[Federal Register: May 1, 2007 (Volume 72, Number 83)]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety Administration
[Docket No. FMCSA-2007-28055]
Demonstration Project on NAFTA Trucking Provisions
AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.
ACTION: Notice; request for public comment.
SUMMARY: FMCSA announces the initiation of a project to demonstrate the
ability of Mexico-based motor carriers to operate safely in the United
States beyond the commercial zones along the U.S.-Mexico border. The
project is part of FMCSA's implementation of the North American Free
Trade Agreement (NAFTA) cross-border trucking provisions. The
demonstration project will allow up to 100 Mexico-domiciled motor
carriers to operate throughout the United States for one year. Up to
100 U.S.-domiciled motor carriers will be granted reciprocal rights to
operate in Mexico for the same period. Participating Mexican carriers
and drivers will be required to comply with all applicable U.S. laws
and regulations, including those concerned with motor carrier safety,
customs, immigration, vehicle registration and taxation, and fuel
taxation. The safety of the participating carriers will be tracked
closely by FMCSA and its State partners, a joint U.S.-Mexico monitoring
group, and an evaluation panel independent of the Department of
Transportation (DOT). The resulting data will be considered carefully
before further decisions are made concerning the implementation of the
NAFTA trucking provisions.
DATES: Comments must be received on or before May 31, 2007.
ADDRESSES: You may submit comments identified by DOT DMS Docket Number
FMCSA-2007-28055 by any of the following methods:
- Web Site: http://dms.dot.gov. Follow the instructions for
submitting comments on the DOT electronic docket site.
- 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., e.t., Monday through Friday, except Federal holidays.
- Federal eRulemaking Portal: Go to http://www.regulations.gov.
Follow the online instructions for submitting comments.
Instructions: All submissions must include the Agency name and
docket number for this notice. For detailed instructions on submitting
comments and additional information, see the Public Participation
heading below. Note that all comments received will be posted without
change to http://dms.dot.gov, including any personal information
provided. Please see the Privacy Act heading below.
Docket: For access to the docket 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., e.t., Monday through Friday,
except Federal holidays.
Privacy Act: Anyone is able to search the electronic form of all
comments received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review DOT's
complete Privacy Act Statement in the Federal Register published on
April 11, 2000 (65 FR 19477-78) or you may visit http://dms.dot.gov.
Public Participation: The DMS is available 24 hours each day, 365
days each year. You can get electronic submission and retrieval help
and guidelines under the "help" section of the DMS Web site. Comments
received after the comment closing date will be included in the docket,
and will be considered to the extent practicable.
FOR FURTHER INFORMATION CONTACT: Mr. Milt Schmidt, Division Chief,
North American Borders Division, Federal Motor Carrier Safety
Administration, 400 Seventh Street, SW., Washington, DC 20590-0001.
Telephone (202) 366-4049; e-mail firstname.lastname@example.org.
Before 1982, Mexico- and Canada-domiciled motor carriers could
apply to the Interstate Commerce Commission (ICC) for authority to
operate within the United States. As a result of complaints that U.S.
motor carriers were not allowed the same access to Mexican and Canadian
markets that carriers from those nations enjoyed in this country, the
Bus Regulatory Reform Act of 1982 imposed a moratorium on the issuance
of new grants of operating authority to motor carriers domiciled, or
owned or controlled by someone, in Canada or Mexico. While the
disagreement with Canada was quickly resolved, the issue of trucking
reciprocity with Mexico was not. Currently, most Mexican carriers are
allowed to operate only within the border commercial zones extending
approximately 25 miles into the United States. Every year Mexico-
domiciled commercial motor vehicles (CMVs) cross into the U.S. about
4.5 million times. U.S.-domiciled motor carriers are not authorized to
operate in Mexico at all.
Trucking issues at the U.S./Mexico border were not fully addressed
until NAFTA in the early 1990s, when both nations agreed to change
their policies. NAFTA required the United States incrementally to lift
the moratorium on licensing Mexico-domiciled motor carriers to operate
beyond the border zones. On January 1, 1994, the President modified the
moratorium and the ICC began accepting applications from Mexico-
domiciled passenger carriers to conduct international charter and tour
bus operations in the United States. In December 1995, the ICC
published a rule and a revised application form for the processing of
Mexico-domiciled [[Page 23884]] property carrier applications (Form OP-1(MX)). These rules anticipated
the implementation of the second phase of NAFTA, providing Mexican
property carriers access to California, Arizona, New Mexico and Texas,
and the third phase, providing access throughout the United States.
