request for Comments'' portion of
the SUPPLEMENTARY INFORMATION section
[[Page 77459]]
below for instructions on submitting comments. Comments received after
the comment closing date will be included in the docket, and we will
consider late comments to the extent practicable. FMCSA may, however,
issue a final rule at any time after the close of the comment period.
FOR FURTHER INFORMATION CONTACT: Sabrina Redd, Office of Chief Counsel,
Federal Motor Carrier Safety Administration, 1200 New Jersey Avenue
SE., Washington, DC 20590-0001, by telephone at (202) 366-6424 or via
email at Sabrina.redd@dot.gov. Office hours are from 9 a.m. to 5 p.m.
ET, Monday through Friday, except Federal holidays. If you have
questions on viewing or submitting material to the docket, contact
Renee V. Wright, Program Manager, Docket Operations, telephone (202)
366-9826.
SUPPLEMENTARY INFORMATION:
Table of Contents for Preamble
-
Public Participation and Request for Comments
- Submitting Comments
- Viewing Comments and Documents
- Privacy Act
- Legal Basis for the Rulemaking
- Background
- Section 386.18
- Section 386.73
- Discussion of Proposed Rule
- Section 386.18
- . Section 386.73
- Regulatory Analyses
I. Public Participation and Request for Comments
FMCSA encourages you to participate in this rulemaking by
submitting comments and related materials. All comments received will
be posted without change to http://www.regulations.gov/ and will include
any personal information you provide.
A. Submitting Comments
If you submit a comment, please include the docket number for this
rulemaking (FMCSA-2011-0259), indicate the specific section of this
document to which each comment applies, and provide a reason for each
suggestion or recommendation. You may submit your comments and material
online or by fax, mail, or hand delivery, but please use only one of
these means. FMCSA recommends that you include your name and a mailing
address, an email address, or a phone number in the body of your
document so FMCSA can contact you if there are questions regarding your
submission.
To submit your comment online, go to http://www.regulations.gov/ and
click on the ``Submit a Comment'' box, which will then become
highlighted in blue. In the ``Document Type'' drop-down menu, select
``Proposed Rules,'' insert ``FMCSA 2011-0259'' in the ``Keyword'' box,
and click ``Search.'' When the new screen appears, click on ``Submit a
Comment'' in the ``Actions'' column. If you submit your comment by mail
or hand delivery, submit them in an unbound format, no larger than 8\1/
2\ by 11 inches, suitable for copying and electronic filing. If you
submit your comments by mail and would like to know that they reached
the facility, please enclose a stamped, self-addressed postcard or
envelope.
FMCSA will consider all comments and material received during the
comment period and may change the proposed rule based on your comments.
B. Viewing Comments and Documents
To view comments, as well as documents mentioned in this preamble,
available in the docket, go to http://www.regulations.gov/ and click on
the ``Read Comments'' box in the upper right-hand side of the screen.
Then in the ``Keyword'' box, insert ``FMCSA-2011-0259'' and click
``Search.'' Next, click the ``open Docket Folder'' in the ``Actions''
column. Finally, in the ``Title'' column, click on the document you
would like to review. If you do not have access to the Internet, you
may view the docket online by visiting the Docket Management Facility
in Room W12-140 on the ground floor of the Department of Transportation
West Building, 1200 New Jersey Avenue SE., Washington, DC 20590,
between 9 a.m. and 5 p.m. ET, Monday through Friday, except Federal
holidays.
C. Privacy Act
Anyone is able to search the electronic form of all comments
received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review the
Department of Transportation's (DOT's) Privacy Act Statement for the
Federal Docket Management System published in the Federal Register on
January 17, 2008 (73 FR 3316), or you may visit http://edocket.access.gpo.gov/2008/pdf/E8-785.pdf.
II. Legal Basis for the Rulemaking
Congress delegated certain powers to regulate interstate commerce
to DOT in numerous pieces of legislation, most notably in section 6 of
the Department of Transportation Act (DOT Act) (Pub. L. 89-670, 80
Stat. 931 (1966)). Section 6(e)(6)(C) of the DOT Act transferred to DOT
the authority of the Interstate Commerce Commission (ICC) to regulate
the qualifications and maximum hours of service of motor carrier
employees, the safety of operations, and the equipment of motor
carriers in interstate commerce. This authority, first granted to the
ICC in the Motor Carrier Act of 1935 (Pub. L. 74-255, 49 Stat. 543),
now appears in chapter 315 of title 49 of the U.S. Code. The
regulations issued under this authority became known as the Federal
Motor Carrier Safety Regulations (FMCSRs), appearing generally at 49
CFR parts 350-399. The administrative powers to enforce chapter 315
were also transferred from the ICC to the DOT in 1966 and appear in
chapter 5 of title 49 of the U.S. Code. The Secretary of DOT delegated
oversight of these provisions to the Federal Highway Administration
(FHWA), the predecessor agency to FMCSA.
