FMCSA Policy on Granting, Withholding, Suspending, Amending or Revoking Operating Authority Registration

Anne S. Ferro
Federal Motor Carrier Safety Administration
August 2, 2012

[Federal Register Volume 77, Number 149 (Thursday, August 2, 2012)]
[Notices]
[Pages 46147-46149]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-18935]


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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration


FMCSA Policy on Granting, Withholding, Suspending, Amending or 
Revoking Operating Authority Registration

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice of policy.

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SUMMARY: FMCSA provides notice of the Agency's policy concerning review 
of applications for operating authority registration, and suspension, 
amendment or revocation of existing operating authority registration. 
Motor carriers, brokers and freight forwarders must demonstrate a 
willingness and ability to comply with applicable statutes and 
regulations in order to obtain and maintain operating authority 
registration. This notice outlines FMCSA's policy for evaluating motor 
carriers', brokers' and freight forwarders' willingness and ability to 
comply with these requirements.

DATES: This policy statement is effective August 2, 2012.

FOR FURTHER INFORMATION CONTACT: Sabrina E. Redd, Federal Motor Carrier 
Safety Administration, 1200 New Jersey Avenue SE., Washington, DC 
20590, 202-366-6240, Sabrina.Redd@dot.gov.

SUPPLEMENTARY INFORMATION

Background

    The Motor Carrier Act of 1935 (Pub. L. 74-255, 49 Stat. 543) 
authorized the Interstate Commerce Commission (ICC) to issue operating 
authority registration to motor carriers, brokers, and freight 
forwarders subject to its jurisdiction and to suspend or revoke such 
registration for willful failure to comply with applicable statutes and 
regulations. The ICC Termination Act of 1995 (Pub. L. 104-88, 109 Stat. 
803) (ICCTA) abolished the ICC and transferred this authority to the 
Secretary of Transportation (Secretary). See 49 U.S.C. 13902 
(establishing standards for issuing operating authority) and 49 U.S.C. 
13905 (establishing standards and procedures for suspending and 
revoking operating authority). Additionally, ICCTA section 204 contains 
a savings clause which states that ``all orders * * * that have been 
issued * * * by the Interstate Commerce Commission * * * in the 
performance of any function that is transferred by this Act * * * shall 
continue in effect according to their terms until modified, terminated, 
superseded, set aside, or revoked.'' The

[[Page 46148]]

policy outlined in this notice stems in part from ICC decisions and 
orders that remain in effect, and it clarifies current FMCSA practice.
    Under 49 CFR 1.73, the Secretary has delegated to the FMCSA 
Administrator the authority to, among other things, develop and 
implement rules to carry out Federal transportation policy; exercise 
administrative procedure powers necessary to implement and enforce 
applicable transportation laws and regulations; register motor 
carriers, brokers and freight forwarders to provide interstate 
transportation and establish standards required to obtain and maintain 
registration; and establish minimum safety standards governing the 
operation and equipment of motor carriers operating in interstate 
commerce.
    A motor carrier, broker and freight forwarder may provide 
transportation or service subject to FMCSA jurisdiction only if it is 
registered by FMCSA. 49 U.S.C. 13901. FMCSA grants registration in 
accordance with the requirements and procedures in 49 U.S.C. 13902. 
Motor carriers, brokers and freight forwarders must demonstrate that 
they are willing and able to comply with the applicable statutory and 
regulatory requirements. Specifically, they must demonstrate 
willingness and ability to comply with applicable regulations imposed 
by FMCSA; the duties of employers and employees established by FMCSA 
pursuant to 49 U.S.C. 31135; the safety fitness requirements 
established by FMCSA pursuant to 49 U.S.C. 31144; the accessibility 
requirements established by FMCSA for transportation provided by an 
over-the-road bus; and minimum financial responsibilities established 
by FMCSA pursuant to 49 U.S.C. 13906 and 31138.
    FMCSA withholds registration if it determines that the carrier, 
broker or freight forwarder does not meet, or is unable to meet, any of 
these requirements. 49 U.S.C. 13902(a)(4). Additionally, if 
registration is granted, and subsequent conduct by the registrant 
demonstrates an unwillingness or inability to remain compliant, FMCSA 
may suspend, amend or revoke the registration. 49 U.S.C. 13905(d).
    This notice describes the policy and procedure FMCSA uses to 
determine whether a motor carrier, broker or freight forwarder is 
willing and able to comply with applicable requirements, and it 
identifies circumstances that can result in withholding, revocation, 
suspension or amendment of registration.