However, at the end of 1995, the United States announced an indefinite
delay in opening the border to long-haul Mexican CMVs.
After the Administration announced its intent to resume the process
for opening the border in 2001, Congress enacted section 350 of the DOT
and Related Agencies Appropriations Act for Fiscal Year 2002 (Pub. L.
107-87, 115 Stat. 833, at 864). Section 350 prohibited FMCSA from using
Federal funds to review or process applications from Mexico-domiciled
motor carriers to operate beyond the border commercial zones until
certain preconditions and safety requirements were met. The
requirements of section 350 have been reenacted in each subsequent DOT
Appropriations Act. The rulemaking requirements of the Act were met by
a series of rules published on March 19, 2002 (67 FR 12653, 67 FR
12702, 67 FR 12758, 67 FR 12776) and a further rule published on May
13, 2002 (67 FR 31978).
In November 2002, Secretary of Transportation Norman Mineta
certified, as required by section 350(c)(2), that authorizing Mexican
carrier operations beyond the border commercial zones does not pose an
unacceptable safety risk to the American public. Later that month, the
President modified the moratorium to permit Mexico-domiciled motor
carriers to provide cross-border cargo and scheduled passenger
transportation beyond the border commercial zones. The Secretary's
certification was made in response to the June 25, 2002, report of
DOT's Office of Inspector General (OIG) on the implementation of safety
requirements at the U.S.-Mexico border. In a January 2005 follow-up
report, the OIG concluded that FMCSA had sufficient staff, facilities,
equipment, and procedures in place to substantially meet the eight
Section 350 requirements the OIG was required to review.
On February 23, 2007, United States Secretary of Transportation
Mary E. Peters and Mexico Secretary of Communications and
Transportation Luis Tellez Kuenzler announced a demonstration project
to implement the trucking provisions of NAFTA. The purpose of the
project is to demonstrate the effectiveness of the safety programs
adopted by Mexico-domiciled motor carriers and the monitoring and
enforcement systems developed by DOT, which together ensure that
Mexican motor carriers operating in the United States can maintain the
same level of highway safety as U.S.-based motor carriers.
Demonstration Project Description
The demonstration project has a one-year limit. It will allow up to
100 Mexico-domiciled motor carriers to operate beyond the border
commercial zones and transport international cargo throughout the
United States. For purposes of the demonstration project,
"international cargo" means cargo transported by Mexico-domiciled
motor carriers in CMVs from Mexico to the United States, with no
loading in the United States, or from the United States to Mexico, with
no unloading in the United States [49 CFR 365.501(b)]. Drivers for
participating motor carriers must comply with the entry requirements of
the Department of Homeland Security (DHS). Under DHS regulations,
"[p]urely domestic [U.S.] service or solicitation [by non-U.S.
drivers], in competition with the United States operators [i.e.,
drivers], is not permitted" [8 CFR 214.2(b)(4)(i)(E)(1)].
Participating motor carriers will be required to comply with all State
and Federal environmental and emission regulations. Carriers must
certify that their vehicles have been manufactured in accordance with
the National Highway Traffic Safety Administration's (NHTSA) Federal
Motor Vehicle Safety Standards (FMVSS).
All Mexico-domiciled participants operating in the United States
under the demonstration project will be required to comply with all
United States safety standards including hours of service, driver
medical standards, financial responsibility, drug and alcohol testing,
size and weight limits, and the ability to communicate in English.
Every Mexico-domiciled CMV scheduled to be used beyond the border
commercial zones will undergo an in-depth safety inspection before
being allowed to operate in the U.S. and must display a valid
Commercial Vehicle Safety Alliance (CVSA) inspection decal indicating
it has passed a thorough vehicle inspection. CVSA decals are valid for
up to 3 consecutive months, so follow-up inspections on Mexico-
domiciled CMVs will be required at least every 3 months. Each vehicle
will be checked for a valid CVSA decal every time it enters the U.S.,
and the validity of each operator's driver's license will also be
checked. The display of a valid CVSA decal will not necessarily exempt
a vehicle from safety inspections.
Participating motor carriers must file proof of insurance
underwritten by a U.S. insurance company and pay State registration
fees and State and Federal fuel taxes.