Between 1984 and 1999, a number of statutes added to FHWA's
authority. Various statutes authorize the enforcement of the FMCSRs,
the Hazardous Materials Regulations (HMRs), and the Federal Motor
Carrier Commercial Regulations (FMCCRs) and provide both civil and
criminal penalties for violations. These statutes include the Motor
Carrier Safety Act of 1984 (Pub. L. 98-554, 98 Stat. 2832), codified at
49 U.S.C. chapter 311, subchapter III; the Commercial Motor Vehicle
Safety Act of 1986 (Pub. L. 99-570, 100 Stat. 3207-170), codified at 49
U.S.C. chapter 313; the Hazardous Materials Transportation Uniform
Safety Act of 1990 (Pub. L. 101-615, 104 Stat. 3244), codified at 49
U.S.C. chapter 51; and the ICC Termination Act of 1995 (Pub. L. 104-88,
109 Stat. 803), codified at 49 U.S.C. chapters 135-149. In practice,
when circumstances dictate that an enforcement action be instituted,
FMCSA typically seeks civil penalties. The Rules of Practice apply to
the administrative adjudication of civil penalties assessed for
violations of the FMCSRs, the HMRs, and the FMCCRs.
III. Background
A. Section 386.18
On May 18, 2005, FMCSA published a comprehensive revision of its
Rules of Practice, which are contained in 49 CFR part 386 (70 FR
28467). The revision was intended to increase the efficiency of Agency
administrative enforcement procedures, enhance due process, improve
public understanding of the Agency's procedures, and accommodate recent
programmatic changes.
Under Sec. 386.11(c) of the Rules of Practice, civil penalty
enforcement proceedings are initiated through
[[Page 77460]]
service of an NOC, which is usually issued by the FMCSA Division
Administrator for the State in which the respondent maintains its
principal place of business. The NOC, which is usually based on a
compliance review or other type of investigation or enforcement
intervention, sets forth the provisions of law allegedly violated by
the respondent and underlying facts pertinent to the alleged
violations; proposes a civil penalty; and provides information
regarding the time, form, and manner whereby the respondent may pay,
contest, or otherwise seek resolution of the claim. Prior to 2005, the
Rules of Practice were silent on whether payment of the proposed civil
penalty in response to the NOC or at a subsequent stage of the
proceeding constituted an admission of the violations alleged in the
NOC.
The 2005 revision of the Rules of Practice added a new Sec. 386.18
titled ``Payment of the claim.'' This section provides:
(a) Payment of the full amount claimed may be made at any time
before issuance of a Final Agency Order. After the issuance of a
Final Agency Order, claims are subject to interest, penalties, and
administrative charges in accordance with 31 U.S.C. 3717; 49 CFR
part 89; and 31 CFR 901.9.
(b) If respondent elects to pay the full amount as its response
to the Notice of Claim, payment must be served upon the Field
Administrator at the Service Center designated in the Notice of
Claim within 30 days following service of the Notice of Claim. No
written reply is necessary if respondent elects the payment option
during the 30-day reply period. Failure to serve full payment within
30 days of service of the Notice of Claim when this option has been
chosen may constitute a default and may result in the Notice of
Claim, including the civil penalty assessed by the Notice of Claim,
becoming the Final Agency Order in the proceeding pursuant to Sec.
386.14(c).
(c) Unless objected to in writing, submitted at the time of
payment, payment of the full amount in response to the Notice of
Claim constitutes an admission by the respondent of all facts
alleged in the Notice of Claim. Payment waives respondent's
opportunity to further contest the claim, and will result in the
Notice of Claim becoming the Final Agency Order.
In a number of enforcement proceedings, respondents have paid the
full amount of the claim with written objection, either in their reply
to the NOC or at a later stage of the proceeding. In such cases, the
respondents argued that payment with written objection terminates the
proceeding without an admission of liability. The FMCSA Field
Administrators, who are responsible for prosecuting enforcement
proceedings before the Agency, contended that respondents could not
unilaterally terminate an enforcement proceeding without an admission
of liability by making full payment.
In a case decided on November 3, 2010, In the Matter of Homax Oil
Sales, Inc., Docket No. FMCSA-2006-26000, Order Denying Petition for
Reconsideration (Homax), FMCSA's Assistant Administrator reasoned that
allowing respondents to unilaterally terminate proceedings by paying
the proposed penalty in full and lodging an objection under Sec.