Policy

    FMCSA withholds operating authority registration from any applicant 
that cannot demonstrate it is willing or able to comply with applicable 
statutory and regulatory requirements. Once granted, FMCSA exercises 
its authority to revoke, amend or suspend operating authority 
registration in cases where a motor carrier, broker or freight 
forwarder engaged in conduct demonstrating willful disregard for 
applicable requirements. Inadvertent, isolated, or sporadic violations 
of applicable requirements generally will not result in revocation, 
suspension or amendment.
    In determining whether to withhold, suspend, amend or revoke 
operating authority registration, FMCSA evaluates, among other things, 
the following factors to determine whether a motor carrier, freight 
forwarder or broker is willing and able to comply with applicable 
statutory and regulatory requirements:
    (1) The nature and extent of existing or past violations;
    (2) the degree to which existing or past violations will affect, or 
have affected, the safety of operations, taking into account any 
crashes, deaths, or injuries associated with the violations;
    (3) whether existing or past regulatory or statutory violations are 
the result a willful failure to comply with applicable requirements;
    (4) the existence and nature of pending and closed enforcement 
actions;
    (5) whether adequate safety management controls exist to ensure 
acceptable compliance with applicable requirements; and
    (6) the existence of corrective action, if any.
    FMCSA evaluates all available information concerning a motor 
carrier's, broker's, freight forwarder's or applicant's current status 
and past conduct to determine whether the person is willing and able to 
comply with statutory and regulatory requirements. One factor is not 
necessarily more significant than another, and the person's conduct and 
history are not considered in isolation. Certain conduct, however, will 
likely be sufficiently egregious to warrant withholding, suspension, 
amendment or revocation.
    FMCSA will not grant operating authority registration to an 
applicant that fails to demonstrate willingness and ability to comply 
with applicable statutory and regulatory requirements. Applicants that 
intentionally furnish false or misleading information during the 
application and vetting process will not be granted operating authority 
registration. FMCSA views this conduct as demonstrating an inability or 
unwillingness to comply.
    Applicants that fail to disclose all required information during 
the application and vetting process will not be granted operating 
authority registration until the required information is supplied. 
FMCSA withholds operating authority registration by rejecting 
applications that are incomplete, because FMCSA cannot determine that 
an applicant is willing or able to comply until the applicant has 
supplied all required information.
    FMCSA does not grant operating authority registration to motor 
carriers that create a new identity or affiliate relationship to avoid 
a previous suspension or revocation of registration, a statutory or 
regulatory requirement, an FMCSA order or a history of past violations. 
FMCSA withholds operating authority registration by rejecting these 
individual's applications. The practice of ``reincarnating'' to avoid 
regulatory requirements and evade enforcement impairs FMCSA's ability 
to carry out its safety mission and creates an unacceptable safety risk 
for the motoring public. Moreover, this conduct demonstrates an 
inability and unwillingness to comply with applicable statutory and 
regulatory requirements.
    Persons who have had their operating authority registration 
suspended or revoked, or who have operated without operating authority 
registration, within the six years prior to their application 
reasonably incur additional scrutiny and an increased burden to 
establish their willingness and ability to comply with applicable 
statutes and regulations. This scrutiny and burden also apply to 
persons who submit an application for operating authority registration 
and begin interstate operations before their application is approved. 
Persons who have been the subject of more than one final Unfit safety 
fitness determination or imminent hazard out-of-service order within 
the preceding six years, or who have operated during this period 
following issuance of a final Unfit safety fitness determination and an 
order to cease operations, face particularly close scrutiny. These 
individuals have already demonstrated a propensity to disregard 
applicable requirements and Agency orders. Accordingly, FMCSA will not 
grant operating authority registration under such circumstances absent 
evidence demonstrating that the regulated entity has corrected 
preexisting violations and clearly

[[Page 46149]]