The demonstration project gives participants no exemptions from
U.S. safety requirements. In fact, it requires compliance with
additional safety requirements not applicable to other motor carriers
operating in this country, such as having a current CVSA decal on the
vehicle at all times, and passing a safety audit prior to receiving
operating authority. Furthermore, under 49 CFR 385.105, FMCSA has
developed additional monitoring criteria for Mexico-domiciled motor
carriers. Every vehicle operated by these carriers in the U.S. will
also be subject to the inspection standards in 49 CFR 365.511.
The demonstration program is reciprocal. Up to 100 U.S.-domiciled
motor carriers will be allowed to operate in Mexico on terms similar to
those applicable to Mexico-domiciled carriers operating in this
country. The Mexican government is finalizing an application form and
procedures for use by interested U.S. motor carriers.
Process for Applying for OP-1(MX) Operating Authority
To participate in the project, a Mexico-domiciled motor carrier
must, pursuant to regulations already in place, submit (1) Form OP-
1(MX), entitled "Application to Register Mexican Carriers for Motor
Carrier Authority to Operate Beyond U.S. Municipalities and Commercial
Zones on the U.S.-Mexico Border"; (2) Form MCS-150, the "Motor
Carrier Identification Report"; and (3) notification of the means used
to designate agents for service of legal process, either by submitting
Form BOC-3, "Designation of Agents--Motor Carriers, Brokers and
Freight Forwarders," or a letter stating that the applicant will use a
process agent service that will submit Form BOC-3 electronically. The
forms are available on the Internet at http://www.fmcsa.dot.gov/documents/op-1mx.pdf.
The FMCSA will compare the information and certifications provided in the application with information maintained
in databases of the governments of Mexico and the United States.
FMCSA has developed special rules that govern Mexico-domiciled
motor carriers during the application process and for several years
after receiving OP-1(MX) operating authority. They are codified in 49
CFR 365.501 through 365.511. These rules impose requirements on Mexico-
domiciled motor carriers in addition to those imposed on U.S. domiciled
motor carriers seeking operating authority.
Selection of Carriers To Participate in the Demonstration Program
Several hundred Mexico-domiciled carriers have filed a complete OP-
1(MX) application, and more applications are expected. The carriers
that were ready for an audit were subjected to an extensive vetting
process. Those known to transport hazardous materials or passengers
were eliminated. All carriers were also checked against the FMCSA
enforcement management information database. Carriers were eliminated
if there were any enforcement actions pending, such as unpaid fines,
unresolved expedited action letters, or operating authority
suspensions/revocations. The remaining carriers were then checked
against a U.S. database for involvement in illegal drug activities.
Those that passed the vetting process were considered for the
demonstration project. Other carriers may be considered for the project
as new applications are submitted.
From among the currently-eligible prospective participants, FMCSA
is in the process of conducting pre-authorization safety audits on a
group of motor carriers diverse both in fleet size and geographical
location. Of the carrier applicants selected by the Agency for audit,
18 percent are from non-border states in Mexico, while 82 percent are
domiciled in one of Mexico's six border states. About 46 percent of the
participants are expected to enter the United States through
California, 41 percent through Texas/New Mexico, and 13 percent through
Arizona. Some 70 percent of the carrier applicants operate small
vehicle fleets, while 25 percent have medium-sized and 5 percent have
large fleets. For this demonstration program, a small vehicle fleet is
20 trucks or less, while a medium-sized fleet consists of 21 to 100
trucks. A large fleet is anything in excess of 100 trucks.
Pre-Authorization Safety Audit (PASA)
A Mexico-domiciled carrier must satisfactorily complete the FMCSA-
administered pre-authorization safety audit (PASA) required under FMCSA
regulations before it is granted provisional authority to operate in
the United States beyond the border commercial zones. This pre-
authorization audit is not required for U.S.-based motor carriers. The
PASA is a review of the carrier's safety management systems including
written procedures and records to validate the accuracy of information
and certifications provided in the application. The PASA will determine
whether the carrier has established and exercises the basic safety
management controls necessary to ensure safe operations. The carrier
will not be granted provisional operating authority if FMCSA finds that
its safety management controls are inadequate, using the standards in
Appendix A to Subpart E of 49 CFR part 365. All PASAs performed under
the demonstration project will be conducted at the motor carrier's
place of business in Mexico. Vehicles the motor carrier intends to use
for operations within the U.S. will be inspected and will be required
to have a valid CVSA decal affixed or to pass an in-depth North
American Standard Truck Inspection.