386.18(c) would be contrary to the Agency's enforcement policy and
section 222 of the Motor Carrier Safety Improvement Act, which requires
that the Agency assess the maximum statutory penalty for each violation
of law by any person ``who is found to have committed a pattern of
violations of critical or acute regulations issued to carry out such a
law or to have previously committed the same or related violation of
critical or acute regulations issued to carry out such a law.'' The
Assistant Administrator concluded that if a carrier is allowed to
unilaterally terminate an enforcement proceeding without an admission,
the case cannot count as prior history for future civil penalty
calculations under 49 U.S.C. 521(b)(2)(D), which requires the Agency to
consider a respondent's history of prior offenses in addition to
several other factors, as well as under section 222 of MCSIA. Allowing
unilateral termination of a proceeding by a respondent without an
admission would permit carriers with abundant financial resources to
repeatedly violate the Agency's regulations without running the risk of
facing escalating civil penalties despite a history of noncompliance
with the regulations. The Assistant Administrator acknowledged that the
regulatory text of Sec. 386.18(c) is less than clear regarding the
consequences of full payment with written objection and recommended
that the meaning of this paragraph be clarified through rulemaking.
As was noted in Homax, in an April 1996 Notice of Proposed
Rulemaking (NPRM), FHWA proposed the following language with respect to
the full payment issue:
363.105(c): Unless otherwise provided in writing by mutual
consent of the parties, payment and/or compliance with the order
constitutes an admission of all facts alleged in the notice of
violation [called a notice of claim under the current Rules of
Practice] and a waiver of the respondent's opportunity to contest
the claim, and results in the notice of violation becoming the final
agency order. (61 FR 18865, Apr. 29, 1996)
FHWA's reasoning for this language was that ``future agency
enforcement actions may be based on, and certain consequences may flow
from, prior and continued violations of the safety regulations.'' (61
FR 18875-76, Apr. 29, 1996).
FMCSA revised this proposal, renumbered as Sec. 386.18(c), in an
October 2004 Supplemental Notice of Proposed Rulemaking (SNPRM) (69 FR
61628, Oct. 20, 2004) to read as follows:
(c) Unless objected to in writing, payment of the full amount in
its reply constitutes an admission by the respondent of all facts
alleged in the notice of claim. Payment waives respondent's
opportunity to further contest the claim, and will result in the
notice of claim becoming the final agency order.
This proposed change was intended to make ``it clear that, unless the
parties otherwise agree in writing, respondent's payment of the full
claim amount as its reply to the notice of claim constitutes an
admission.'' (69 FR 61622).
The final rule published on May 18, 2005 (70 FR 28467), adopted
this provision with little change. In the 2010 Homax Order, the
Assistant Administrator concluded that, notwithstanding the removal of
the language requiring mutual consent of the parties from the
regulatory text, the Agency intended to adopt the mutual consent
requirement originally proposed in 1996.
In a subsequent case, In the Matter of Associated Pipe Contractors,
Inc., Docket No. FMCSA-2008-0159, Order Terminating Proceeding and
Closing Docket, January 10, 2011, the Agency addressed the implications
of full payment of the proposed civil penalty at any time before
issuance of a Final Agency Order, in accordance with Sec. 386.18(a).
In Associated Pipe Contractors, the carrier paid the full penalty with
written objection several months after contesting the NOC and
requesting administrative adjudication. Section 386.18(a), which
applies to this situation rather than Section 386.18(c), is silent
regarding whether a carrier can unilaterally terminate an enforcement
proceeding without an admission of liability under these circumstances.
The Agency concluded that the same concerns expressed in the Homax
decision apply to such a payment and that Sec. 386.18(a) should be
clarified to be consistent with that decision.
B. Section 386.73
FMCSA has determined that a number of motor carriers have submitted
new applications for registration, often under a new name, in order to
continue operating after having been placed out of service for safety-
related reasons; to avoid paying civil penalties; to
[[Page 77461]]
circumvent denial of operating authority based on a determination that
they are not fit, willing, or able to comply with the applicable
statutes or regulations; or to otherwise avoid a negative compliance
history. Other motor carriers attempt to avoid enforcement or negative
compliance history by creating or using an affiliated company under
common operational control. They then shift customers, vehicles,
drivers, and other operational activities to that affiliated company
when FMCSA places one of the commonly controlled companies out-of-
service. The practice of ``reincarnating'' as a new carrier or
operating affiliated companies to circumvent Agency enforcement actions
and avoid a negative compliance history or enforcement action creates
an unacceptable risk of harm to the public because it results in the
continued operation of at-risk carriers and thwarts FMCSA's ability to
carry out its safety mission.
The danger posed by ``reincarnation'' became evident following a
fatal bus crash in Sherman, Texas in 2008. Investigation revealed that
the carrier involved did not have operating authority from FMCSA, but
had an application for authority pending with the Agency. FMCSA
determined that the carrier was a reincarnation of another bus company
that had recently been placed out of service. Following the Sherman,
Texas bus crash, FMCSA began a vetting process that involves a
comprehensive review of applications for passenger-carrier operating
authority to determine whether the applicants are reincarnations or
affiliates of other motor carriers with negative compliance histories
or are otherwise not fit, willing, and able to comply with the
applicable regulations. Although the vetting program is a significant
improvement to the operating authority review process, it is not a
complete solution to the reincarnation problem. Accordingly, FMCSA
proposes new procedures to prohibit reincarnated or affiliated carriers
from successfully evading accountability for their compliance history.