exhibited a willingness and ability to comply with regulatory 
requirements in the future.
    FMCSA uses a six-year compliance history to make determinations 
under 49 U.S.C. 13902 and 13905. Accordingly, FMCSA evaluates a 
person's willingness and ability to comply with applicable statutory 
and regulatory requirements based on, among other things, their 
compliance record, if any, and the factors identified above for the 
six-year period before the date of their application or the date of any 
conduct prompting review of their registration status. The six-year 
period is consistent with FMCSA's penalty assessment policies regarding 
``history of prior offenses'' under 49 U.S.C. 521(b)(2)(D) and a 
``pattern of violations'' warranting assessment of maximum civil 
penalties under section 222 of the Motor Carrier Safety Improvement Act 
(Pub. L. 106-159, 49 U.S.C. 521 note). See 69 FR 77828 (Dec. 28, 2004) 
and 74 FR 14184 (Mar. 30, 2009).
    FMCSA considers all available information to analyze the factors 
identified above. Information bearing on the nature and extent of past 
violations is often contained in FMCSA records, State law enforcement 
records, State regulatory agency records, or State or Federal judicial 
records. Relevant information may also exist in a regulated entity's 
records. Information concerning the extent of a person's cooperation 
with FMCSA is also relevant to evaluate whether their conduct 
represents willful disregard of applicable requirements. FMCSA 
therefore considers a person's willingness to cooperate with FMCSA and 
State enforcement personnel during the application review process, 
compliance reviews, investigations, inspections, or audits, including 
timeliness in responding to requests for information or other 
regulatory directions.
    Relevant information might also be available in complaints that 
private individuals file with FMCSA. While FMCSA lacks authority to 
resolve disputes between individuals and regulated entities, these 
complaints may be relevant in assessing whether a pattern of regulatory 
noncompliance exists. The totality of such information may show an 
unwillingness or inability to comply with statutory or regulatory 
requirements.
    FMCSA will also consider a person's attempts to correct past 
violations. Relevant evidence might include, among other things, 
documentation of vehicle repairs or modifications, including 
installation of collision avoidance, automatic on-board recorders, 
speed limiters, stability control or other safety equipment, training 
and education programs instituted by the entity, changed policies, 
responses to FMCSA communications showing corrective action and other 
similar corrective action plans. The timeliness of corrective action is 
also relevant. FMCSA will not, however, accept a regulated entity's 
mere assertion that it intends to be compliant in the future as 
evidence of efforts to rectify past violations. In order to demonstrate 
an adequate effort to correct past violations, the available 
information must show that the regulated entity took corrective action 
to address the problem and comply with applicable statutes and 
regulations.
    Finally, FMCSA will also consider the existence of any mitigating 
circumstances surrounding the regulated entity's conduct. Mitigating 
circumstances are facts that, while not exonerating, tend to explain 
why the violation occurred and that may tend to lessen a person's 
culpability for the violation. A mitigating fact would not necessarily 
relieve a person of the civil penalty liability, but it may be relevant 
in determining whether the conduct should preclude operating authority 
registration, given the other factors and circumstances described 
above. Proof of mitigating circumstances is evaluated in light of all 
the available information concerning a carrier's history.
    FMCSA informs applicants of the Agency's decision to reject its 
application and withhold operating authority registration in writing. 
The rejection notice informs the applicant of the factual and legal 
basis for the rejection. Any person whose application is rejected may 
appeal the rejection to FMCSA. Under 49 CFR 365.111, the appeal must be 
filed with FMCSA within 10 days of the date of the letter of rejection. 
Information on where to submit an appeal is provided in the notice.
    FMCSA suspends, amends or revokes operating authority registration 
in accordance with the procedures in 49 U.S.C. 13905. FMCSA initiates 
the proceeding by issuing an order to the motor carrier, broker or 
freight forwarder directing the registered entity to correct compliance 
deficiencies and show good cause, within 30 days of service of the 
order, why its registration should not be suspended, amended or 
revoked. The order provides the registered entity with notice of the 
alleged violation, explains how to respond to the order, and informs 
the registered entity that failure to respond and demonstrate 
corrective action or other good cause will result in suspension, 
amendment or revocation.
    The Agency Official who issued the order reviews the registered 
entity's response. In reviewing the response, the Agency Official 
considers, among other things, the registered entity's proof of 
corrective action and supporting documentation, and the factors 
outlined above to evaluate whether the registration should be 
suspended, amended or revoked. After reviewing the response, the Agency 
Official issues a written decision and takes one of three actions. 
First, he or she may enter an order suspending, amending or revoking 
the entity's registration if the registered entity failed to take 
appropriate corrective action or show good cause why its registration 
should not be suspended, amended or revoked. Second, the Agency 
Official may enter an additional order directing the registered entity 
to come into compliance if the Agency Official determines the evidence 
of corrective action is deficient, but can be cured. Third, the Agency 
Official may determine that suspension, amendment or revocation are not 
appropriate and enter an order terminating the proceeding.

    Issued on: July 17, 2012.
Anne S. Ferro,
Administrator.
[FR Doc. 2012-18935 Filed 8-1-12; 8:45 am]
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