As required by FMCSA regulations, the carrier will be denied
provisional operating authority if the FMCSA can not:
1. Verify the existence of a controlled substances and alcohol
testing program consistent with 49 CFR part 40. The Agency will ensure
that the carrier has information on collection sites and laboratories
it intends to use.
2. Verify a system of compliance with hours-of-service rules in 49
CFR part 395, including recordkeeping and retention;
3. Verify proof of financial responsibility, as required by 49 CFR
4. Verify records of periodic vehicle inspections, as required by
49 CFR part 396; and
5. Verify that each driver the carrier intends to assign to operate
under the demonstration project meets the requirements of 49 CFR parts
383 and 391. This will include confirmation of the validity of each
driver's Licencia Federal de Conductor through the Mexican driver
license information system and a check of the Commercial Driver's
License Information System (CDLIS) for violations, suspensions, etc.
Issuance of Operating Authority
If a carrier successfully completes the PASA and the FMCSA approves
its application, the Agency will publish a summary of the application
as a preliminary grant of authority in the FMCSA Register, which is
available at http://li-public.fmcsa.dot.gov/LIVIEW/pkg_html.prc_limain.
However, the carrier will not be authorized to operate until it
has made the insurance filings required by 49 CFR 365.507(e)(1) and
designated a process agent as required by 49 CFR 365.503(a)(3).
Additionally, no carrier will be authorized to operate until this
notice-and-comment procedure is completed.
Upon granting provisional operating authority, the Agency will
assign a unique USDOT Number, including an "X" suffix, which
identifies the motor carrier as authorized to operate beyond the
municipalities and commercial zones on the U.S.-Mexico border.
The issuance of OP-1(MX) provisional operating authority will
supersede any other operating authority the FMCSA may have issued the
carrier, including authority to operate within the border commercial
zone. The participating carrier's entire U.S. operations will be
subject to the terms and limitations in the OP-1(MX) document,
including the prohibition on transporting hazardous materials and
Termination of Provisional Operating Authority
The demonstration project will terminate and all provisional
operating authority certificates expire one year from the date FMCSA
grants the first provisional certificate.
Provisional operating authority may be suspended or revoked at any
time during the demonstration project if FMCSA determines that the
carrier's safety performance does not meet the standards established in
49 CFR part 385, subpart B. Operating authority may also be suspended
or revoked if the motor carrier is found to have transported hazardous
materials or passengers in the U.S., or otherwise to be operating
beyond the scope of its provisional authority.
If a Mexico-domiciled motor carrier held FMCSA operating authority
to operate exclusively within the border commercial zones (OP-2
authority) before being granted provisional OP-1(MX) operating
authority, the certificate of registration to operate exclusively
within the border commercial zones will be reinstated at no cost to the
motor carrier upon expiration of the demonstration project, providing
the carrier's safety record during the project has been satisfactory.
Operating in the U.S. Under OP-1(MX) Provisional Operating Authority
Mexico-domiciled motor carriers are subject to DHS and DOT cabotage
requirements and prohibited from providing domestic point-to-point
transportation while operating in the U.S. Carriers found to have
violated the cabotage requirements will be placed out-of-service under
the DOT regulations. DHS could also prohibit the driver from entering
the U.S. in the future. FMCSA, in coordination with the International
Association of Chiefs of Police (IACP), has developed and provided
training to State and local law enforcement agencies on the cabotage
Monitoring, Oversight and Enforcement
FMCSA will monitor the operational safety of all Mexico-domiciled
motor carriers participating in the demonstration project. To
accomplish this, FMCSA will work closely with State commercial vehicle
safety agencies, the IACP, CVSA, DHS, and others.
Field monitoring will include inspections of vehicles, verification
of compliance with the terms of the provisional operating authority,
driver license checks, crash reporting, and initiation of enforcement
actions when appropriate. Additionally, a Mexico-domiciled motor
carrier committing any violations specified in 49 CFR 385.105(a) and
identified through roadside inspections or by other means, may be
subject to a compliance review and enforcement action.
Monitoring will also include electronic data collection and
analysis. Data collected as a result of field monitoring and other
activities will be entered into FMCSA databases. The data will be
tracked and analyzed to identify potential safety issues. Appropriate
action will be taken to resolve any identified safety issues. This
could include suspension or revocation of the provisional operating
authority or the initiation of other enforcement action against the
carrier or driver.