FMCSA is empowered to suspend, amend, or revoke a motor carrier's
registration for willful failure to comply with applicable safety
regulations, an FMCSA order, or a condition of its registration
pursuant to 49 U.S.C. 13905. Motor carriers that obtain registration by
creating a new company or an affiliate company with a new registration
for the purpose of avoiding FMCSA orders, regulations, or enforcement
action procure the registration by fraud--by knowingly misrepresenting
and/or withholding material information. FMCSA has authority to
sanction these motor carriers, which have already demonstrated an
unwillingness or inability to comply with applicable safety
regulations, by suspending, amending, or revoking their registration
and/or by imposing applicable civil penalties.
While the FMCSA has existing authority to address the practice of
reincarnation or affiliation to avoid compliance, the FMCSRs do not
include an efficient procedure to sanction and deter the conduct. The
FMCSRs also do not contain a procedure by which FMCSA can consolidate
motor carrier compliance records once FMCSA determines that a motor
carrier has reincarnated or is operating affiliated companies for the
purpose of avoiding enforcement action or a negative compliance
history. Further, the FMCSRs do not include a procedure by which motor
carriers can expeditiously contest FMCSA's determination that a motor
carrier is a reincarnation or affiliate of another motor carrier.
IV. Discussion of Proposed Rule
A. Section 386.18
FMCSA proposes to amend 49 CFR 386.18(a) and (c) to clarify that
payment of the full amount of the proposed civil penalty constitutes an
admission of all facts alleged in the NOC, unless otherwise agreed by
both the respondent and FMCSA. The mutual consent provision will give
FMCSA Field Administrators the discretion to permit payment without an
admission of liability in appropriate cases, such as first-time
inadvertent minor violations where the respondent demonstrates a
sincere intent to comply in the future. Payment without written
objection will continue to be considered as an admission of liability.
If payment is tendered with a written objection, it will still be
treated as an admission of liability unless the Field Administrator
responsible for prosecuting the case agrees in writing that payment
will not be treated as an admission. Respondents, therefore, should
contact the appropriate FMCSA Service Center to seek the necessary
written consent if they are considering paying the penalty with written
objection.
B. Section 386.73
FMCSA proposes to revise its Rules of Practice to address
operational reincarnation or affiliation by adding a new Sec. 386.73.
This new section would establish flexible, efficient procedures to
address entities that attempt to reincarnate or operate affiliated
entities for the purpose of evading FMCSA Orders, avoiding statutory
and regulatory compliance, or concealing a history of non-compliance.
The proposed procedures would more fully implement the Agency's current
authority to prohibit unsafe entities from operating while, at the same
time, providing due process for companies that seek to challenge a
finding that they are a reincarnated or affiliated company.
The purpose of this proposed new section is to provide a mechanism
to prevent motor carriers, intermodal equipment providers, brokers, and
freight forwarders, from creating new or multiple business identities
to avoid statutory or regulatory requirements, FMCSA Orders and
enforcement actions, or a negative compliance history. The rule would
authorize FMCSA to issue out-of-service orders to motor carriers,
intermodal equipment providers, brokers, and freight forwarders
determined to be reincarnated or operating as affiliates to avoid
enforcement action or negative compliance and it would provide a
mechanism for administrative review of such orders. The rule would also
establish procedures to consolidate the compliance records of motor
carriers, intermodal equipment providers, brokers, and freight
forwarders determined to be reincarnated or affiliated entities.
V. Regulatory Analyses
Executive Order (E.O.) 12866 (Regulatory Planning and Review) and DOT
Regulatory Policies and Procedures
FMCSA has determined that this proposed rule is not a significant
regulatory action within the meaning of Executive Order (E.O.) 12866,
as supplemented by E.O. 13563 (76 FR 3821, January 21, 2011), or within
the meaning of DOT regulatory policies and procedures. The estimated
cost of the proposed rule is not expected to exceed the $100 million
annual threshold for economic significance, therefore, any costs
associated with the rule are expected to be minimal. Moreover, the
Agency does not expect the proposed rule to generate substantial
Congressional or public interest. The proposed rule would not impose
new requirements upon carriers and thus should result in minimal to no
economic burdens. The revisions clarify existing rules and implement
procedures that would not require a change in the business practices of
already compliant carriers.
Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612) requires
Federal
[[Page 77462]]
agencies to consider the effects of the regulatory action on small
business and other small entities and to minimize any significant
economic impact. The term ``small entities'' comprises small business
and not-for-profit organizations that are independently owned and
operated and are not dominant in their fields and governmental
jurisdictions with populations of less than 50,000.\1\ Accordingly, DOT
policy requires an analysis of the impact of all regulations on small
entities and mandates that agencies strive to lessen any adverse
effects on these businesses.
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\1\ Regulatory Flexibility Act (5 U.S.C. 601 et seq.) see
National Archives at http://www.archives.gov/federal-register/laws/regulatory-flexibility/601.html.
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Under the Regulatory Flexibility Act, as amended by the Small
Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121,
110 Stat. 857), the proposed rule is not expected to have a significant
economic impact on a substantial number of small entities. Payment of
claims and admissions of liability reflect current FMCSA policy, as
discussed in the background section, and therefore this rule would not
disproportionately impact small entities. Even before the current
policy was enunciated through administrative adjudication, this portion
of the rule did not have a significant impact. From 2008 through 2011,
the Agency adjudicated only six cases in which the respondent motor
carrier paid a civil penalty with written objection, which indicates
the minimal impact the rule would have.
FMCSA estimates that fewer than 50 carriers annually would be
affected by the proposed rule as it pertains to reincarnated or
affiliated carriers. Consequently, I certify that the proposed action
would not have a significant economic impact on a substantial number of
small entities.
Assistance for Small Entities
In accordance with section 213(a) of the Small Business Regulatory
Enforcement Fairness Act of 1996, FMCSA wants to assist small entities
in understanding this proposed rule so that they can better evaluate
its effects on themselves and participate in the rulemaking initiative.
If the proposed rule would affect your small business, organization, or
governmental jurisdiction and you have questions concerning its
provisions or options for compliance, please consult the FMCSA point of
contact, Sabrina Redd, listed in the FOR FURTHER INFORMATION CONTACT
section of this proposed rule. FMCSA will not retaliate against small
entities that question or complain about this proposed rule or any
policy or action of the Agency.
Small businesses may send comments on the actions of Federal
employees who enforce or otherwise determine compliance with Federal
regulations to the Small Business Administration's Small Business and
Agriculture Regulatory Enforcement Ombudsman and the Regional Small
Business Regulatory Fairness Boards. The Ombudsman evaluates these
actions annually and rates each agency's responsiveness to small
business. If you wish to comment on actions by employees of FMCSA, call
1-888-REG-FAIR (1 (888) 734-3247).
Unfunded Mandates Reform Act
This rulemaking would not impose an unfunded Federal mandate, as
defined by the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532 et
seq.), that would result in the expenditure by State, local, and Tribal
governments, in the aggregate, or by the private sector, of $141.3
million (which is the value of $100 million in 2010 after adjusting for
inflation) or more in any 1 year.
E.O. 13132 (Federalism)
A rule has implications for Federalism under Section 1(a) of E.O.
13132 if it has ``substantial direct effects on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government.'' FMCSA has determined that this proposal would not have
substantial direct effects on States, nor would it limit the
policymaking discretion of States. Nothing in this document preempts
any State law or regulation
.
Indian Tribal Governments
This proposed rule does not have Tribal implications under E.O.
13175, Consultation and Coordination with Indian Tribal Governments,
because it would not have a substantial direct effect on one or more
Indian Tribes, on the relationship between the Federal Government and
Indian Tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian Tribes.
Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.),
Federal agencies must obtain approval from the Office of Management and
Budget (OMB) for each collection of information they conduct, sponsor,
or require through regulations. FMCSA has determined that there is no
new information collection requirement associated with this proposed
rule.
National Environmental Policy Act
FMCSA analyzed this NPRM for the purpose of the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and
determined this action is categorically excluded from further analysis
and documentation in an environmental assessment or environmental
impact statement under FMCSA Order 5610.1(69 FR 9680, March 1, 2004),
Appendix 2, paragraphs (6)(u)(1), (6)(u)(2), and (6)(y)(7). The
Categorical Exclusion (CE) in paragraph (6)(u)(1) addresses rules
concerning compliance with regulations; the CE in paragraph (6)(u)(2)
addresses regulations assessing civil penalties; and the CE in
paragraph (6)(y)(7) addresses rules for record keeping. The various
proposals in this rule are covered by one or a combination of these
three CEs. Therefore, this proposed action does not have any effect on
the quality of the environment. The Categorical Exclusion determination
is available for inspection or copying in the Regulations.gov Web site
listed under ADDRESSES.
FMCSA also analyzed this rule under the Clean Air Act, as amended
(CAA), section 176(c) (42 U.S.C. 7401 et seq.), and implementing
regulations promulgated by the Environmental Protection Agency.
Approval of this action is exempt from the CAA's general conformity
requirement since it does not affect direct or indirect emissions of
criteria pollutants.
E.O. 13211 (Energy Effects)
FMCSA has analyzed this proposed rule under E.O. 13211, Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use. The Agency has determined that it is not a
``significant energy action'' under that order because it is not a
``significant regulatory action'' under E.O. 12866 and is not likely to
have a significant adverse effect on the supply, distribution, or use
of energy. Therefore, no Statement of Energy Effects is required.