The DOT and the Mexican Secretaria de Comunicaciones y Transportes
(Secretariat of Communication and Transport, or SCT) have established a
bi-national monitoring group. The group includes officials from FMCSA,
DOT, and the U.S. Trade Representative. Mexican participants include
representatives from the Federal Motor Carrier General Directorate,
Communications and Transport Secretariat (SCT); the Services
Negotiations General Directorate, Economy Secretariat; and the SCT
Centers from the Mexican Border States. The monitoring group's
objective is to supervise the implementation of the demonstration
project and to find solutions to issues affecting the operational
performance of the project. The group will generally convene weekly via
Enforcement is a key component of the monitoring and oversight
effort. FMCSA has trained and provided guidance to Federal and State
auditors, inspectors and investigators to ensure their knowledge and
understanding of the demonstration project and the procedures for
taking enforcement actions against carriers or drivers participating in
To ensure carrier compliance with operating authority limitations,
including the prohibition of domestic point-to-point transportation of
cargo in the U.S., FMCSA and the IACP have developed and implemented a
training program that provides State and local officials detailed
information on cabotage regulations and enforcement procedures.
FMCSA is also working with the DHS to develop guidance concerning
the enforcement of DHS cabotage regulations. This material will be
incorporated into the CVSA North American Standard Inspection Course
and provided to roadside enforcement officers.
FMCSA will be issuing policy memoranda and guidance to the Federal
field staff, State agencies and others concerning monitoring and
enforcement issues, including English language proficiency, inspection
of each participating Mexico-domiciled vehicle every time it enters the
U.S., enforcement of the Federal Motor Vehicle Safety Standards, and
enforcement of the CVSA decal requirement.
To ensure uniformity and effective enforcement, the CVSA has
revised the North American Standard Out-of-Service Criteria to include
as out-of service criteria, violations of 49 CFR 391.11(b)(2) relating
to the driver's ability to communicate in English while operating in
the U.S. and violations of 49 CFR 385.103(c) relating to the display of
a valid CVSA decal on vehicles operated by project participants.
Evaluation and Reporting
The DOT will evaluate the success of the demonstration project by
examining the safety performance of Mexico-domiciled motor carriers
operating in the U.S. Specifically, FMCSA anticipates examining the
crash rate of Mexican carriers, convictions of Mexican drivers for
violations of U.S. traffic safety laws, the rate at which Mexican
drivers and vehicles are placed out of service when inspected in the
U.S., violations discovered during pre-authority safety audits, and
compliance of Mexican trucking companies with U.S. drug and alcohol
testing regulations. These data will be collected through police
reporting of crashes and moving violations, uploads of roadside
inspection results performed by FMCSA or our State partners, and
uploads of safety audits and compliance reviews of Mexican motor
carriers performed by FMCSA staff.
The DOT also intends to provide for an independent evaluation of
the demonstration project. The Secretary has asked former DOT Inspector
General Kenneth Mead, former DOT Deputy Secretary Mortimer Downey and
former House Appropriations Sub-Committee Chairman Jim Kolbe to serve
on an evaluation panel. The panel will be responsible for evaluating
the safety impacts of allowing Mexico-domiciled motor carriers to
operate on U.S. roads beyond the border commercial zone. They will
operate independently from other monitoring efforts and provide their
own assessment of the project. Their conclusions will be considered
carefully before a decision is made on a permanent full implementation
of the NAFTA trucking provisions.
Request for Comments
The FMCSA has decided to request public comment from all interested
persons on the demonstration project outlined above. The FMCSA has
fulfilled all of the statutory requirements necessary for the lifting
of the moratorium against certain Mexico-domiciled motor carriers. The
Agency intends the demonstration project to be the means of validating
its safety oversight regime.
All comments received before the close of business on the comment
closing date indicated at the beginning of this notice will be
considered and will be available for examination in the docket at the
location listed under the address section of this notice. Comments
received after the comment closing date will be filed in the public
docket and will be considered to the extent practicable. In addition to
late comments, the FMCSA will also continue to file, in the public
docket, relevant information that becomes available after the comment
closing date. Interested persons should continue to examine the public
docket for new material.
Issued on: April 27, 2007.
John H. Hill,
[FR Doc. 07-2152 Filed 4-30-07; 8:45 am]
BILLING CODE 4910-EX-P