E.O. 13045 (Protection of Children)
E.O. 13045, Protection of Children from Environmental Health Risks
and Safety Risks (62 FR 19885, Apr. 23, 1997), requires agencies
issuing ``economically significant'' rules, if the regulation also
concerns an environmental health or safety risk that an agency has
reason to believe may disproportionately affect children, to include an
evaluation of the regulation's environmental health and safety effects
on children. As discussed previously,
[[Page 77463]]
this proposed rule is not economically significant. Therefore, no
analysis of the impacts on children is required. In any event, we do
not anticipate that this regulatory action could in any respect present
an environmental or safety risk that could disproportionately affect
children.
E.O. 12988 (Civil Justice Reform)
This action meets applicable standards in sections 3(a) and 3(b)(2)
of E.O. 12988, Civil Justice Reform, to minimize litigation, eliminate
ambiguity, and reduce burden.
E.O. 12630 (Taking of Private Property)
This proposed rule would not effect a taking of private property or
otherwise have taking implications under E.O. 12630, Governmental
Actions and Interference with Constitutionally Protected Property
Rights.
National Technology Transfer and Advancement Act (Technical Standards)
The National Technology Transfer and Advancement Act (15 U.S.C. 272
note) requires Federal agencies proposing to adopt Government technical
standards to consider whether voluntary consensus standards are
available. If the Agency chooses to adopt its own standards in place of
existing voluntary consensus standards, it must explain its decision in
a separate statement to OMB. This rule does not propose to adopt any
technical standards.
Privacy Impact Assessment
FMCSA conducted a privacy impact assessment of this rule as
required by section 522(a)(5) of the FY 2005 Omnibus Appropriations
Act, Public Law 108-447, 118 Stat. 3268 (Dec. 8, 2004) [set out as a
note to 5 U.S.C. 552a]. The assessment considers any impacts of the
rule on the privacy of information in an identifiable form and related
matters. FMCSA has determined this rule would have no privacy impacts.
List of Subjects in 49 CFR Part 386
Administrative practice and procedure, Brokers, Freight forwarders,
Hazardous materials transportation, Highway safety, Motor carriers,
Motor vehicle safety penalties.
In consideration of the forgoing, FMCSA is proposed to amend 49 CFR
part 386 as follows:
PART 386--RULES OF PRACTICE FOR MOTOR CARRIER, INTERMODAL EQUIPMENT
PROVIDER, BROKER, FREIGHT FORWARDER, AND HAZARDOUS MATERIALS
PROCEEDINGS
1. The authority citation for part 386 will continue to read as
follows:
Authority: 49 U.S.C. 113, chapters 5, 51, 59, 131-141, 145-149,
311, 313, and 315; Sec. 204, Pub. L. 104-88, 109 Stat. 803, 941 (49
U.S.C. 701 note); Sec. 217, Pub. L. 105-159, 113 Stat. 1748, 1767;
Sec. 206, Pub. L. 106-159, 113 Stat. 1763; subtitle B, title IV of
Pub. L. 109-59; and 49 CFR 1.45 and 1.73.
2. Amend Sec. 386.18 by revising paragraphs (a) and (c) to read as
follows:
Sec. 386.18 Payment of the claim.
(a) Payment of the full amount claimed may be made at any time
before issuance of a Final Agency Order and will constitute an
admission of liability by the respondent of all facts alleged in the
Notice of Claim, unless the parties agree in writing that payment shall
not be treated as an admission. After the issuance of a Final Agency
Order, claims are subject to interest, penalties, and administrative
charges, in accordance with 31 U.S.C. 3717; 49 CFR part 89; and 31 CFR
901.9.
* * * * *
(c) Unless otherwise agreed in writing by the parties, payment of
the full amount in response to the Notice of Claim constitutes an
admission of liability by the respondent of all facts alleged in the
Notice of Claim. Payment waives respondent's opportunity to further
contest the claim and will result in the Notice of Claim becoming the
Final Agency Order.
(c) Unless otherwise agreed in writing by the parties, payment of
the full amount in response to the Notice of Claim constitutes an
admission of liability by the respondent of all facts alleged in the
Notice of Claim. Payment waives respondent's opportunity to further
contest the claim and will result in the Notice of Claim becoming the
Final Agency Order.
Sec. 386.73 Operations Out-of-Service and Record Consolidation
Proceedings (Reincarnated Carriers).
(a) Out of Service Order. An FMCSA Field Administrator or the
Director of FMCSA's Office of Enforcement and Compliance (Director) may
issue an out-of-service order to prohibit a motor carrier, intermodal
equipment provider, broker, or freight forwarder from conducting
operations subject to FMCSA jurisdiction upon a determination by the
Field Administrator or Director that the motor carrier, intermodal
equipment provider, broker, or freight forwarder or an officer,
employee, agent, or authorized representative of such an entity,
operated or attempted to operate a motor carrier, intermodal equipment
provider, broker, or freight forwarder under a new identity or as an
affiliated entity to:
- Avoid complying with an FMCSA Order;
- Avoid complying with a statutory or regulatory requirement;
- Avoid paying a civil penalty;
- Avoid responding to an enforcement action; or
- Avoid being linked with a negative compliance history.
(b) Record Consolidation Order. In addition to, or in lieu of, an
out-of-service order issued under this section, the Field Administrator
or Director may issue an order consolidating the records maintained by
FMCSA concerning the current motor carrier, intermodal equipment
provider, broker, and freight forwarder, or an affiliated motor
carrier, intermodal equipment provider, broker, or freight forwarder
and its previous incarnation, for all purposes, upon a determination
that the motor carrier, intermodal equipment provider, broker, and
freight forwarder or officer, employee, agent, or authorized
representative of the same, operated or attempted to operate a motor
carrier, intermodal equipment provider, broker, or freight forwarder
under a new identity or as an affiliated entity to:
- Avoid complying with an FMCSA Order;
- Avoid complying with a statutory or regulatory requirement;
- Avoid paying a civil penalty;
- Avoid responding to an enforcement action; or
- Avoid being linked with a negative compliance history.
(c) Standard. The Field Administrator or Director may determine
that a motor carrier, intermodal equipment provider, broker, or freight
forwarder is reincarnated if there is substantial continuity between
the entities such that one is merely a continuation of the other. The
Field Administrator or Director may determine that a motor carrier,
intermodal equipment provider, broker, or freight forwarder is an
affiliate if the business operations are under common ownership and/or
common control. In making this determination, the Field Administrator
or Director may consider, among other things, the following factors:
- Whether the new or affiliated entity was created for the
purpose of evading statutory or regulatory requirements, an FMCSA
order, enforcement action, or negative compliance history; in weighing
this factor, the Field Administrator or Director may consider the
stated business purpose for the creation of the new or affiliated
entity.
- Consideration exchanged for assets purchased or transferred;
[[Page 77464]] - Dates of company creation and dissolution or cessation of
operations;
- Commonality of ownership between the current and former company
or between current companies;
- Commonality of officers and management personnel;
- Identity of physical or mailing addresses, telephone, fax
numbers, or email addresses;
- Identity of motor vehicle equipment;
- Continuity of liability insurance policies or commonality of
coverage under such policies;
- Commonality of drivers and other employees;
- Continuation of carrier facilities and other physical assets;
- Continuity or commonality of nature and scope of operations,
including customers for whom transportation is provided;
- Advertising, corporate name, or other acts through which the
company holds itself out to the public; and
- History of safety violations and pending orders or enforcement
actions of the Secretary.
(d) Evaluating Factors. The Field Administrator or Director may
examine, among other things, the company management structures,
financial records, corporate filing records, asset purchase or transfer
and title history, employee records, insurance records, and any
information related to the general operations of the entities involved.
(e) Effective Dates. An order issued under this section becomes the
Final Agency Order and is effective on the 21st day after it is served
unless a request for administrative review is served and filed as set
forth in paragraph (f) of this section. Any motor carrier, intermodal
equipment provider, broker, or freight forwarder that fails to comply
with any prohibition or requirement set forth in an order issued under
this section is subject to the applicable penalty provisions for each
instance of noncompliance.
(f) Commencement of Proceedings. The Field Administrator or
Director may commence proceedings under this section by issuing an
order that:
- Provides notice of the factual and legal basis of the order;
- In the case of an out-of-service order, identifies the
operations prohibited by the order;
- In the case of an order that consolidates records maintained by
FMCSA, identifies the previous entity and current or affiliated motor
carriers, intermodal equipment providers, brokers, or freight
forwarders whose records will be consolidated;
- Provides notice that the order is effective upon the 21st day
after service;
- Provides notice of the right to petition for administrative
review of the order and that a timely petition will stay the effective
date of the order unless the Assistant Administrator orders otherwise
for good cause; and
- Provides notice that failure to timely request administrative
review of the order constitutes waiver of the right to contest the
order and will result in the order becoming a Final Agency Order 21
days after it is served.
(g) Administrative Review. A motor carrier, intermodal equipment
provider, broker, or freight forwarder issued an order under this
section may petition for administrative review of the order. A petition
for administrative review is limited to contesting factual or
procedural errors in the issuance of the order under review and may not
be submitted to demonstrate corrective action. A petition for
administrative review that does not identify factual or procedural
errors in the issuance of the order under review will be dismissed.
Petitioners seeking to demonstrate corrective action may do so by
submitting a Petition for Rescission under paragraph (h) of this
section.
- A petition for administrative review must be in writing and
served on the Assistant Administrator, Federal Motor Carrier Safety
Administration, 1200 New Jersey Ave. SE., Washington, DC 20590-0001,
Attention: Adjudications Counsel or by electronic mail to
FMCSA.Adjudication@dot.gov. A copy of the petition for administrative
review must also be served on the Field Administrator or Director who
issued the order at the physical address or electronic mail account
identified in the order.
- A petition for administrative review must be served within 15
days of the date the Field Administrator or Director served the order
issued under this section. Failure to timely request administrative
review waives the right to administrative review and constitutes an
admission to the facts alleged in the order.
- A petition for administrative review must include:
- A copy of the order in dispute; and
- A statement of all factual and procedural issues in dispute.
- If a petition for administrative review is timely served and
filed, the petitioner may supplement the petition by serving
documentary evidence and/or written argument that supports its position
regarding the procedural or factual issues in dispute no later than 30
days from the date the disputed order was served. The supplementary
documentary evidence or written argument may not expand the issues on
review and need not address every issue identified in the petition.
Failure to timely serve supplementary documentary evidence and/or
written argument constitutes a waiver of the right to do so.
- The Field Administrator or Director must serve written argument
and supporting documentary evidence, if any, in defense of the disputed
order no later than 15 days following the service of the petition for
administrative review.
- The Assistant Administrator may ask the parties to submit
additional information or attend a conference to facilitate
administrative review.
- The Assistant Administrator will issue a written decision on
the request for administrative review within 30 days of the close of
the time period for the Field Administrator or the Director to serve
written argument and supporting documentary evidence in defense of the
order, or the actual filing of such written argument and documentary
evidence, whichever is earlier.
- If a petition for administrative review is timely served and
filed in accordance with this section, the disputed order is stayed
pending the Assistant Administrator's review, unless the Assistant
Administrator orders otherwise for good cause shown.
- The Assistant Administrator's decision on a petition for
administrative review of an order issued under this section constitutes
the Final Agency Order.
(h) Petition for Rescission. A motor carrier, intermodal equipment
provider, broker, or freight forwarder may petition to rescind an order
issued under this section if action has been taken to correct the
deficiencies that resulted in the order.
- A petition for rescission must be made in writing to the Field
Administrator or Director who issued the order.
- A petition for rescission must include a copy of the order
requested to be rescinded, a factual statement identifying all
corrective action taken, and copies of supporting documentation.
- Upon request and for good cause shown, the Field Administrator
or Director may grant the petitioner additional time, not to exceed 45
days, to complete corrective action initiated at the time the petition
for rescission was filed.
- The Field Administrator or Director will issue a written
decision on the petition for rescission within 60
[[Page 77465]]
days of service of the petition. The written decision will include the
factual and legal basis for the determination. - If the Field Administrator or Director grants the request for
rescission, the written decision is the Final Agency Order.
- If the Field Administrator or Director denies the request for
rescission, the petitioner may file a petition for administrative
review of the denial with the Assistant Administrator, Federal Motor
Carrier Safety Administration, 1200 New Jersey Ave. SE., Washington, DC
20590-0001, Attention: Adjudication Counsel or by electronic mail to
FMCSA.Adjudication@dot.gov. The petition for administrative review of
the denial must be served and filed within 15 days of the service of
the decision denying the request for recession. The petition for
administrative review must identify the disputed factual or procedural
issues with respect to the denial of the petition for rescission. The
petition may not, however, challenge the underlying basis of the order
for which rescission was sought.
- The Assistant Administrator will issue a written decision on
the petition for administrative review of the denial of the petition
for rescission within 60 days. The Assistant Administrator's decision
constitutes the Final Agency Order.
(i) Other Orders Unaffected. If a motor carrier, intermodal
equipment provider, broker, or freight forwarder subject to an order
issued under this section is or becomes subject to any other order,
prohibition, or requirement of the FMCSA, an order issued under this
section is in addition to, and does not amend or supersede such other
order, prohibition, or requirement. A motor carrier, intermodal
equipment provider, broker, or freight forwarder subject to an order
issued under this section remains subject to the suspension and
revocation provisions of 49 U.S.C. 13905 for violations of regulations
governing their operations.
(j) Inapplicability of Subparts. Subparts B, C, D, and E, except
Sec. 386.67, do not apply to this section.
4. Amend Appendix A to 49 CFR part 386, section IV, by
redesignating existing paragraph (h) as paragraph (i) and adding a new
paragraph (h) to read as follows:
Appendix A to Part 386--Penalty Schedule; Violations of Notices and
Orders
* * * * *
IV. * * *
h. Violation--Operating in violation of an order issued under
Sec. 386.73.
Penalty--Up to $16,000 per day the operation continues after the
effective date and time of the out-of-service order.v
* * * * *
Issued on: December 7, 2011.
Anne S. Ferro,
Administrator.
[FR Doc. 2011-31858 Filed 12-12-11; 8:45 am]
BILLING CODE P
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